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Making Use of Telemarketing

Maligned as it may be, telemarketing continues to be a proven marketing strategy. While manual-contact telemarketing operations do remain, most now rely on automated and computer-based systems to accept incoming calls and place calls to build leads for the sale of products and services. This article looks at the best ways to structure a telemarketing operation for your business and also offers tips about using an independent telemarketing agency.

What You Need to KnowHow can I set up telemarketing in-house?

Office design can significantly affect performance. If your budget allows, it's wise to use a consultant experienced in call center design. Such a center should be designed and organized so call-center personnel can place or answer calls privately yet still feel part of a team. Good sound insulation is essential. Workstations should be comfortable, and equipment should include lightweight headsets, antiglare computer screens and comfortable seating.

Think carefully about the recognition and remuneration of employees. For those making outgoing calls, you could use a results-based plan. For staff handling incoming calls, you could offer bonus payments for attaining or exceeding targets for "cross-selling"—selling customers different products within your range; or up-selling—selling customers a higher-priced version of a product they have bought previously. Before launching a full program, you also could run a pilot program to evaluate variable factors such as lists, people, markets, equipment, and management procedures.

How do I get the best value from a telemarketing program?

A telemarketing operation won't reach its full potential in isolation. It needs to work with other parts of the business. True cooperation is the key to success. Everyone involved in marketing, sales, and production needs to understand the reasons to introduce telemarketing, the benefits it will bring, and the impact it will have. Sales staffs may feel threatened by telemarketing, so it's important to explain how telemarketing will complement their activities rather than replace them.

First, overview the business operations, then identify telemarketing objectives as a contributor to overall business success. Finally, carry out a cost-benefit analysis and draw up a detailed step-by-step plan for implementing and running the operation.

Are there some "rule-of-thumb" numbers to know?

Yes. Although technology can quickly render statistics outdated, they're still good to keep in mind, if only for comparison's sake. A good 80% or more of all telemarketing calls are dialed by automated systems that can call as many as 50,000 a day! In late 1990, a mere 25 calls a day were considered the norm! Independent services will promise to make as many as 60 to 100 contacts per day, i.e. actually reach individual targets.

Understand that "calls dialed" and "contacts" are two different yardsticks. You need to know the difference in evaluating different telemarketing service providers. Know, too, that while complaints about telemarketing are legendary and total thousands a day, it remains a viable way to sell: Annual revenues crossed the $100 billion mark in 2002 and have kept increasing every year.

What to DoImplement the Program With Targets and Testing

First, you need to set targets for your telemarketing program. Identify the targets for outgoing calls by analyzing existing customers' respective buying patterns: how recently a customer bought something, how frequently he or she buys, and the values of the purchases. Prospects can also be identified by geographical location, now-inactive customers, and from outside lists of names. Incoming calls are usually generated through advertising, which must also be targeted. Ideally, rank various target groups by the potential return on investment each represents.

Second, you must test your telemarketing program. There are specific methods for calculating a sample size, but for any serious campaign, the experts advise having 500 to 1,000 names. After determining the sample size, you can calculate the staff and telephone resources the trial period needs. The trial allows your business the chance to monitor results and modify various details.

Next, you need to implement your program, pending the outcome of the test results, of course. This is also the time to set budgets for the entire program. You will need to consider the initial investment required, operating costs, cost savings the program will generate, and extra revenues likely to be generated by additional orders the calls will bring.

Finally, you will need to evaluate the program. Key factors to study include actual costs and productivity levels—both the rates of response and the conversion of contacts into sales. Telemarketing should produce quantifiable results. Given accurate figures, it is possible to establish future budgets and to compare the cost-effectiveness of telemarketing with other sales and marketing efforts or as a program supporting those efforts.

Make Use of a Database

You'll need to buy or develop a database to store information on customers and prospects. Databases range from simple systems such as a computerized card index system to sophisticated relational databases that allow you to analyze data in various ways. Think about the categories of information the database should hold; potential data entry methods (directly during a customer's telephone call, for example, or transferring paper records afterwards); how information will be retrieved; how reports will be generated; and quality standards and procedures to keep data accurate and current.

Your own database is an ideal primary source of customer and prospect contacts, but also consider buying well sourced and documented contact lists from an outside agency. Shop around first, though; the list business is competitive, and different brokers offer similar lists at different prices. Know, too, that lists become outdated in a heartbeat. The quickest way to check a list's accuracy is by calling, of course!

Manage Incoming Calls

Call management affects the service your callers provide and the cost-effectiveness of your telemarketing operation. There are two primary methods of managing incoming calls:

  • An Automatic Caller Distributor (ACD) transfers incoming calls to the first available call center staffer or plays a message indicating that the caller is in a queue. ACDs also produce useful call-management information for subsequent analysis.
  • Call Sequencers answer all calls with a message saying that the call will be taken as soon as possible; they also give a caller the option to leave voicemail for a return call.

