Telemarketing: ten FAQs

1. What can telemarketing realistically be used for?
2. Can telemarketing replace my sales force?
3. How should I plan my telemarketing activities?
4. What is a telemarketing campaign likely to cost?
5. Can we do telemarketing ourselves or should we use an agency?
6. How do we know who to contact?
7. Can we control how the phone calls develop? Should we work from a script?
8. What tips will help non-specialists make successful telemarketing calls?
9. Should I be planning other telemarketing activities, besides outbound telesales calls?
10. How should pay and incentives for telesales staff be structured?

1. What can telemarketing realistically be used for?

Telemarketing can perform several useful roles including:

• identifying key personnel at target companies
• gaining appointments for salespeople
• following up on mailshots, exhibition attendance, or potential customers who have responded to advertisements
• researching the potential of a new product or a new sales area
• keeping in touch with existing customers: reminding them of special offers or anniversaries, or checking that they are satisfied
• direct sales of goods which can be sold on a trial, or sale or return, basis

You (or a good agency) can achieve a better than 10% success rate for, say, following up on mailshots, and up to 50% or higher for booking appointments or arranging open days. Telesales calls to businesses are generally more successful than to individual consumers.

Telemarketing offers a way of reaching prospects and customers, without the impracticality of visiting them to meet face-to-face. It can hit high numbers of contacts and save both time and money.

However, telemarketing also has some inherent disadvantages. You cannot see the impact you are having on the other person, nor can you be certain if you have their interest or their full attention. Call recipients also find it easier to cut you off than if you were physically in front of them. Even so, the business world can still use telesales to great effect.

It is possible to make first time sales over the telephone, but success might depend on how well-known or easy-to-understand the offering is. However, telesales can work very well when it comes to making initial contact, keeping a customer informed, and encouraging repeat sales.

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2. Can telemarketing replace my sales force?

Telesales can rarely replace the traditional sales person. Here are just some of the considerations:

• establishing rapport is difficult without eye contact
• you cannot give a demonstration over the telephone
• you cannot give the prospect the product to handle or try out
• prospects cannot show specific issues they may need help with
• you cannot see other selling opportunities that might be apparent on the premises
• you cannot see if the prospect has enough space or back-up facilities to accommodate the new purchase
• you cannot easily talk to more than one person
• it is easier to build relationships face to face because you can interpret the prospect's body language
• it can be important to see the client's premises in order to get a feel for their personality or to judge their potential for future business

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3. How should I plan my telemarketing activities?

You will first need to assess if your business - or some part of your range - lends itself to telephone selling.

Suppose, for example, that you decide that only repeat purchases suit telesales. This is how you might proceed:

1. Analyse how much of your sales revenue comes from initial purchases and how much from repeat business.

2. Analyse your sales visits into three categories:

• visits associated with making an initial sale
• necessary visits to key accounts to build relationships
• visits associated with getting a repeat order

Assuming that visits associated with getting a repeat order will be transferred to telesales, calculate how many salesperson days you will save.

3. Decide whether to reduce the size of your direct sales force, or to keep the same number but insist on a higher quota of new business from them (since they will have more time to generate it).

4. Now look at the issue of repeat purchases. You know the target required, but your staffing calculation is complicated because the number you require to reach it depends upon:

• the expertise of those doing the work
• the uniqueness of your product or service (the difficulty in selling)

Throw science to one side. Put one or two people on telesales and monitor carefully the progress they make. On the basis of what they do and the results they get, decide on your staffing level.

5. Back to the existing direct sales force. If your choice was to increase sales, then an additional task of telesales will be to arrange more scheduled meetings for them with prospective customers. You must ensure that they keep enough work in the 'pipeline' to ensure future success. For example, suppose you calculate that every nine initial contacts leads to one new customer, with an average sales value of £X. The additional number of new contacts required each week can be calculated as:

Target new sales per week divided by £X multiplied by nine.

If these new contacts are not made each week, regardless of any other telesales activities, your new sales pipeline will dry up.

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4. What is a telemarketing campaign likely to cost?

An agency will usually charge a daily rate of around £250-£350 per day. The number of calls made during a day will depend on the number of questions to be asked. A one-off set up charge, of perhaps £250, is also to be expected. This will cover agreeing the script and reporting back with a complete listing of numbers called and the response - even if it was 'get lost'.

The cost of telemarketing will depend entirely on the scale of the campaign. Once you know what you are doing, you can calculate the cost based on the number of staff employed and the telephone costs. You also need to allow for the costs of setting up the operation (eg recruitment and developing a sales 'script').

Costs will be offset by the savings you make on other aspects of the sales process eg travelling time, travelling expenses, fewer dead-end leads, etc. You can also improve the likelihood of good value by asking the telesales provider to price your arrangement according to results rather than according to the time it takes.

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5. Can we do telemarketing ourselves or should we use an agency?

The simple tasks - updating customer lists, maintaining contact with old clients - can be done in-house. You can use an outside agency to handle research work and book appointments, but you may have less control over the quality of the work. It all comes down to costs and whether you have the skills to do it yourself.

