telemarketing

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Use of the telephone as an interactive medium for promotion or promotion response; also known as teleselling. Telemarketing, a response vehicle, includes receiving orders, inquiries, and donation pledges in response to print and broadcast advertising, catalogs, and direct-mail promotions, and also receiving customer inquiries and complaints. Incoming telephone callers are usually given access to an in-wats number but may also call collect or call at their own expense. Outbound telemarketing is used to follow-up on inquiries, to sell products or services, to clarify or upgrade an order, or to gather information about consumers or other aspects of the market.

Unlike other promotion mediums, outbound telemarketing calls interrupt the consumer by demanding immediate attention and are not identifiable as a promotion before the consumer is interrupted. Therefore, telemarketers must be particularly careful not to antagonize the consumer. For example, calls should not be made at inconvenient hours such as dinnertime or early morning. A carefully written script should be utilized by every caller to get the most value from the time and money spent on each call and to avoid angering or annoying the person receiving the call. Some elaborate calling scripts include answers to every objection a prospective buyer might mention. In contrast, a few telemarketers have utilized a prerecorded message rather than a "live" caller; the consumer can respond to the recording by pressing numbers on a touch-tone telephone dial. Telephone numbers can be dialed at random by a computer that relays the call to an operator when a contact is made. Calls are frequently made to preselected individuals such as current or prior customers or likely prospects selected from a rented list.

Telemarketing is used heavily by business-to-business marketers to identify qualified leads, avoiding travel and other costs associated with personal sales calls. One telemarketing call can cost four times as much as a direct-mail piece but can generate as much as two to six times the response. The success of a telemarketing program is measured in terms of contacts made (reaching the right person), attempts made (calls that do not reach the right person, busy signals, or no-answers), and conversions (completed sales, surveys, etc.).

The direct marketing association has established guidelines for telemarketing, concerning issues such as calling hours, use of unlisted telephone numbers, and recording of conversations. See also telephone agency.

Telemarketing is the process of using the telephone to generate leads, make sales, or gather marketing information. Telemarketing can be a particularly valuable tool for small businesses, in that it saves time and money as compared to personal selling, but offers many of the same benefits in terms of direct contact with customers. In fact, experts have estimated that closing a sale through telemarketing usually costs less than one-fifth of what it would cost to send a salesperson to make a sale in person. Though telemarketing is more expensive than direct mail, it tends to be more efficient in closing sales and thus provides a greater yield on the marketing dollar.

Telemarketing is especially useful when the customers for a small business's products or services are located in hard-to-reach places, or when many prospects must be contacted in order to find one interested in making a purchase. Although some small businesses operate exclusively by telephone, telemarketing is most often used as part of an overall marketing program to tie together advertising and personal selling efforts. For example, a company might send introductory information through the mail, then follow-up with a telemarketing call to assess the prospect's interest, and finally send a salesperson to visit.

Telemarketing can be either inbound or outbound in scope. Inbound telemarketing consists of handling incoming telephone calls—often generated by broadcast advertising, direct mail, or catalogs—and taking orders for a wide range of products. Representatives working in this type of telemarketing program normally do not need as much training as outbound reps because the customer already has shown an interest by calling in.

Outbound telemarketing can be aimed directly at the end consumer—for example, a home repair business may call people in its community to search for prospects—or can be part of a business-to-business marketing program. Representatives working on this side of the industry generally require more training and product knowledge, as more actual selling is involved than with inbound operations.

Major applications of business-to-business telemarketing include selling to existing accounts, outbound new account development, inbound order processing and inquiry handling, customer service, and supporting the existing field sales force. As the costs of field sales continue to escalate, businesses are using telemarketing as a way to reduce the cost of selling and give more attention to marginal accounts. Telemarketing programs can be either handled in-house by a company or farmed out to service bureaus. Operations range in size from a one-person in-house staff member at a small business to a major corporation or service center that may have as many as 1,000 telephone stations.

One of the advantages telemarketing has over other direct marketing methods is that it involves human interaction. According to Robert J. McHatton in Total Telemarketing, "used correctly and by professionals, the telephone is the most cost-efficient, flexible and statistically accountable medium available. At the same time, the telephone is still very intimate and personal. It is individual to individual."

Although telemarketing has been the center of some controversies—ranging from scams run over the phone to a number of legal issues that have been the center of debate at both the state and national levels—the industry continues to grow. In fact, the American Telemarketing Association found that spending on telemarketing activities increased from $1 billion to $60 billion between 1981 and 1991. By the mid-1990s, telemarketing accounted for more than $450 billion in annual sales, a figure that is expected to continue to rise through the foreseeable future.

