Business-To-Business Telemarketing; Is It For You?

R.R. Donnelley in 1930 pioneered telemarketing (TM) by using it to entice advertisers to buy ad space for the Business Yellow Pages. This opened the door for using the telephone for business.

In 1970 Murray Roman of New York was credited for creating the first business-to-business TM program to sell Saturday Review subscriptions to professionals. Today, TM is the fastest growing marketing technique being used by small entrepreneurial companies to sell to Fortune 500 companies.

If you took a survey of people and asked them what comes to mind when you mention the term "telemarketing," the majority of people would say, "sales people calling at dinner time trying to sell me something I do not want or need." TM has received a bad name over the years, but a properly developed program can achieve measurable benefits.

TM combines the use of telecommunications with a database to promote products and services in a cost-effective manner. It also provides a key source of intelligence gathering for market, prospect and competitive information and enables you to have greater contact with the marketplace.

You can have both inbound and outbound TM. However, a word of caution, be careful not to take a person who has expertise in customer service and have them perform outbound TM. Chances are it will not work because there are specific skills needed in outbound TM.

Marketing over the telephone is quite different than face-to-face selling. It requires different skills. You must be able to build trust, credibility and rapport with the prospect and also be able to handle rejection. Some companies feel that TM is EASY and that anybody can market over the phone, so they give a list of prospects to their secretary or assistant and have her/him attempt to market their products and services. When the project fails, they say that TM does not work. In this instance, the project failed because of using untrained personnel and lack of commitment from the company.

I personally can attest to the fact that TM DOES WORK. While working at a chemical company, I developed an inside marketing position. Through prospecting and research, I developed 65 small accounts with about $500,000 in sales without leaving my desk. These results were especially impressive, because I was marketing "commodity chemicals," which are price driven (a penny or two could lose a sale). I gained this business through the relationships and trust that I developed with these clients. In essence they were buying "me," not the product. This is the level you must reach in TM -- building lifetime relationships. The next step is retaining them.

USES

Following are some areas that outbound TM can be used to benefit a company:

• Qualifying leads (advertising, trade show, seminar, direct response);
• Prospecting for new customers and penetrating new markets quickly;
• Selling to marginal or mid-sized accounts;
• Upselling products/services;
• Setting appointments and closing sales; and
• Reactivating lost accounts.

THE BENEFITS & WHY IT IS GROWING

There are several reasons why TM has been growing rapidly:

• 1. COST-EFFICIENCY -- Cost of a field sales call in relation to the number of contacts made is becoming cost-prohibitive. With TM physical logistics are eliminated (no downtime between calls, no missed appointments, no weather/traffic delays). It allows greater access to the marketplace.
• 2. TIME MANAGEMENT -- Re-engineering has caused increased responsibilities for those who survived downsizing, and they have less time to see field representatives. Using TM for appointment setting and prequalifying prospects will increase your field sales time. Most field representatives do not like prospect or cold calls; they prefer solid leads.
• 3. MARKET INTELLIGENCE/DATABASE TRACKING -- Using a database or contact manager software program in conjunction with your TM effort provides simultaneous intelligence gathering. To me this is the most important part of the TM program. You can gather vast amounts of market, competitive, and prospect information during a telephone conversation. All of this information should be put into the database for building a prospect/customer profile for future follow-up calls and marketing strategies. Experts in database marketing state that companies without a database will be out of business by the year 2000! Invest in a database program to maintain your competitive edge.

WHY TM FAILS!

Many companies try TM but fail to achieve the results they expect. There are various reasons which contribute to this scenario. Some of these reasons are:

• UNTRAINED PERSONNEL: In order to gain the benefits of a TM program you must have personnel with expertise in the TM field -- without this key ingredient you will not succeed. It is like baking a cake without the flour. EXPERTISE is the important factor.
• UNREALISTIC EXPECTATIONS: Some companies expect results overnight. In business it does not work that way. Every product or service has a different sales cycle. You do not expect your field representative to close a deal on the first or second call, so why expect it from TM? TM requires dedicated time and quality follow-up calls to develop relationships with the prospects. QUALITY NOT QUANTITY should be the criteria.
• FAILURE OF MANAGEMENT SUPPORT: Since TM always should be part of an integrated marketing strategy, it must have full support from management because it interfaces with other areas of marketing. If the management team is not committed to the concept then your success rate may be in jeopardy.
• INSUFFICIENT INVESTMENT: Companies fail to make the necessary investment in dollars or people to support the TM effort. They fail to understand that it takes time to develop relationships with prospects. At times, they also fail to correlate the benefits of the market intelligence and the prospect/customer database with the cost of the program.

WHO SHOULD USE TM?

Various industries (service to manufacturing) are currently using TM as part of their integrated marketing strategies. There are some questions that you should ask to see if your products or services can benefit from TM.

Q: Who is your target market? Can it be readily reached by telephone contact?

• Some decision makers, such as executives, research scientists and doctors, are practically impossible to reach through TM. On the other hand, purchasing managers, engineers, operations personnel, and marketing managers are somewhat easier to reach.

Q: Is the product/service extremely technical in nature?

• If the product/service is too complicated or technical, it should be prefaced with a direct mailing of a brochure, introductory letter, or video brochure. You can then use TM to reinforce the message, answer any questions, offer additional information and prequalify the lead.

Q: How broad is your target market?

• If you have a niche market or limited base, then TM is not for you. Conversely, a broad target market could benefit from TM by providing cost-effective market penetration.

Q: How would TM be integrated into your marketing strategy?

• TM should always be integrated with other marketing strategies. Today integrated marketing is the key to increasing response rates. It can be combined with field sales, direct mail, advertising and telefocus marketing; it also can be used for upselling and customer service.

Q: Should you create a TM position in-house or should you outsource?

• You must analyze the cost of a TM startup operation in-house (personnel, training, equipment, etc.) versus outsourcing the function on a "project" basis. If you do not have the personnel on staff or plan to use TM for special projects, it probably will be more cost-effective to outsource the project. It really depends on your commitment to the concept and whether it can support a full-time person.

THE FUTURE OF TM

Technology is changing how we conduct business today. Gone are the days of index cards with hand-written customer data. Today we use sophisticated database tracking methods which can analyze, segment, and target specific markets. Large companies have established call centers with automatic dialing to reach their prospective customers. With corporate emphasis on becoming "lean and mean" and reducing costs, more and more companies are looking to experiment with the TM approach. No matter what your industry or size, you may be able to reap the benefits from using TM in your integrated marketing strategy.