Sales Of Credit Cards: Telemarketing

2164 words (9 pages) Essay

11th May 2017 Marketing Reference this

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Telemarketing is a direct market technique for selling goods and services, making appointments, and generating sales leads over the telephone. Although the telephone has been used as a sales tool for nearly a century, the term telemarketing was first used by AT&T in the early 1980s in conjunction with a long-distance phone service sales campaign. Telemarketing may be in-bound or out-bound. With in-bound telemarketing the consumer responds to advertisements, usually featuring toll-free 800-numbers, and calls a company or a company’s telephone service and orders products directly. Out-bound telemarketing involves a company’s sales force calling consumers, usually at their residence, and soliciting orders or making appointments. Out-bound telemarketing as such is proactive, with the telemarketing company taking the initiative. Out-bound telemarketing has as of late become controversial because of privacy issues and questionable if not outright fraudulent telemarketing schemes. In spite of this controversy, in 1996 approximately 304,000 Americans were employed in telemarketing or telemarketing related jobs as reported by the Occupational Outlook Quarterly. Management Review estimates that telemarketing generates about $424.5 billion in annual revenue. C:UsersrobinPicturesfull-age-telemarketing_~u18457022.jpg

History of Telemarketing

The telemarketing industry dates back to the early part of the 20th century, when the financial services industry used the telephone as a marketing technique. Stock brokers have traditionally made extensive use of the phone, a practice that continues today. In the 1930s and 1940s, telemarketing units-commonly known as inside sales operations, because the sales reps remained “inside” the office-began to emerge in wholesale distribution organizations. This trend accelerated during World War II as much of the nation’s sales force was drafted into service and travel was restricted due to rationing of gasoline and tires.

Boom of Telemarketing

Magazine publishers began to use telemarketing extensively in the 1940s and 1950s, trying to sign up new subscribers as well as re-sign former subscribers. In 1955 Reuben H. Donnelley began a major telemarketing success story when he started a telephone sales program to sell advertising in the Yellow Pages to small businesses. In 1985, the most profitable publishing entity in the state of California was the Pacific Telephone’s Yellow Pages-and approximately 60 percent of the ads and one-third of the revenue were generated by phone. C:UsersrobinPicturestelemarketing.jpg

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The introduction in 1960 of the Wide Area Telephone Services (WATS) lines helped increase business use over the telephone. This opened the way for high volume outbound calling at low cost, so it became cost-effective to have large regional or national call centers. Similarly, with the 1967 unveiling of 800 numbers, inbound WATS lines paved the way for direct response capability, where consumers could respond to national advertising toll free.

The telemarketing industry is rapidly growing in the United States, tripling between 1988 and 1998 to about 2,500 companies. In 1995 about 81 million Americans bought goods and services from telemarketers. Consumer sales totalled about $186 billion with business-to-business sales reaching over $238 billion. Telemarketing has grown because it is so cost-effective. One telemarketer, sitting at a phone with a telephone list of sales leads, can reach many more potential customers in eight hours than can a salesperson on the road. It is estimated that face-to-face field calls to potential customers cost about $250 each with outside sales people making four to six contacts a day. An outbound telemarketer, however, can make 90-100 calls a day with 35-50 of these calls ending up as full presentations. Wages in the telemarketing industry are also relatively low. Again citing the Occupational Outlook Quarterly, in 1996 the median wage for workers in the telemarketing category was $7.77. Training for telemarketers takes only a day or two before the trainee makes his or her first sales call. Even faster and cheaper but probably less effective are automatic dialling machines with a pre-recorded sales message.

