What Is Telemarketing?
Telemarketing is a form of direct marketing that is used to generate leads, gather marketing information, and/or complete a sale through a phone conversation with a potential customer. Sales pitches that are recorded and played over the phone automatically when dialing a certain number are also considered telemarketing. However, this form of engagement with a potential customer has received less support in recent years with the reputation of being annoying and impersonal.
Examples of telemarketing include:
- A call from a paper company suggesting to renew your paper supplies for your business
- A local Internet provider calling to offer a better deal
- A receptionist from your favorite gym calling to inform you about new equipment arriving, etc.
Telemarketing vs. Cold Calling
Telemarketing is often confused with 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 is 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 signing a deal.
Types of Telemarketing
The most common types of telemarketing include outbound calls, inbound calls, lead generation, and sales calls:
- Outbound calls: Sales representatives reach out to potential prospects to increase the efficiency of an outbound campaign. In this case, the prospect’s 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.
Example: An IT-company reaches out to their clients to introduce a new paid feature for their software. The main goal here is to raise awareness and increase sales conversions for the new product.
- Inbound calls: 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.
Example: A prospective customer sees a Facebook ad about new graphic-design courses and contacts sales representatives to find out more information, and possibly sign up for the course.
- 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.
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 phone conversation
- 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 is 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 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. In 2018, the Bridge Group calculated that the average monthly expenses for the work of an in-house SDR are around $10,701 (including base pay, bonuses, hiring expenses, management, overheads, and tech stack). Thus, the average price of a lead, in this case, is about $1,216.
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 40 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 the call center you outsource to. You can cut costs and optimize the sales process, and they often receive higher salaries than average market salaries and get extra job opportunities. If you don’t know how to choose a perfect outbound cold calling center, check our guide dedicated to this topic.