Typical Telemarketing Uses

Although telemarketing can be used as a stand-alone operation, it often works best as part of an overall marketing effort. Companies considering the use of telemarketing have to look at such factors as: which products and services are candidates to be sold by phone; whether telemarketing can be used to increase volume through upgrading the sale; how the process can help qualify prospects, define the market, and service existing accounts; and whether telemarketing can help generate new business. Some of the roles telemarketing can be used to fulfill include: selling, generating leads, gathering information, and improving customer service.

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; sales increases most often come from current accounts, and it generally is less costly to maintain current customers than to search out new business. 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 considering telemarketing as an option; 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. As Richard L. Bencin wrote in Strategic Telemarketing, "management must understand and agree to the necessary personnel and financial resources, as well as the time required for program development and testing. Telemarketing and related direct marketing techniques can work astoundingly well. But they need a real chance to demonstrate that success. It doesn't happen over a couple of weekends."

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 Bureau

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.

SERVICE BUREAUS. One of the main advantages of service bureaus is that they can likely 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 also are common so 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.

Controversies and Future Outlook

Unfortunately, telemarketing has been the basis for numerous scams over the years. Federal authorities estimate that con artists using the phone bilk people out of least $1 billion annually. Some analysts contend that the figure may even be closer to $10 billion, as many embarrassed victims shy away from filing complaints. These frauds have given the telemarketing industry much bad press.

Legislators, on both the state and federal levels, have debated a number of proposed laws that could affect telemarketing in the future. For example, some proposed laws would require registration of telephone solicitors in a state. Registration often includes bonding requirements, submission of scripts and/or names of employees, and other administrative devices designed to create a paper trail to track fraudulent marketers. Another type of proposed legislation, known as "asterisk bills," would require the telephone company or state government to keep a list of people who object to receiving unsolicited phone sales calls. Marketers would be required to obtain the list and not call these people. A similar law passed in 1996 mandated that marketers remove from their calling lists the name of anyone who requests that the marketer not contact him or her again.

A number of other proposed bills seek to restrict the hours available to telemarketers, generally limiting calls to no later than nine o'clock in the evening, local time. Still other laws under discussion would prohibit the completion of some types of phone sales unless a written contract is signed and returned by the consumer. Telemarketers generally favor an alternative allowing firms that offer consumers a right of examination and promise a refund to be exempt from such legislation. Finally, many states have considered enacting legislation that would prohibit or restrict the practice of monitoring customer service employees who work over the phone. The telemarketing industry considers monitoring vital to maintaining quality control and protecting consumers, so many firms ask employees to sign a release allowing such monitoring.

Further Reading:

Eisenhart, Tom. "Telemarketing Takes Quantum Leap." Business Marketing. September 1993.

Everett, Martin. "It's Jerry Hale on the Line." Sales & Marketing Management. December 1993.

Gottlieb, Mag. "Telemarketing and The Law." Direct Marketing. February 1994.

McHatton, Robert J. Total Telemarketing. Wiley, 1988.

McLuhan, Robert. "Warm Calling Builds Results." Marketing. August 5, 1999.

Moretti, Peggy. "Telemarketers Serve Clients." Business Marketing. April 1994.

Rosen, Judith. "Telemarketing: Pros and Cons." Publishers Weekly. January 11, 1999.

Stern, Aimee L. "Telemarketing Polished Its Image." Sales & Marketing Management. June 1991.

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• Advertising - telemarketing: selling, advertising, or market research done by telephone

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Author and activist Bob Wood places one of his numerous phone calls to residents in Muskegon County, Michigan.

Telemarketing (sometimes known as inside sales,^[1] or telesales in the UK and Ireland) is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequent face to face or Web conferencing appointment scheduled during the call.

Telemarketing can also include recorded sales pitches programmed to be played over the phone via automatic dialing. Telemarketing has come under fire in recent years, being viewed as an annoyance by many.

Contents 1 History 2 Categories 2.1 Subcategories 3 Procedure 4 Negative perceptions and criticism 5 Regulations 5.1 United States of America 5.2 Canada 5.3 Australia 6 Technology 7 See also 8 References 9 External links

History

Many^[who?] believe that in the 1950s, DialAmerica Marketing, Inc became the first company completely dedicated to inbound and outbound telephone sales and services. The company, spun off and sold by Time, Inc. magazine in 1976, became the largest provider of telephone sales and services to magazine publishing companies. The term telemarketing was first used extensively in the late 1970s to describe Bell System communications which related to new uses for the outbound WATS and inbound Toll-free services.

Categories

The two major categories of telemarketing are Business-to-business and Business-to-consumer.

