What is telemarketing? Definition and examples
Telemarketing usually means contacting customers and potential customers by telephone, but can also include using fax or the Internet. Direct mail and face-to-face meetings are not part of telemarketing. The two main categories of telemarketing are business-to-consumer (B2C) and business-to-business (B2B).
It is a widely used method of contacting people to promote products or services, raise money for charity, gather information, generate leads, and carry out surveys. With new technology, the term also includes videoconferencing calls, which in the vast majority of cases occurs with existing customers.
Political parties use telemarketing during their election campaigns when carrying out polls to determine people’s voting preferences.
According to the UK’s Direct Marketing Association: “The average ROI [return on investment] for B2B telemarketing is £11 for every £1 spent, but I’ve seen campaigns achieve ROI of 12,000%… a few phone calls to the right people can land you some big accounts.”
Telemarketing cold calling or canvassing means contacting new customers. The consumer has probably never bought anything from the company and has no idea that he or she will be approached.
Telemarketers purchase lists of names to call from list service agencies, which have information on people according to age, ethnic group, interests, profession, socioeconomic level, academic level, etc.
If a telemarketing team is tasked with promoting a lawn mower, it does not want to telephone people who live in apartments. It will purchase lists of people who have a garden, and if terms are offered, people with good credit ratings.
If you are trying to sell rock concert tickets that cost $250 each, you will want to call people of a certain age group who are middle class or wealthier. Agencies can sell you lists of the type of people you want to call.
According to BusinessDictionary.com, telemarketing is:
“Contacting, qualifying, and canvassing prospective customers using telecommunications devices such as telephone, fax, and internet. It does not include direct mail marketing.”
Telemarketing vs. telesales
Telemarketing is a relatively recent term, while telesales has been used for a long time. Today, they are virtually interchangeable, but technically they do not have the same meaning.
- Telesales means selling a service or product directly to potential customers by telephone; trying to get people to buy.
- Telemarketing means using the telephone to generate interest, provide information, create opportunities, get customer feedback, generate leads, and make appointments.
Telemarketing creates prospects and lets consumers know about what a company has to offer them – it provides the opportunity for both the company and customer to get to know each other better. Telesales turns those opportunities into sales.
However, as the term ‘telemarketing’ is used often these days with the same meaning as ‘telesales’, it is best to explain exactly what you mean in more detail when using one of them.
Telemarketing is not for everybody. Like any marketing strategy, it has some disadvantages. However, for many businesses the method clearly works, otherwise it would not be so popular.
Subcategories of telemarketing
- Lead generation: the aim here is not to sell, but to gather information and contacts.
- Sales: calling people by telephone in order to persuade them to buy a product or service.
- Outbound: proactive marketing in which pre-existing and prospective customers are called directly.
- Inbound: responding to incoming calls and information requests. People usually call in because they saw an advertisement, met a sales person, or were exposed to some kind of publicity.
Telemarketing – a controversial subject
While telemarketing has become an extremely popular tool to promote products, it is also a divisive strategy in modern marketing, because consumers find it annoying and risky. Most people do not like being called by strangers unexpectedly.
A large number of organizations use unethical – or at least extremely irritating – practices in telemarketing. For example ‘robo-calling’, a technique that uses a pre-recorded message delivered to thousands of telephone subscribers in one broadcast – the telephone rings, you answer, and hear a promotional recording.
Ever since we first started using the telephone, it has been an important marketing and sales tool.
Scammers use the telephone to swindle people, especially elderly individuals who live on their own and have symptoms of dementia or some kind of cognitive impairment. Fear of being conned or having a family member swindled has made many people anti-telemarketing.
Because of scammers, as well as intrusive and unpopular methods used by a number of telemarketers, most governments have introduced legislation.
In the United States, some jurisdictions have ‘Do Not Call’ lists through legislation or industry organization. Telemarketing teams are not allowed to contact participating consumers. Companies that call people on these ‘Do Not Call’ lists are liable to hefty fines.
The US Federal Trade Commission implemented a National Do Not Call Registry in an attempt to minimize intrusive telemarketing across the country.
