The Renewed Importance of Outbound Telemarketing

Posted by Nathan Baldwin on November, 13th 2015

As part of our mission to improve customer satisfaction through wider adoption of service contracts, we recently focused our attention on improving the use of outbound telemarketing for increased acquisition.

Telemarketing became a powerful, effective and widely used marketing channel in the 1990s, due to reductions in the price of telephony services, technology improvements, and changes in labor markets. But as with all marketing channels, it quickly became over-used, something that eventually led to regulation at the state and federal level. This pattern is nothing new – some of us can remember similar restrictions being implemented for fax machines – and more recently, electronic messaging has come under increasing scrutiny.

Regulation, and a sense that a stigma still lingers over telemarketing, have put the channel into something of a deep freeze over the past decade.

But times and impressions are beginning to change.  The companies abusing the channel are gone, and the laws and means in which to remain compliant are now widely understood.  Corporate impressions of OBTM (Out-Bound TeleMarketing) are beginning to thaw….

The truth is, a personal phone call is still one of the most important channels for disseminating critical information to your customers, particularly when it is for a relatively complex product like extended service contracts.  Feedback from our programs show that while a high percentage of customers recall receiving information through direct mail or email, they have specific questions about plan features and benefits that result in them not purchasing the plan through those channel.

As we have developed OBTM programs, we’ve taken these customer reactions into account.  Using the interactivity of the outbound channel was something we felt was critical to helping customers make decisions about the benefits of extending coverage as their current limited warranty expires.

Here’s a little about what we did and some of the surprising results we have seen:

First, and most importantly, we do not see cannibalization of the other channels.   In fact we found more information led to an increased lift on the other channels, due to better awareness of the service contract and the urgency to extend the coverage.

Timing is everything!  As with other channels, we found that initial interest in purchasing service contracts was higher during two times: early in the product ownership lifecycle and at the time when the manufacturer’s limited warranty is due to expire.  As we add analytical products to this channel, future segmentation and allocation of resource will be placed on the beginning and end of the limited warranty life cycle.

And lastly – the OBTM channel gave us the best indications for future modifications to all channels and operations.  By using the opportunity to survey if a customer had indeed received the information regarding their expiration, understood the benefits and learned what was critical to them to make a purchase has spillover benefits for future messaging and operations.

In the end, the overall increase in service contract adoption can be double for the top test cells.   When forecasting out that increase to the larger population, it’s clear that using OBTM in the correct way is still a valuable channel.

We will continue to test and learn – but it looks like we have a new channel to incorporate into our scientific approach to service contract marketing.

Feel free to contact us if you have any questions about our new outbound call operations and our strategies.  We are always available for a conversation.