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MHT "Tele" Marketing
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My current comments about this article:

Mass Hi Tech Article: Telemarketing

 

Just what is this thing called telemarketing? We've all

been using the telephone in business for decades, so it's

hardly a new form of business communications. By comparison

to Express Mail or Fed Ex, the telephone is a grand daddy.

Could it be that telemarketing is nothing more than a turn of

phrase carefully crafted by the telephone companies to

increase usage? Can you really reach out and touch someone's

wallet for more than a $13.95 Roncomatic... say, for $50,000

worth of software or hardware? Read on for answers.

For as many organizations that have successfully

implemented telemarketing, there are numerous others which

have tried only to fail. Still others, have rejected out-of-

hand the entire TM concept as impossible, due to the above

failures... or at least not probable with their products

based on a bias which I call press-the-flesh chauvenism.

These latter two groups have telemarketing hang-ups, for it's

unlikely that a company exists which cannot benefit from a

properly implemented telemarketing program.

First, let's get straight about the meaning of

"telemarketing". The ol' Greek word "tele" means "at a

distance," which implies no singular reference to voice,

electronic mail, or whatever. Telemarketing is a state of

mind and action which seeks to close business remotely, or as

Aristotle would have had it, "at-a-distance". Though

popular notion holds that phone usage is the core of the

"tele" concept, telemarketing shouldn't be considered the

telephone companies' exclusive domain. In reality, the

telephone is one element in the telemarketing approach. And

inturn, the telemarketing approach is usually one ingredient

in the entire sales and marketing mix. If using the

telephone today is different from before its because its

usage is organized and highly refined.

Now, let's understand what the above "to close business"

really means, since there are numerous activities that can be

classified as valid telemarketing functions. The thrust of

telemarketing is the desire to have the called party act on

the proposal which is presented to them. That's right, the

telemarketer wants the receiver to directly respond to

his/her proposition --- be it an actual product purchase or

an appointment. Hence, telemarketing activites are generally

classified as a form of direct marketing (or direct response

marketing) as opposed indirect marketing which doesn't seek

an immediate action.

(DM trade magazines support this statement through the

inclusion of telemarketing news and features in their

editorials).

Finally let's discuss this direct vs indirect marketing

further, for it is key to understanding (1) where and how

telemarketing can be employed plus (2) why the statement can

be made that all companies can benefit from initiating the

telemarketing function.

While there are unlimited reasons why people buy, there

are only FOUR definable steps that lead to the purchase. They

are Awareness, Perception, Preference, and the Purchase per

se. Indirect marketing is concerned about building

Awareness, Perception, and sometimes Preference which

HOPEFULLY will create the Purchase. Most Radio, TV, magazine,

newspaper, billboard ads etc., public relations and publicity

are of this nature. Likewise is the mailed, sample tube of

toothpaste which attempts to build Preference by having you

try it. But, there is no commitment for you to due so. Here

is where direct marketing differs; there is always a

"Purchase" being sought -- even if it's just "buying-in" to

sample the toothpaste. And here is where TM shines.

.

The corporate decision for undertaking telemarketing

should be made at the executive level. Like other major

decisions, the commitment to telemarket, once internalized,

both consciously and subconsciously influences subsequent

decisions. At issue can be some hefty ones regarding

owners', investors' and officers' egos with respect to

centralized vs decentralized offices, fear of confinement,

loss of public presence, etc. Consequently, in addition to

making the telemarketing commitment, each company must also

determine the degree to which it will implement the function.

By the range of TM functions below, it's apparent that

the telemarketing activity from one company to another may

vary greatly. There are two hard guidelines that help to

structure the degree of initial TM implementation (note the

word "initial", for it's possible to alter the product and/or

target market later on). They are (1) how definable and

reachable the market for the product or service is and (2)

the complexity of the product or service, itself. Likewise

there are two soft guidelines which should be taken into

account, but shouldn't be considered such limiting contraints

-- rather potential difficulties. They are (1) price and (2)

the buying customs of the target market. And yes, a hybrid

approach involving telemarketing and field sales teams can

work very well where the product or service requires.

Clearly the more definable a market, the easier it is to

target it assuming that there is data with which to range in

on. If a product is of general use such a toothpaste, the

chances of having a cost effective telemarketing function are

slim. Nonetheless, as the toothpaste market gets more

defined, such as toothpaste for older people, then with the

aid of census demographics telemarketing becomes more

reasonable. And telemarketing becomes duck soup for retirees

in St. Petersburgh FL who have registered Cadillacs.

But toothpaste is easy; how about software? That

depends on how easily it installs (hard guideline) more than

how much it costs (soft guideline). This author's experience

has been that it is easier to sell $30,000 software that is

comprehensible, than $5,000 software that is esoteric. Then

again some markets are accustomed to a free 30 day demo prior

to purchase (soft guideline), but strong testimonials help to

sell around this obstacle.

A partial list of "closing" commitments which can be

obtained via telephone and supporting documentation/materials

that reinforce the telephone contact are...

