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).
