LETERATURE REVIEW

Telemarketing is the process of using the telephone to generate leads, make sales, or gather

marketing information. Telemarketing can be a particularly valuable tool for small businesses, in that

it saves time and money as compared to personal selling, but offers many of the same benefits in

terms of direct contact with customers. In fact, experts have estimated that closing a sale through

telemarketing usually costs less than one-fifth of what it would cost to send a salesperson to make a

sale in person. Though telemarketing is more expensive than direct mail, it tends to be more efficient

in closing sales and thus provides a greater yield on the marketing dollar.

Telemarketing is especially useful when the customers for a small business's products or

services are located in hard-to-reach places, or when many prospects must be contacted in order to

find one interested in making a purchase. Although some small businesses operate exclusively by

telephone, telemarketing is most often used as part of an overall marketing program to tie together

advertising and personal selling efforts. For example, a company might send introductory information

through the mail, then follow-up with a telemarketing call to assess the prospect's interest, and finally

send a salesperson to visit.

Telemarketing can be either inbound or outbound in scope. Inbound telemarketing consists of

handling incoming telephone calls—often generated by broadcast advertising, direct mail, or catalogs

—and taking orders for a wide range of products. Representatives working in this type of

telemarketing program normally do not need as much training as outbound reps because the customer

already has shown an interest by calling in.

Outbound telemarketing can be aimed directly at the end consumer—for example, a home

repair business may call people in its community to search for prospects—or can be part of a

business-to-business marketing program. Representatives working on this side of the industry

generally require more training and product knowledge, as more actual selling is involved than with

inbound operations.

Major applications of business-to-business telemarketing include selling to existing accounts,

outbound new account development, inbound order processing and inquiry handling, customer

service, and supporting the existing field sales force. As the costs of field sales continue to escalate,

businesses are using telemarketing as a way to reduce the cost of selling and give more attention to

marginal accounts. Telemarketing programs can be either handled in-house by a company or farmed

out to service bureaus. Operations range in size from a one-person in-house staff member at a small

business to a major corporation or service center that may have as many as 1,000 telephone stations.

One of the advantages telemarketing has over other direct marketing methods is that it

involves human interaction. According to Robert J. McHatton in Total Telemarketing, "used correctly

and by professionals, the telephone is the most cost-efficient, flexible and statistically accountable

medium available. At the same time, the telephone is still very intimate and personal. It is individual

to individual."

Although telemarketing has been the center of some controversies—ranging from scams run

over the phone to a number of legal issues that have been the center of debate at both the state and

national levels—the industry continues to grow. In fact, the American Telemarketing Association

found that spending on telemarketing activities increased from $1 billion to $60 billion between 1981

and 1991. By the mid-1990s, telemarketing accounted for more than $450 billion in annual sales, a

figure that is expected to continue to rise through the foreseeable future.

TYPICAL TELEMARKETING USES

Although telemarketing can be used as a stand-alone operation, it often works best as part of

an overall marketing effort. Companies considering the use of telemarketing have to look at such

factors as: which products and services are candidates to be sold by phone; whether telemarketing can

be used to increase volume through upgrading the sale; how the process can help qualify prospects,

define the market, and service existing accounts; and whether telemarketing can help generate new

business. Some of the roles telemarketing can be used to fulfill include: selling, generating leads,

gathering information, and improving customer service.

SELLING : Telemarketing can either supplement or replace face-to-face selling to existing accounts.

It can complement the field sales effort by reaching new customer bases or geographic markets at

relatively low cost. It can also be used to sell goods and services independently, with no field sales

force in place. This method often is used for repetitive supply purchases or readily identifiable

products, though it can be effectively applied to other products as well.

The inside sales force can be used to replace direct contact for marginally profitable customers. A

general rule of thumb in business says that 20 percent of customers account for 80 percent of sales, so

conversely the remaining 80 percent of customers generate just 20 percent of sales. But businesses

must keep in mind that marginal does not necessarily mean unprofitable. And the existing customer

base is perhaps the most important asset in any business; sales increases most often come from

current accounts, and it generally is less costly to maintain current customers than to search out new

business. Telemarketers can give these reliable customers the attention they deserve. The reps can

phone as often as needed, determine the customers' purchasing cycles, and contact them at

appropriate reorder times.

