What Is Telemarketing?

Telemarketing is the direct marketing of goods or services to potential customers over the telephone, Internet, or fax. Telemarketing may either be carried out by telemarketers or increasingly, by automated telephone calls or "robocalls." The intrusive nature of telemarketing, as well as reports of scams and fraud perpetrated over the telephone, has spurred a growing backlash against this direct marketing practice. Telemarketing may also be referred to as "telesales" or "inside sales."

Key Takeaways

  • Telemarketing is the direct marketing of goods or services to potential customers over the telephone or the Internet.
  • Four common kinds of telemarketing include outbound calls, inbound calls, lead generation, and sales calls.
  • Due to the intrusive nature of telemarketing, including spam calls, many customers do not prefer telemarketing. Countries such as the U.S. and Canada have federal "Do Not Call" lists where individuals can register their phone numbers to avoid telemarketing calls.

How Telemarketing Works

Telemarketing involves the practice of contacting, vetting, and approaching potential customers. It does not include the use of direct mail marketing methods. The term was first used in the 1970s with the advent of a new, cheaper class of outbound long-distance telephone services and inbound toll-free services. The practice of telemarketing take may take place from a call center, an office, or, increasingly, a home. Many times, telemarketing can involve a single call to assess interest or suitability, and then follow-up calls to pursue a sale. Various data may be used to narrow down large databases of names to a small number of higher-probability customer prospects. Telemarketing is used by for-profit businesses, non-profit charities, political groups and candidates, surveying, donation solicitation, marketing research, and other kinds of organizations.

Telemarketing Activities

The act of telemarketing can be divided into four subcategories:

  • Outbound: Customer prospects and existing customers are actively reached out to via outbound telemarketing calls, also known as "cold" calls.
  • Inbound: These telemarketing calls are based on inbound inquiries about products or services as prompted by advertising or sales efforts. These are considered "warm" calls as customers will typically have submitted an interest form online or already be familiar with the company.
  • Lead generation: The collection of intelligence about the profiles, interests, and demographic data of potential customers.
  • Sales: The persuasive activity engaged in by salespeople, in which telemarketers are trained and aim to close a deal on the phone.

Telemarketing may entail a variety of activities, such as surveying, appointment-setting, telesales, database maintenance and cleaning, and providing a call to action.

Telemarketing Reception

The United States and Canada have national "Do Not Call" (DNC) registries that give their residents a choice about whether to receive telemarketing calls at home. In the U.S., the registry is managed by the Federal Trade Commission (FTC) and enforced by the FTC, Federal Communications Commission, and state law enforcement officials.

Consumers who are registered in the DNC database can file a complaint if they receive a call from a telemarketer, which could lead to a stiff fine and sanctions for the telemarketing firm. However, calls from charities, political organizations, and telephone surveyors are permitted and therefore may be received by a consumer despite having their number listed on the DNC registry. Also permitted are calls from businesses with whom the consumer has an existing relationship, as well as those businesses where consent to call has been provided in writing.

Numerous North American companies outsource their telemarketing functions to lower-cost jurisdictions such as India, Mexico, and the Philippines.