In reality telemarketing does work because you can nurture the buying experience prior to turning the lead to another marketing professional inside of another department.
Usually, the generally-accepted conversion ratio is 1% which means that it takes about 1,000 calls to acquire 10 solid prospects, or that 99% of all people will say no.
This is where you are a marketing genius, a moderate or a failure at writing great phone craft scripting and training personnel and this with other financial factors generate your financial bottom line.
The telemarketer requires on the job training and so do the people that create a phone sales script, and if this is not done properly your 1% number is accurate.
Note that I’m not using the word customer because once you have a prospect; you then need to convert that prospect into a customer: prospecting is not about necessarily selling over the phone, sometimes it’s just about getting an appointment.
For instance, if you’re selling a product or a service that requires one or more face-to-face appointment then 1,000 calls will yield 10 appointments which may in turn convert to 0 or 10 customers. Of course, the number varies a lot from salesperson to salesperson and phone sales expert working from industry to industry.
When people from the general public think of telemarketing, they think of businesses calling consumers but actually, the bulk of business is businesses selling their products or services to other businesses, and consumers who only purchase the end-products that result from a supply chain marketing that involves many other businesses.
Companies that sell advertising, kitchen cabinets or painting services, industrial equipment, corporate IT services and countless other business services rely on B2B salespeople who make a lot of prospecting phone calls. Telemarketing is therefore not really a matter of using the phone to make a sale to consumers, but rather a matter of using the phone to nurture business relationships.
Overall, telemarketing is a marketing art along with sales closing so a numbers game is hard to predict which relies on the law of large numbers, meaning lots and lots of phone calls, and whose purpose is usually to prepare a sale.
In my opinion for telemarketing to work in your company, 3 conditions must be met.
1) The price of the product or service you sell must be high enough to support the cost of the salespeople. For instance, if your conversion rate is 1% and a sales person can make 20 calls per hour then to make 1,000 calls will take 100 hours of telemarketing.
If a salesperson sales ability costs a total of $50 per hour or you make money because they can close sales better than others, your end profit or loss numbers may vary.
The average cost of acquisition will be $5,000 per new customer just for the sales person who relies on not well trained sales people working with trained appointment generation capability.
If your marketing formulas are inaccurate you may require pricing well above that to account for other costs of sales; think how important telephone sales or sales person training is in your company.
Telephone sales allows you to generate consistent leads and this will help diagnosis your sales teams sales closing capability numbers, and this will allow appropriate product price setting as well as appropriate sales training to your experts developing your marketing solutions.
2) Telemarketing works well when buyers are usually not the ones initiating the purchase. For instance, we all have things in mind that we would like to buy but how often do we actively think that we want to buy my products on the telephone? If you’re selling something that people in your target market don’t think of buying, then with telemarketing you can contact them directly and offer them your service. Needs and demand are different.
3) Finally, telemarketing works well when you’re selling into a widely dispersed market. If you’re selling jumbo jets, then you don’t need telemarketing because the number of potential buyers is limited.
If you’re selling something to like a service vs a product then telemarketing is required? You can try to reach these shop owners with advertising but telemarketing is usually much more efficient.
Telemarketing is a viable distribution strategy: when you’re selling something expensive to a large number of people who don’t think about buying what you have but need it.
Some people call it telemarketing, some people call it prospecting, for others it’s cold-calling, inside sales, in the UK it’s called tele sales, but it’s all the same job.
Next time you hear someone say that they do inside sales, you’ll know that part of their work includes telemarketing, even though it’s not politically correct to say so.
In a sense, asking if telemarketing actually works is kind of like asking “Does online advertising actually work? Because I never click on those online ads.”
So, how did I use my telemarketing experience? I ended up building the marketing group I had always wanted specializing in phone sales I learned when I was cold-calling: https://www.digitalmindcoach.net. Check it out!