Continued Changes in Communications Point to Growing Telemarketing Needs

Telemarketing has been described as a union between modern telecommunications technology and professional sales and customer service skills. It is not just selling by phone; rather, telemarketing is essentially a systematic approach toward the use of the telephone. Thousands of companies rely on telephones to produce a substantial part of their sales, including Bell & Howell, CBS, Ford, RCA and Reader's Digest. This list is long and impressive and it gets longer every day.

The telephone, as a sales medium, now exceeds direct mail in terms of direct marketing advertising expenditures. With marketing costs skyrocketing, more care than ever is being taken to use each facet of the media in the most cost-effective manner. Telephone marketing is complex, demanding, exacting and, if properly used, cost efficient.

In the past, and even today, a few individuals and some organizations feel that if they have a telephone and central office trunk, they can become telephone marketing experts. Well, there are some operations that did start that way, but in today's ever-changing and fast-paced world, telemarketing has become quite sophisticated. To accomplish the proper use of telemarketing requires telecommunications technology and professional marketing skills.

Telemarketing today consists basically of out-bound and in-bound service. Out-bound telemarketing has been around almost as long as the telephone, but inbound toll-free 800 service has been around for only the 18 years since AT&T introduced it in 1967.

Let's take a look at in-bound 800 service. What are the primary goals to consider for any company thinking about utilizing this unique direct-response medium? Should we set up an in-house operation or let a service bureau handle the project or program? You'll have your answer after knowing what considerations are involved with an in-house operation. For example, you must consider the type of telephone configuration, the equipment required, the space needed, personnel, the need for programming, and service and back-office assistance. The nature of your in-bound program will tell you what type of telephone configuration you require: single-number service or two-number service, dedicated or generic, local or WATS, and in what service areas.

Equipment to Consider

Next, looking at equipment, we opted for an ACD from Rockwell for our main center. This unit provides tele-rep position with an electronic phone equipped with LED readout that can indicate the name or number of each incoming call. These phones also have the standard hold button, transfer, assist, emergency and trouble bottons.

Considerable study and on-line testing was done in the selection of headsets. We've tested them all, I think, but we are still on the lookout for something newer and better.

Along with the electronic phone, each position is also equipped with a seven-color CRT. Varying colors for different fields makes call processing much easier for the tele-rep. Errors, for instance, in the zip code, source code or item fields will automatically pop up in red so that corrections can be made immediately. We feel that the seven-color screens are easier to cope with for long periods and will reduce eye strain.

At the main supervisor's contol center we have the standard CRT, supervisor's electronic set for monitoring, and a beehive terminal showing real-time activity of all positions, client groups and trunk usage. Each hour and after each four-hour shift, all data collected is dumped into a printer for future reference. We're in the process of converting this dump into a PC for easier storage and retrieval.

Consideration was also given to the space. Egg-crate diffusers for lighting were installed that greatly reduce glare. Scattered modular furniture is excellent for reducing noise and organizing the work flow. Pleasant surroundings lead to improved productivity, less absenteeism, better recruiting and retention of the telephone-representative force.

The programming department developed a system allowing us to create a "customer parameter file" with all related facts of the program. In five minutes or less, this data can be entered and we will then be on-line and ready to take calls. If a client doesn't fit into one of the five basic areas, special programming must be done, which can take days or even weeks.

Service or technical support is generally handled in-house. Fifty to 60 percent of any glitches in the ACD can be handled by our operations manager, while any CRT-related problems are worked on by tech support from the computer department. Major problems require outside help, but help is generally on the premises within an hour.

With out-bound service, considerations are basically the same as for inbound. The only main difference here would be in the area of equipment. You don't need expensive $2200 electronic phones backed by an ACD when you can use straight-line six, 10, 22 or 30-button phones. Whatever is used, however, should be backed up with good service-observing equipment for monitoring purposes.

A big step up from this standard equipment is a new system currently being offered to telemarketers. This is an off-line computerized dialing system in which calls are automatically dialed and when answered, are forwarded to the next available tele-rep. On their CRT screen appears the name of the called party along with appropriate scripting and offers available. This computer-aided system eliminates all the wasted time spent on busies and no-answers, and results in better productivity, more presentations give, more sales being made, and ultimately more bottom-line profits.

telecommunications technology has come a long way, and coupled with advances in hardware and software, has made telemarketing one of the fastest-growing mediums around.

When we examine the spectrum of sales and customer service activities, we begin to see that they are all basically exchanges of information. In a retail or industrial-sales setting, this exchange is accomplished face-to-face. Sales people transmit price and product information, describe features and benefits of a product, answer questions about warranty policy, payment terms and more. In the telemarketing environment, the very same types of information can be exchanged just as efficiently. Program sucess will depend on how well the telephone is positioned and woven throughout the entire marketing plan.

The development of a strong telemarketing operation requires close cooperation throughtout the marketing department and a commitment to telemarketing at the highest levels of corporate management. The medium must be carefully integrated into the total marketing strategy.

