From the Bell Systems Sales Center in Kansas City, Art sold small businesses on the concept of telemarketing. First, he found out as much as he could about what a business did. Then, he helped the business identify how it could benefit from telemarketing. Once the benefits were pinned down, he worked with his prospect, usually an owner or a manager to identify the phone system that would help the business realize those benefits. Finally, he signed them up for AT&T 800 or a WATS-line. All told, each sale took from one to ten phone calls to close. The resulting sale added up to between $50 to $5,000 all sold by phone.
One year later, at age 23, Art's urge to be an entrepreneur had not diminished, so he set up his own company, which specialized in telemarketing consulting and training services. In addition, he became the director of Outbound Telemarketing for a telemarketing service agency in Shawnee Mission, Kansas, where he put together telemarketing programs, hired and trained new telephone marketing representatives, and evaluated and reported on programs to clients. As if running a business and a service agency weren't enough, he also launched a newsletter, Telephone Selling Report, which coached telephone sales representatives on what to say and how to say it on the phone.
"After juggling all those balls for a year, running my consulting business, publishing a newsletter, and managing the telemarketing service agency, I found I wanted to focus more on sales than operations. So I joined WATS Marketing as national sales manager for outbound telemarketing, targeting large accounts like regional Bells, consumer products," Art remembers.
A year later, he was asked to join WATS Marketing's sister company, First Data Resources (both are subsidiaries of American Express), where he took a position purchasing direct marketing services. "Eight months of coordinating inserts for credit card statements was enough. I went back to my business, and have focused on it full time ever since."
His business, Business by Phone, focuses on training telephone marketing representatives and helping them boost their sales. As an acknowledged expert in the field, he runs seminars, has developed video and audiotape programs, and continues to publish Telephone Selling Report, as well as a catalog of training products. He is also putting the finishing touches on a book about telesales.
THE TELEMARKETING REVOLUTION
Art Sobczak lives in a corner of the world where telemarketing has become a major industry. Ideally situated in a central time zone, telemarketers in Nebraska can work from 8:00 A.M. until past 11:00 P.M. to reach consumers in every U.S. time zone. A convenient time zone and a cutting-edge telecommunications system (installed because of the large number of defense installations in Nebraska) have enticed catalog companies, credit card servicing centers, hotel and airline reservation centers to Omaha, the "toll-free capital of America."
But it isn't only in Omaha that telemarketing is surging. In the last ten years, telemarketing has grown everywhere. In some industries, telephone sales have practically replaced face-to-face sales calls. In others, telephone marketing campaigns have doubled the effectiveness-the "pull"-of mail campaigns. As telephone equipment gets more sophisticated, and as people feel more and more at ease handling business by phone, telemarketing and telesales are sure to grow even more.
Why is telephone marketing so popular? For one thing, the telephone is a very flexible and personal medium. Unlike direct mail pieces or broadcast advertising, where the message is "frozen" before production, a telephone script can be modified as needed, in an instant. In sales, it offers the intimacy of a person-to-person conversation without the expense of a traditional sales route - car maintenance, gasoline, hotels, "down time," and so forth.
The telephone also provides immediate results. Whether a telephone campaign or a telephone sales call has been successful is quickly apparent. Reviewing a day's phone calls can reveal
- How many sales, leads, or orders were generated per hour or day.
- How many calls it takes to make a sale.
- The variety of reasons an offer is refused, compared to how many refusals were logged.
- The geographic distributions of sales and refusals.
- Test market new product and service ideas.
- Promote special time-limited offers to existing or potential customers.
- Increase the size of customer orders by upgrading an order, for example, by suggesting add-ons or special additional offers and incentives. Add-ons are merchandise added to an order after or as it is being placed. Usually, the customer service representative who takes the call or a telephone communicator who places a call to a consumer will suggest related merchandise of interest.
- Handle consumer problems and inquiries promptly, conveniently, and personally.
- Generate leads for salespeople, or explore leads to make sure they are genuinely "hot" before a salesperson follows them up in person.
- Raise funds for nonprofit and political organizations.
- Enhance a database by learning more about customers as they call in or are contacted.
- The icing on the telemarketing cake is its low cost. Selling, generating leads, or accepting orders by phone can lower the cost of each sale, which is an attractive factor in any industry.
THE SIZE AND SCOPE OF TELEMARKETING
Telemarketing experiences a 20 percent growth rate each year. More than 300,000 firms incorporate telephone marketing as a channel of marketing and distribution. In addition, 800-number services are now a $7 billion-a-year industry, thanks to the 17 million 800-number calls placed every day.
Business Week magazine estimates that by the year 2000, there will be more than 8 million jobs in telemarketing. Some of these will be in reactive or inbound telemarketing, where a consumer calls the telemarketing center to reserve a ticket for an airline, a sporting event, or an opera, or to order merchandise. The rest will be in proactive or outbound telemarketing, in which the telemarketing representative places calls to customers or prospects.