In making a consolidation between a direct and inside sales force, the company must be

careful in determining which accounts should stay with field sales and which should be handled by

telemarketing. Some businesses start their telemarketing operations with just small or inactive

accounts, gradually increasing the size of accounts handled.

LEAD GENERATION Through telemarketing, a company can compile and update lists of customer

prospect leads and then go through these lists searching for sales leads. Telemarketing can screen the

leads and qualify them according to priority, passing the best leads to the field sales force for

immediate action. The inside sales force also can identify the decision maker with the buying power

and set up appointments for the outside sales force.

GATHERING INFORMATION Telemarketing can provide accurate information on advertising

effectiveness, what customers are buying, from whom they're buying, and when they will buy again.

It is also commonly used in conducting surveys.

IMPROVING CUSTOMER SERVICE Studies show it costs five times more to win over a new

customer than to keep an existing one. By using telemarketing as a main facet of customer service,

companies can go a long way toward keeping customers happy.

In addition, when used in conjunction with current computer technology, a telemarketing program

can be analyzed in terms of costs and benefits, using quantitative data on the number of contacts,

number of presentations, total sales, cost per sale, and income per sale.

According to the Telemarketing and the Telephone Consumer Protection Act (TCPA),

November 2003,‘Telemarketing is a practice where a business initiates a phone call in order to

propose a commercial transaction. ‘Hence, any marketing done over the telephone can be categorized

under telemarketing.

According to RosetteSiriban (2008), telemarketing is the process of marketing goods,

advertising services or customer service over the telephone. Direct marketing has registered massive

growth owing to changes in market behavior and declining effectiveness of traditional media. This

growth is set to continue, particularly in terms of telemarketing and direct response advertising . Like

a renewable natural resource, consumer goodwill can be over-exploited. A review of the rise and

rapid fall of the business-to-consumer telemarketing industry in the USA provides evidence of the

over-exploitation of consumer goodwill.

Hurst argues that direct marketing practices ought to be managed in accordance with

principles of sustainability. If they are not, the consequences may be sudden and near-permanent

declines in consumer responsiveness. There exists a real, but yet- undefined threshold of consumer

goodwill towards consumer telemarketing.

Nancarrow and Sally examine that there is a particular need for telemarketers to understand

how rapport might be developed on the telephone. Through their study among organizations with in-

house telemarketing facilities in UK, they conclude that a telemarketing culture still has some way to

develop and that, while many organizations used a number of seemingly relevant techniques, there

are a number of issues still to be resolved regarding measurement of rapport.

Eric Boyd (1996) describes telephone marketing as an essential tool in building relationships

and retaining customers. This proves to be useful for both the customers and the companies. The

companies claim several strategicadvantages – customer satisfaction, cost effective marketing, speed

in marketing efforts designed towards customers, industry leadership. At the same time there are

certain strategic concerns that the companies cannot afford to neglect.

Evans M, Malley L and Patterson M, (1995) highlight the consumer concerns over privacy

and ethical issues. Rather than being alleviated, they are likely to become more prevalent as the

sophistication of database targeting increases. For future growth of direct marketing it becomes

necessary for marketers to address this problem of consumers. The paper suggests self regulation as a

cure to this problem. But the success of self-regulation will also be dependent on consumers using the

facilities provided to them and registering complaints on offending companies .To this end, both

consumers and companies will need to be better educated as to what is acceptable and what is not

acceptable, in the future.

According to Licata and Kleiner (2005) telemarketing services face problems with

customers they are trying to reach and the telemarketers. Customers view telemarketers as nuisance

and the telemarketers work in an environment that suffers from high turnover, low morale, high

absenteeism and low productivity.