The basic day-to-day uses of an inbound telemarketing program are most frequently order taking, lead qualification, dealer referrals, customer service, and the selling a product. It took over 10 years for consumers in the United States to become accustomed to the in-bound toll-free 800 numbers after they were first introduced in 1967. Today it is an accepted telemarketing technique.

When an 800 number is mentioned in an ad, an insert card, a TV commercial, or a direct-mail piece as a response option, it is generally estimated that the 800 option will improve response dramatically. Catalog orders taken over the phone for example are usually about 20 percent higher than those that arrive by mail. This means that people who call in are in a buying frame of mind, and the person answering the phone has a unique opportunity to sell something. Godiva Chocolatier is a perfect example of this. This well-known company merchandises the product in a variety of ways, including catalogs and space ads with an 800 toll-free number.

To help Godiva track the source of their orders, a source code is keyed into the order, along with name, address, city, state, zip, phone number, credit card number, expiration date, inter-bank number and item numbers.

The computer calculates appropriate sales taxes, shipping and handling costs, and the computer program also offers the ability to take gift orders and provide a personalized message line.

Many major publishers have discovered that the toll-free number increases orders substantially. TV Guide, for example, displays the 800 number of several of their renewal efforts. In addition to taking the renewal order, address changes can be made, customer service calls can be properly directed and requests for special editions, gift subscriptions or new subscriptions can be quickly handled.

A dealer locator program provides clients with an 800 number for their customers to call in order to find the nearest dealer for a particular product.

When the caller provides the telephone representative with his zip code, it is entered into the CRT and a list directly appears showing all cities where stores are located within that zip-sectional center. If no dealers are available close-by, the telephone representative can take the order for the product and process it directly to the client's fulfillment house.

A unique program for a major manufacturer is a sales-call follow-up program that makes it possible for a field-sales force to call an 800 number where the telephone rep enters the name and address of each person the salesman called on that day. The next morning, a personalized letter is generated to each person called on. This letter recaps the conversation, reinforces the sales pitch, and thanks the person for providing time for the salesman to talk. The laser-generated letter is on the desk of the recipient within 48 hours after the salesman has made his call. It is personally signed and addressed and has the appearance of a hand-typed letter.

Major banks around the country have recently begun to realize the effectiveness of 800 toll-free numbers. Utilizing space ads, one particular bank has been promoting student loans. Individuals call the number to receive a complete package of information including applications, instruction sheets, booklet about loans and a reply envelope. This package goes out within 24 hours of receipt of the call.

These few examples demonstrate the value of in-bound telemarketing.

Highly trained telephone representatives, or more properly, product information specialists, facilitate the exchange of information, usually aided by on-line computers, and conclude a sale, a customer service or whatever else is the purpose of the particular program.

Out-bound telemarketing provides the opportunity to make sales calls, to upgrade mail orders, do prospecting, or speed up cash flow to the corporation through accounts-receivable collection efforts. Out-bound calling may also be used to build retail traffic, get appointments for sales reps, and even re-sell customers who have cancelled their orders. Fund raising represents another area where out-bound telemarketing has brought dramatic results.

Telemarketing as a Complementary Tool

Telemarketing is never as powerful as it is when used in conjunction with other forms of selling, especially as a complementary mode to the field salesman.

One such success story is the consumer-products division of a major pharmaceutical company that embraked on a telemarketing campaign to call retail pharmacies around the nation to sell their over-the-counter pharmaceutical products. Because of the distance between pharmacies, their sales staff, especially in the more-rural areas, were able to reach five or six stores a day, but that number of contacts by telephone could be reached in an hour.

Upon reaching the druggists and determining their willingness to purchase over the telephone, the telephone reps presented the current product deal being offered, explained the media advertising to support the trade, and consummated the sale. A future date or cycle for calling back, was established so that the store would not be in a "stock out" situation, or being unable to supply a customer's request for the product. At the conclusion of the day, in order to speed the product to the pharmacy, all sales are called in to the appropriate wholesaler serving that particular druggist with a written confirmation order following by mail.

This year, AT&T will have completed its fourth year of calling business customers to see if they would like to have their 800 number publised in directories. In december of 1983, the program was extended to calling twice a year in order to handle up-dating of 800-number information and adding those that had recently been acquired.

The program offers customers the opportunity to be listed in directories, and it gives AT&T an accurate file of 800 customers. The number of 800 listing is projected at about 350,000 in 1985. To handle a project of this magnitude by mail would be enormous in terms of the volume of correspondence handling. With telemarketing and computer updating, the project is very manageable and the time element is considerably shortened. In addition, because of the personal contact with a well-trained, product-knowledgeable telephone-sales person, the accuracy of information is assured.

the financial community is an excellent candidate for telemarketing, according to the discovery of one major corporation that in 1980 contacted public and corporate libraries and financial institutions. Their product was various financial books, newsletters, magazines and other services. The test and subsequent roll-out of the initial program prompted interest among other divisions within the company, and they are now performing several profitable telemarketing campaigns. In these campaigns, they do monthly renewals targeted at the consumer audience, lead-qualification for their salesmen, and annual subscription renewals geared to the investment community. Telemarketing has also proven profitable with cold-call sales, for a new $4,000-per-year subscription service.