ACDs and Call Sequencers can be located on site and are widely available. In addition, caller-controlled systems let callers, by pressing buttons on their telephone or via voice recognition, select the person or department they're trying to reach.

Recruit Carefully and Train Extensively

Any telemarketing operation's performance depends on the people staffing the phones. It's that simple. They must be able to create rapport, overcome objections, respond to criticism, and direct conversations. As you recruit and hire staff for these positions, it makes sense to initially evaluate them over the phone in order to hear them in action. As you listen, ask yourself the following questions:

  • Do they come across as genuine, interested individuals who enjoy contact with people?
  • Do they communicate clearly?
  • Do they listen well?

Finally, ask yourself if they seem likely to be able to work well in a demanding atmosphere without becoming discouraged. This last question is particularly important, for rejection is an inevitable part of the job. Training is vital, and appropriate courses for telemarketing managers and staff are widely available.

Provide a Team Leader and Motivator

Like any team, a telemarketing team needs a leader, someone with excellent interpersonal skills and the ability to motivate. The leader should start—and close—each day with upbeat team briefings. Before making calls, it is important that everyone knows his or her target for the day. At day's end, results can be discussed before sending team members home on a positive note. The team leader should be located near the team, and members should be encouraged to swap information and raise problems. Calls should be monitored unobtrusively to see if anyone needs help in developing their respective style and skills.

Use Scripts

To ensure good conversation and good data, telemarketing staff must direct every conversation in a planned and controlled, yet natural, way. You will need to develop a script or structured call plan that covers all stages of the conversation, from greeting callers and answering questions to taking orders and signing off. Telemarketing departments typically provide their staffs with computer-based scripts. These scripts often come with built-in intelligence: For example, as an operator records an answer onto a form onscreen, the computer provides the most appropriate question to ask next.

Writing a multi-option telemarketing script is a specialized skill, and it is worth hiring a professional to do it. Script in hand, first let your team spend time role-playing; for example, tape trial conversations to see how natural they sound, then adjust them as needed. Well-prepared scripts should control the message being delivered and ensure that customers receive correct information. They further ensure that your staff collects the right information and make it easier to analyze results.

There can be drawbacks, however; in the hands of inexperienced personnel, scripts can sound false and contrived, and they can erode the initiative of more experienced staff members.

Consider Using an Outside Agency

If you decide not to set up an in-house telemarketing staff, determine exactly what services your business requires, and try to personally visit each telemarketing agency to see how it works and to talk to its employees. Some agencies specialize in inbound telemarketing, others in outbound calls, but many operate in both fields. Check the agency's client list, and ask permission to contact several clients for references. Find out about the agency's database system and what management information it can provide. Insist on a written proposal with detailed costs. A trial run is a good idea, too, as is confirming that the agency is capable of handling your entire telemarketing activity if the trial goes well.

Monitoring performance is essential, so arrange for regular reports on all key activities, including lost calls, response rates, and data quality. You can also make some test calls yourself to be sure everything is operating within the specified timeframe. If people are declining an offer, try to find out why; for example, changing the script might help. Finally, reward outstanding results and thank the agency staff personally to keep its collective motivation high.

What to AvoidYour Research Is Inadequate

Whatever type of business you're in, keep up to date with what services and equipment are available, and what your competitors are doing. What you learn will serve as a benchmark if you're launching a telemarketing operation and will help you boost its effectiveness if your operation is already in place.

You Ignore Technology

What's available can deliver stunning improvements in efficiency. Automated dialing systems, for instance, have increased actual "talking time" from 30 minutes per hour to 54. If your minutes are stuck at 30 and your competitors' are at 54, you are losing business. There are limits, of course, but most telemarketing investments are money well spent.

You're too Thin-Skinned

Everyone complains about telemarketing solicitations. But the billions in sales the practice generates each year affirm its effectiveness. If it makes sense for your business, ignore the critics.

You Don't Use an 800 Number

No serious company relying on telemarketing can be without an 800 number, especially since there are a wide array of suppliers and options.

Where to Learn MoreBooks:

Aspatore Staff. Complying with the Laws Behind Direct Marketing and Telemarketing—The Over-Arching Issues You Need to Know. Aspatore Executive Reports, 2006.

Lautenslager, Al. Ultimate Guide to Direct Marketing. Entrepreneur Press, 2005.

Web Sites:

American Teleservices Association:

Call Center Network Group (CCNG):

Customer Care Institute (CCI):

Direct Marketing Association (DMI):

International Customer Service Association:

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