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Telemarketing and how to keep it legal

How to target new customers without breaking the rules

Telemarketing is a double-edged sword. Powerful in its immediacy and personalisation in an increasingly hi-tech and depersonalised world, it’s a great way of building prospect lists, boosting customer loyalty and clinching sales.

In fact, when employed correctly, telemarketing delivers sales conversion rates that hit double digits in contrast to the one to two per cent typical of direct mail.

On the downside, developments such as deregulation of the utilities sector have created a degree of consumer antipathy towards the medium.

Tired of being harangued by eager sales reps from the gas and electricity suppliers that proliferated in the wake of deregulation, consumers, it seems, are more resistant than ever to being ‘disturbed’ at home.

Which is why companies undertaking telemarketing must be more scrupulous than ever in their approach. This means abiding by legislation governing telemarketing, as well as observing the relevant industry codes of practice.

And here’s the rub. Because according to recent research commissioned by the TPS (Telephone Preference Service), while 71 per cent of SMEs know their legal responsibilities with regard to telemarketing, many aren’t aware of, or don’t know how to use services like the TPS, which are aimed at helping companies comply with the law.

What is the Telephone Preference Service? The TPS is a centralised service, administered by the DMA (Direct Marketing Association), to which consumers can subscribe should they wish to opt out of sales and marketing calls from any company. Firms wishing to make telemarketing calls must consult the TPS to ensure they are not contacting registered consumers (see contact details at the end of this article).

Why is it so important to consult the TPS? Telemarketing is governed by the Telecommunications (Data Protection and Privacy) Regulations 1999. This stipulates that telemarketers should not call people who have indicated either directly to the company or by registering with the TPS that they do not wish to receive marketing calls. By contacting such individuals companies are breaking the law and risk court action and a fine of up to £5,000.

How much does access to TPS records cost?The annual fee for unlimited TPS data access is £7,500. However, many companies don’t require such comprehensive provision, in which case data subsets can be purchased for significantly lower tariffs.

Catering to SMEsThe TPS offers a raft of cost-effective services tailored to the needs of the small to medium enterprise. These include:

  • TPS Online Interrogation Service: For a minimum monthly fee of £50 (for 500 numbers), this allows SMEs to check individual phone numbers via the TPS website (www.tpsonline.org.uk).
  • TPS Callgard: Again, for a minimum monthly charge of £50, this service enables subscribers to filter out TPS-registered numbers by dialling a unique pin number prior to making telemarketing calls. Any calls to TPS subscribers are then automatically barred.
  • TPS Telepath: Here SMEs can check individual numbers via an automated telephone service. This round-the-clock, pay-as-you-go service costs 25 pence per minute.

Additional legislative requirements When requesting information from the prospect be transparent about why you want that data – i.e., be up-front about storing it for future marketing purposes. Don’t pretend it’s for research purposes only. If planning to share information with a third party you must also request permission from the prospect.

Best practiceCodes of practice from trade associations like the DMA (see contact details at the end of this article) also provide guidance on best telemarketing practice. These include stipulations such as avoiding high-pressure tactics and not knowingly making outbound calls to minors.

Once armed with the legal know-how, the following are key areas to consider when seeking to achieve optimum results from your telemarketing campaign.

  • Targeting
  • Staff training
  • Scripting
  • Integration with other marketing media
  • When to use telemarketing
  • Making contact with your prospect
  • To outsource or not to outsource?

TargetingIt’s tempting when launching a telemarketing campaign to play the numbers game, pull out the local phone book or Thomson Directory and hit those phones indiscriminately.

But this temptation should be resisted. The extent to which you direct the right offer to the right person makes a significant difference to your return on investment; telemarketing, after all, is significantly more expensive to implement than direct mail.

Use a data partner like a data bureau if you can afford it, as it will use geo-demographic resources to profile and segment your contacts, ensuring higher hit rates.

Also, concentrate as much as you can on your existing customer base, at least then there is already a relationship in place and calls won’t seem so intrusive.

