Outbound telemarketing isn’t just for business-to-business marketers. Plants and flowers cataloger Jackson & Perkins (J&P) and food gifts merchant Harry and David — both owned by $500 million-plus Medford, OR-based Bear Creek Corp. — are among the merchants using outbound telemarketing (OBT) to stimulate sales and liquidate inventory among consumer customers.
For J&P, the limited shelf life of its product line and the ever-changing regulations regarding keeping perishables alive for extended periods mean the marketer could get stuck with unsaleable stock. So in 1990 the cataloger established an outbound telemarketing program to sell off excess inventory. The calling program was a success, so J&P began to share the outbound telemarketing team with Harry and David. Currently the OBT program accounts for about 10% of the combined revenue for both brands, or roughly $50 million in overall sales. J&P alone generates about $25 million in sales from OBT.
In addition to liquidation, J&P uses outbound telemarketing to upsell and cross-sell items. “While OBT certainly helps us in clearing old plant and flower inventory,” says J&P senior marketing analyst Colleen Browne, the program “also allows us to target hard-goods buyers who may be interested in items like outdoor furniture and garden accessories.”
J&P runs two primary outbound telemarketing campaigns a year: one from late August to mid-November, and another starting in late March and running through early June. “We usually call our best customers first — those who have made the most purchases based on statistical models,” Browne says.
In addition to the consumer businesses, J&P sells to nurseries and gardening retailers, while Harry and David targets corporate gift-givers. The same OBT team contacts consumers as well as business customers.
Bear Creek has about 55 full-timers in the OBT department, with 15-20 part-timers. Browne says that the part-time calling staff can nearly double for the holidays. Although some are hired from the outside, most of the outbound reps are selected from the inbound service team. Browne estimates that the outbound calling program costs about $18 per hour per employee during a 40-hour work week; the sum includes salaries and technology costs.
Do-not-call file a damper
Revenue from outbound telemarketing has been flat for the past two and a half years, which Browne blames largely on the National Do-Not-Call Registry and other Federal Trade Commission (FTC) regulations. Only about 2%-3% of Bear Creek customers are on the national registry, Browne says, but she says further rule changes on the state level may exclude more people from Bear Creek’s outbound calling lists. “We may no longer be able to call on certain people who have been good customers in the past based solely on where they’re located,” she says.
Nonetheless, Browne adds, “as long as the FTC doesn’t make their rules any tougher, OBT will remain part of our overall strategy.”