Procedure of Telemarketing

The telephone, as an “intimate” means of communication, also contributes to the success of telemarketing. “The telephone is one of the few mediums that allow you to have a dialogue with prospective or existing customers. You have the ability to deliver or fine-tune the message and respond based on what you’re hearing over the phone,” Jon Kaplan, past president of the American Telemarketing Association told Management Review during an interview. People are also more and more comfortable doing business over the phone, especially those with hectic schedules. Andrew Wetzler, president of Wetzler & Associates, a consulting company specializing in telemarketing sales, also has great belief in the telephone as an effective tool for sales.” Everyone thought you had to have face-to-face contact for selling. In reality, there aren’t a lot of things that can’t be sold over the phone. Some big-ticket items are the exception, but in most cases, product upgrades and smaller items are perfect for phone sales,” said Wetzler when interviewed for the same article. http://www.vebleads.com/content_images/telemarketing.gif

Telemarketing programs can either be handled in-house by a company or farmed out to service bureaus. Operations can range from extremely small to major corporations or service centers that have more than 1,000 telephone stations. Although telemarketing can be used as a stand-alone operation, it often works best when part of an overall marketing effort. Companies considering the use of telemarketing have to look at such factors as which products and services are good candidates for telephone sales; whether telemarketing can be used to increase volume through upgrading the sale; how the process can help qualify prospects, define the market, and help service existing accounts; and whether telemarketing can help generate new business. Some of the roles telemarketing can be used to fulfil include: selling, the generation of sales leads, information gathering on such things as advertising effectiveness, and finally telemarketing can be used to improve customer service.

Credit Card Sales through Telemarketing at HDFC Bank

The whole credit card process is conducted in a sequential process which consists of series of role to play simultaneously. Here I will be giving example of a typical HDFC credit card sales department.

The example which I have taken into consideration is from HDFC’s DSA at Bangalore India.

ORGANISATION:

NAME: Hind Associates

TYPE: DSA (Direct Selling Agency) for HDFC BANK

LOCATION: Rammurthinagar Bangalore

WORK TYPE: Credit Card sales for HDFC Bank

ORGANIZATION CONSTITUTION

organization structure.jpg

The shaded part is generally consisted in the DSA, where a Team Lead is having a group of Tele – callers under him and 3 Asst. Team Lead to assist him in the selling process. The power in the hierarchy moves vertically and is generally has the decision making power wasted in the top most hierarchy.

The part of DSA in this whole selling process is to generate the lead on the basis of perfect documentation. This whole process is in a step wise process which is explained in a flow chart.

WORKING PROCESS

So this is the process how the work is done in a DSA for HDFC Bank. The bank act as a secondary body in this whole process. It does the scrutiny and final approval and process.

DECISION MAKING PROCESS / PLANNING

The planning out strategy is generally influenced by the company’s short term marketing strategies. But the real time strategy is generally developed by the governing group that is

Team leader

Asst. team leader

Best telemarketers

They help in chalking out the plans to how to deal with certain issues and how to push sales.

For ex:

Here at this DSA, there was a condition when HDFC bank was trying to promote Women’s card. This marketing strategy was due to following reasons:

Women generally spend more money on leisure expenditure than men

They are frequent users

They prefer easy payment solutions

They are generally dependent or working so a card gives them more freedom and comfort

Thus DSA was supposed to target female customers as the revenue was more in this. Thus the conditions were as follows:issues.jpg

MEASURES/FACTS FOR GENERATING SALES LEAD THROUGH TELEMARKETING:

Number of calls made.

Number of calls converting into warm leads. (customer is ready to meet OR consider- One needs to define the criteria clearly).

Number of calls, converting into sales. (this can be cut to further sub-stages like customer demo, price negotiations, raising purchase orders deliver)

Telemarketing cost.

Number of Telemarketing staff.

Number of dead leads.

SWOT OF TELEMARKETING SALES LEADS GENERATION

This is the reference list of what could be part of the SWOT of Telemarketing for lead generation. Within strengths/weaknesses- if an item is rated high, it will be strength and if it is rated low, the same item will be considered a weakness. Same rule applies on items within threats and opportunities (unless marked specifically as O OR T)

Strengths/Weaknesses

Quality of telemarketing databases.

Quality of telemarketers

Training material and quality of trainers.

Retention of quality telemarketing staff.

Multi time-zone operations.

Language skills.

Ability to ramp-up OR ramp-down without a big impact on per unit cost.

