A reality check

Call centers, IVR platforms, blended live agent/IVR solutions, and dynamic call routing platforms are expensive. With the high cost of media and persistent downward pressure on profit margins, picking the “right” telemarketing solution can be the difference between having a direct marketing hit and a case study miss.

In the realm of direct to consumer marketing, telemarketing costs can be higher than the cost of the product being sold, and are typically the 2^nd or 3^rd biggest expense behind the cost of media. Sales commissions, talk time fees, set up fees, script development, custom reporting and programming charges all conspire to drive up the cost of doing business “direct” for marketers.

Some good news

We can expect more and get more from our investment.

With some informed selection, a collaborative and accountable work style and an uncompromising focus on results (vs. activity), direct marketers can expect (and achieve) truly great results from their telemarketing partner(s).

So, looking to change call centers? Test a new one or link two or more together? Want to test that automated attendant, intuitive speech recognition / IVR solution? Think a blended approach makes sense? Here are some considerations for choosing the “right” type of solution and getting the most out of your investment:

1. Offer type - soft offer or hard offer? If price is not mentioned in the ad (i.e. “soft offer”) for a “risk free trial” or “call now to find out how…” or “call now for your free…” offer, live agent call centers are the best. So-called soft offer call centers are in essence your commissioned sales force, and they are skilled at the art of selling – they’ll inform and persuade the curious callers to take your offer. When price is mentioned in the ad (i.e. “hard offer”), callers are typically more ready to “buy” (they already know what they’re going to get and how much it should cost them), and therefore do not require as much “selling” (when compared with soft offer callers)…the key for this type of offer (and caller type) is efficient order taking, which means less art and more science is required at the point of sale. Live agents can get the job done, but consider the automated attendant options – test both and compare results. The benefits of automated attendant platforms (i.e. 0% abandonment, 100% script adherence) can be compelling, and can be a nice complement to the live agent strategy.

2. Medium (and media plan), messaging - TV short form (“spots”), TV long form (infomercials or “shows”), print, radio or direct mail? Broadcast or cable? Local newspaper or national magazine? First class mail or bulk rate? You get the jist – the point is: the combination of messaging and medium drives various caller (and potential “buyer”) profiles as well as the “call curve” for a specific ad impression.

An understanding of caller profiles (i.e. their demographic, psychographic, geographic info) is important input to selecting (and optimizing) a telemarketing solution.

As an example, if you’ve got a mature (i.e. baby boomer and older) and evenly skewed male/female caller profile responding to a soft offer, long form radio show for a relatively high ticket (i.e. north of $150) dietary supplement, it is likely that a purely automated attendant telemarketing solution would yield unacceptably low conversion rates; in contrast, the same caller profile directed to a boutique (i.e. small, few clients, highly trained and well-compensated agents) soft offer call center is likely to be converted at least twice as frequently.

An understanding of the “call curve” (i.e. call volume and timing relative to ad impression – low to high, impulse or delayed; call density – number of calls over a time interval, say, per half hour) is also important when considering telemarketing solutions. As a for instance, direct mail and print advertisements typically generate a fairly smooth and predictable call curve, with a large percentage of those calls generated during the daylight hours of Monday to Friday – good to know if you’re the call center manager in charge of scheduling and staffing, and great to know if you’re a call center owner because you know that overnights and weekends are (generally) more difficult and more expensive to service.

In terms of handling high call volume as well as high call density (or “spiky”) call curves, the larger call center companies (with more “in house” capacity, typically across multiple physical centers, and even continents/time zones, but sharing the same “in house” telecom and technology backbone) and automated platforms are typically best at (consistently) delivering the service levels marketers require (and that media buyers love). That said, call management technologies that provide call routing options (whether third party, stand alone like Intellimedia’s www.intellimedia.com or those offered by a combination of call center and their telecom carrier) can be employed to daisy-chain (or hub-and-spoke) multiple small call centers together to create a larger ‘virtual’ call center and thus absorb more calls.

3. Initial media budget, spending growth plans – both affect call forecasting (read: demand for your telemarketing partner’s capacity, including live agent scheduling) and call service levels (read: your telemarketing partner’s capacity, including live agent scheduling). Over communicate the growth plans (and changes in plans) with your telemarketing partners – consider developing a collaborative planning model where media buyers and telemarketing work together and interact directly. Track forecast accuracy, call service levels (read: call answer rate, or one minus the abandonment rate) and make updates to call projections and staffing models regularly.

4. Outcomes and results – define success with your telemarketing partners. Calculate, articulate and then communicate the “success metrics” and “service level” expectations you have for the marketing campaign as well as for the telemarketing partner. Develop a scorecard with specific KPI’s – metrics along with their calculations – and their targets (i.e. revenue per unique call in; minimum performance as measured weekly needs to be $45 excluding third party cross sells). Consider tying compensation to performance. Expect call centers to record all calls, provide compliance reporting – monitor and spot check the process to your satisfaction. Ensure 100% call dispositioning – know where every call that hit the switch ended up…have programs in place for recovering all of the “leakages” (i.e. every call that hit the switch that didn’t result in an order is a leakage). Lastly, expect full transparency and accountability of the call reporting, order management, payment processing and data movement (i.e. data file transmission of media results to media buyers) processes.

5. Recommendations - good sources for referral of leading telemarketing solution providers include trusted business partners and other marketers, colleagues in your industry peer group and “ecosystem”, as well as trade associations such as the Electronic Retail Association (www.retailing.org), Direct Marketing Association (www.the-dma.org). In particular, we’ve found that media buyers and production companies (whether for print, TV or radio) are typically in the know about “what’s hot and what’s working”; “telemarketing consultants” and “campaign management companies” generally have fact-based and empirically supported recommendations as well.

In general, my suggestion to those shopping around for telemarketing solutions is to do three things: first, do your homework – be ready to articulate your business objectives and then translate these into measurable success metrics / service level expectations for your prospective telemarketing partner. Second, when considering recommendations for telemarketing solutions, perform your own due diligence or work with someone who’s independent and objective – be critical of unconditional and unqualified recommendations and be clear about the motivation (financial, personal, other) for the referral. Lastly, test and learn – set up a controlled test (or set of tests) and learn firsthand what works with your combination of marketing variables and the chosen telemarketing solution.

This entry was posted on Friday, June 6th, 2008 at 1:23 pm and is filed under DR Marketing, Infomercials, Metrics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.