Ё

.

generating leads * qualifying leads * setting appointments

* securing attendance at seminars, trade shows, or user

groups * negotiating contracts * closing prospects *

selling add-on products to the customers * reestablishing

dormant accounts * opening up new territories * selling

products whose margins are to small to support on-site

calls * reducing costly in-person visits without losing

customer goodwill * 800 IN WATS for direct response sales.

Ӂ

.

collecting and resolving delinquent accounts * seeking and

supporting products and customer requests * servicing low

volume and marginal accounts

́

ws

testing market positions and sales approaches * obtaining

competitive information

Depending upon the selections from the above buffet,

a company's telemarketing success requires the rethinking of

the way its products are to be offered through the way

contracts are to be worded to how installation, education and

maintenance will be handled. For with all of telemarketing's

benefits, it is necessary to overcome the sensory deprivation

inherent with at-a-distance marketing.

If a company currently has a field sales organization

with supporting advertising and collateral materials, which

it has determined it now wants to centralize with

telemarketing, this conversion could (but not necessarily

should) be quite an extensive endeavor. On the other hand,

a start up company will have an easier time adopting TM

concepts since the obstacles of cumbersome product offerings

can be "engineered out" and restrictive attitudes are not as

firmly entrenched.

s.

Either way, the true test of a successful TM program is

the ability to give a vigorous, thumbs-up response to the

question, "If our corporate life depended upon it (which it

probably does) can we sell and service more products remotely

or in combination with greatly reduced visits than solely

with in-person visits?"

"

Considering the collective effort in deciding and

in implementing a telemarketing function, what are some of

the benefits that make it all worthwhile? The most

frequently called to mind are...

Ł

.

lower cost per call -- approximately $7 vs $225;

more calls per period -- at least 20 calls/hr;

reduced overhead -- no satellite offices necessary;

less costly personnel -- better supervision & control.

However, equally, and sometimes more important are these

other benefits ...

Á

.

speed of reaction * concentration of knowledge, pre sales

support and decision making * improved servicing of low

profit or remote accounts * accessibility by all

Ӂ

l

subvisible advertising and positioning * instantaneous

reaction to competitors' thrusts * camouflage corporate

structure * integrate sales and marketing tactics

Á

consistent home court advantage * immediate deployment or

re-deployment of resources * maintaining a consistent

marketing message * rapid reorientation of a presentation

or sales pitch * improved monitoring of calls for research

and analysis data * increased spans of control.

.

As might be expected, the costs associated with

implementing the telemarketing function depend on how it is

going to be performed and where -- in-house or with an

outside firm.

Let's address the latter first, since it can be the most

confusing. Though one would think that the pricing for

outside telemarketing services would be within certain range,

this isn't the case.

In a recent survey of over 10 telemarketing firms

advertising in the Boston area, the hourly prices varied from

$12.50/hr to $60.00/hr. This difference represents a variety

of elements: First there are people or coffee clatches of

people sitting in homes as opposed to online, centralized

organizations that advertise their advanced services

nationwide. Secondly, there is a question of whether

telephone line charges are or are not included in the price

that is quoted. Third, there is the question of initial

fees, types of reports, frequency of reports, etc., etc.

And to the most commonly asked question, "Do telemarketing

firms only charge by the hour?" the answer is "NO". With

some organization it's possible to structure an engagement on

a per call basis, or even a per lead basis, or even a reduced

hourly fee and commission basis. Which is best depends upon

factors beyond the limits of this articles space.

So why not just bring the TM function inside? First of all,

if a company has never undertaken a telemarketing function,

there is much to be learned from the expertise of an outside

organization. Then again, a company may decide after its

venture into telemarketing that it wants to return to the old

way; this could mean layoffs. Also, the telemarketing

function requires planning, organizing, directing and

controlling like any other function, i.e. management; this

translates to structure and overhead. Additionally,

telemarketers work most efficiently on a four hours shift;

this means more different people, more training and higher

turnovers. And so the reasons go.

In short, for all the reasons that organizations look

outside for public relations, advertising, lettershop, legal

and accounting firms, they should give the TM function the

same consideration before assuming that it's obviously better

to bring the function inside.

Finally, what shouldn't a company do ...

1. Ɂ

. It may be surprised to find out that

the competitor has already quietly beaten it to the draw.

Eventually, and to varying degrees, the benefits of this

marketing pro-cess will win over the staunchest of field

sales chauvenists. And they'll act... bam!

2. Ɂ

. Picking

up the telephone is easy enough to do, but supporting the

effort with existing materials will not produce the results

that are expected. Its necessary to audit and rethink

matters with sensory deprivation in mind to achieve a

succesfully systematized, telemarketing operation.

3. Ɂ

-- P-E-R-I-O-D! Costs per

in-person call are soaring while all markets are

simultaneously expanding geographically and overlapping

functionally. Nine digit zips, overnight letters, electronic

mail, cable TV, microwave by-pass, teleconferencing... and

yes even paging beepers with electronic message boards are

only the beginning of ways to reach out and touch someone's

wallet, remotely.

In short, it shouldn't let a telemarketing hang-up leave

it hung-up (to dry).

Sottile's Winning Action Team
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Tactical Marketing Agency

"Marketing Tactics Make Corporate Strategies Happen!"
                                                                   John Sottile