According to Simon Cooke (The Cooke Consultancy, 1996) there are two types of

telemarketing- outbound and inbound. Inbound telemarketing is any incoming sales or service from

viewers and listeners who want to order the advertised product or ask for more information. Some

inbound applications are order taking, customer service, help desk and many more. An outbound

telemarketing on the other hand, is the practice of making phone calls to prospects or existing

customers done by a marketing person. Some outbound telemarketing applications include phone

sales, appointment setting, lead generation and many more.

Academic journal article By Sedwick, Susan Wyatt; Carpenter, D. Stanley; Sherman,

Nestor W.; Tipton, Alan (College and University , Vol. 77, No. 2 ):-An effective telemarketing

campaign can enhance recruitment and enrollment goals while addressing the informational needs of

potential students through personal one-on-one contact. While a conversation with a university

representative can have a positive effect on all students, the greatest impact can be made on those

students who are more ambivalent regarding attendance. Although many studies have stressed the

need for personal contact, few have incorporated assessment of the impact of such strategies. A

positive contact with a university representative can have a significant influence on enrollment of

those who are reluctant to commit or those who do not list the university as their first choice.

Kellaris and Kellaris 1988.The individual campus visit was most influential, with the

organized group campus visit, telemarketing contact by a student team, and direct mail also rated

highly.

Wanat and Bowles 1992.Form letters were deemed of little significance by high ability

students; they were more motivated by personal contact by mail or phone, and were especially

influenced by telephone contacts from alumni.

According to Young (1991), telemarketing can be utilized to address a myriad of needs

associated with enrollment management. Young provides an explicit definition for telemarketing in

the context of enrollment management and college recruitment: "To put this definition in terms of

enrollment management, telemarketing is the planned use of the telephone as a recruitment, follow-

up, and retention medium in conjunction with traditional recruitment programs to increase the yield

rate for inquiries to admits to enrolled students in the most cost efficient and timely manner" (p.78).

A defined purpose for the telemarketing campaign is imperative.

Tips for effective telemarketing

Organise and prepare in advance: Have in place all the relevant background information about

businesses and individuals that you would be contacting and save it in an easy to access and

understand database. This will help you to plan a well thought out strategy for your campaign.

Prepare a script but never read from it: Developing a script gives you an outline of what you are

going to say and how you plan to steer the conversation. It also enables you to have alternate

questions/strategies ready at a glance that you can use to maximise chances of making a sale.

However make sure that you use this only as support and never make the mistake of reading from it

verbatim. Reading a prepared script would make you sound unnatural and the listeners are quick to

discern your level of sincerity from the tone of your voice and the manner of your speaking.

Know the purpose of your call and fix a secondary objective: It’s rarely the case that you succeed

in the purpose of your call in the very first attempt and that’s when you could at least try to achieve

the secondary objective which could be obtaining their email address or ask for a suitable time to call

again. This helps to keep open the possibilities for future interaction even if the situation is not

favorable at the present moment.

Generate interest in the first 10 seconds of the call: This is perhaps the most vital telemarketing tip

and the major factor that determines the success of the call. Time is of paramount importance and if

the precious initial seconds are not capitalised on, your efforts would fail to give results. Use a

friendly tone that is pleasant and engaging and speak to catch the listeners’ attention so that they

believe that they stand to gain by the call.

Ask the right questions: Frame questions that would serve to highlight the benefits of your product

or service and be careful that you word them well so they don’t sound as though you are wasting

precious time. This would also indicate to you whether they would in fact have a need for your

products and if they do not, you could politely end the call without further ado.

Practice makes you perfect: It would be a great idea to record yourself and judge whether or not

you got the pitch, the tone, the speed right and if you sound convincing enough. You could also make

practise by making mock calls to a friend. This is a tried and tested way to perfect your telephone

etiquette and voice modulation as it clearly tells you what you need to change about your style of

speaking

Under authority of the act the Federal Trade Commission (FTC) adopted the Telemarketing

Sales Rule (which quickly became known as the "Rule") in 1995. The Rule contains a number of key

provisions aimed directly at achieving the hoped for goals of the 1994 legislation. The Rule has

language covering: specific disclosures; the prohibition of misrepresentations; times when

telemarketers can and cannot call consumers; the prohibition of calls after a consumer asks not to be

called; the setting of payment restrictions for the sale of certain goods and services; and the

requirement that specific business records be kept for two years. It is important to note that the Rule

does not supersede more stringent state and local telemarketing laws. Another telemarketing law in

place is the Telephone Consumer Protection Act, which is enforced by the Federal Communications

Commission (FCC).

