How to Select aTelemarketingServices CompanyThe decision of which telemarketing services company to select – orwhether to select one at all – is anything but straightforward. On thecontrary, the labyrinthine path to telemarketing success contains manytwists and turns, signposts and crossroads. As with the Labyrinth ofmythology, making a wrong turn can lead to a monstrous ending.Many businesses struggle with these decisions because they don’tknow the signs to look for or the turns to make. But having a properguide can help you navigate the maze and reach a solution that worksbest for your business.1
Executive SummarySelecting a telemarketing services company involves navigating a maze of issues and decisions,the first of which is whether or not to outsource your telemarketing at all. But a path can befound through the confusion by considering each turn carefully and enlisting the aid of aprofessional guide.First, consider if outsourcing is a good fit for your business. Factors such as cost, culture,complexity and integration all play a role. The cost of handling telemarketing in-house extendsbeyond personnel and can include things such as technology, administration and rent. Outsourcingcosts can follow a variety of pricing structures, affecting the decision to keep things in-houseor outsource.When you add in all the costs, an in-house operation may cost you money rather than savingyou money.Once a business decides to outsource, choosing the right telemarketing vendor can spellthe difference between triumph and disaster. The size of vendor to choose depends onthe size of the campaign, and one that’s too big can be just as bad as one that’s too small.Location, and the accent of the agents working in a particular location, can also come withpluses and minuses.Supervision – particularly the front-line supervisor – can make or break a campaign andshould be seriously evaluated when selecting a telemarketing vendor. Likewise, call centerscan take various approaches to quality assurance, but a commitment to quality is imperative.Navigating the maze of decisions surrounding the process of selecting a telemarketingservices company can be simplified by bringing on a managed outsource provider as yourguide. A managed outsource provider can help you select the best call center for your business,set up the program and training, play a role in quality assurance and deliver in-depth reports.Qu ality Con ta c t S olutions , Inc .2
Start with In-housevs Outsource DecisionAs you start your journey, the first crossroad is whether to outsource at all. Do a quick assessmentto decide if your outbound marketing contacts are well-suited for outsourced telemarketing.Among the many factors affecting that decision, take a look at four primary areas.CostCultureIs your company in a high-cost labor market? Doesyour company structure require an internal departmentwith expensive benefits such as profit sharing andpremium health insurance? Is your rent per squarefoot expensive? If you answered yes to any of thesequestions, it may be worthwhile to look at anoutsourced call center.Has your company successfully used outsourcedtelemarketing before? Has your company outsourcedany business processes before? Is your companycentralized or decentralized?In some companies, everything is done internally andcentralized. That could be a negative for outsourcedtelemarketing. But that’s also where vendor selectioncomes into play because every call center is different.If you conduct a proper Request for Proposal (RFP)and visit potential call centers, you can find one thatfits your culture.But how does the quoted cost of outsourced telemarketingcompare to the cost of building a team in house? Youneed to identify all the cost components to ensure anapples-to-apples comparison.There’s more to it than salaries,bonuses and commissions, such as:Complexity Capital expenses, facilities and equipment,especially for new space.If the teleservices program requires a high degree ofsales skill with a wide range of complex products, itmay be better suited for an internal team. Outsourcedoperations are most successful with less-complexprograms. Ask the vendors you’re considering toprovide an example of their work that may be similarto yours. Recruitment and training, including downtimeas new resources are brought up to speed. Vacations, healthcare and other benefits.IntegrationThe last factor is the need for integration with otherdepartments or teams. If a high degree of integration isrequired, it may be best to keep the program in house. Opportunities lost while managers and salesteams coach telemarketing staff.3Q u a l i t y C o n t a c t So l u t i o n s , In c.
Understanding theCosts of an In-houseTelemarketing TeamAs you delve more deeply into the primary factor of cost, consider carefully these five componentsthat affect any comparison of in-house vs. outsourcing.People costs includeOverhead andadministrative costssalaries, taxes, benefitsand costs of managing,supervising and training.include computer hardware,software and phone equipment.can vary significantly. Somecompanies are allocated costsfrom “corporate” that they mustpay monthly. This can be basedon head count or on revenuegenerated by the department.This typically includes seniormanagement and shared servicessuch as human resources,payroll and accounting.TelecommunicationsRent expense is typically theis typically a cost per minuteplus the monthly cost fortelecom infrastructure.square footage used by the internalcall center times the rent factor.Technology costsThe last factor is the need for integration with other departments or teams. If a high degreeof integration is required, it may be best to keep the program in house.Qu ality Con ta c t S olutions , Inc .4
Understanding theCosts of an OutsourcedTelemarketing CompanyThere are four typical pricing structures for outsourced telemarketing vendors.Most outsource providers includeall overhead and ancillary servicesin their fee model.1. H ourly pricing is the mostcommon and will vary based onthe complexity of the program andthe skill level of agents.Baked-in costs will include:2. O ffshore pricing can varydramatically, depending on if thelocation is near-shore (such asMexico or Costa Rica) or in Indiaor the Philippines. Telemarketing staff recruitment Benefits (industry average is 17%of W-2 income)3. H ourly plus commissionor incentives would most oftencomprise about 75% to 80% inhourly rate and 20% to 25% ascommission or incentive. Commissions paid to telemarketing staff Training and certification4. P ay for performance is Facilities, including rent and furnituremost often used for large programswith proven track records. Mostoutsourced vendors won’t acceptpay for performance unless thetrack record allows better thanaverage revenues for the hours thevendor will put into the program. Hardware and software Telemarketing system licenses5Q u a l i t y C o n t a c t So l u t i o n s , In c.
