Telemarketing involves contacting potential customers via phone calls, emails, or other online communication.
Businesses can use various advertising strategies, and they might consider implementing telemarketing to reach customers directly. Learning about telemarketing can help you improve your persuasion skills and determine if this field is right for you.
In this article, we explain what telemarketing is and how it works, including different strategies, skills, and roles to consider pursuing.
Telemarketing
Telemarketing, also known as “telesales” or “inside sales,” involves selling services or products by telephone or online. For example, when companies call to encourage you to upgrade your cell phone, that’s telemarketing.
Telemarketers typically work from sales teams specializing in telemarketing or from small company offices (a “call bank”) with fewer than ten workers. This method is used across various sectors, including:
- Insurance (medical, home, etc.)
- NGOs (non-profit organizations, charities)
- B2B (business-to-business) and B2C (business-to-consumer)
- Public service
Applications of Telemarketing
Marketers employ telemarketing to offer consumers information, entertainment, or opportunities to express their opinions.
For instance, Nintendo provides game players with assistance for a fee related to the company’s video games.
Ronald McDonald House Charities uses telemarketing to raise funds. Similarly, consumers can receive weather forecasts from American Express, pet care information from Quaker Oats, advice on snoring and other sleep disorders from Somnus, and golf lessons from Golf Digest.
How Telemarketing Works ?
Telemarketing involves contacting, evaluating, and approaching potential customers, excluding direct mail marketing methods.
This practice can occur from a call center, an office, or increasingly from home. It often begins with a single call to know interest or suitability, followed by subsequent calls to close a sale. Various data sources are used to refine large databases of names into a smaller list of high-probability customer prospects.
Telemarketing is utilized by for-profit businesses, nonprofit charities, political groups and candidates, and for purposes like surveying, donation solicitation, and market research.
The term telemarketing emerged in the 1970s with the development of new, cost-effective outbound long-distance telephone services and inbound toll-free services.
Telemarketing Examples
Outbound Calls
Known as cold calls, outbound calls are a fundamental aspect of telemarketing. They involve contacting potential clients from lists, often without prior knowledge of their interest or familiarity with the company.
Inbound Calls
Inbound telemarketing occurs when customers voluntarily call a contact center. Typically, these are existing customers who have previously purchased from the company, indicating strong customer retention.
Sales
Telemarketers engage in sales by persuading customers to purchase products or services. This often involves upselling additional items to enhance the original purchase.
Lead Generation
This involves gathering data on potential customers, categorizing them into prospects or leads based on criteria such as age, name, and location. It may include cold calling, handling inbound inquiries, and meticulous data collection to identify promising leads.
Technical Support
Telemarketing includes providing technical assistance to customers experiencing issues with products or services. This support ranges from password resets and basic installations to troubleshooting software, hardware, and clearing data and browser caches.
B2B Telemarketing
B2B telemarketing involves one business calling another for various purposes:
- Conducting market research
- Qualifying prospects
- Following up on direct marketing efforts
- Generating leads
Political Telemarketing
During election seasons, political candidates and coalitions use telemarketing to reach voters directly. This method efficiently targets specific audiences, promotes campaign events, encourages voter turnout, and announces candidate appearances.
Phone Surveys
Businesses conduct phone surveys by calling existing clients to gather feedback on their satisfaction with the brand. These surveys provide instant insights into customer opinions about products, services, and overall brand perception. They help identify pain points, areas for improvement, and enhance customer loyalty.
Product Sales
Telemarketers engage in product sales by contacting individuals to persuade them to purchase a company’s goods. This approach targets both regular and potential clients, aiming to increase sales and brand awareness in both B2C and B2B sectors.
Asking for Information
Inbound telemarketing occurs when potential customers call a brand to inquire about products or services. Skilled telemarketers use these opportunities to provide information, address concerns, and persuade potential customers to make a purchase.
The Advantages of Telemarketing
Telemarketing plays a crucial role in generating leads and building a new client base. By using this tactic, businesses can reach prospective clients and compile lists of potential customers.
The primary advantage of telemarketing is the ability to instantly know a customer’s interest in a product or service. Additionally, telemarketing allows businesses to:
Generate Quality Leads
Telemarketing is one of the fastest ways to acquire new clients. It not only strengthens relationships with existing and prospective clients but also enables companies to generate high-quality leads. By directly connecting with potential customers, telemarketing stands out as an effective sales tool.
Reduce Operating Costs
Telemarketing is an economical method for various business processes, including:
- Marketing or selling services and products
- Generating leads
- Conducting market research
- Informing clients
It is generally less expensive than other marketing strategies, especially when outsourced to services like Myphoner. Such services provide teams with efficient solutions, elevating the often undervalued task of cold calling with tools like the Power Dialler.
Boost Customer Experience
Telemarketing is a cost-effective way to re-engage with old leads or inactive customers. Research shows that retaining a former lead is approximately five times cheaper than acquiring a new one.
Viewing potential and current clients as partners rather than mere customers can enhance the customer experience. Therefore, telemarketing remains a valuable marketing tactic.
Disadvantages of Telemarketing
Here are the disadvantages of telemarketing:
Restrictions and Regulations:
Regulations like the Do Not Call registry can limit telemarketing effectiveness. Companies must adapt by managing strong customer lists and leveraging lead generation programs.
Unsolicited Marketing:
Telemarketing involves providing information to individuals who haven’t requested it, potentially interrupting their day. Maintaining positivity and composure during calls can help mitigate this issue.
Low Conversion Rates:
Telemarketing typically has a lower conversion rate, which may not justify its implementation costs. Monitoring sales rates helps businesses assess and adjust strategies promptly.
Employee Morale:
The repetitive nature and frequent rejection in telemarketing can affect employee morale. Supporting colleagues and fostering a positive workplace environment are essential for maintaining motivation.
Cost of Agent Training:
Training telemarketing agents effectively incurs costs that may be challenging for some organizations. However, investing in training is crucial as skilled agents contribute to higher sales.
Types of Telemarketing Activities
Telemarketing can be divided into four main subcategories:
Outbound Telemarketing:
Companies proactively reach out to prospective and existing customers through outbound calls, often referred to as “cold” calls.
Inbound Telemarketing:
These calls are responses to inbound inquiries about products or services prompted by advertising or sales efforts. These are known as “warm” calls since customers typically have shown prior interest, such as by submitting an online form or being familiar with the company.
Lead Generation:
This involves gathering information about the profiles, interests, and demographic data of potential customers.
Sales:
Telemarketers, who are trained salespeople, engage in this activity with the goal of closing deals over the phone.
Telemarketing activities can also include surveying, appointment-setting, telesales, database maintenance and cleaning, and providing a call to action.
Many North American companies outsource their telemarketing functions to lower-cost regions such as India, Mexico, and the Philippines.