Ability to reach out to the lead in a short time.

Threats/Opportunities

Outsourcing of telemarketing work.

Our telemarketer doing telemarketing for our competitors.

The telemarketer selling our database of existing customers.

Do not call registry by the government.

THE SUCCESS DRIVER FOR TELEMARKETING SALES LEADS GENERATIONS:

Training script and Q&A:

To ensure that your staff is giving consistent message and is ready for any kind of questioning and response.

Awareness of the product and company:

When a potential customer talks to a telemarketer, one can judge within 1 minute, if the caller is reading a dry script OR is aware of the product OR the company.

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Customer information on existing relationship:

This is next level of sophistication. A customer would like to be asked ‘You are using our LCD and I hope you are happy with it. You may like to have our latest blue-ray at a special discounted price for you’, instead of ‘ ‘we have got your name from our customer list, and we are offering you discount on blue-ray’.

Asking only the information, which you don’t have. No need to ask the address again OR the age etc, if you can get it from your systems.

Prioritization of leads:

If your leads are appropriately classified and prioritized, a telemarketer should be trained to spend more energy on what is more important OR greater potential.

CONSTRAINS IN TELEMARKETING SALES

Employee:

Employees generally get irked by the differential nature of customer. So a good team and good environment is required for working. As the nature of customers are beyond control

Calls made:

Sometime the sales don’t reach to the desired level. This happens because the numbers of productive calls are made less. So the only solution is to make more number of calls so that the desired level of solutions comes out more.

No call list:

The no call list are increasing to no end. Almost everyone is trying to flag their number through no call list. There is no solution to this problem. It can be only assimilated on the basis of new users coming in market. So before the resources are exhausted we must try to bag the maximum out of it.

HR Problem:

The HR solutions are required as the team has average life of 18 months. After that a new team is formed due to high attrition rate in this kind of sector. Thus the training programme should be short and should try to drive out maximum result before it actually leaves the system.

Reaching Target:

The target reaching is sometime difficult for certain employees and thus they lose interest before they could actually perform. So a grace period of 1 ½ months should be considered before giving high targets to them.

Telemarketing is a direct market technique for selling goods and services, making appointments, and generating sales leads over the telephone. Although the telephone has been used as a sales tool for nearly a century, the term telemarketing was first used by AT&T in the early 1980s in conjunction with a long-distance phone service sales campaign. Telemarketing may be in-bound or out-bound. With in-bound telemarketing the consumer responds to advertisements, usually featuring toll-free 800-numbers, and calls a company or a company’s telephone service and orders products directly. Out-bound telemarketing involves a company’s sales force calling consumers, usually at their residence, and soliciting orders or making appointments. Out-bound telemarketing as such is proactive, with the telemarketing company taking the initiative. Out-bound telemarketing has as of late become controversial because of privacy issues and questionable if not outright fraudulent telemarketing schemes. In spite of this controversy, in 1996 approximately 304,000 Americans were employed in telemarketing or telemarketing related jobs as reported by the Occupational Outlook Quarterly. Management Review estimates that telemarketing generates about $424.5 billion in annual revenue. C:UsersrobinPicturesfull-age-telemarketing_~u18457022.jpg

History of Telemarketing

The telemarketing industry dates back to the early part of the 20th century, when the financial services industry used the telephone as a marketing technique. Stock brokers have traditionally made extensive use of the phone, a practice that continues today. In the 1930s and 1940s, telemarketing units-commonly known as inside sales operations, because the sales reps remained “inside” the office-began to emerge in wholesale distribution organizations. This trend accelerated during World War II as much of the nation’s sales force was drafted into service and travel was restricted due to rationing of gasoline and tires.

