Managing Performance / Setting Goals

The Illusion of "pay for Performance" Telemarketing

Brian Augustus Parnell asked:

Copyright (c) 2008 Grindstone Inc.

Throughout my tenure in the Sales Outsourcing arena I have been approached regularly with my thoughts regarding pay for performance marketing for Lead Generation and Appointment Setting campaigns. Particularly in Outbound telemarketing Business to Business. Sure it seems very appealing. No risk, have the vendor pay for your marketing, and let them work for free until results come. Wouldn’t it be nice to do a direct mail campaign, but only pay for new customers? How about marketing on a cable or local T.V. network, and only pay them if you get new business? Maybe place some ads in your local newspaper and only pay them for results? Marketing is Marketing and Telemarketing is no different. Some vendors have tried this, mostly offshore in places like India, The Philippines, and South America. Although it may appear as a safe approach, you will almost always experience poor results, higher staff attrition, increased training time, reduced quality and the risk of having your company conveyed in an unprofessional manner.

Nathan Lewis, A Senior Business Development Advisor for Grindstone Inc. Shares the following: All marketing efforts embrace a “ramp-up” period. If your company is paying for results alone you can bet the telemarketing agent is being paid the same way. If immediate success is not achieved it is proven that the quality will suffer due to “pushing” through leads and appointments that are not properly qualified. The result: Your sales executives are chasing down prospective clients that were never truly interested. Worst case scenario, your salesperson shows up for an appointment only to find that the prospect has no idea who you are or why you are there. Naturally, this lack of quality leads to call agent replacement which will now require additional training and more ramp up time for those new agents. Worst case scenario, many pay for performance call centers will simply add agents and increase call volumes to satisfy minimum quotas without thorough training. Now your company’s visibility and integrity is jeopardized by representation that is not symmetrical or up to the professional standards that you have worked so hard to create. Let’s face it, the reputation of your company is critical to growth.”

Companies looking to have success in outsourcing must select those vendors with solid management infrastructures; appropriate recruiting measures and capable systems and technologies to execute professional Business Development efforts. These qualified vendors work on hourly rates because they have adequate resources and processes in place to ensure proper practices and professional business continuity.

First, many call centers vendors are fly by night operations. Do not be surprised when doing your due diligence to find that the sales guy is also the manager and telemarketer for your program. Ask about the structure and composition of the company you are researching. Here are a few excellent questions to ask to determine the quality of the company you are prospecting: How many members make up your management team? How many clients are you currently servicing? How many calling agents are currently representing your clients? What is included in your service? How are the agents compensated? How are the calling efforts monitored? Will the agents be working my program exclusively? You will uncover quickly the companies that are well organized, procedurally sound and equipped to make the best use of your marketing dollars.

Second, you can avoid many of these detriments by selecting a vendor with strong business continuity and quality assurances in place. Any telemarketing program is driven by the calling agents making the actual phone calls. Be sure when shopping for a third party vendor to ask about the agent selection process. You deserve to know who is representing your company, their work experience and why they are the best fit to represent your organization. All quality telemarketing firms should allow you the opportunity to meet and learn about the agents representing you. If they do not, consider this a red flag. The relationship and communication between agent, management and client heavily impacts performance. Top notch firms strengthen business continuity by paying agents on an hourly basis and rewarding them through incentives for quality results. After all, you want your telemarketer focused on delivering the right message and not wondering where their next paycheck is coming from.

Last but not least, the company you are investigating must have appropriate systems in place to effectively monitor your program. The best vendors out there have management software and give clients access to their program’s data and reports. Everyone wants results but credible firms want you to get those results with an explanation as to how they were achieved. Marketing is an ongoing learning process and not something that just happens. A call center’s ability to monitor activities, make revisions, and track efforts will ultimately paint a clear picture regarding your company’s successes.

Next time you decide to look for the assistance of a third party Telemarketing Company, realize that the right questions will get you the right answers. Whether you are an upstart or an established company, the key to success is finding a firm that focuses on agent talent, embraces a strong management team and provides modern day technologies to help track and build an adaptable and successful marketing program. I assure you that your return on investment and overall experience will be greatly improved by following these simple little steps in your selection process. Bottom line, avoid Pay for Performance plans.

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