What Is Telemarketing?

Telemarketing is a form of direct marketing that is used to generate leads, gather marketing information, and complete a sale with a potential customer. The term telemarketing implies that there are no face-to-face meetings and all conversations are held through telecommunications devices. Automated telephone calls with prerecorded sales pitches that are played over the phone automatically when dialing a certain number are also considered telemarketing.

However, because of the improper direct mail marketing and unsolicited phone calls, this form of engagement with prospective customers received less support in recent years and got a reputation as “intrusive telemarketing.” 

Telemarketing vs. Cold Calling

Telemarketing is often confused for a cold calling outbound channel. However, although both techniques use a telephone as the main way of contacting a potential prospect, the final goals of these calls are different and used for varying reasons. Telemarketing calls are more of a B2C form of communication where any engagement with a prospect counts. Cold calling has a more narrow focus, which includes targeted B2B sales where the final purpose of the talk is appointment setting or signing a deal. 

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Telemarketing Subcategories

The most common types of telemarketing include outbound, inbound, lead generation, and sales calls:

  • Outbound telemarketing: Sales representatives reach out to potential prospects to increase the efficiency of an outbound campaign. In this case, prospects' contact information is gathered beforehand and stated in the lead list. Because these calls require a deep knowledge of the product, answering numerous questions from the prospect, and mastering objections, sales representatives often use cold calling scripts to improve the results.
  • Inbound telemarketing: Potential customers get in touch with sales representatives to find out specific information about the service/product they offer. Usually, these calls are generated through social media, email marketing, or direct marketing channels.
  • Lead generation: Sales representatives collect personal information about potential clients through a call conversation: their age, interest, job positions, etc.  
  • Sales calls: Salespeople actively promote their services to potential clients until they close the deal. The main goal of the conversation—making a sale. 

Examples of Telemarketing: 

  • Outbound telemarketing: You reach out to your clients (potential or existing) to introduce a new paid feature of your product. The main goal here is to raise awareness and increase sales conversions for the new product.
  • Inbound telemarketing: A prospective customer sees an ad about the new product feature and contacts sales representatives to find out more information and possibly sign up for the course.
  • Technical support: A customer reaches out to your representatives with a problem or a question.
  • Satisfaction surveys: You reach out to your existing customers to get their feedback on the service to assess the level of customer satisfaction.
  • Studies. You reach out to your customers to gather information on the state of current processes or tendencies in the industry.
  • Political telemarketing.: Politicians reach out to their electorate to inform them about their campaigns and gather public opinions or voting preferences. 

Telemarketing Advantages and Disadvantages 

Telemarketing, the same as any other sales method, has both pros and cons. To make your decision about its efficiency for your business, make sure to understand both sides.

Advantages of using telemarketing include:

  • Direct engagement with the prospect
  • Quick and straightforward lead qualification process within the first minutes of the telemarketing call 
  • Relatively affordable price eases up possible payment restrictions
  • A simplified way of providing sales support regarding any technical aspects of the sales process
  • Establishing immediate human contact with the prospect
  • Easier to measure and monitor the results
  • Possibility to outreach to a large number of leads regardless of the business’s geographical position

Disadvantages of telemarketing include:

  • When done poorly, telemarketing can have a negative effect on your business’s reputation.
  • Telemarketing calls are believed to be old-fashioned and impersonal.
  • Obtaining a lead list to make the calls is often expensive and time-consuming. 
  • Not all the prospects are ready to have a sales conversation over the phone. 
  • Having and managing an in-house team of SDRs requires a large budget.

How Much Telemarketing Costs 

Telemarketing activities can be quite expensive, especially if it is an in-house team. The exact price varies depending on the type of business, company size, number of sales seats, SDR labor market rate, geographical location of the office, etc. 

The average monthly expenses for the work of an in-house SDR are around $10,930 (including base pay, bonuses, hiring expenses, management, overheads, and tech stack). Based on this sum and our further calculations, the average price of a lead is about $1,822. 

If you don’t have the budget to pay so much money per lead, there is an alternative—outsourced telemarketing. Just to compare, the average cost of a lead generated by an outsourced telemarketing company varies from $35 to $60 per lead, which is over forty times less expensive than the first option.

However, cost-efficiency isn’t the only reason why it is better to outsource telemarketing rather than having an in-house team. Other reasons include:

  • Avoiding dealing with infrastructural costs of a call center 
  • Paying only for the actual work done
  • Investing money on developing other outbound channels
  • Saving time and resources on sales training 
  • No need to have a technical team to support the call center
  • Working with intercultural teams from all around the world 

Overall, outsourcing telemarketing is beneficial for both your business and your salespeople. While you can cut costs and optimize the sales process, your salespeople will be able to focus on other tasks, such as closing deals. If you don’t know how to choose a perfect outbound cold calling center, check our guide dedicated to this topic. 

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