CSO Insights Blog Posts

Telemarketing/Inside Sales Thoughts & Observations

Last month I attended the American Association of Inside Sales Professionals (www.aa-isp.org) Summit in Minneapolis and wrote about some of the highlights in my 4/29 blog: Lead Generation: What Telemarketing/Inside Sales is Doing. This week we are releasing our 2010 Telemarketing/Inside Sales Optimization report and I want to share a brief sneak preview.

Initially, customer-facing phone-based personnel were called "telemarketers" since their primary function-like the rest of Marketing--was identifying prospects/leads to move on and eventually into the sales funnel.

Once prospects and customers became more comfortable with phone-based sales reps, opportunities could be carried further into the sales process by these lower cost sales reps and in many cases opportunities closed without a field-based sales rep visiting the buyer. Telemarketing had in many cases become "telesales."

Enter the Internet and the business imperative on both sides of the buy-sell equation do more with less faster. Telephones have been augmented by live chat, web-based meetings/demos, customer self-service and more-all with the aim of closing and renewing sales. Hence, "inside sales" is increasingly in use as the label for non-field-based personnel.

Telemarketing-Telesales-Inside Sales are used essentially interchangeably with some industries favoring one term over another. In this report we are interested in gauging the activities and effectiveness of individuals who do any of the following from their desk:

a) developing leads for themselves or others to pursue;
b) qualifying leads into opportunities for themselves or others to pursue;
c) pursuing opportunities to a sale or eventual ending;
d) turning over opportunities for others to complete the sale.

I'll share a few key findings from it including:

Quota attainment is Down: 53% of Telemarketing/Inside Sales reps met or exceeded their quota last year; this is up one point from two years ago, but down four full points from one year ago.
Telemarketing/Inside Sales is playing nicer with Marketing: Telemarketing/Inside Sales has a lower percentage of self-generated leads and is generally happier (than field sales) with the quantity/quality of leads provided by Marketing.
Number of Calls to Close is Up: 63% of sales close with 3-9 calls, down from 72% a year earlier; only 1% went to 1-2 calls to close, the other 8% went to >9 calls to close (see Figure 1).

Number of Inside Sales Calls is Up

Figure 1

You might be tempted to think 1-2 call closes are restricted to small opportunities. In fact, 80% of deals reported by these companies were in the $30k-$100K range.

The data suggest that as your sales cycles tend toward the high end of the mid-range (i.e., 6-9 calls) things will tend to go south pretty quickly. Said another way, unless there is something particular to your industry that causes extra long sales cycles and/or extra numbers of touches, chances are you need to revisit your sales process. Specifically, having an organized win/loss assessment process, as well as observing and sharing best practices of those reps able to close deals more quickly (you may also think about rewarding these reps for sharing their golden tactics) both seem in order.

Another eye-catching metric this year is the planned increase in inside sales force size. While the past 12-18 months were characterized by staff reductions and hiring freezes, companies this year plan to grow inside sales-a LOT (see Figure 2).

Figure 2 - Planned Sales Force Change

Figure 2

As seen in chart, the majority of firms expect to grow their Telemarketing/Inside Sales teams in 2010. Recognize that holding onto and attracting solid Telemarketing/Inside Sales talent is going to be much tougher this year than last.

One in seven firms plan to increase by more than 20%. For starters, if you're at the low end of the scale with 20% total turnover (another metric tracked in the study), you'll have to replace one in five reps just to stay even. If you're among the 28% of firms seen above that plan to increase their team size by more than 10%, you need to add another one in five (more or less). The same is true for your toughest competitors and the other key metric you need to be aware of-or reminded of-is that 38% of new hires are sales professionals from within our industry. That means, they are looking to your company as a fertile hunting ground.

Action Items:

As we approach the end of Q2, if you've not already "hired up" approved headcount, now is the time to do so.
Retaining talent is just as important so if you aren't regularly coaching and taking the temperature of your key performers, don't delay longer.
Develop an ongoing recruitment program to identify solid candidates in advance of your immediate need and build bench strength.

Sell Well,

Barry Trailer

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Barry Trailer

Telemarketing

Thursday May 05, 2011

Dave,

You make a good point and one that is not restricted to telemarketing. You're right in noting that many of the tasks that comprise "telemarketing" are quite different from those in telesales, even though the terms are generally used interchangably.

One reason may be that in many companies, the same group may be fulfilling both functions: generating leads and/or setting appointments one day, qualifying leads and maybe trying to renew an existing customer the next.

Or fulfilling a customer request (such as activating a credit card), then extending one or more offers (e.g., identity theft protection or mortgage refinancing).

There is a second problem as well, which is the lack of standard definitions within sales. This has been much discussed, particularly in conjunction with the topic of sales professionalism--or sales certification.

Just as telemarketing/telesales are treated as synonymous, so too are sales process and sales methodology though these, too, are different.

A third challenge is that the roles themselves are morphing. As we pointed out in the report, inside vs. field sales may be a less relevant distinction going forward than selling virtually vs. physically calling on accounts.

Analyzing the sales today may be like trying to take a snapshot of a fast moving racecar while the camera is changing in your hands (camera, iPhone, Flip (now discontinued), etc.)!

As for the economy, we are generally hearing here in the US that things continue to improve and survey results seem to support this cautious optimism. UK is facing severe cutbacks in the public sector and, of course, some of the supply chain impacts from Japan's tragedy are now being felt and will take time to recover from.

Thanks for reading--and writing!

Barry

telemarketing

http://www.marketingquotes.co.uk/telemarketing/

Thursday May 05, 2011

It is interesting how 'telemarketing' had merged into 'telesales' as the two are quite different.

How are things now (bearing in mind the way the economy has gone) - are they still positive?