Telemarketing

Telemarketing can offer a number of advantages over other forms of direct marketing. By talking directly to your potential customers, you can immediately determine their interest in what you are selling. It also allows you to ask questions to assess their needs for your product or service, and effectively explain any technical areas.

However, there are some strict regulations that cover telemarketing, so you will need to be aware of these when deciding how to market your business.

This guide provides information on the different types of telemarketing, including the advantages and disadvantages, and how to work out which will suit your business. It also explains the main regulations that cover telemarketing and how you must comply with them. Finally, this guide explains the benefits and disadvantages of hiring another business to help you with your marketing, and how to do so.

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How to start telemarketing in your business

Telemarketing is a form of direct marketing. It involves talking to potential or existing customers on the telephone.

Telemarketing can help you to promote your products or services, build your customer database, generate leads and appointments, stay in touch with existing customers or generate new ones.

For more information on direct marketing, see our guide on direct marketing: the basics

Planning your telemarketing

When planning your telemarketing campaign, you should:

• Decide whether you will carry out the telemarketing in-house or use the services of a specialised marketing company. For information on using an outside marketing company, see the page on how to get help with a direct-marketing campaign in our guide on direct marketing: the basics.
• Make sure you know who your target audience is. You need to know what your product or service is, who it is aimed at, and who is most likely to purchase it. For more information, see our guide on direct marketing: the basics.
• Make sure your marketing lists are reliable and up to date. This will allow you to focus on your target audience, ensure your lists comply with the Privacy and Electronic Communications (EC Directive) Regulations 2003, and do not include people or organisations that have opted out of receiving unsolicited sales and marketing calls. See our guide on privacy and data protection in direct marketing.
• Identify key personnel at target businesses. Speaking to the right person will increase your chances of making a sale.
• Consider how you will pay your telesales staff. You could, for example, provide sales incentives.
• Have a script in place. Having a simple, professional, and pre-prepared script allows you to sell and respond to queries more effectively. For more information, see the page on explaining who you are and what your business does in our guide on marketing your business confidently.
• Think about the relative costs. It may be more cost-effective to use an outside marketing business. The initial costs may be outweighed by increased sales.

Automated telemarketing

Automated telemarketing uses interactive voice response (IVR) to effectively process high numbers of telemarketing calls in an inexpensive way.

Outbound IVR telemarketing can be used to generate leads and sales and alert customers to new offers, product or service changes and product recalls. It can also be used to conduct meetings, conference calls or business surveys.

Inbound IVR can be used to offer helpdesk services, handle incoming calls or to provide disaster backup in case of emergency.

Since IVR campaigns do not require actual telemarketers, they are often less expensive than traditional telemarketing campaigns. The results are also easy to measure, flexible and can show immediate results.

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Telemarketing planning

If you are planning to use telemarketing for your business, you should determine whether you are operating in business-to-business (B2B) or business-to-consumer (B2C) sales – as the skills and expertise required to deal with each group are different.

You can either choose to conduct your own telemarketing campaigns or use a provider that offers B2B or B2C telemarketing services. When operating your own telemarketing operation, you need to be aware of the different characteristics and issues each group poses, and how this may affect your approach.

Considerations when running your own telemarketing operation

B2C companies usually:

• run their business to sell a product
• focus on sales turnovers rather than building customer relationships
• look to get as much value from sales as possible
• have a large target market
• aim to create a brand identity to appeal to customers
• use merchandising and point of purchase activities to increase sales
• use ’emotional buying techniques’ to sell to customers – based on status, desire, or price

When dealing with B2B companies, you need to consider that they:

• are usually relationship driven
• aim to generate profits through repeated sales through returning customers
• have a small and focused target market
• create a ‘brand identity’ by building on personal relationships
• use educational and awareness-building activities

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Telemarketing methods for targeting customers

Once you have decided to conduct a telemarketing programme and have determined your target audience, you need to decide how you will approach your strategy.

Contacting customers directly can be an efficient sales device – especially if you intend to tell existing customers about a new product, or one that is similar to something they have previously purchased from you.

However, before you begin telemarketing, you need to do the following:

• obtain your clean, opted-out list of current customers and their details
• decide if you will do your telemarketing in-house or get an agency to do the work for you
• think about rewarding your existing customers with special offers

Using a telemarketing agency

You should try to ensure that your telemarketing generates new leads, retains your existing customers, and maintains relationships. If your business is struggling to do these things through its telemarketing project, consider hiring a telemarketing service provider.

Before instructing a service provider you should:

• Decide on the services you need. For example, do you just need cold calling, or would you require someone to be contactable at all times?
• Ask for referrals and research into any bidding service providers. Many telemarketing agencies advertise their services but you can also find information about them online and in printed material.
• Contact the telemarketing service provider directly and gauge their responses to your particular needs.
• Develop and submit a Request for Proposal – this will help you shortlist the agencies you are considering.
• Visit the agency to observe the office environment and see if the company appears credible.

Planning other telemarketing activities

You can also use inbound calls to sell products or services to your customers. For example, if a customer asks for a particular item that you stock, you can offer to supply them with relevant, accompanying products that they may need. If you intend to use this sales tactic, you should ensure that any telemarketing staff have had previous sales training.

