Eye on B-to-B: Dialing for Dollars

Judy Powell (not her real name) sounds a bit embarrassed on the phone. When asked about her company’s outbound telemarketing program, Powell concedes that the cataloger has put off establishing a more aggressive strategy due to “inertia.” Instead, her company sticks to the “mail-call” formula: mailing the print book first, then following up on leads with a phone call.

But these days more catalogers are expanding upon the mail-call telemarketing strategy to develop a deeper and richer relationship with their customers.

“The corporate account manager making outbound calls daily is more of a relationship account manager and total solutions manager,” says Peter Cannone, senior vice president of sales for Merrimack, NH-based PC Connection, which sells computers to small and midsize businesses. “Instead of a reactive sale, it’s more of a proactive sale.”

With sales of more than $1.5 billion compared with $563 million in 1997 PC Connection has clearly succeeded with its “call-mail” strategy of building or bolstering a customer relationship before mailing out sales materials. In the first quarter of this year, about 70% of the company’s business was proactive, Cannone says, compared to being 100% reactive just six years ago.

PC Connection is not alone. During the past two years, “our best success has been fueled by outbound call campaigns,” says Pat Berg, vice president of sales for Renton, WA-based computers cataloger Zones. Annual net sales at Zones jumped 37% in 2000, to $634 million, largely due to improved productivity among account executives resulting from a switch to a call-mail strategy.

Getting started

“It’s rare that you can’t apply” call-mail outbound telemarketing, says Laura Hansen, president of Direct Response Corp., a Glenview, IL-based telemarketing consultancy.

Although some marketers go so far as to cold-call prospects, others advocate using telemarketing more selectively, to upsell current clients and to pursue only those potential customers who have already expressed interest. “Take a relationship you already have, and develop it and cultivate it,” suggests telemarketing consultant Mitchell Lieber, president of Chicago’s Lieber & Associates.

At PC Connection, phone reps may find through their customer databases that a client who has bought numerous laptops from the company isn’t buying servers from the cataloger. Cannone would then fashion a “value added” solution for that customer by having the reps emphasize such extras as round-the-clock service and same-day delivery.

As critical as the offer is, the tone of the call is even more important, Hansen says: “You have to learn how to read the signals.” Since many communications signals are visual, phone reps are at a greater disadvantage than salespeople talking face to face with customers. Nonetheless, certain clues are still discernible.

“You’re looking to see if they are engaged in the conversation, if they give you an opening,” Lieber says. Straight “yes” or “no” answers might be discouraging, but a good phone rep will look for any sign of interest.

In fact, training sales reps to seek and seize upon signs of interest is a major factor in the success of telemarketing. At Zones, sales reps undergo up to 18 weeks of paid training before making their first call. They spend five weeks in a classroom, then the rest of the training time in role-playing activities.

Basic training

One of the most important things you can teach phone reps is to ask probing questions: “How many employees do you have?” “What kinds of products or services do you sell?” “What are your needs?” Moreover, have your reps focus on building trust by convincing buyers that they’re not out simply to sell them a product, but rather to offer a broad-based solution to their problems.

Many reps must learn patience as well. It can take three calls, four calls, or even more to build the relationship and make the sale. (And that’s assuming the prospect is even taking the reps’ calls.)

Of course, your reps need to be educated about the products so that they can devise holistic solutions. But they also need to learn how to tailor pitches to a particular market. “You’d talk to a stockbroker differently than you would talk to an engineer,” Lieber says. “A stockbroker has very little time to talk. An engineer is more detail-oriented.”

What’s more, “in talking about services you have to have different listening skills than for hardware sales,” Zones’ Berg says. A prospective buyer of a product is more likely to have actually seen the item, so the discussion would cover how to use it. In selling network security service, though, you might discuss whether the prospect’s data have ever been stolen or sabotaged, or if he has looked at possible holes in his network.

And don’t neglect to teach reps not to leave anything on the table. For example, a laptop sale should lead to a sale of extra batteries as well. Otherwise, Berg warns, “the customer will buy that product elsewhere.”

Hooking Up Outbound Telemarketing Programs

So you want to implement or rev up your outbound telemarketing program, but you don’t know where to begin. Here are a few tips to get you on your way:

  • Decide what you’ll use your telemarketing program for: Upselling existing customers? Opening new markets? Prospecting for new business?

  • Run the numbers to determine if you have the resources to set up a decent program or if you need to outsource. It’s hard to say exactly what each alternative would cost, although a company with a three- or four-person sales department could start up an operation for as little as $20,000-$80,000, says telemarketing consultant Mitchell Lieber, depending on the need for a consultant. Outsourcing costs $35-$40 a phone-hour; conducting an initial test to see if an outbound program is viable might run about $10,000.

  • Determine which segment of your lists and/or which prospects you want to test, and then follow up with fine-tuning and evaluation. Who should you test? Customers who should be buying more products from you, such as clients with a low average order size prime candidates for upselling, Lieber says. He likens it to being the manager of a mutual fund and deciding which stocks are undervalued and therefore worth pursuing.

  • Develop a top-flight training program. “Don’t skimp on training,” warns Pat Berg, vice president of sales for computers cataloger Zones.

  • Plot your scripts and scenarios. One common approach provides telemarketers with actual scripts. The other depends upon call guides bulleted points that the rep should address, depending on the scenario. The latter are more common in b-to-b sales. “If you can empower your reps to engage [clients] in conversation, it’s much more effective,” Lieber says. And in closing a sales call, avoid asking a yes-or-no question that could leave the rep without any options.

  • Above all, those who have done it say, don’t be daunted by the task. “It might be a little bit intimidating,” says Peter Cannone, senior vice president of sales for computer reseller PC Connection. “But it’s very much a long-term game. It’s not just a one-time sale. It’s more a customer-for-life sale.”