TELEMARKETING

Telemarketing is the process of selling goods and services over the telephone. It has been used to successfully market a variety of products ranging from insurance to newspapers to industrial equipment, and it has the potential for selling virtually any product. There are two types of telemarketing: outbound and inbound. Outbound telemarketing calls are those placed by salespeople to homes or

businesses. Inbound telemarketing occurs when customers call in to businesses to place orders.

OUTBOUND CALLS

Outbound telemarketing is particularly appealing to businesses whose salespeople have traditionally made outside sales calls. It reduces the cost per contact, increases the number of contacts that can be made per day or week, and still retains the human element. Computerized databases of prospects and automated predictive dialers can further extend the potential number of contacts a telemarketer can make. Outbound calls can be used to canvass for new business, follow up former customers, contact new leads, speed up payments on past due accounts, and raise funds for nonprofit organizations.

Outbound calls present an ideal marketing situation in which the telemarketer has the undivided attention of the prospect and can get immediate feedback. At the same time, the limited window of opportunity requires that the salesperson establish rapport and trust quickly, listen carefully, and provide clear information. Success in outbound sales is related to product knowledge and presentation skills and, thus, can be enhanced by training.

INBOUND CALLS

Inbound telemarketing is also a very efficient marketing approach that also retains the element of personal interaction. Calls are generated by catalogs mailed to prospective customers or by radio, television, commercial Web sites, or print advertisements. These promotional pieces solicit customers to buy by calling a toll-free number. When customers call in, they may either reach a telemarketer directly or receive an electronic message that gives them the option of being connected to a salesperson. Since inbound callers have entered the buying process when they call in, a customer service orientation is more critical to the success of the telemarketer than sales training.

The use of the telephone as a sales tool dates back to the early 1900s. The full potential of outbound telemarketing, however, was not recognized by business until Wide-Area Telecommunications Service lines came into existence in 1960. Likewise, the full potential for inbound sales did not become apparent until the Sheraton hotel chain implemented the first toll-free 800 lines in 1967. By 2001 telemarketing sales to consumers and businesses exceeded $660 billion, with a projected growth rate of 8.4 percent through 2006. Employment in the teleservices industry surpassed 6 million in 2001, with a projected growth rate of 4.2 percent through 2006.

PERCEPTIONS AND OUTLOOK

Although telemarketing has experienced continued growth, it has not been without problems. Many consumers have a negative perception of it, particularly with outbound telemarketing, because of untimely and annoying calls. This discontent led to the development of the National Do Not Call Registry by the Federal Trade Commission in 2003. The registry listed over 58 million phone numbers in the first eight months. Many states also have instituted do-not-call lists.

Another problem with telemarketing is that it has been the vehicle for a variety of fraudulent schemes, which prompted a crackdown by the U.S. attorney general in 1997. Despite these concerns, the outlook for the industry appears to be positive. Research indicates that businesses are becoming increasingly receptive to doing business with sales representatives by telephone and inbound telemarketing is becoming an even more important component of a direct-marketing campaign.

see also Marketing

bibliography

Direct Marketing Association. (2005). Teleservices in the United States. Retrieved September 14, 2005, from http://www.thedma.org/government/USmap.pdf

Goldstein, Linda (1996, February). Reflections on the past and predictions for the future of telemarketing legislation. Telemarketing and Call Center Solutions, 48–50.

Kotler, Philip, and Armstrong, Gary (2006). Principles of marketing (11th ed.). Upper Saddle River, NJ: Pearson Prentice-Hall.

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Thomas R. Baird

Earl C. Meyer

Winifred L. Green