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Advantages and disadvantages of telemarketing

Telemarketing can be an effective tool for your business and it can be an easy and effective way to increase your profits and promote your product or service. However, it does have some disadvantages that you should also consider.

Benefits of using telemarketing

The main benefit of using telemarketing to promote your business is that it allows you to immediately gauge your customer’s level of interest in your product or service. Additionally it allows you to do the following:

• provide a more interactive and personal sale service
• create an immediate rapport with your customers
• explain technical issues more clearly
• generate leads and appointments
• sell from a distance to increase your sales territory
• reach more customers than with in-person sales calls
• sell to both existing and new customers
• achieve results that are measurable

Disadvantages of telemarketing

There can be as many negatives using telemarketing as there are positives. In particular, you need to consider that:

• telemarketing can be resented – particularly when dealing with business-to-consumer customers, and when calls are made in the evenings
• customer lists may not always be clean and opted-out – this leaves you with a potential risk of breaking the law
• customer lists can be very costly
• telemarketing has a negative image that could damage your business’ reputation – if carried out poorly
• telemarketing has the potential to replace a sales team and this could lead to negative feelings among employees
• training staff can be time-consuming and costly
• you may need to prepare a script
• an outside service provider can result in your losing control over your sales processes because the people doing the work aren’t your employees

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Targeting consumer audiences using telemarketing

You can ensure that you target the correct group of customers and potential customers for your product or service by obtaining telemarketing lists. These lists need to be ‘clean’ – ie only contain details of individuals and organisations that have chosen to receive unsolicited sales calls. Any customers who do not wish to receive calls will have joined specialised lists.

Even if customers are on preference lists, there are certain ways to target the correct audiences for your products or services. For example, you could consider:

• Contacting people that are new to an area – you can access new telephone numbers before people are registered on ‘do-not-call lists’. This audience is often in the market for products and services related to setting up new households.
• Customising your pitch to make it appropriate to your audience – you could consider adjusting your data to target specific demographics like age, location, or profession.
• Developing lists that are based on particular interests. You can run contests or drawings at events – ideal places where you can capture opted-in information.

It is crucial that you do not make calls to anyone who is registered on a Telephone Preference Service or a Corporate Telephone Preference Service list.

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Measuring the success of your telemarketing campaign

To ensure that your telemarketing campaign is effective and efficient, it is important that you evaluate its success at regular intervals. There are a number of methods you can use to measure the results of your campaigns, such as the following:

• comparing it to previous campaigns from the year before that ran within the same time period
• keeping track of calls and orders received and compare these results with the previous year’s statistics
• judging the effectiveness of the cold calls by the reactions of customers contacted
• assessing the number of leads generated within a particular time period
• recording the number of meetings that are generated from the leads received
• comparing the cost of the telemarketing against the money made in overall sales
• checking the value of sales in pounds made per hour

You should consider running a test telemarketing campaign to work out how you will assess success or failure, before you begin a more permanent campaign. You can then use this information for any future campaigns you decide to undertake.

You should record any information specific for a campaign, such as:

• the telemarketed product
• the number of calls
• the targeted group of customers
• the address source

Ensure that you also record the costs of the address source, telephone charges and any other relevant costs for each campaign.

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Legalities, scams and protecting customers when telemarketing

There are many laws and legal issues that you need to be aware of when dealing with telemarketing, such as unlawful selling. Telemarketing scams are of concern for customers and can take the form of one of the below:

• fraudulent directory listing services
• promised lottery prizes or loans
• advance fee fraud
• charity fraud

Because of these potential scams, you need to ensure you protect your customers.

Telemarketing is governed by the Telecommunications (Data Protection and Privacy) Regulations 1999. Under these regulations, you must not call people who have indicated – either directly to your business or by registering with the Telephone Preference Service (TPS) – that they do not wish to receive marketing calls.

When you request information from a potential customer, you must tell them why you are requesting the data and inform them if the information is to be stored for future marketing purposes. If you intend to share the information with a third party, you must request their permission.

The Direct Marketing Association (DMA) also offers guidance on the best telemarketing practices. Find DMA contact centres and telemarketing business-to-business best practice guidelines on the DMA website- Opens in a new window.

For more information, see the page on legal issues and best practice in our guide on direct marketing: the basics.

Individuals and organisations who do not wish to be contacted by telesales can register with the TPS or the Corporate Telephone Preference Service (CTPS).

Find information about TPS  and CTPS on the TPS website- Opens in a new window. 

Read information about advertising best practice on the CAP website- Opens in a new window.

You must also ensure that your telemarketing campaigns do not create ‘silent calls’ – where the customer cannot hear the messages – which can sometimes happen through automated call centres.

Businesses must also refrain from using answer machine detection equipment – one cause of the silent call problem – more than once a day, unless a call centre agent is on hand to answer the call.

To help make sure that your lists are clean with opted-in individuals or businesses, you can check your telephone number database on the TPS manage website (registration required)- Opens in a new window.

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