Telemarketing

Service Bureaus

One of the main advantages of service bureaus is that they likely can offer lower costs. By grouping programs from several different companies, service bureaus can generate sufficient volume to reduce labor and telephone costs, which make up a majority of total costs. They can also get a program started more quickly because they have experienced telephone reps on staff, along with necessary equipment.

When 24-hour coverage is needed on an inbound telemarketing program, it probably is more cost-effective to go with a bureau. When setting up an outbound program, the experienced managers at a bureau can help a company avoid making mistakes and often can accurately project call volumes and sales per hour. Service bureaus also can help with testing new programs and have a greater ability to handle demand peaks.

On the downside, several client companies often must compete for a service bureau's attention, and for firms that share service with a broadcast advertiser whose response rates are underestimated, that can be a decided drawback. Stability of service bureaus has also been a problem at times.

In-house Operations

The main reason companies decide to run their own telemarketing campaign is that they can maintain total control over all facets, including hiring and firing, scripts and presentations, budgets, advertising, and compensation and incentive policies. When telemarketing programs are kept in-house, phone reps have ready access to company information, so they can confirm delivery, authorize credit, and suggest alternatives to out-of-stock items.

Since in-house reps are trained on individual product lines, they can handle highly technical calls no service bureau likely would attempt. Such technical expertise also helps companies maintain effective customer service programs through observation (such as via call monitoring). In addition, it is easier to gain company loyalty from actual employees than from people employed by an outside bureau. The biggest drawback to taking a program in-house is the large capital investment needed to get a telemarketing program started. It involves hiring and training new personnel, purchasing new communications equipment, and dealing with a process that is unfamiliar to many in business.

TECHNOLOGICAL AND HUMAN ELEMENTS

Computers have played an important role in the growth of telemarketing. Access to databases provides phone reps with account histories, stock status, order-taking formats, and other vital information. Besides analyzing data, computers are used for scheduling, scripting, and follow-ups. Computers also can be programmed to automatically dial phone numbers and connect the calls to telemarketers only if they are answered, screen out answering machines, and guide the phone rep through the telemarketing presentation.

While technology plays a vital role in keeping telemarketing cost-effective, the human element is critical in making the effort successful. Unfortunately, many firms still view telemarketing positions as clerical-level jobs staffed by people with few skills, no training, and little understanding of the product or service being sold. Often, the manager of a telemarketing operation is the only person in an organization familiar with the discipline. Some firms, though, have come to realize the importance of the telemarketers, as the firm's image is on the line with every call. They realize the position needs skilled, trained professionals who must be adequately compensated.

For compensation, most companies use a combination of salary, commission, and/or bonuses. Studies indicate that incentives generally aid in sales success, but it is important to link the inducements to the performance desired, be it total sales, calls completed, or presentations given. Some form of quotas are also commonly used so that sales reps know what is expected of them. Firms should be reasonable in setting quotas. If the goals are too high, the reps will become frustrated, leading to morale and worker retention problems. Conversely, low quotas can create an environment in which effort is lacking, especially if the compensation package in place is heavily weighted toward base salary.

Telemarketing positions typically show high levels of turnover, in large measure because the majority of interactions with potential customers end in rejection. Working shorter shifts or using computers to prescreen customers can help reduce the amount of rejection telemarketers experience. Training is another important factor. If the individuals that comprise your telemarketing staff are trained to be specific, control the time and pace of conversation, ask questions and listen without interrupting or rushing the customer's response, and respond to objections or concerns in a positive manner, they will experience greater levels of success—and hence, a more positive outlook on their duties.

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