Studies indicate that the technique can be very successful. According to the Washington-based American Teleservices Association, the telemarketing industry employs more than eight million people in the United States alone and generates an average return of $7.15 for every dollar invested.

A recent study by The Winterberry Group, a direct marketing industry research and consulting firm with offices in New York and Santa Monica, Calif., found that outbound business-to-business telemarketing (call centers that contact prospects) generated more than $330 billion in 2000. Outbound business-to-consumer telemarketing accounted for more than $240 billion in revenue.

The real challenge for the direct marketing industry–and independent agents looking to use direct marketing in their business–is using technology to call those prospective customers who most likely would be interested in their product or service and would be likely to respond to direct marketing.

Using new data-modeling techniques, it is now possible to produce a list of prospective customers and predict the top 20 percent of respondents to your product or service and your brand of direct marketing. Combining this with customer relationship management technology allows telemarketers to be less intrusive in their quest to forge new relationships with potential customers.

The point is this: there is a lot of bad marketing going on out there.

Just hoping for some kind of hit ratio, many ill-informed telemarketers are blanketing lists of unsuspecting consumers and businesses with products and services they cannot or will not buy. This is especially true with the advent of e-mail.

Independent agents can do their part by carefully creating a marketing list, which should consist of:

The demographics of their current clients and geographic boundaries.

The business size they want to target.

The Standard Industrial Classification (SIC) codes of their target markets, and whether they need to use the six-digit SIC codes.

When calling, sending e-mail or mailing solicitations to consumers, agents should consider:

The income levels being targeted.

The need for credit-scored information.

Home values, if they apply.

The age group of prospects

Agents should provide their client list to a database-modeling firm to create a model of businesses or consumers most likely to buy their product or service. Running the list through the model identifies the clients that should be called or mailed first.

It can take three to four years to write most big accounts. Using telemarketing, the cost would be between $14 and $20 for each profiled lead and it usually takes about five of them to convert one into an appointment. The information is good for years and can yield appointments every year if properly managed.

Agents should use an electronic-CRM software system to track results and manage data. The system enables an agent to store and manage customer service and prospective customer data for use by customer service representatives and salespeople.

The software not only allows the agent to manage the data properly, it can prevent a disgruntled associate from walking away with the principal's leads, and gives the producer the maximum return on a direct marketing investment.

Finally, agents should be aware of their states regulations concerning telemarketing, especially if they decide to do it in house. Thirteen states have enacted Do-Not-Call lists–consumers who do not want to be contacted by telemarketers. Of these, two do not maintain a Do-Not-Call list, but require callers to subscribe to the Direct Marketing Association lists.

In New York, for example, you are pretty much assured a pardon from prosecution if you can prove you have registered by purchasing its Do-Not-Call list. The broad exclusions in the law were set forth to protect the firms that genuinely are interested in providing a valid service to the businesses and consumers the law is designed to protect.

Most marketers do not want to call or mail solicitations unless they have a pretty good chance of getting a return on their marketing investment. Careful list selection, e-CRM, well-thought-out scripting, and well-trained telemarketers can go a long way to achieving that end.

Larry Neilson is founder and president of Laguna Hills, Calif.-based National Marketing Services and CEO of ProgramBusiness.com. He can be e-mailed at [email protected].

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 17, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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