TELEMARKETTING - PRESENT TRENDS IN THE SOCIETY

Telemarketing also sometimes known as inside sales or telesales in the UK and Ireland is a

method of direct marketing in which a salesperson solicits prospective customers to buy products or

services, either over the phone or through a subsequent face to face or Web conferencing

appointment scheduled during the call.

Telemarketing can also include recorded sales pitches programmed to be played over the

phone via automatic dialing. Telemarketing has come under fire in recent years, being viewed as an

annoyance by many.

Many believe that in the 1950s, DialAmerica Marketing, Inc became the first company

completely dedicated to inbound and outbound telephone sales and services. The company, spun off

and sold by Time, Inc. magazine in 1976, became the largest provider of telephone sales and services

to magazine publishing companies. The term telemarketing was first used extensively in the late

1970s to describe Bell System communications which related to new uses for the outbound WATS

and inbound Toll-free services.

The two major categories of telemarketing are Business-to-business and Business-to-

consumer.

Telemarketing office Procedure

Telemarketing may be done from a company office, from a call Centre, or from home. It

may involve either a live operator or a recorded message, in which case it is known as "automated

telemarketing" using voice broadcasting. "Robocalling" is a form of voice broadcasting which is most

frequently associated with political messages.

An effective telemarketing process often involves two or more calls. The first call (or series

of calls) determines the customer’s needs. The final call (or series of calls) motivates the customer to

make a purchase.

Prospective customers are identified by various means, including past purchase history,

previous requests for information, credit limit, competition entry forms, and application forms.

Names may also be purchased from another company's consumer database or obtained from a

telephone directory or another public list. The qualification process is intended to determine which

customers are most likely to purchase the product or service.

Charitable organizations, alumni associations, and political parties often use telemarketing

to solicit donations. Marketing research companies use telemarketing techniques to survey the

prospective or past customers of a client’s business in order to assess market acceptance of or

satisfaction with a particular product, service, brand, or company. Public opinion polls are conducted

in a similar manner.

Telemarketing techniques are also applied to other forms of electronic marketing using e-

mail or fax messages, in which case they are frequently considered spam by other people.

Negative perceptions and criticism

Telemarketing has been negatively associated with various scams and frauds, such as pyramid

schemes, and with deceptively overpriced products and services. Fraudulent telemarketing companies

are frequently referred to as "telemarketing boiler rooms" or simply "boiler rooms". Telemarketing is

often criticized as an unethical business practice due to the perception of high-pressure sales

techniques during unsolicited calls. Telemarketers marketing telephone companies may participate in

telephone slamming, the practice of switching a customer's telephone service without their

knowledge or authorization.

IN-HOUSE VS. OUTSIDE SERVICE BUREAU

When establishing a telemarketing program, a company has the option of setting up the

operation in-house, or subcontracting it to an outside service bureau. Both have advantages and

disadvantages. In-house programs usually are better if products and/or services require extensive

technical expertise to explain. They also can be better for firms making a long-term commitment to

telemarketing. Service bureaus, on the other hand, can help firms that need around-the-clock

coverage for inbound programs, are supporting television ad campaigns, or are running a seasonal

marketing program.

SERVICE BUREAUS : One of the main advantages of service bureaus is that they can likely offer

lower costs. By grouping programs from several different companies, service bureaus can generate

sufficient volume to reduce labor and telephone costs, which make up a majority of total costs. They

can also get a program started more quickly because they have experienced telephone reps on staff,

along with necessary equipment.