Boom of Telemarketing

Magazine publishers began to use telemarketing extensively in the 1940s and 1950s, trying to sign up new subscribers as well as re-sign former subscribers. In 1955 Reuben H. Donnelley began a major telemarketing success story when he started a telephone sales program to sell advertising in the Yellow Pages to small businesses. In 1985, the most profitable publishing entity in the state of California was the Pacific Telephone’s Yellow Pages-and approximately 60 percent of the ads and one-third of the revenue were generated by phone. C:UsersrobinPicturestelemarketing.jpg

The introduction in 1960 of the Wide Area Telephone Services (WATS) lines helped increase business use over the telephone. This opened the way for high volume outbound calling at low cost, so it became cost-effective to have large regional or national call centers. Similarly, with the 1967 unveiling of 800 numbers, inbound WATS lines paved the way for direct response capability, where consumers could respond to national advertising toll free.

The telemarketing industry is rapidly growing in the United States, tripling between 1988 and 1998 to about 2,500 companies. In 1995 about 81 million Americans bought goods and services from telemarketers. Consumer sales totalled about $186 billion with business-to-business sales reaching over $238 billion. Telemarketing has grown because it is so cost-effective. One telemarketer, sitting at a phone with a telephone list of sales leads, can reach many more potential customers in eight hours than can a salesperson on the road. It is estimated that face-to-face field calls to potential customers cost about $250 each with outside sales people making four to six contacts a day. An outbound telemarketer, however, can make 90-100 calls a day with 35-50 of these calls ending up as full presentations. Wages in the telemarketing industry are also relatively low. Again citing the Occupational Outlook Quarterly, in 1996 the median wage for workers in the telemarketing category was $7.77. Training for telemarketers takes only a day or two before the trainee makes his or her first sales call. Even faster and cheaper but probably less effective are automatic dialling machines with a pre-recorded sales message.

Procedure of Telemarketing

The telephone, as an “intimate” means of communication, also contributes to the success of telemarketing. “The telephone is one of the few mediums that allow you to have a dialogue with prospective or existing customers. You have the ability to deliver or fine-tune the message and respond based on what you’re hearing over the phone,” Jon Kaplan, past president of the American Telemarketing Association told Management Review during an interview. People are also more and more comfortable doing business over the phone, especially those with hectic schedules. Andrew Wetzler, president of Wetzler & Associates, a consulting company specializing in telemarketing sales, also has great belief in the telephone as an effective tool for sales.” Everyone thought you had to have face-to-face contact for selling. In reality, there aren’t a lot of things that can’t be sold over the phone. Some big-ticket items are the exception, but in most cases, product upgrades and smaller items are perfect for phone sales,” said Wetzler when interviewed for the same article. http://www.vebleads.com/content_images/telemarketing.gif

Telemarketing programs can either be handled in-house by a company or farmed out to service bureaus. Operations can range from extremely small to major corporations or service centers that have more than 1,000 telephone stations. Although telemarketing can be used as a stand-alone operation, it often works best when part of an overall marketing effort. Companies considering the use of telemarketing have to look at such factors as which products and services are good candidates for telephone sales; whether telemarketing can be used to increase volume through upgrading the sale; how the process can help qualify prospects, define the market, and help service existing accounts; and whether telemarketing can help generate new business. Some of the roles telemarketing can be used to fulfil include: selling, the generation of sales leads, information gathering on such things as advertising effectiveness, and finally telemarketing can be used to improve customer service.

Credit Card Sales through Telemarketing at HDFC Bank

The whole credit card process is conducted in a sequential process which consists of series of role to play simultaneously. Here I will be giving example of a typical HDFC credit card sales department.

The example which I have taken into consideration is from HDFC’s DSA at Bangalore India.

ORGANISATION:

NAME: Hind Associates

TYPE: DSA (Direct Selling Agency) for HDFC BANK

LOCATION: Rammurthinagar Bangalore

WORK TYPE: Credit Card sales for HDFC Bank

ORGANIZATION CONSTITUTION

organization structure.jpg

The shaded part is generally consisted in the DSA, where a Team Lead is having a group of Tele – callers under him and 3 Asst. Team Lead to assist him in the selling process. The power in the hierarchy moves vertically and is generally has the decision making power wasted in the top most hierarchy.

The part of DSA in this whole selling process is to generate the lead on the basis of perfect documentation. This whole process is in a step wise process which is explained in a flow chart.

