Does Telemarketing Work?
Telemarketing companies often claim impressive returns on investment for new business sales using telephone contact lists. In an age of increasingly digitalised communication, it is interesting to note that personal, telephone contact is still an effective way of closing a deal. However, it is also useful to examine a bit more closely the context in which telemarketing works and what telemarketing actually means in 2017 – before you decide to spend any money on it.
Telesales Or Telemarketing?
Wait a minute… What do we mean when we say telemarketing, and is it different to telesales? Many people use the terms interchangeably and there is a lot of overlap, but we would like to draw a distinction:
- Telesales approaches prospects directly with the sole intention of making a sale. Telesales may be completely cold, e.g. numbers called straight from a directory, or it may be based on marketing information, e.g. previous telemarketing calls, emails, social media contact etc.
- Telemarketing is a broader approach that may involve increasing brand awareness, seeking out information or soliciting feedback on the nurturing/marketing programme, as well as trying to close deals. Sales calls to existing customers usually fall under the telemarketing bracket.
Both telesales and telemarketing are direct marketing approaches, in that they make a value proposition to prospects who may or may not have heard of your business before. In this they should be distinguished from inbound marketing techniques, which seek to increase brand awareness by drawing the attention of prospects to your business through blogs, social media, emails and so on. ‘Cold’ telesales/telemarketing approaches prospects who have not yet made a purchase, whereas ‘warm’ approaches target existing customers – for up selling or cross selling.
When evaluating returns from telesales/telemarketing, draw a careful distinction between cold and warm approaches. Acquisition costs are higher and ROI lower (in general) for cold campaigns, while costs are lower and ROI higher when approaching warm customers. Results should never be taken for granted and care is required with both strategies.
Advantages Of Telemarketing
Businesses that use telemarketing often do so for the following reasons:
- It is a good way of testing new products on a warm audience of existing customers before general roll-out.
- Telemarketing can be extremely cheap, requiring no printed, written or web content. The returns are therefore potentially high.
- Telesales/telemarketing can be a fast way of acquiring new customers; cutting out all the time needed to nurture a lead through the buying funnel by other methods.
- Telephone contact gives many of the advantages of face-to-face meetings, while also allowing companies to contact a large number of potential customers at a distance.
Disadvantages Of Telemarketing
It is fair to say that there are some disadvantages to telemarketing. Some of these are common to all direct marketing approaches, while others are specific.
- Some prospects resent direct approaches and will attempt to block attempts at direct marketing.
- Upselling and cross selling requests may alienate existing customers if not handled correctly. Note the issues caused in the charity sector by unscrupulous use of this tactic.
- Telemarketing and telesales are governed by strict data handling and contact regulations that restrict how data can be acquired, stored and used. Breach of these regulations is considered to be spam and could land your business in trouble.
- Unless you are able to secure a good conversion rate, telesales can wind up being expensive. Paying a team of sales people to hit the phones for eight hours without scoring many conversions or leads is an expensive waste of time. Remember that staff resources are always your biggest cost. You can often reach a lot more people, for less money, by using email or social approaches.
The Verdict On Telemarketing / Telesales
Telemarketing and telesales are by no means dead. It is still a common means of communicating with existing customers in the B2C market and is still sometimes adopted as a cold approach by B2B companies. However, the reputation of telemarketing has taken a hit in recent years. Therefore, it is important that the correct strategic approach be taken to telephone contacts to avoid alienating prospects and customers. Do your research in order to get the best results – and be sure you know your market before picking up the phone. The results of telemarketing have also been eclipsed by other, more indirect digital tactics.
To strike the right balance, you need a bespoke strategy in place that focuses on business growth. Pick up the phone or write an email to one of our growth specialists today to discuss what that strategy might look like for your business.