At Southern Bell's request a fulfillment center was established in Atlanta, with the purpose of providing fulfillment services to Southern Bell for their various direct-marketing programs. All requests for custom-calling services and DTMF, generated by direct-response programs, are processed at the fulfilmment center. All orders are contacted by telephone for information verification and up-sell attempt. All orders are then prepared for order entry and are distributed to the appropriate business office.

These orders are generated by a number of direct response programs including In-WATS (800), direct mail, Out-WATS calls, and various other direct reponse programs. All customers reponding to these direct promotions are captured on a data base for future promotions. The information captured includes customer name, address, telephone number, the promotion/media to which the customer responded and services ordered. A number of other special services are provided to Southern Bell out of the Atlanta Fulfilmment Center, including out-bound telephone as follow-up to direct mail.

Uising CAPs (Customer Analytical Profiles), Southern Bell is able to target their particular market by pre-selecting prospective customers to match the profile of the ideal consumer of customer calling services. Whether calling to upgrade existing orders, determine the receptivity of a product in a new market, or increase the response to a mail piece, sent to an existing market, the orginal marketing objective has remained unchanged; to offer CCS (Customer Calling Services) to the residence marketplace, with telemarketing properly positioned and woven throughout the entire marketing plan.

Developing Marketing Programs

In the coming years, the challenge for marketers will be one of imagination--taking the lessons learned from the innovative applications of telephone marketing and continuing to develop effective multi-media marketing programs.

The boradening scope of telephone marketing, with its advantages of personto-person contact and mass-market strategies, will afford the opportunity for the distribution of goods and services with even-greater efficiency in the future. Today, we live in the full flower of an era of radical change. The pace of change is now so rapid that it requires us to totally alter the way we handle the mechanics of living.

Ultimately, only the creative powers of the marketing department will limit the range of telemarketing programs a company may want to inaugurate. There are any number of potential users for telemarketing that are yet to be created by those with the need. In fact, a whole new form of telemarketing looms in the future with the advent of interactive television. Telemarketing is an essential first step into that future.

Adding television to the computer-telephone marriage has the potential for completely rewriting the direct-marketing industry as it exists today. Using the cable-TV network and the telephone as the communications vehicle linking the merchandiser with the at home shopper, consumers will at their leisure and in the comfort of their own home, examine catalogs and other merchandise offers on their home television sets. They can place orders by either calling the appropriate telephone response center, or by entering their credit-card number directly into the sales-center computer by using a simple keyboard provided for that purpose.

Limitless At-home Shopping

The future of electronic at-home shopping and information services is limitless. Many of these concepts are now being tested, although it may be several years before this type of capability is available nationwide. In addition to at-home shopping, companies are testing at-home electronic banking, bill paying, accessing travel availability and reservations and more. the potential exists for each home to become a source of increased sales for the merchandiser. Through the magic of cable TV and computer, the telephone could well be on its way toward becoming the major shopping vehicle of the future, approaching the shopping mall as a source of sales for the merchandiser.

As an ever-increasing number of independent in-bound telephone response suppliers and in-house telephone response departments automate, they begin to possess "the winning edge" over their competition. They offer greater capability and faster response in an attempt to develop and maintain a large, active customer base. It is their desire to set and maintain this pace that is, to a great extent, responsible for the dynamic growth of telemarketing and its continued advance into the future. The sky's the limit and the future is bright for those willing to jump on the telemarketing rocket to limitless growth and opportunity.

A special golden anniversary issue of U.S. News & World Report devoted the issue to "What The Next 50 Years Will Bring." They reported that the revolution brought about by computers and automation is setting the stage for employment in the 21st century. By the year 2000, they predict, manufacturing jobs will account for 11 percent of the labor force, down from nearly 24 percent in 1980. Jobs in agriculture will decline from 4 percent to 3 percent, while service employment will increase from 62 percent to 86 percent.

In their forecast of the nearly 14-million jobs that will be created by year 2000, 8 million, or nearly 60 percent, will be telemarketing workers.

We predict taht for a number of reasons, direct marketing of goods and services will continue to grow for the next 10 years even more rapidly than the growth in the past five years, and that telemarketing will grow at least twice as fast.

Also, we feel direct marketing of personal services will grown even faster than direct marketing of goods, and that telemarketing will be among the leaders of that growth.

In addition, every business that makes customers stand in line will either learn direct marketing or lose those customers to the competitor who does learn.

And finally, we predict that telemarketing will become the most significant medium of the direct-marketing hostory.

COPYRIGHT 1985 Nelson Publishing
COPYRIGHT 2004 Gale Group