Staff training Staff who make telesales calls should be good communicators who are confident speaking to strangers. They must have sufficient sensitivity to gauge the best tone to adopt during their pitch, according to the product or the service being sold, as well as the prospect (a pensioner is likely to respond differently to certain approaches than a 20-something).

Staff must also be able to think on their feet while they are talking and input information via a computer terminal.

The Chartered Institute of Marketing offers one-day courses on telephone selling skills and techniques (see contact details at the end of this article).

Scripting One word: Beware. Scripting is a necessary evil and as such should be dealt with carefully. Ensure telesales staff are versatile enough to depart from the text when necessary. Blatant and rigid scripting is regularly cited by consumers as off-putting.

Integration with other marketing media Telemarketing is just one tool in the entire marketing bag. For best results, it makes sense to integrate phone campaigns with direct mail shots – in this way the consumer is already aware of the offer and feels less like he/she is being cold-called. If employing such tactics, be sure to make calls within five days of sending out direct mail pieces, otherwise any benefits are likely to be cancelled out.

If your company has a website, it is also good practice to provide the website address at some point during the call. This enables the prospect to search for additional information not covered in the call, while adding gravitas to the company and the offer.

When to use telemarketing Telemarketing tends to be more effective for lower value products and services with high levels of customer relevance. The phone is not an ideal medium for introducing expensive or complex products or brand new concepts.

Making contact with your prospect It may sound obvious but the best time to catch consumers at home on weekdays is between 5pm and 9pm. However, your hit rate on Friday evenings is likely to be low given that many people will be starting their weekend at the pub or the cinema.

Saturday between 10am and 3pm tends to be a good time to call, but beware Sundays, as people don’t want to be pestered. Obviously, keep a record of people you may have called during previous campaigns and who indicated that, say, 6pm weekdays is a bad time because they are making dinner and supervising homework. Make the mistake of calling them again at what they have already indicated is a bad time and you will seriously blot your copybook.

In the business-to-business arena, clearly it’s best to call between 9am and 5pm, generally on weekdays. Times to avoid are 12pm-2pm when executives are at lunch. And remember, with b2b calls there is generally an additional hurdle to clear: the so-called ‘gatekeeper’ (i.e. receptionist or personal assistant). For greater success, try to get hold of the prospect’s name, as opposed to asking for ‘the person responsible for…’ – it will give your call greater credibility.

To outsource or not to outsource? For many SMEs, outsourcing telemarketing campaigns will not be an option. It may be that the limited number of calls being made are short of a contact centre’s entry level requirements (usually around 1,500 contacts per week, split between no fewer than five agents). Or it may be that outsourcing is deemed too expensive.

But if you do fulfil the entry level requirements it’s worth bearing in mind that handing over a telemarketing campaign to a third party can have significant benefits. The contact centre is likely to work with a data partner that will be able to segment your contacts, resulting in higher success rates. It will also have the latest call telephony technology, such as automated call-back, meaning calls can be scheduled for a later date if the initial contact was not convenient for the prospect. Costs weigh in at around £17 per hour.

On the flip side, be aware that if you call volume requirements are small you are unlikely to be allocated dedicated staff, meaning satisfactory product or service knowledge may be lacking.

Summary There are many clear benefits to telemarketing and any company not employing it as a sales and service media would be strongly advised to consider bringing it into the mix.

While often tempting, a gung-ho approach is not the way to go, though, and only those firms that take a sensitive and considered approach will reap rewards.

It’s good to talk, but only – repeat only – if the person at the other end of the phone is open to your call.

Useful contacts The Telephone Preference Service: tel: 020 7291 3320, email: tps@dma.org.uk, www.tpsonline.org.uk The Direct Marketing Association: tel: 020 72913300 www.dma.org.uk The Call Centre Association (for information on potential outsourcing partners): tel: 0141 564 9300, www.cca.org.uk The Information Commissioner (for legal queries): 01625 545700, www.dataprotection.gov.uk/commissioner.htm The Chartered Institute of Marketing: tel: 01628 427500, www.cmi.co.uk

This article was written by Tessa Kelly, director of compliance at the Direct Marketing Association UK.

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