When 24-hour coverage is needed on an inbound telemarketing program, it probably is more

cost effective to go with a bureau. When setting up an outbound program, the experienced managers

at a bureau can help a company avoid making mistakes and often can accurately project call volumes

and sales per hour. Service bureaus also can help with testing new programs and have a greater

ability to handle demand peaks.

On the downside, several client companies often must compete for a service bureau's

attention, and for firms that share service with a broadcast advertiser whose response rates are

underestimated, that can be a decided drawback. Stability of service bureaus has also been a problem

at times.

IN-HOUSE OPERATIONS : The main reason companies decide to run their own telemarketing

campaign is that they can maintain total control over all facets, including hiring and firing, scripts and

presentations, budgets, advertising, and compensation and incentive policies. When telemarketing

programs are kept in-house, phone reps have ready access to company information, so they can

confirm delivery, authorize credit, and suggest alternatives to out-of-stock items.

Since in-house reps are trained on individual product lines, they can handle highly technical

calls no service bureau likely would attempt. Such technical expertise also helps companies maintain

effective customer service programs through observation (such as via call monitoring). In addition, it

is easier to gain company loyalty from actual employees than from people employed by an outside

bureau. The biggest drawback to taking a program in-house is the large capital investment needed to

get a telemarketing program started. It involves hiring and training new personnel, purchasing new

communications equipment, and dealing with a process that is unfamiliar to many in business.

The Commons Culture, Media & Sport Select Committee Published its Report into Nuisance

Calls on 5 December 2013 it says:

Nuisance calls are irritating and distressing. Scattergun marketing is needlessly disruptive; it

benefits few, and at worst is unscrupulous or fraudulent. The challenge is to curtail bad and

illegal practice while allowing legitimate marketing and reasonable unsolicited calls.

According to telemarketing experts: We will see global telemarketing expand a hundredfold in

the future due to advancement in telecommunication technology and international telephone rates

coming down. Future of telemarketing is to be more offshore, with extremely low operational costs of

call centers, more targeted marketing as databases get better and data mining tools become more

powerful.

Like we can assume from the title, in practise telephone marketing is “using the telephone to

sell directly to customers” (Kotler & Armstrong 2004, 549).

Cron and Decarlo (2010, 40) define the term more specifically: “telemarketing refers to

customer contacts utilizing telecommunications technology for personal selling without direct, face-

to-face contact”.

According to Brassington and Pettitt (2003, 758): “Any planned and controlled activity that creates

and exploits a direct relationship between customer and seller, using the telephone”.

EcoTelematics Group has used telemarketing in the past for supportive follow-up calls to their

e-mail campaigns. Calls have been carried out by their marketing representative directly to the

customer businesses after 5-7 workdays of sending the preliminary information e-mail. No specific

technique has been used; rather just checking andconfirming the appearance of the e-mail.

Today people are familiar with telemarketers who call and sell their products straight to customers.

We often think negatively about telemarketers and feel like they are teasing ourselves

constantly.

However, according to Kotler and Armstrong (2004, 549) over 58% of all telephone

marketing sales are done by business-to-business marketers and not to private customers.

This emphasizes the value of telemarketing in today’s business world. EcoTelematics Group has used

telemarketing as follow-up calls in the past. Nevertheless, the company has not really been aware of

the techniques.

Telemarketing and dos and do not’s

Kotler and Armstrong (2004, 549) define two types of telemarketing: outbound and

inbound.When telemarketer contacts the customer for sales directly, it is called outbound telephone

marketing. Inbound however, occurs when a customer himself calls to company’s sales number,

for example a toll-free 800-numbers in USA. (Kotler & Armstrong 2004, 549.)

Vuorio (2008,95) concentrates on the company’s initiatives and lists different outbound

telemarketing activities. According to him, telemarketing is used as part of the marketing plan

when wanting to get the greatest possible outcomes. His outbound telemarketing list consists

of 13 different procedures and some of them will be introduced next. First three are different

selling procedures: media selling, distribution selling and product and service selling. Second

are founding and getting new customers. The list is followed by different questionnaires and

researches and also different bookings are mentioned. Outbound telemarketing can also be

used for distributing products for resellers. Last on his list is database updating.