Inbound and outbound telemarketing are practiced in several settings:
- Within agencies devoted to designing and running telemarketing programs for clients, and placing or accepting phone calls
- Within major consumer marketers such as Sears and Montgomery Ward, who call customers to sell add-ons like extended warranties or additional insurance policies
- Within catalog companies like Lillian Vernon, which accepts calls from customers ordering merchandise, and also calls customers to offer related merchandise, such as a pair of headphones to go with a stereo set
- Within major business-to-business companies, whose inside sales staff can profitably cover very large territories or service marginal accounts by phone
Telemarketing Service Bureaus and Agencies
More than 1,500 organizations now offer telemarketing services. Telemarketing service bureaus take or transfer phone orders and inquiries, while full-line telemarketing agencies can create, perform, and maintain complete telemarketing programs. Within service bureaus, dozens of communicators place or receive telephone calls all day long. These part-time or full-time personnel must have excellent communication skills and be friendly and personable.
Trainers, who instruct communicators about products and services and coach them in listening skills and sales techniques, are themselves supervised by the service bureau's managers. They monitor the output of bureau employees, measuring calls per hour, completed contacts per hour, and sales or orders per hour. When a service bureau provides both outbound and inbound services, there may be a manager or director for each division.
In telemarketing agencies, the service bureau is complemented by marketing-oriented staffs who work with clients to develop programs, write, test, and revise scripts, select telephone lists, and evaluate the results. Account executives organize and manage the client's program within the agency. In each of these positions, familiarity with the goals and processes of telemarketing is a must.
By the way, writers who develop telemarketing scripts rely on a different set of gifts than copywriters working with print. Because the telephone is an aural medium, a telephone script must "talk" easily, sound natural, and be easy to listen to and grasp over the phone.
Consumer Direct Marketers and Catalog Companies
Thanks to 800 numbers, the lion's share of goods and services ordered through direct marketing and catalog companies are placed by phone. Almost every direct marketing company offers an 800-number service now. When L.L. Bean, for many years a prominent hold-out, added an 800 number in 1986, telephone sales jumped to 70 percent of total catalog sales.
These companies use both inbound and outbound telemarketing to increase revenues. Customers who call to place orders can be told about short-term specials and related merchandise that, if added, can substantially increase the size of an order. Outbound telemarketing can be used to communicate with top customers, reactivate old ones, and, to some extent, prospect for new customers.
Business-to-Business Telemarketing and Telesales
In business-to-business environments, telemarketing is more accurately called "telesales." Here, selling takes place entirely by phone, instead of only partially, as is the case when a consumer is called a week or two after receiving a direct mail piece.
"Telesales is a hard business to do well in," Art Sobczak notes. "Someone who sells by phone must know a product or service inside and out and be attuned to customer needs in order to find out how a business can benefit from the product or service. He or she must also be able to do both with less than half of the traditional communication tools. Telephone sales reps can't rely on the nonverbal or visual cues that are so important to sales professionals."
An inside sales representative must be able to
- Find out what a prospect's needs are in relation to the products or services the company is offering.
- Introduce appropriate products or services and outline their benefits to the listener.
- Conduct every step of the traditional sales process, including answering objections, probing for and overcoming resistance, and closing by phone.
QUALIFICATIONS FOR TELEMARKETERS
People drawn to careers in telemarketing must be interested in people, eager to master telephone selling techniques and must have an aptitude for sales. "I'd say that sales aptitude is the most important quality," comments Joe Culotta, founder and owner of Telemarketing Search/Telemarketing Temps, the biggest broker of full-time and part-time telemarketing personnel in the U.S. "The telephone is a sales channel and it requires selling skills. More specifically, it takes a certain type to be able to sit down and sell by phone. Not everyone who has an aptitude for selling has an aptitude for selling by phone.
"Higher up the career ladder, managers need a comprehensive understanding of direct response marketing, marketing, and sales. They need to understand the essence of the medium in the same way that a pilot understands the essence of flying a plane or a doctor understands the essence of medicine."
According to Joe Culotta, who places part-time and full-time telephone personnel for clients like Abbott Labs, Citicorp, Baxter Travenol, and Rand McNally, wages in telemarketing will vary depending upon the environment. In a consumer telemarketing environment, where the average sale is small and communicators less skilled, salaries are lower. In a business-to-business environment, communicators may earn $70,000 a year. Supervisors' wages will be correspondingly higher.
At the first level are telephone communicators, who can make as little as $5.00 an hour or as much as $70,000 in salary and commissions a year. Above them are supervisors and trainers, who do not receive commissions; they coach communicators in selling technique and product knowledge, monitor and evaluate calls, and distribute the work load. A typical business-to-business supervisor oversees ten communicators; a consumer supervisor oversees twenty. Their pay can range from $28,000 to $35,000, with higher wages on the business-to-business side.
In large operations, telemarketing managers may manage as many as ten supervisors. They may also assume responsibility for operations, including staffing, distributing the calling hours and work load, gathering results data and keeping statistics. Script writing is another duty. Telemarketing managers earn $40,000 to $70,000.
Telemarketing directors are involved in the overall direct marketing activities of a company. For them, telemarketing is but one channel in the overall marketing mix, although it is the channel in which they are experts. In a consumer in-house telemarketing center, telemarketing directors are responsible for the overall promotional campaign. In the business-to-business environment, they run the inside sales department. Salaries can range to $70,000 or more.