Subcategories

• Lead Generation, the gathering of information
• Sales, using persuasion to sell a product or service
• Outbound, proactive marketing in which prospective and preexisting customers are contacted directly
• Inbound, reception of incoming orders and requests for information. Demand is generally created by advertising, publicity, or the efforts of outside salespeople.

Telemarketing office

Procedure

Telemarketing may be done from a company office, from a call centre, or from home. It may involve either a live operator or a recorded message, in which case it is known as "automated telemarketing" using voice broadcasting. "Robocalling" is a form of voice broadcasting which is most frequently associated with political messages.

An effective telemarketing process often involves two or more calls. The first call (or series of calls) determines the customer’s needs. The final call (or series of calls) motivates the customer to make a purchase.

Prospective customers are identified by various means, including past purchase history, previous requests for information, credit limit, competition entry forms, and application forms. Names may also be purchased from another company's consumer database or obtained from a telephone directory or another public list. The qualification process is intended to determine which customers are most likely to purchase the product or service.

Charitable organizations, alumni associations, and political parties often use telemarketing to solicit donations. Marketing research companies use telemarketing techniques to survey the prospective or past customers of a client’s business in order to assess market acceptance of or satisfaction with a particular product, service, brand, or company. Public opinion polls are conducted in a similar manner.

Telemarketing techniques are also applied to other forms of electronic marketing using e-mail or fax messages, in which case they are frequently considered spam by receivers.

Telemarketing agent sitting in a cubicle. The brightly colored rebuttal sheets are used to answer most questions a customer might have.

Negative perceptions and criticism

See also: Telemarketing fraud

Telemarketing has been negatively associated with various scams and frauds, such as pyramid schemes, and with deceptively overpriced products and services. Fraudulent telemarketing companies are frequently referred to as "telemarketing boiler rooms" or simply "boiler rooms". Telemarketing is often criticized as an unethical business practice due to the perception of high-pressure sales techniques during unsolicited calls. Telemarketers marketing telephone companies may participate in telephone slamming, the practice of switching a customer's telephone service without their knowledge or authorization.

Telemarketing calls are often considered an annoyance, especially when they occur during the dinner hour, early in the morning, or late in the evening.

Some companies have capitalized on these negative emotions. Since 2007 several forums have sprouted and act as complaint boards where consumers can voice their concerns and criticism. In response some telemarketing companies have filed law suits against these portals^[2][3][4]. The current legal system in the U.S grants such forums a certain degree of protection through "Communications Decency Act, 47 U.S.C 230" and California's Anti-SLAPP law.

A recent trend in telemarketing is to use robocalls: automated telephone calls that use both computerized autodialers and computer-delivered pre-recorded messages in a sales pitch. These often include intentionally deceptive tactics, with computer recorded messages saying things like "Don't panic but this is your final notice" or "We have already attempted to contact you through the mail." These messages are often outright lies, intended to incite concern or fear in the potential customer.

Robocalls are known for failing to add numbers to their do-not-call list and repeatedly interrupting individuals at all hours of the day.

Regulations

This article is outdated. Please update this article to reflect recent events or newly available information. Please see the talk page for more information. (January 2010)

In some countries telemarketing is subject to regulatory and legislative controls related to consumer privacy and protection.

United States of America

It is not known exactly when, or possibly if telemarketing officially became legal in the United States of America. Telemarketing in the United States of America is restricted at the federal level by the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227) and the FTC's Telemarketing Sales Rule (TSR). The FCC derives regulatory authority from the TCPA, adopted as CFR 64.1200 and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 6101-6108.^[5] Many professional associations of telemarketers have codes of ethics and standards that member businesses follow to encourage public confidence.

Some jurisdictions have implemented "Do Not Call" lists through industry organizations or legislation; telemarketers are restricted from initiating contact with participating consumers. Legislative versions often provide for heavy penalties on companies which call individuals on these listings. The U.S. Federal Trade Commission has implemented a National Do Not Call Registry in an attempt to reduce intrusive telemarketing nationwide. Telemarketing corporations and trade groups challenged this as a violation of commercial speech rights.^[6] However, the U.S. 10th Circuit Court of Appeals upheld the National Do Not Call Registry on February 17, 2004.^[7]

Companies that use telemarketing as a sales tool are governed by the United States Federal regulations outlined in the TSR (amended on January 29, 2003 originally issued in 1995) and the TCPA. In addition to these Federal regulations, telemarketers calling nationally must also adhere to separate state regulations. Most states have adapted "do not call" files of their own, of which only some states share with the U.S. Federal Do Not Call registry. Each U.S. state also has its own regulations concerning: permission to record, permission to continue, no rebuttaling statutes, Sunday and Holiday calls; as well as the fines and punishments exacted for violations. September 1, 2009, FTC regulations banning most robocall went into effect.