The National Do Not Call Registry has the following warning on its homepage:
“Scammers have been making phone calls claiming to represent the National Do Not Call Registry. The calls claim to provide an opportunity to sign up for the Registry. These calls are not coming from the Registry or the Federal Trade Commission, and you should not respond to these calls.”
If you want to work in telemarketing and have never done it before, look for a reputable company with a comprehensive training program that is selling a good product or service. Bear in mind that for the best jobs you will need to have experience, so be prepared to start at the bottom.
In the United Kingdom, you can register with the Telephone Preference Service to opt out of receiving any unsolicited phone calls. You can either register your landline or mobile online or call 0345 070 0707. The service is free and takes up to 28 days to come into effect.
Companies are allowed to call people on the Telephone Preference Service list for genuine market research purposes, provided their calls do not include any collect or marketing data for use in future sales calls. Unfortunately, many companies break and overbend those rules.
Some people protect themselves by using a call blocker. It is a device that can be attached to the telephone or which may already be part of the device. The call blocker can be used to stop different types of calls from getting through. Some of them ask the caller to give his or her name beforehand.
Telephone service providers usually have ways customers can reduce the number of nuisance calls they receive – some of their options might not be free of charge.
Is telemarketing for you?
Many people see telemarketing as a cushy and easy job. You sit on a comfortable chair in a warm room, talk to lots of people, and earn money.
In reality, however, it can be an extremely challenging, competitive and stressful job. Not everybody is cut out for telemarketing. If you hate pressure, targets and deadlines, telemarketing is probably not your ideal job.
Even though many of the required skills can be learned in training and improved over time, a good telemarketer needs to start off with a set of innate qualities.
– Listening Skills: sales is not all talk, much of it is being able to listen. Through listening to a person’s doubts, concerns, needs and questions, you can tailor what you say – or your presentation – according to their preferences. For example, if you are selling appointments to test-drive an SUV, and learn that the person is an avid angler who hates the color blue, you could try to make them imagine they are driving a reliable, silver-colored vehicle up to a well-known fishing lake nearby.
– Honesty: the best sales come from honest people. If you bend the truth there is a considerably greater risk of your order being cancelled, or problems later on with customers and other departments in your company.
– Resilience: telemarketing is full of rejection. You may call dozens and dozens of people and they all say they are not interested – sometimes rudely. You need to be the kind of individual who keeps going – tenaciously and enthusiastically – no matter how bad things appear to be.
– Adaptability: great telemarketers are highly adaptable people. Over the course of just one day, you will be talking to a wide range of people with different tastes, moods, preferences, socioeconomic and academic levels, and degrees of seniority. You need to be able to adapt your approach according to the person you are talking to and what your are promoting.
– Motivation: you need to be a highly-motivated person who can work enthusiastically under his or her own steam. Sales is a numbers game – the more people you call the more business you will generate. You need lots of motivation to contact as many people as possible, and still sound fresh and positive in each phone call.
– Voice: a good telemarketer must have a great voice. You will also need to adopt a tone that suits whoever you are talking to.
– Computer Literacy: in most cases, you will need to know how to use spreadsheets, CRM software, the Internet in general, and other computer-related items.
– Keen Learner: great telemarketing people are always willing and wanting to learn. Most telesales supervisors and managers report that their best-performing people were those most eager to learn during the training courses. You need to be the type of person who is always looking out for new things to learn from colleagues, prospects, bosses, etc.
– Faith: you must believe that you will succeed. That is what will keep you going after calling fifty people and getting nowhere.
– Well Organized: managing time zones, co-coordinating diaries, and complying with CRM protocols mean that today’s professional marketer must be very well organized. If you are tasked with making appointments for a busy team of salespeople in different parts of the country or even the world, you will need to organize not only your time, but also theirs. If you are going to talk to your prospect again, you must take notes, and make sure they are easily accessible when that next conversation takes place.
Telemarketing may not be for you if getting a regular salary is your top priority. In the majority of cases, a telemarketer’s income is linked to how well he or she performs. Sometimes the job is totally sales-related, i.e. employees earn nothing if they don’t sell.
Video – Making a fantastic telemarketing call
This Zone Marketing Global video highlights some important skills and techniques that can be extremely useful when it comes to effective preparation before you make a telemarketing call.