Telemarketing

Although solid numbers are hard to find, one commonly accepted estimate is that the do-not-call regulation had cut the number of telemarketing calls by half during the first two years in effect. Telemarketing firms report seeing their lists cut from 35 to 55 percent.

The industry is still adjusting to the new reality that has been created by the do-not-call registry. They will continue to search for ways in which to generate new telephone lists that include potential clients that are not on the do-not-call list or clients who by virtue of signing up for a sweepstakes event have created for themselves a "relationship" with the seller. Companies with whom a person has done business or with whom a person has signed up for a drawing are allowed to call that individual whether or not his or her phone number is on the do-not-call list. Consequently, companies that use telemarketing are researching ways to go about rebuilding their calling lists.

Although much reduced during the first years of the 21st Century, telemarketing is still an option for some types of businesses. In particular, business-to-business telemarketing is still a useful tool within a larger marketing strategy for companies that sell to other companies.

Selling

Telemarketing can either supplement or replace face-to-face selling to existing accounts. It can complement the field sales effort by reaching new customer bases or geographic markets at relatively low cost. It can also be used to sell goods and services independently, with no field sales force in place. This method often is used for repetitive supply purchases or readily identifiable products, though it can be effectively applied to other products as well.

The inside sales force can be used to replace direct contact for marginally profitable customers. A general rule of thumb in business says that 20 percent of customers account for 80 percent of sales, so conversely the remaining 80 percent of customers generate just 20 percent of sales. But businesses must keep in mind that marginal does not necessarily mean unprofitable. And the existing customer base is perhaps the most important asset in any business; increases in sales most often come from current accounts, and it generally is less costly to maintain current customers than to search out new business, particularly with the reduction of access resulting from the FTC do-not-call list. Telemarketers can give these reliable customers the attention they deserve. The reps can phone as often as needed, determine the customers' purchasing cycles, and contact them at appropriate reorder times.

In making such a consolidation between a direct and inside sales force, the company must be careful in determining which accounts should stay with field sales and which should be handled by telemarketing. Some businesses start their telemarketing operations with just small or inactive accounts, gradually increasing the size of accounts handled.

Lead Generation

Through telemarketing, a company can compile and update lists of customer prospect leads and then go through these lists searching for sales leads. Telemarketing can screen the leads and qualify them according to priority, passing the best leads to the field sales force for immediate action. The inside sales force also can identify the decision maker with the buying power and set up appointments for the outside sales force.

Gathering Information

Telemarketing can provide accurate information on advertising effectiveness, what customers are buying, from whom they're buying, and when they will buy again. It is also commonly used in conducting surveys.

Improving Customer Service

Studies show it costs five times more to win over a new customer than to keep an existing one. By using telemarketing as a main facet of customer service, companies can go a long way toward keeping customers happy.

In addition, when used in conjunction with current computer technology, a telemarketing program can be analyzed in terms of costs and benefits, using quantitative data on the number of contacts, number of presentations, total sales, cost per sale, and income per sale.

ESTABLISHING A SUCCESSFUL PROGRAM

Not all telemarketing programs are successful. Improper execution, unrealistic goals over a short time period, oversimplification, and lack of top management support have caused the ultimate failure of more telephone sales programs than can be imagined. Like any marketing strategy, telemarketing takes time to plan and develop. It takes time to gain confidence in the message, to identify weak areas, and to predict bottom-line results. Some of the most common telemarketing mistakes include: not giving it a total commitment; not utilizing the proper expertise; failing to develop a proper database; improper human resource planning; lack of proper scripts and call guides; lack of quality control, and failing to understand the synergy with other direct marketing disciplines. To create a successful telemarketing program, management must understand and agree to the necessary personnel and financial resources, as well as devoting adequate time for program development and testing. Telemarketing and related direct marketing techniques can produce solid sales. But they need a chance to develop and demonstrate that success. Very simply, it takes time.

Experts agree that companies must be careful in forming telemarketing goals and objectives. Some of the most important factors for success include: developing a complete marketing plan with built-in criteria for accounting and analysis; writing scripts, sales outlines, and presentations to be performed; establishing training and hiring procedures for both supervisors and sales personnel; analyzing and evaluating campaigns, personnel, and cost effectiveness; having support and commitment from management for the telemarketing's role in the overall marketing effort; establishing reachable goals; and placing a continuous emphasis on follow-up.

IN-HOUSE VS. OUTSIDE SERVICE BUREAUS

When establishing a telemarketing program, a company has the option of setting up the operation in-house, or subcontracting it to an outside service bureau. Both have advantages and disadvantages. In-house programs usually are better if products and/or services require extensive technical expertise to explain. They also can be better for firms making a long-term commitment to telemarketing. Service bureaus, on the other hand, can help firms that need around-the-clock coverage for inbound programs, are supporting television ad campaigns, or are running a seasonal marketing program.

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