In-House vs Outsourced Telemarketing. Which is better?
We’re often asked whether it’s better to outsource telemarketing or to recruit and manage internal callers. There isn’t really a right or wrong on this as it depends on circumstances and your appetite to do it one way or another. Below are a few of the questions you need to consider when deciding whether to outsource or DIY.
Is this a short or long term objective?
This may not drive the ultimate decision since many companies use outsourced telemarketing on a long term basis and companies also recruit temporary callers in house. The point is how you view the calls. It also depends on the shape and nature of calling. However you handle the process, this needs managing and it may require chopping and changing as requirements change. For example, priorities change and you need the flexibility in calling to manage this.
Systems and CRM and how it facilitates calls and notes
Sounds like something that wouldn’t be on the top of the list for decision making. However, effective telemarketing relies on good systems and processes. It relies on quick access to good notes. Being able to identify call backs required at the right time produces good results. What if someone new is making the call after the previous person leaves? Can they quickly find the details and pick things up seamlessly? And is it configured for workflow to speed up calling rates? Some CRM systems are not structured for calling. If call rates are 6 or 8 calls per hour on one system, they could be 15 on another. That’s double or treble the productivity. A good CRM enables productive outbound lead generation. If you have a good system in house, that’s great. If not, consider the implications on the call numbers and call flow.
A good telemarketer (and good system) knows when to make a call-back. It may be that the trigger is a new financial year or contract renewal date. If that call back isn’t triggered by the system with accompanying notes where you can also locate previous correspondence, it’s likely to have a negative impact on securing potential new business. Calling back at the appropriate time is the engine for new business development. That means diligent telemarketers that have effective time management and consistent calling and systems that enable that to take place.
Cost and budgets
It’s likely that outsource is relatively more expensive than doing it in house. But some companies can’t carry or don’t want to carry internal overhead especially if flexibility is required in calling patterns. That’s especially the case when it comes to the additional costs associated with PAYE. There are also the added costs of office space and management time (see below). You can certainly engage temporary staff at lower cost but often that’s through a recruitment agency where there’s a mark-up and fees if you want to take that person on permanently. Equally, there will be times when they don’t show up. If you’ve got room and budget for headcount, it may be that you can utilise the telemarketer for other tasks and marketing to make the investment worthwhile. On the flip-side, internal telemarketers often get drawn into other tasks and the calling rates suffer.
Management time and skills
This is often ignored or simply given insufficient importance. Time is a significant cost and it’s also an opportunity cost. It is a major factor. If you have the management time to organise and manage a series of ongoing telemarketing campaigns then consider running the activity in house. However, knowing how to run and manage an effective campaign is a different issue. There are many aspects to a successful calling activity and regular tweaking is needed. If there are multiple callers, they need managing and what happens during times of illness or holidays? Who provides proper briefs (verbal and written) and so on? Who makes changes when they are needed? Do they have the skills required when important changes are required?
Reporting and KPI management
It is often said that you can’t manage what you can’t measure. Good reporting is fundamental to telemarketing success. Measurement and analysis support calling and ensure that you’re more likely to achieve the set objectives. A good system will provide daily, weekly and monthly reporting on number of calls, decision maker engagements, leads, opportunities and successes. However, you do the outbound calls, make sure that you factor in reporting requirements.
Management skills in this field
This follows on from point 5 above. I once worked with a company where the telemarketer came to me crying because she’d asked for management input to the campaign and they said something to the effect of ‘you’re the telemarketer, you should know what’s best’. They had provided little in the way of guidance, no worthwhile proposition upon which to base the calls and the data was a mess. When she failed to get results, no-one took ownership and supported her to identify how to make the changes necessary to get better outcomes. As an aside, she came to work for us and worked with us for several years before taking a marketing role. If you are planning to run campaigns in-house, management needs to take ownership and the marketing and sales functions must provide input and ongoing guidance to ensure that the campaign is effective on an ongoing basis. You should expect these as a matter of course from your external agency as they will pick up these elements of the calling.
Complexity of proposition
Whilst good telemarketers don’t let complex propositions faze them, knowledge is power. And that doesn’t mean only knowledge of what to say. It’s fair to say that telemarketers working in house have a much greater depth of knowledge of the market, the proposition and product benefits. That’s not to say an external agency can’t glean the knowledge through a good briefing and over time through making the calls. But it’s likely that internal people probably have a better grasp of everything around the proposition. However, sometimes internal staff get carried away and forget what telemarketing is. The point is to secure an opportunity or lead not to explain the whole proposition over the phone. GSA worked for the Chartered Institute of Bankers in 2012 on their FSA Regulatory compliance proposition. The key to the calls was the concern amongst compliance directors in the big banks and insurers that they would lose their key fee earners when the new regulations came into place. The proposition therefore did not need detailed knowledge of specific compliance. There primary need was to understand the benefits or issues. Hence, effective telemarketing is about understanding the approach and the challenges from the customer’s perspective not the technical aspects.
Volume of calls
Whilst call volume isn’t the only criterion and the quality of call is critical, telemarketing lives or dies by consistent calling. Momentum is paramount since between 5-20% of calls reach a decision maker. Hence, you need enough calls to get enough conversations about a proposition to facilitate results. If you make 4000 calls, possibly only around 200-800 will result in a conversation of sorts. That conversation may result in all manner of responses from ‘no’ to ‘no time to talk’ to ‘send info’ to ‘call back in 3 or 6 months’ to ‘tell me more’ to ‘we have a need’. Hence, 4000 calls become several thousand calls when we consider call backs. You need to segment the data (by size, sector, location etc) to be most effective but however you configure it, there needs to be a significant volume of calls whether you do it in house or hire an agency.
Objectives and KPIs / Timeframe and speed of results
The shorter the time-frame and the bigger the targets (based on business objectives), the more people are likely to be needed to make the calls. This has an impact on all of the elements mentioned above. If you have specific business objectives that hinge on the results from telemarketing, this is a major factor in how you plan the calling and whether you have the bandwidth to do it using internal resource, need to hire more staff or use external resource.
Willingness and skills of internal personnel
We write a lot about telemarketing training skills. There are a significant number of technicalities that make calling effective. That ranges from dealing with gatekeepers to objection handling to effective call intros to dealing with rejection and rapport building. Even with the simplest call and proposition, getting through to a decision maker is a challenge. If staff are not comfortable with calling and overcoming these hurdles, the calling will be less effective.
The above isn’t exhaustive but give you a flavour of some of the issues when you are in the process of making a choice between one or the other route. There’s no right or wrong and there are pros and cons to both options. Whatever way you go, you need to consider all of the implications and factor in some of the considerations above.
If you’d like to know how GSA Business Development can help generate growth for your business through managing the enquiry management process via telemarketing or if you’d like to book one of our new business development and marketing strategy workshops, contact us now on 0845 658 8192 or use the form on this site.