Telemarketing: Definition, What They Do, Example, and Types

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 are against it.
  • 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 is the practice of contacting, vetting, and approaching potential customers. It does not include the use of direct mail marketing methods.

Telemarketing 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, nonprofit charities, political groups and candidates, surveying, donation solicitation, marketing research, and other kinds of organizations.

The term telemarketing 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.

Types of Telemarketing Activities

The act of telemarketing can be divided into four subcategories:

  • Outbound: Companies actively reach out to customer prospects and existing customers 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: This is the collection of intelligence about the profiles, interests, and demographic data of potential customers.
  • Sales: Telemarketers who are trained salespeople engage in this persuasive activity. They 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.

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

Telemarketing: Criticism and Regulation

The intrusive nature of telemarketing, together with its association with scams and fraud, has turned a vast number of people against this direct marketing method. Often, telemarketing phone calls are unwelcome, and the companies that operate in this space are persistent.

Suspicious activity together with a backlash from the public has led many countries to lay down laws and police how telemarketers can operate.

Do Not Call (DNC) Registries

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.

Telemarketing Sales Rule in the U.S.

Other than giving people living in America the option to not be called by certain telemarketers, the FTC also:

  • Has banned most forms of robocalling
  • Requires telemarketers to make specific disclosures of material information
  • Prohibits misrepresentations
  • Sets limits on the times telemarketers can call consumers
  • Prohibits calls to a consumer who has asked not to be called again
  • Sets payment restrictions for the sale of certain goods and services

What Is an Example of Telemarketing?

If you receive a call from somebody you don’t know who seeks to sell you products or services, you are talking to a telemarketer. These individuals contact people usually with the intention of selling something and can be very persuasive.

Is Telemarketing an Easy Job?

Telemarketing isn’t for everyone. People working in this profession are generally hung up on continuously throughout the day. After being told where to shove it, you’ll be expected to quickly make another call without losing any enthusiasm. Not everyone is capable of dealing with such rejection or able to bounce back immediately. It takes a special kind of person to be able to deal with that and stay upbeat for eight-odd hours a day. You’ll also need to be really good at selling things.

Do Telemarketers Make Money?

Yes, though how much varies by company. Telemarketers are paid by the hour, by sale, or a combination of both. Commission is often a key component of salaries as it incentivizes staff to make sales. Usually, to earn a decent wage and avoid getting fired you’ll need to make your employer money.

The Bottom Line

It’s always wise to be extra diligent when you get a cold call about purchasing a good or service. Don't be pushed into doing anything you don’t feel comfortable with. Telemarketers can be very persuasive and talk us into doing something that maybe isn’t in our best interests.

Know your rights, don’t be afraid to ask questions, and take some time to make a decision if you need to. Most telemarketers are honest people but there are a few scammers out there, which is why we sadly always need to treat unknown callers with an element of suspicion.

Article Sources
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  1. GCL. "The Evolution of Telemarketing."

  2. Ad Age. “Telemarketing: Overview."

  3. Federal Trade Commission. "Q&A for Telemarketers & Sellers About DNC Provisions in TSR."

  4. Federal Trade Commission. "Complying With the Telemarketing Sales Rule."

  5. Federal Trade Commission. "Telemarketing Sales Rule."

  6. Glassdoor. "How Much Does a Telemarketer Make?"

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