Telephone marketing - Marketing Management

This is a long established direct marketing tool, mainly in B2B situations. Much routine reordering can be handled over the telephone without the need for an expensive personal visit. The telephone is used to keep in touch with customers between visits. It can be used to make ‘cold call’ appointments and re-appointments with established clients. In consumer markets it is now used extensively and has grown in importance as a marketing tool. Services like banking are offered over the telephone and customers can give instructions to pay bills and receive a balance on their account using special access codes.

Telephone marketing is divided into incoming and outgoing call telemarketing. With incoming call telemarketing the prospect makes the call to the marketing firm, usually in response to a direct mail advertisement or direct response television advertisement giving a free phone or toll free telephone number. Hence, telemarketing is often used with other direct marketing tools as a part of an integrated programme. The caller may wish to sign up to a service such as insurance, apply for a loan over the telephone, order a product seen on the television or in a direct response advertisement or ask for further details. The call is logged. The caller is followed up with an outgoing telephone call later, or sent information through the post. A personal visit might be arranged for example from a kitchen surveyor. Outgoing telephone marketing may simply be the return of an incoming call. Often existing customers are telephoned to ask if they want to take advantage of a special offer. For example, if a loan has been taken out with a finance company by a good customer, the firm may ring that customer to offer another loan at a special discount rate. A bank may telephone a customer to ask if they would like to make an appointment at the branch to have their house borrowing reviewed or discuss house insurance.

Often telemarketing involves making telphone calls to individuals in their own homes or businesses which are unsolicited. The marketer has not obtained or even sought the customer’s permission to call and usually has had no previous contact with the customer. This is referred to as cold calling and is often outsourced to specialist call centres. This type of telephone selling can cause annoyance to some customers and many believe it is intrusive and should be outlawed. This has led some countries to introduce legislation including fines. In the USA, a national ‘do-not-call’ list came into effect in 2003 and it is now illegal for telemarketers, who are fined, if they call anyone who has registered themselves on the list. After one year over 62 million people in the USA had signed up. The telemarketing industry is opposed the creation of such lists as it restricts their commercial activities.

Jobber and Lancaster8 cite a set of guidelines that have been suggested by Bell Telephone Systems of America in relation to best practice for this type of telemarketing, particularly in B2B situations, as follows:

1. identify yourself and your company;
2. establish rapport: this should come naturally since you have already researched your potential customers and their business;
3. make an interesting comment (e.g. to do with cost savings or a special offer);
4. deliver your sales message: emphasize benefits over features (e.g. your production people will like it because it helps to overcome down time through waiting for the material to set);
5. overcome objections: be skilled at objection handling techniques;
6. close the sale: when appropriate – do not be afraid to ask for the order (e.g. ‘Would you like to place an order now?’) or fulfil another objective (e.g. ‘Can I send you a sample?’)
7. action agreement: arrange for a sales call or the next telephone call;
8. express your thanks.

Like direct mail, telemarketing has developed something of a poor image. As already mentioned, many householders and businesses resent unsolicited telephone calls to sell something. As we have discussed, there are codes of practice in the industry regarding the use of this tool, but the more unscrupulous telemarketers can legitimately be accused of pestering customers in their own homes. Despite these problems and criticisms, telemarketing’s importance as a marketing tool is underlined by a growth rate, in the UK at least of approximately 20 per cent per year over the past ten years. The advantages of telemarketing include easy and widespread access to customers in their own homes or offices; low cost per contact compared to personal selling; and the ability to contact customers outside normal shopping hours.

When setting up a telemarketing system staff must be recruited and suitably trained. In addition, suitable equipment and software packages must be acquired, and in the first instance many newcomers to telemarketing use agencies at least as the first step.

Companies can exploit the telephone as a marketing tool in a number of ways:

• Cost savings – Telephone selling provides customized communications. Greater sophistication in telemarketing equipment and services, new marketing approaches and developments in applications have turned the use of the telephone into ‘telemarketing’. The telephone may not have the quality of a personal sales call, but it is significantly cheaper. Sometimes in the initial stages of a direct marketing programme a personal visit is not necessary or appropriate.
• Supplement to a personal visit – Professional salespeople use a system of differential call frequency to plan their visits to customers. Salespeople may have to prioritize their calls on a key account basis. Although they may not be able to visit less important customers with the same frequency as more important customers, they can make a telephone call on a regular basis to keep customers informed and build and maintain relationships.
• Gaining marketing intelligence – Marketing firms can speak to customers on a regular basis, not only to maintain relationships, but also to ask questions about their needs and wants and purchasing intentions. This information can be recorded and fed into the organization’s marketing information system (MkIS) for future use. Buying intentions can be used to produce sales forecasts for future planning. On establishing customer needs, telephone marketers can introduce new products to clients and use the call to sell further products.
• Supplement to direct mail and other advertising – Many direct mail and other forms of direct response advertising, on television, press or radio for example, will carry a free phone message. This enables the prospect to make telephone contact at no cost. Prospects can make an immediate commitment to purchase while the advertising message is still fresh in their minds.

If they do not ring to make a purchase, they may telephone for further information, which in turn produces a qualified lead for further marketing action. The above list is not exhaustive, but it serves to demonstrate how versatile the telephone can be as a direct marketing tool. As we have seen, the use of the telephone is still growing as a marketing tool and advances in technology and the linking of the telephone to television and the Internet is bringing further developments, thus making it an even more important marketing medium.