Honeycutt, Ford and Simintiras (2003, 104-105) also talk about the outbound and inbound

telemarketing. However, they add to the list a few new inbounding telemarketing activities.

According to them, inbounding calls are not just for sales activities. It can also be used for

sales assistance and technical support. Authors also highlight the importance of telephone

support with highly technical and complex products. (Honeycutt et al. 2003, 104-105.) Brassington

and Pettitt (2003, 758-759) mention also the value of customer relationship maintenance

via help phones and add competitions and other sales promotions to the inbound telephone

marketing list.

Cron and Decarlo (2010, 166) introduce a table summarizing four telemarketing activities.

First, “customer service” provides a helpline for customers’ questions. Second, “prospecting and lead

qualification” helps telemarketers to call prospects or qualify customers for face-to-face selling.

Third, “account management” should concentrate on smaller customer groups in order to free

salesmen to concentrate on larger customers. Fourth, “promotion support” is for inbound calls from

interested customers.

Telemarketing can of course be a powerful tool just used alone. However, the possible

outcomes can be maximised by using other marketing channels side by side with telemarketing.

Telemarketing as a part of marketing plan (Vuorio 2008, 95). In the second level strategy, company

first contacts the customer and then performs the after call, in other words telemarketing. Vuorio calls

other forms of marketing as supporting advertising, because according to him a well planned

telemarketing campaign can bring more volume and bigger sales than other marketing activities. In

the third level strategy the first step can be a direct marketing letter (or spokesman’s visit) and then

continued by the supporting advertising and telemarketing. In the last and fourth level, all the

activities will be performed: direct marketing letter, supporting advertising, spokesman’s visit and

telemarketing. He states that with several previously mentioned activities and larger investments the

outcomes can be higher. However, marketer must remember to take under consideration the volumes

and financial issues and form a marketing plan that is beneficial in both terms.

(Vuorio 2008, 95-96.) When talked about e-mail marketing, different rules were mentioned due to

writing a text. In telemarketing we have to take under consideration that only straightforward

messages can be delivered. It is also important that your message is relatable to the customer and not

sudden, because they are often felt like interruptions. However, if a telemarketing call includes an

attractive offer and the call is targeted to a right customer, company can enjoy the positive outcomes.

(Tapp 2005, 314.)

Advantages of Telemarketing

Advantages of telemarketing will be introduced by first listing the points concerning the

company (seller) or marketer and then followed by matters with customers (other company,

buyer).

Many authors talk about the advantages of telemarketing for the company and direct

marketer. One flagrantly stands out from the rest as in e-mail marketing: cost-effectiveness. For

example,

Cron and Decarlo (2010, 165) mention that telemarketing is five to fifteen times more

efficient and 70 to 95 percent less expensive than field sales. This is based on the fact that necessarily

no other tangible assets than telephone is needed for achieving benefits.

Kotler and Keller (2009, 577) highlight also the importance of reducing costs and increasing

revenues to the list of telemarketing’s advantages. Of course the stakes climb rapidly up if salesmen

bear some personal and communicational skills. With the help of trained and professional

telemarketers the marketing campaign can lead to larger results.

(Brassington and Pettitt 2003, 764). Also Vuorio (2008, 101) talks about communicational

skills in telemarketing. Additionally possible lacks in knowledge can be easily cheated from papers

because there is no face to face contact. Still, telemarketing is a dynamic communication tool and can

be used for surveying customer needs and wants and changing their stereotypes towards the product

or service. Technology can improve companies’ efficiency dealing with outgoing calls. Server

systems can for example move unanswered, busy-line numbers and answer machine calls

automatically to the end of the call list in order to try again later. If these small steps are not required

from the salesmen, they can more easily concentrate on what is required from them: selling.

(Brassington and Pettitt 2003, 764.) From the customer’s point of view, telemarketing is often seen as

a distraction but it can hide some hidden advantages.

