Telemarketing is a double-edged sword. Powerful in its immediacy and personalisation in an increasingly hi-tech and depersonalised world, it's a great way of building prospect lists, boosting customer loyalty and clinching sales.
In fact, when employed correctly, telemarketing delivers sales conversion rates that hit double digits, in contrast to the one to two per cent typical of direct mail.
On the downside, developments such as deregulation of the utilities sector have created a degree of consumer antipathy towards the medium.
Tired of being harangued by eager sales reps from the gas and electricity suppliers that proliferated in the wake of deregulation, consumers, it seems, are more resistant than ever to being 'disturbed' at home.
Which is why companies undertaking telemarketing must be more scrupulous than ever in their approach. This means abiding by legislation governing telemarketing, as well as observing the relevant industry codes of practice.
And here's the rub: although services such as the Telephone Preference Service are aimed at helping companies comply with the law, many small firms still don't know about them, or how to use them.
The TPS is a centralised service, administered by the DMA (Direct Marketing Association), to which consumers can subscribe should they wish to opt out of sales and marketing calls from any company. Firms wishing to make telemarketing calls must consult the TPS to ensure they are not contacting registered consumers (see contact details at the end of this article).
Telemarketing is governed by the Telecommunications (Data Protection and Privacy) Regulations 1999. This stipulates that telemarketers should not call people who have indicated either directly to the company or by registering with the TPS that they do not wish to receive marketing calls. By contacting such individuals companies are breaking the law and risk court action and a fine of up to £5,000.
The annual fee for unlimited TPS data access is £4,400. However, many companies don't require such comprehensive provision, in which case data subsets can be purchased for significantly lower tariffs.
The TPS offers a raft of cost-effective services tailored to the needs of the small to medium enterprise. These include:
- TPS Online Interrogation Service: For a minimum monthly fee of £50 (for 500 numbers), this allows SMEs to check individual phone numbers via the TPS website (www.tpsonline.org.uk).
- TPS Callgard: Again, for a miniumum monthly fee of £50, this service enables subscribers to filter out TPS-registered numbers by dialling a unique pin number prior to making telemarketing calls. Any calls to TPS subscribers are then automatically barred.
- TPS Telepath: Here SMEs can check individual numbers via an automated telephone service. This round-the-clock, pay-as-you-go service costs 25 pence per minute.
When requesting information from the prospect be transparent about why you want that data - i.e., be up-front about storing it for future marketing purposes. Don't pretend it's for research purposes only. If planning to share information with a third party you must also request permission from the prospect.
Codes of practice from trade associations like the Direct Marketing Association (see contact details at the end of this article) also provide guidance on best telemarketing practice. These include stipulations such as avoiding high-pressure tactics and not knowingly making outbound calls to minors.
Once armed with the legal know-how, the following are key areas to consider when seeking to achieve optimum results from your telemarketing campaign.
- Staff training
- Integration with other marketing media
- When to use telemarketing
- Making contact with your prospect
- To outsource or not to outsource?
It's tempting when launching a telemarketing campaign to play the numbers game, pull out the local phone book or Thomson Directory and hit those phones indiscriminately.
But this temptation should be resisted. The extent to which you direct the right offer to the right person makes a significant difference to your return on investment; telemarketing, after all, is significantly more expensive to implement than direct mail.
Use a data partner like a data bureau if you can afford it, as it will use geo-demographic resources to profile and segment your contacts, ensuring higher hit rates.
Also, concentrate as much as you can on your existing customer base, at least then there is already a relationship in place and calls won't seem so intrusive.
Staff who make telesales calls should be good communicators who are confident speaking to strangers. They must have sufficient sensitivity to gauge the best tone to adopt during their pitch, according to the product or the service being sold, as well as the prospect (a pensioner is likely to respond differently to certain approaches than a 20-something).
Staff must also be able to think on their feet while they are talking and input information via a computer terminal.
The Chartered Institute of Marketing offers one-day courses on telephone selling skills and techniques (see contact details at the end of this article).
One word: Beware. Scripting is a necessary evil and as such should be dealt with carefully. Ensure telesales staff are versatile enough to depart from the text when necessary. Blatant and rigid scripting is regularly cited by consumers as off-putting.
Telemarketing is just one tool in the entire marketing bag. For best results, it makes sense to integrate phone campaigns with direct mail shots – in this way the consumer is already aware of the offer and feels less like he/she is being cold-called. If employing such tactics, be sure to make calls within five days of sending out direct mail pieces, otherwise any benefits are likely to be cancelled out.
If your company has a website, it is also good practice to provide the website address at some point during the call. This enables the prospect to search for additional information not covered in the call, while adding gravitas to the company and the offer.