Like any outsourcing
decision, retaining outside
telemarketing services should be
subject to cost/benefit
analysis. Evaluating the costs
may be a complex process in some
cases, but it is at least a
quantifiable side of the
equation. Less readily
quantifiable are the benefits.
While ultimately the goal is
that some benefits can be
quantified in terms of sales
results, it is useful to
recognize that there may be
additional, tactical benefits to
be gained by outsourcing
telemarketing. Only when these
broader implications are
understood can a full cost/
benefit analysis take place.
The goal of this white paper is
to provide a framework for
telemarketing outsourcing
decisions. By detailing some of
the broader, tactical benefits
of retaining outside
telemarketing services, this
paper will both provide a
template for fully-realized
cost/benefit analysis, and
suggest criteria for selection
of a telemarketing company.
Comparing Costs and Benefits
of Telemarketing Options
Comparing the cost side of
in-house vs. outsourced
telemarketing operations is
relatively straightforward. In
particular, where a company has
a history of in-house
telemarketing operations, there
is an established budget which
can be compared against outside
telemarketing quotes. Even where
there is no existing internal
operation as a basis for
comparison, a pro-forma budget
can be formulated for comparison
against telemarketing quotes.
It is on the benefits side of
the cost/benefits analysis that
things get a little trickier.
First of all, sales results are
notoriously hard to project
whenever a change in personnel
and methodology is involved.
Second of all, while sales
results are the main goal, there
are also significant benefits to
outsourcing telemarketing that
are not so easily quantified.
Indeed, although sales results
are likely to be paramount in
the ultimate evaluation of the
success of the program, because
of the uncertainty of sales
projections at the start, the
less tangible benefits of
outsourcing should be viewed as
key criteria for the initial
decision.
This is why a full understanding
of those benefits is so
important to the cost/benefit
decision. A review of ten
tactical uses of telemarketing
services can help shed light on
those broader potential
benefits.
Ten Tactical Uses of
Telemarketing Services
The list below highlights ten
tactical uses of telemarketing
services. While any one company
is not likely to be able to take
advantage of all ten at one
time, it is important to
recognize all ten so that each
management team can decide on
the uses best suited to their
needs and opportunities, and
choose a telemarketing company
accordingly.
1. Lower barriers to entry. For
a start-up, assembling a
telemarketing team would
represent an extremely costly
upfront investment in personnel
and technology. Perhaps even
worse, the time this would take
could take away a key advantage
small companies have, which is
nimbleness in pursuing emerging
opportunities. Being able to
outsource telemarketing reduces
this barrier to entry.
2. Scale up sales staff at peak
times. Sales for many products
and services are seasonal.
Trying to expand and contract an
in-house telemarketing staff to
conform with those seasons is
not practical- qualified
temporary workers can be hard to
find, and doing so would mean
regularly consuming time
building the team back up. With
outsourced telemarketing
services, sales resources can be
ramped up and scaled back down
at any time.
3. Leverage in-house sales staff
by setting appointments.
Sometimes, the argument may be
that a given type of sales close
is too complex to be handled by
an outsourced telemarketing
team. If a close requires a
highly-specialized sales force,
it may be all the more reason to
leverage their time by using
outside telemarketing to do
preliminary prospect screens and
set appointments.
4. Free management to focus on
core competencies. Another way
outside telemarketing can
leverage in-house expertise is
by freeing a portion of
management time to focus on core
competencies. Outsourcing the
telemarketing department means
one less group to oversee, and
one less set of personnel issues
to handle.
5. Limit fixed costs to improve
ROI. Besides leveraging
expertise, outsourcing
telemarketing can provide
financial leverage by converting
a fixed cost into a variable
cost. While personnel cost
savings may be offset by fees
for telemarketing services, the
sunk costs of real estate and
technology investment can be
avoided by outsourcing.
6. Call attention to other
marketing media. Mailers are
more effective when accompanied
by timely telephone follow-up,
and telemarketing campaigns can
also be used to drive traffic to
special web site features. Since
all marketing initiatives have a
limited shelf life, being able
to deploy concentrated resources
to call timely attention to new
initiatives is a clear advantage
of outsourcing.
7. Test new tactics. Having
access to an expandable sales
resource in the form of an
outside telemarketing company
allows a firm to run parallel
sales campaigns to test new
tactics. Different value
propositions and price points
can be tried, with efforts then
directed toward the approaches
which are most successful.
8. Qualify prospects and develop
a proprietary database. Any
publicly-available contact list
is likely to contain some errors
and be based on dated
information. In addition, it
might not have the specific
contact information or profile
detail for a given product or
service. By compiling updated
information and additional
detail in the course of their
efforts, a professional
telemarketing team can quickly
turn a flawed database into a
proprietary information source.
9. Gain access to
state-of-the-art technology and
expertise. Telemarketing
companies are specialists in
what they do. They have the
fastest, most reliable, and most
cost-efficient equipment, and
their experience can be
unleashed on new marketing
challenge. This is a significant
advantage over having to
accumulate this equipment and
experience from scratch.
10. Avoid telemarketing
regulatory pitfalls. There has
been a series of legislative
restrictions on telemarketing
activities, which can represent
a potential legal liability to
any organization with an in-
house telemarketing operation.
Outside telemarketing companies
are in the business of keeping
track of and complying with
those regulations, and they keep
the potential liability at arm s
length.
Conclusion
Outsourcing telemarketing
services may not be an option
for all organizations,
especially in highly-regulated
industries with strict licensing
requirements, or for very
complex, high-end sales.
However, for the vast majority
of sales-driven organizations,
it is an option which should be
explored with a full
understanding of the potential
benefits.
Cost/benefit decisions are
usually discussed as trade-offs,
where lower costs are exchanged
for lesser benefits, or higher
costs are invested in return for
greater benefits. Approached
correctly though, outsourcing
telemarketing services can be a
win/win proposition rather than
a trade-off, as lower costs may
be accompanied by improved
productivity and a range of
other benefits.*
Source: Paul Rivera link