Kotler and Keller (2009, 577) mention that telemarketing can add customer satisfaction.

The truth could lay behind the fact that telemarketing calls can lighten the customer’s burden when

they do not have to make the first initiative for purchasing orordering something. When being

contacted personally, customers can feel special and enjoy the fact that a salesmen concentrates on

them only. With these facts telemarketing can be viewed as good customer service.

Challenges of Telemarketing

Before clarifying different challenges of telemarketing we have to consider the fact that

telemarketing can be performed also outside the company. Outsourcing could be cheaper and

the work force used more professional, as they are especially trained for telemarketing. Last,

these reasons lead to the fact that outsourcing is becoming more popular in business-tobusiness

direct marketing. However, for EcoTelematics Group, it has been cheaper to conduct

their own telemarketing calls. Getting the first impression of the possible client (other

business, buyer) and having the possibility to tell more about their product and service has

been the aggravation for not outsourcing telemarketing. For this reason, the research of this

thesis will concentrate on examining telemarketing as an internal activity in the company. This

could include value and importance in the future also to EcoTelematics Group.

Companies like the advantage of contacting customers individually. However in Finland, for

example, there are regulations that limit the possibility to call whoever whenever.

(The Finnish Direct Marketing Association) appoint the possibility for customers

to limit the direct marketing via their phones and mails. These lists are called the Robinson

lists and their purpose is to ”refrain from sending addressed direct mail or making promotional

phone calls to consumers, who have disclosed their will not to receive either of the

mentioned forms of advertising / sales”. (The Finnish Direct Marketing Association 2009.)

This sets limits for the companies as they have to respect the customer’s wishes. Even though

companies think they are contacting other companies and not individuals, they still have to

make sure whether or not the person him- or herself has banned direct marketing. In other

words, individuals within companies have the right to abstain from e-mail marketing or

telemarketing.

(Data Protection in Finland 2010). However, it is challenging because not everyone

is aware of this possibility and thinks that this law does not affect on companies.

What seems to be the greatest advantage of telemarketing can also end up being a challenge.

Especially in inbound telemarketing companies can have troubles in making their telemarketing

successful due to financial issues. Hiring enough people in order to have a trouble-free

and efficient customer service or sales department can be very expensive. Companies who

want to gain customer loyalty should definitely invest in inbound telemarketing because customers

can find it very intrusive if they have to wait service for too long.

(Brassington and Pettitt 2003, 763.) It is obvious that the employees have to know the

products and services sold in order to close the deal. Like mentioned before, finding the right people

for telemarketing can also be a challenge for companies. Firms need a combined customer service

worker and a salesperson. After hiring, motivating your telemarketers can cause problems. Usually

they are expected to make 20 to 30 phone calls per hour and they are still paid less than face-to-face

salesmen. This is why, companies tend to provide different bonus systems and commission based

salary. Role of the internet has also grown to be a challenge for telemarketing. Customers can not

relate to the offered products online without any visual help. Many companies have realized this and

now offer a telemarketing service through their web page. For example, via “Call me up”-button.

This is called permission marketing and it is not only a challenge but can lead to company’s

competitive advantage.

(Cron & Decarlo 2010, 166-167.) Brassington and Pettitt (2003) also highlight the

importance of targeting outbound telemarketing calls. A telemarketer should spend time for carefully

selecting his target customer groups like in e-mail marketing. This will lower down the irritation

factors for customers who are not interested in products and stop bothering the customers who have

added their names to the Robinson list, mentioned earlier. How to achieve this accurate list of only

interested customers is a true challenge for telemarketing.

(Brassington and Pettitt 2003, 764.) However, not everybody can be interested of every

product or service. This is why a telemarketer must be prepared also for negative answers.

According to Vuorio (2008, 25) these rejectionscan be extra sharp and harsh over the phone,

because lacking of face-to-face contact.

Tapp (2005, 314-315) also reminds that many people refuse to answer calls that they know

are from telemarketers. Companies have learned from this and nowadays many use regular phone

numbers instead of 1-800 types of selling numbers