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Nov 14, 2005
How To

How to Pick the Best B-to-B Telemarketing Firm: Quick Buyer's Guide

SUMMARY: Hiring a telemarketing firm is one of the least fun jobs for a business marketer because there are hoards of telemarketing firms all claiming to be the best. And many are not that great (to put it politely). Plus, telemarketing's expensive and public-facing. So if you make a mistake, it's a costly one. MarketingSherpa reader Kate Baar just spent weeks researching the field so she could pick the best telemarketing firm for her campaigns. We picked her brains for lessons learned.
"With telemarketing, there's no barrier to entry. You can start a telemarketing firm today with a telephone, so there are hundreds if not thousands of firms."

That's what Kate Baar, Director of Marketing for IT and business services firm Hitachi Consulting found in her recent search for a new telemarketing vendor. "I believe that nurturing leads is a really important process, and that process for us is most effectively done by telemarketing, either outsourced or in-house."

Although Baar had a firm she was happy with, Hitachi's sales lead generation campaigns went so well this year that she needed to add on another firm to handle the flow. We asked her for a behind-the-scenes tour of the vendor shopping process.

Step #1. How to evaluate your telemarketing needs

With so many firms to choose from, you must be very clear on what you want from a telemarketer, and in some cases, it might make the most sense to have more than one telemarketing firm; one for each requirement.

Hitachi Consulting, for example, wanted to continue with the firm they were using for a certain type of outbound calling -- when, for example, the company wanted to contact companies to tell them about a seminar or web event, to ask if they were interested and to find out if they were willing to commit to attending.

But this firm wasn't suitable for calling VP-level executives at large corporations.

Baar suggests companies look at telemarketers based on your level of need:

--A straightforward sales call requires a smaller skill set, less training and less experience on the part of the caller.

--A consultative sale that depends on uncovering a potential client's need is far more complex. "We're trying to uncover whether a company has a need for our high-end service. It means getting deep with an account and wide with an account. It means asking, 'If you're not in charge of this area, is there someone else I should be talking to?' It means getting a sense of the organizational structure. It's different than selling a $2,000 widget."

Step #2. Understand telemarketing vendor business models

"I went out there thinking I'd be able to evaluate these guys on a level playing field, comparing apples to apples," says Baar. Instead, she says, "I found apples and kumquats and cars."

Baar cited examples from three firms she spoke with to illustrate the different options available:

--Level One: Entry level

These are the firms that evaluate their callers by the number of outgoing dials they make, and you pay them by the hour. Their business experience is minimal. “We had one caller say ‘dude’ to the CFO of a major corporation on the phone," Baar explains. These firms have their place in lower-level calling but are not appropriate for a complex sale.

--Mid-Level: Appointment setters

This type of telemarketer focused on getting an appointment with the appropriate person. A script might sound something like: "Hello, this is so-and-so from such-and-such, and we sell X type of services. I know that there are times when you need x, y, and z, and we're the best at that because of. Can we come meet with you?"

When asked for more information, the caller might say, "You know, I could tell you more, but the best person to talk to you is Tom and he'll be in your area next week. Could he come meet with you for half an hour?"

Baar piloted this firm, in part because there was no start-up fee and cost was based on appointments made, not calls. The firm charges about $650 per appointment made. "You'd be surprised at the number of people even at the CIO level who are willing to take a half-hour appointment."

--Level Three: Consultative sale

Another company Baar researched believed that for the highest level consultative selling, the best discussion with a high level executive comes from another high level executive. That firm takes a VP to a recording studio and records three voicemails: the first recording is an introduction ("Hi, I'm the VP of Food and Beverage Services at Hitachi Consulting and I'd love to talk with you about…"); the second is similar, but might say, "I left a message for you last week, wanted to touch base about…"; and the third might say, "I'm sending you some materials, and I'll call you on Monday to discuss."

"Their whole methodology is based on trying to build a relationship with a company on a peer-to-peer level," Baar explains.

On the fourth call, the telemarketer makes the call on the VP's behalf. On that call, they don't hang up if they get a real person (as they do in earlier calls). By then, the lead believes that the VP of another company has tried to reach him three times and is more open to the telemarketer's call, which might go something like this: "Hi, I'm calling on behalf of so-and-so, he's been trying to reach you, did you get the materials he sent, and can I set up an appointment for the two of you to meet?"

With so many types of telemarketing firms available, it’s critical that you start by understanding each firm's model: are they measuring by number of outgoing dials or number of appointments? Are they charging by the organization?

(One company Baar mentioned might charge $10,000 just to get an appointment with, say, Coca-Cola, and they would "work and work and work until they understood the lay of the land of the company and how that company makes decisions," she explains.)

Step #3. How to grill prospective vendors

First, absolutely ask for references, preferably for companies that sell the types of products/services that you sell. Then, call them. "One guy I called said to me, 'You have a highly complex sale. I love my firm, but they're not for you,'" says Baar.

Six questions to ask the firm:

--Average age of the callers --The business experience of the callers --What do they pay their callers --What is the firm's background in your kind of selling --Do they offer audiotapes --What is their philosophy toward lead generation

"One firm had two levels of callers. They recognized that there were low-level callers and high-level callers, and they promoted within. If you were looking for someone to put people in seats for a conference, they'd use the low level, but for a consultative sale they'd use high-level."

Another company, when asked what they paid their callers, replied that they hired very experienced banking experts and paid an average of $60,000 to $70,000 per year. But when she went to Monster and looked up job openings for that company, they were offering $15/hour. At that rate, they were going to be lucky to get ex-bank tellers.

Step #4. The reality of contract and set-up commitments

With higher-end telemarketing firms, there's an up-front pilot or training fee that can be as high as $10,000, and many of them also ask for six- or twelve-month retainers.

Plus, there's a period of training, and then the process of finding and nurturing leads, with multiple contacts from the telemarketer. So at least for a consultative sale, it generally doesn't make sense to "try out" a firm for a month or two. "It's a commitment," Baar says.

That makes it doubly important that you're confident in the firm you choose and that you're clear on the level of commitment they require from you. Useful link related to this article:

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