A skilled agency can be much more effective when actual selling is involved. Selling on the telephone for call after call is not a skill easily learnt, when the chance of rejection is so high. You can organise the work on a trial basis: if you have, say, 5,000 names, they will trial 1,000 in the hope of winning the contract for the rest. They want success, not a poor response rate.

Before handing an assignment to an agency, ensure that you are happy with the script and personnel they will use. Also confirm how many times a number will be called before they give up.

An agency will either call 'on your behalf' or disclose their identity. The former will generate a better response, if done well.

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6. How do we know who to contact?

Knowing how to contact previous customers, providing you have kept a customer database, ought not to be a problem. Finding new contacts is more difficult. However, you do know that you are looking for more people with familiar characteristics to your current customers. So, you can try looking for them using:

• local or national telephone directories - Yellow Pages
• trade directories or yearbooks
• lists that can be bought or rented from professional brokers

If the last option is one to explore, try contacting the Direct Marketing Association (020 7291 3300). They will be able to put you in touch with suitable list brokers.

Sometimes you may find that trade associations or professional bodies will rent lists of their members. You should:

• make sure lists match the customer types you seek
• make sure lists are accurate and up-to-date
• make sure you are clear about the charges and terms of use
• check whether you need to register under the Data Protection Act (you almost certainly will)

A list broker should be able to help. Look in Yellow Pages under Direct Mail. Also try the Direct Marketing Association (www.dma.org.uk).

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7. Can we control how the phone calls develop? Should we work from a script?

You cannot control how the person at the other end of the line will respond, but the right approach will help to keep the call moving in the right direction. Start with a good opening which sets the tone and establishes their interest. As well as planning what you want to say, work out how you will bring the conversation back on track if they raise a separate issue.

Do use a script, but keep it brief and interesting, preferably with sincerity and a large dose of integrity thrown in. Rehearse into a tape recorder and go through several trials and drafts. The trick, of course, is to allow departure from the text rather than slavish adherence: it can all sound horribly false and mechanical.

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8. What tips will help non-specialists make successful telemarketing calls?

1. Be clear about what you want to achieve from the call. Without a clear objective, you cannot plan.

2. Check as much as you can about the contact and their existing relationship with your company.

3. Put a smile in your voice, sound open and enthusiastic, though not slick or false.

4. Introduce yourself and use the prospect's name whenever you can.

5. Plan your opening words very carefully. They must grab attention. This means that what you say must be relevant to the prospect, highlighting interest or benefits.

6. Be prepared to deal with a secretary or assistant who is 'shielding' the person you really want to talk to.

• If you can't get round the gatekeeper, try getting them on your side by being friendly and asking earnestly for their help.
• Ask when would be a good time to call such a busy person. Make a note of this time; when you call back, remind the gatekeeper that you are calling at his or her suggestion.

7. Ask open questions so that the contact discloses information. For example: "You talked of our first delivery to you as being a trial. How did it work out for you, Mr Prospect?"

8. Listen carefully. Remember, the contact cannot see you nodding your head in agreement, so say something from time to time which demonstrates that you are still on the same wavelength.

9. Write down each answer. If in doubt, check what the contact is saying.

10. Prepare in advance for likely objections. Have persuasive responses ready.

11. Try a trial close without actually asking for the business. For example: 'It sounds very much that it will solve your problem in a cost effective way, Mr Prospect, doesn't it?'

• If the answer is YES, you can move to close the sale.
• If it is NO, identify and counter the objection, and then try another trial close.

12. Close the sale. If you do not like the direct approach, try assumptive closes like these:

• "Shall I put you down for 50 packs or will you want more?"
• "You do want it delivered by the end of next week, don't you?"
• "It was the XY model in blue that you preferred, wasn't it?"

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9. Should I be planning other telemarketing activities, besides outbound telesales calls?

Inbound calls can be turned to a sales call with deft handling. If a client asks for a particular item think what else they may need to complete the job. An obvious example: "Do you stock teak wood stain?" "Yes and we also supply an all weather varnish that will seal it." Anyone who may pick up the telephone should be trained in a sales capacity.

Do not neglect your answerphone for out-of-hours calls. Make it sound refreshing rather than dull, and repeat vital instructions. Again, there are agencies that will pick up these calls diverted to a 24-hour service, but watch out for the costs of these services.

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10. How should pay and incentives for telesales staff be structured?

It is difficult to generalise because not all telesales jobs are the same. For example, someone taking repeat orders will have an easier task than someone selling from scratch.

That said, all jobs ought to have targets. Without these, there can be no measurement. It should therefore be possible for you to work out a scheme where bonus payments are earned once the pre-agreed target figure is exceeded.

It is common for sales staff to be paid a salary plus bonuses which can account for about 20 to 30 per cent of their total income. There are still some businesses where remuneration is based on commission alone. Ask your telesales specialist to give you some payment options that will provide results for you and rewards for them.

The key thing about any incentive scheme is that it should reflect superior performance. It should be seen as realistic, and the sums involved should provide a real incentive. Bonuses paid closest to the time they were earned will be more powerful incentives than those that are delayed.

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