In-house vs OutsourcedTelemarketing ServicesCost ComparisonTo bring more clarity to the potential chaos of cost comparison, here’s a quick TelemarketingServices Cost Comparison Worksheet for outsourced telemarketing vs. in-house.Salary or Rep Rate is often stated in terms of “Per Hour” when priced by an outsource provider.Cost ComponentOutsourced ProviderRecruitmentIncluded in Per Hour RateBenefits Load (17%)Included in Per Hour RateCommissionIncluded in Per Hour RateTraining & CertificationIncluded in Per Hour RateFacilities (rent, furniture, etc.)Included in Per Hour RateHardware (computer, phone, etc.)Included in Per Hour RateSoftware Licensing (CRM, dialingsystem, etc.)Included in Per Hour RateTotal cost per sales repShould be 28 to 38 per hour,depending on if you are outsourcingB2B or B2C telemarketing anddepending on complexity of programIn-house CostsContinued on page 7Qu ality Con ta c t S olutions , Inc .6
Continued from page 6Because most telemarketing service providers chargeAlso, outsourced telemarketing costs vary over theper hour, convert your internal costs to a per-hour basis.long run, compared to the high fixed costs of hiringFor example, if you pay a rep 50,000 per year, theand laying off employees. Organizations should considerper-hour cost would be 25 ( 50,000 divided by 2,000program risk and the value of risk management whenhours per year). If the CRM licensing cost is 1,000 percomparing in-house and outsource costs.license, the CRM license costFinally, remember that a narrowper hour would be 50 centsfocus on costs can be misleading.Outsourced telemarketing providers( 1,000 divided by 2,000 hoursOutsourced telemarketing providper year).should offer real economies of scale.ers should offer real economiesThat should give you a goodof scale, not just cut-rate servicesstarting point for navigating this turn of the maze. Whenthat underperform and defeat their clients’ purposes.you add in all the costs, the in-house option may costOrganizations should never forget the real benefits onyou money rather than saving you money.the other side of the ledger: increased sales results.Outsourced TelemarketingVendor SelectionThe telemarketing vendor should be a traveling companion on your journey to success. So,choosing a vendor isn’t just a question of what makes a good call center but also what makesa good call center partner. Several key factors should be considered.Choose the right pond for your fishIs bigger always better? It depends. If you need a singlecall center to staff a 200-seat credit card sales program,a company that has two centers at 50 seats each justwon’t work. But if your program needs 10 to 20 seats,the center that can staff that 200-seat program may notbe the way to go.Will your campaign becomea small fish in a big pond?noyance than a new partnership? What is a smallfish to one company can be a game changer foranother that will put everything it has into makingyour campaign successful.Will your campaign become a small fish in a big pond?Will it be assigned to an overworked account managerwho sees your new pesky program as more of an an-7Q u a l i t y C o n t a c t So l u t i o n s , In c.
Continued from page 7Location, Location, LocationQuality ApproachLike using local telephone numbers forCaller ID to improve answer rates, having acall center in the right location can make a differencein a campaign’s success. Having a call center in thewrong location can lead you off the path to successand in the direction of disaster.Without a commitment to quality assurance,the goals of your program can get lost in a maze ofother interests. But different companies take differentapproaches to quality monitoring. Some have a qualitydepartment separate from the operations staff. Anorganization with a separate department obviouslyholds quality in high regard, and keeping this kindof department separate from operations ensuresan unbiased approach to quality. Operations peoplecan have the highest regard for quality, but campaignresults are their first responsibility. For a quality assurancedepartment that’s separate from operations, quality is thenumber one priority.If the majority of your agents have a heavy accent,that call center may be perfect for a program callinginto a market that also heavily uses that accent.However, you’re probably less likely to fit a campaigncalling into any other market. There’s more flexibilitywith accent-neutral agents. Choosing an offshorevendor may result in cheaper rates but may hurtsales and the overall customer experience.Under the typical model, each call center has a qualityassurance manager tied directly to operations, and thecall center supervisors and QA manager all report tothe call center manager. Under this model, everyoneis completely aligned with expectations, and QA andoperations work in conjunction with each other. Witha separate QA department, feedback is often passedfrom QA to the supervisor to the agents, so feedbackcan get diluted or lost in translation.SupervisionThe supervisor position is the most difficult job inthe call center industry. The supervisor is most responsiblefor driving team performance, constantly pushing, coaching and motivating, guiding the team toward success.Having a good supervisor is everything. Having a bad onecan be disastrous. This position is also the most difficultto evaluate if you can’t see the supervisor in action.So, which is the right way? Both ways have their prosand cons, but when evaluating a call center, you have todetermine if the center is committed to quality assuranceand if the process that organization has in place workswell for them.Most interaction your business will have with a call centerwill be through an account manager, so when you visit acall center in person, spend time with the front-line supervisor. See if the team is responding to that supervisor andfocusing on the most important areas.If the person doing quality assurance is also thesupervisor, call center manager and IT person,there may not be a proper commitment to quality.However, even the best supervisors need support. A callcenter may have an incredible supervisor and a team of12 agents on an island all by themselves. Is the qualityassurance staff also coaching the team so it’s not all onthe supervisor? If the program has a lot of moving parts,is there a program manager managing the dial strategyeffectively, or is that on the supervisor’s plate as well?Does the supervisor have more agents than he or shecan reasonably manage? A supervisor for one programcan handle 12 agents, another possibly seven,depending on the program.When monitoring with a client, a quality assurancemanager should lead the session rather than anaccount manager. The quality assurance manageris the one constantly listening to the program anddelivering feedback, and the client should know thatperson is capable in that role. When it’s a first sessionwith a call center or a launch of a big program, theaccount man