What Is Telemarketing and Why Should You Do It?

What Is Telemarketing?

Telemarketing is the practice of selling goods or services directly to potential customers over the phone, the Internet, or by fax. Telemarketing can be done by telemarketers or, increasingly, by automated phone calls (sometimes known as “robocalls”).

The intrusive aspect of telemarketing, as well as stories of telemarketing scams and fraud, has sparked a growing reaction against this form of direct marketing. “Telesales” or “inside sales” are other terms for telemarketing.

Key Takeaways

  • Telemarketing is the direct marketing of goods or services to potential customers over the telephone or the Internet.
  • Four common kinds of telemarketing include outbound calls, inbound calls, lead generation, and sales calls.
  • Due to the intrusive nature of telemarketing, including spam calls, many customers do not prefer telemarketing. Countries such as the U.S. and Canada have federal “Do Not Call” lists where individuals can register their phone numbers to avoid telemarketing calls.

How Telemarketing Works

The practice of calling, vetting, and approaching new clients is known as telemarketing. It excludes the use of direct mail marketing strategies. In 1973, the word was first employed in reference to a new class of outgoing long-distance telephone services and inbound toll-free services.

Telemarketing can be done from a call center, an office, or, increasingly, from one’s own home. Telemarketing frequently entails a single contact to gauge interest or suitability, followed by follow-up calls to close the deal.

To filter down vast databases of names to a small number of higher-probability customer prospects, various data can be used.

For-profit enterprises, non-profit organizations, political groups and candidates, surveying, gift solicitation, marketing research, and other purposes all employ telemarketing.

Telemarketing Activities

The act of telemarketing can be divided into four subcategories:

  • Outbound telemarketing calls, sometimes known as “cold” calls, are used to aggressively contact potential and existing consumers.
  • Inbound telemarketing calls are made in response to inbound product or service queries initiated by advertising or sales initiatives. Customers that have filled out an online interest form or are already familiar with the company are called “warm” calls.
  • Lead generation is the process of gathering information about potential consumers’ profiles, interests, and demographics.
  • Telemarketing is a type of sales activity in which telemarketers are taught and attempt to clinch a deal over the phone.

Telemarketing may entail a variety of activities, such as surveying, appointment-setting, telesales, database maintenance and cleaning, and providing a call to action.

Legal Requirements

Telemarketers must abide by any local, regional, or national regulations. In the U.S., the Federal Trade Commission’s Telemarketing Sales Rule “requires that telemarketers make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.”  

Best Practices

While telemarketing has acquired a bad reputation because it’s used by unscrupulous people trying to steal from the vulnerable and by annoying “Robo-callers” who play a recorded outgoing message in a continuous loop, it can be an effective small business marketing tool when used properly.

Whether selling to businesses or to consumers, telemarketing is most effective when the business making the call has an established connection – even a slight one – to the person being called.

For example, the call recipient might already be a customer of the business or is a prospect who has requested more information.

Best practices for telemarketing success include:

  • Customer information. The caller should know why the people being called are good prospects – did they open an email message about the product or enter a prize drawing at a trade show?  
  • Knowledge. Individuals placing the sales calls should know the products they’re selling and the companies they represent, and should also be able to answer questions about both. They should also be trained in typical purchase objections and how to overcome them in a conversation.
  • Empathy. An empathetic telemarketer who demonstrates listening skills is better able to develop a customer relationship than a caller who is focused on nothing more than the sale.
  • A campaign. Because customers need several contacts in different forms – advertising, direct mail, and so on – the telemarketing call needs to be part of a larger marketing effort.

Telemarketing is most successful when used to nurture leads rather than to generate them.

Telemarketing Reception

The United States and Canada have national “Do Not Call” (DNC) registries that give their residents a choice about whether to receive telemarketing calls at home. In the U.S., the registry is managed by the Federal Trade Commission (FTC) and enforced by the FTC, Federal Communications Commission, and state law enforcement officials.

Consumers who are registered in the DNC database can file a complaint if they receive a call from a telemarketer, which could lead to a stiff fine and sanctions for the telemarketing firm.

However, calls from charities, political organizations, and telephone surveyors are permitted and therefore may be received by a consumer despite having their number listed on the DNC registry.

Also permitted are calls from businesses with whom the consumer has an existing relationship, as well as those businesses where consent to call has been provided in writing.

Numerous North American companies outsource their telemarketing functions to lower-cost jurisdictions such as India, Mexico, and the Philippines.

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