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.*