Telemarketing techniques are increasingly used in political campaigns. Because of free-speech issues, the laws governing political phone calls are much less stringent than those applying to commercial messages. Even so, a number of states have barred or restricted political robocalls.

Canada

Main article: Telemarketing in Canada

In Canada, telemarketing is regulated by Federal Government, specifically handled by Canadian Radio-television and Telecommunications Commission.

Australia

Telemarketing in Australia is restricted by the Australian Federal Government and policed by the Australian Communications and Media Authority (ACMA). Australian Federal legislation provides for a restriction in calling hours for both Research and Marketing calls.^[8]

In 2007 a Do Not Call Register was established for Australian inbound telephone numbers. The register allows a user to register private use telephone numbers. Australian Federal Legislation limits the types of marketing calls that can be made to these registered telephone numbers; however, research calls are allowed. Other exemptions include calls made by charities and political members, parties and candidates^[9] however any organisation that is instructed by the recipient of a telemarketing call, not to call that number again, is legally obliged to comply, and must remove the phone number from the organisations calling list(s).

Inbound telemarketing is another major industry^{[citation needed]}. It involves both live operators and IVR—Interactive Voice Response. IVR is also known as audiotext or automated call processing. Usually, major television campaigns and advertisers use toll-free telephone number that are answered by IVR service bureaus^{[citation needed]}. Such service bureaus have the technology and call capacity to process the large amounts of simultaneous calls that occur when an toll-free telephone number is advertised on television^{[citation needed]}.

Technology

• Autodialer
• Automatic call distributor
• Customer relationship management
• Predictive dialer
• Private Branch eXchange
• Teleblock
• Natural Predictive Dialing

See also

• Boiler room (business)
• Call Centre
• Cold calling
• Direct marketing
• List of call centre companies
• Marketing
• Reloading scam
• Spamming
• Sucker list
• Telemarketing in Canada
• Natural Predictive Dialing

References

1. ^ http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B9HC9-4XM62FG-4&_user=10&_coverDate=12%2F31%2F1991&_rdoc=1&_fmt=high&_orig=search&_origin=search&_sort=d&_docanchor=&view=c&_searchStrId=1484536889&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=da40b391f1250788db20338ac99b63fd&searchtype=a
2. ^ public citizen
3. ^ citmedialaw
4. ^ techdirt
5. ^ http://www.ftc.gov/os/2002/12/tsrfinalrule.pdf
6. ^ Miller, Jacqui Brown. "Mainstream Marketing Services, et al. v. Federal Trade Commission: Resources and Legal Analysis." ReclaimDemocracy.org. January 20, 2004.
7. ^ Text of the case and the decision. FindLaw.
8. ^ Telecommunications (Do Not Call Register) (Telemarketing and Research Calls) Industry Standard 2007 ACMA.
9. ^ Do Not Call Register FAQACMA FAQ.

External links

• Congressional Research Service (CRS) Reports regarding Telemarketing
• Federal Trade Commission Information about Telemarketing Rules and Scams
• File a Complaint to the Do Not Call Registry
• Federal Trade Commission Do Not Call Registry
• Laws Regulating Telemarketers
• List of State Do Not Call Lists
• s+new+measures+to+tackle+silent+calls
• Telephone Preference Service – UK Do Not Call Registry
• Protect yourself from top telemarketing scams

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Dansk (Danish)
n. - telefon-markedsføring, telemarketing

Nederlands (Dutch)
verkoop via de telefoon

Français (French)
n. - télémarketing

Deutsch (German)
n. - Vermarktung per Telefon

Ελληνική (Greek)
n. - τηλεαγορές

Italiano (Italian)
televendita

Português (Portuguese)
n. - telemarketing (m)

Русский (Russian)
поиски рынка ("маркетинг") посредством телекоммуникации

Español (Spanish)
n. - venta de productos mediante el teléfono

Svenska (Swedish)
n. - telemarketing

中文（简体）(Chinese (Simplified))
电话销售

中文（繁體）(Chinese (Traditional))
n. - 電話銷售

한국어 (Korean)
n. - 전화를 이용한 판매방식, 전화를 걸어서 광고를 함

日本語 (Japanese)
n. - 電子市場売買

العربيه (Arabic)
‏(الاسم) بيع و اعلان بواسطه الهاتف‏

עברית (Hebrew)
n. - ‮שיווק באמצעות הטלפון‬

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