WORKING PROCESS

So this is the process how the work is done in a DSA for HDFC Bank. The bank act as a secondary body in this whole process. It does the scrutiny and final approval and process.

DECISION MAKING PROCESS / PLANNING

The planning out strategy is generally influenced by the company’s short term marketing strategies. But the real time strategy is generally developed by the governing group that is

Team leader

Asst. team leader

Best telemarketers

They help in chalking out the plans to how to deal with certain issues and how to push sales.

For ex:

Here at this DSA, there was a condition when HDFC bank was trying to promote Women’s card. This marketing strategy was due to following reasons:

Women generally spend more money on leisure expenditure than men

They are frequent users

They prefer easy payment solutions

They are generally dependent or working so a card gives them more freedom and comfort

Thus DSA was supposed to target female customers as the revenue was more in this. Thus the conditions were as follows:issues.jpg

MEASURES/FACTS FOR GENERATING SALES LEAD THROUGH TELEMARKETING:

Number of calls made.

Number of calls converting into warm leads. (customer is ready to meet OR consider- One needs to define the criteria clearly).

Number of calls, converting into sales. (this can be cut to further sub-stages like customer demo, price negotiations, raising purchase orders deliver)

Telemarketing cost.

Number of Telemarketing staff.

Number of dead leads.

SWOT OF TELEMARKETING SALES LEADS GENERATION

This is the reference list of what could be part of the SWOT of Telemarketing for lead generation. Within strengths/weaknesses- if an item is rated high, it will be strength and if it is rated low, the same item will be considered a weakness. Same rule applies on items within threats and opportunities (unless marked specifically as O OR T)

Strengths/Weaknesses

Quality of telemarketing databases.

Quality of telemarketers

Training material and quality of trainers.

Retention of quality telemarketing staff.

Multi time-zone operations.

Language skills.

Ability to ramp-up OR ramp-down without a big impact on per unit cost.

Ability to reach out to the lead in a short time.

Threats/Opportunities

Outsourcing of telemarketing work.

Our telemarketer doing telemarketing for our competitors.

The telemarketer selling our database of existing customers.

Do not call registry by the government.

THE SUCCESS DRIVER FOR TELEMARKETING SALES LEADS GENERATIONS:

Training script and Q&A:

To ensure that your staff is giving consistent message and is ready for any kind of questioning and response.

Awareness of the product and company:

When a potential customer talks to a telemarketer, one can judge within 1 minute, if the caller is reading a dry script OR is aware of the product OR the company.

Customer information on existing relationship:

This is next level of sophistication. A customer would like to be asked ‘You are using our LCD and I hope you are happy with it. You may like to have our latest blue-ray at a special discounted price for you’, instead of ‘ ‘we have got your name from our customer list, and we are offering you discount on blue-ray’.

Asking only the information, which you don’t have. No need to ask the address again OR the age etc, if you can get it from your systems.

Prioritization of leads:

If your leads are appropriately classified and prioritized, a telemarketer should be trained to spend more energy on what is more important OR greater potential.

CONSTRAINS IN TELEMARKETING SALES

Employee:

Employees generally get irked by the differential nature of customer. So a good team and good environment is required for working. As the nature of customers are beyond control

Calls made:

Sometime the sales don’t reach to the desired level. This happens because the numbers of productive calls are made less. So the only solution is to make more number of calls so that the desired level of solutions comes out more.

No call list:

The no call list are increasing to no end. Almost everyone is trying to flag their number through no call list. There is no solution to this problem. It can be only assimilated on the basis of new users coming in market. So before the resources are exhausted we must try to bag the maximum out of it.

HR Problem:

The HR solutions are required as the team has average life of 18 months. After that a new team is formed due to high attrition rate in this kind of sector. Thus the training programme should be short and should try to drive out maximum result before it actually leaves the system.

Reaching Target:

The target reaching is sometime difficult for certain employees and thus they lose interest before they could actually perform. So a grace period of 1 ½ months should be considered before giving high targets to them.

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