Telemarketing - Explained
What is Telemarketing?
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Table of ContentsWhat is Telemarketing?How does Telemarketing Work? Classifying Telemarketing ActivitiesTelemarketing Best PracticesCriticism of TelemarketingAcademic Research on Telemarketing
What is Telemarketing?
Telemarketing is a marketing strategy that involves directly contacting customers and potential customers by telephone, facsimile or through web-based video conferencing in order to sell products or services. Such direct marketing strategies are also known as inside sales or tele-sales and are often considered intrusive by the recipients of such communication. Apart from being mostly unsolicited and irritating, telemarketing sometimes also involves attempts to scam or defraud gullible targets by unscrupulous individuals or businesses. As a result, there has been considerable public antipathy against such practices. It should be noted here that direct emails and face-to-face meetings are not considered telemarketing.
Back to: MARKETING, SALES, ADVERTISING, & PR
How does Telemarketing Work?
Besides its most common application of promoting products or services, telemarketing is also used for various other purposes such as raising funds for charity, collecting consumer information, generating sales leads, and carrying out surveys. With the advancements in technology, telemarketing is also widely adopted by political parties across the globe to carry out polls to determine the voting preferences of the populace, especially during election campaigns. If implemented well, a telemarketing campaign can be quite lucrative. For example, according to statistics provided by the UK's Direct Marketing Association, the average return on investment (ROI) for UK-based business-to-business (B2B) telemarketing entities was over 1000 percent, with some campaigns achieving ROIs of upto 12,000%.
Classifying Telemarketing Activities
Telemarketing activities can be broadly classified into four subcategories:
- Outbound Telemarketing: Outbound telemarketing campaigns directly and proactively reach out to both existing as well as prospective customers.
- Inbound Telemarketing: Inbound telemarketing refers to the reception of inbound customer orders as well as inbound customer inquiries soliciting information about products or services on offer.
- Lead Generation: Lead generation refers to the gathering of data pertaining to prospective customers, such as customer profiles and contact information , areas of interest and demographic data.
- Sales: Sales refers to the act of using persuasion in order to sell a product or a service to a prospective customer. If the actual sales transaction is completed over a phone call, usually through the collection of credit card details over the phone, such an activity is known as telesales.
Telemarketing encompasses various marketing styles and approaches depending on the target customer and/or the product or service on offer. For example, a call to action is purposed to elicit a favorable action from the targeted customer, such as visiting the company/product website. Similarly, telemarketing can be used to schedule more direct communication with prospective customers in the foreseeable future via face-to-face or telephonic appointments. Telemarketing campaigns are also used to conduct surveys aimed at collecting data from specific target consumers for statistical or qualitative research.
Telemarketing Best Practices
When used ethically and judiciously, telemarketing can present itself as an effective marketing tool, especially for small businesses that usually have limited resources for marketing. A telemarketing venture can hope to succeed when it follows certain best practices when contacting existing or prospective customers. Some of these best practices are listed below.
- Collect information about the customer: Before telemarketers attempt to establish contact with existing or prospective customers, it is mandatory to collect pertinent information about them. Any good telemarketer will first study whether the people being called are good prospects and if so, why.
- Know your product / service: Telemarketers should know the products or services they are offering to their customers and should be able to answer any questions that are put to them. It is also a good practice for telemarketers to try and learn as much as possible about the companies they are representing.
- Handle sales objections effectively: Sales objections are some of the most demanding situations that a telemarketer will ever have to encounter. Many a sales pitch has been unceremoniously cut short because of the inexperience of the telemarketer to handle purchase objections put forward by discerning customers. While possessing adequate knowledge of the product or service is mandatory, an experienced telemarketer will have cultivated certain additional skills that let him/her question and isolate each objection before answering it. The best telemarketers will go a step further and confirm their answers with the customer.
- Empathize with the customer: It is usually the norm for telemarketers to make sales pitches using scripted presentations and responses. However, a successful telemarketer is often the one that empathizes with the customer. Many a sale has been confirmed simply by hearing the customer out completely and patiently. Great telemarketers not only do not interrupt their customers, they also put in a softening statement whenever they are responding to purchase objections. The budding telemarketer must understand that developing a customer relationship should always take priority over a blatant focus on the sale.
- Back up the telemarketing activity with other marketing campaigns: A telemarketing campaign that is not backed up by other marketing initiatives is most likely to fail. In other words, telemarketing is not comprehensive and as such, it should never be used in isolation, but only as part of a larger marketing campaign. Marketing initiatives such as advertising and direct mail often accompany telemarketing activities in order to ensure that the prospective customer has been contacted in as many different forms as possible.
Criticism of Telemarketing
Telemarketing has its fair share of demerits. To begin with, several confidence tricks and fraudulent activities have been perpetrated through seemingly harmless telemarketing activities. Fraudulent business models such as pyramid schemes would not succeed without the support of organized telemarketing boiler rooms. Secondly, even when used for legitimate business schemes, telemarketing activities are still commonly perceived as unethical business practices since they rely on high-pressure salesmanship through unsolicited phone calls or other similar forms of communication. Lastly, telemarketing is increasingly being perceived as a nuisance. This is in most part because a great many of such activities occur during inconvenient hours such as early mornings, late evenings or dinner hours. Moreover, the increasing use of robocalls and ringless voicemails have only exacerbated the antipathy that the public harbours regarding telemarketing. Such negative public perception about telemarketing often causes businesses to have second thoughts about engaging in these activities and thus risking irreparable damage to their reputation.
Academic Research on Telemarketing