The Illusion of “Pay for Performance” Telemarketing

Throughout my tenure in the sales outsourcing field, I have been regularly approached with my thoughts on pay per performance marketing for lead generation and appointment setting campaigns. Particularly in Business to Business Outbound Telemarketing. It sure looks very attractive. There is no risk, make the provider pay for your marketing and let them work for free until the results come in. Wouldn’t it be nice to run a direct mail campaign, but only pay for new customers? How about marketing to a local or cable TV network and paying them only if you get new business? Maybe place some ads in your local newspaper and just pay them for the results? Marketing is marketing and telemarketing is no different. Some vendors have tried this, mostly overseas in places like India, the Philippines, and South America. While it may seem like a safe approach, you will almost always experience poor results, increased staff attrition, increased training time, reduced quality, and the risk of your business being conveyed in an unprofessional manner.

All marketing efforts should encompass a “bootstrap” period. If your business pays only for results, you can bet the telemarketer gets paid the same way. If immediate success is not achieved, it is proven that the quality will be affected by the “push” through leads and appointments that are not properly qualified. The result: Your sales executives are chasing prospects who were never really interested. In the worst case scenario, your salesperson shows up for an appointment only to discover that the prospect has no idea who you are or why you’re there. Naturally, this lack of quality leads to the replacement of call agents, which will now require additional training and more preparation time for those new agents. At worst, many pay-for-performance call centers will simply add agents and increase call volumes to meet minimum quotas without extensive training. Now, your company’s visibility and integrity are jeopardized by representation that isn’t symmetrical or up to the professional standards you’ve worked so hard to create. Let’s face it, your company’s reputation is critical to growth.”

Companies looking to be successful in outsourcing should select those providers with solid management infrastructures; appropriate recruiting measures and systems and technologies capable of executing professional Business Development efforts. These qualified providers work at hourly rates because they have the right resources and processes in place to ensure proper practices and professional business continuity.

First of all, many call center providers operate overnight. Don’t be surprised when you do your due diligence to discover that the salesperson is also the manager and telemarketer for your program. Ask about the structure and composition of the company you are researching. Here are some great questions for determining the quality of the company you’re prospecting for: How many members make up your management team? How many clients do you currently serve? How many call agents currently represent your clients? What is included in your service? How are agents compensated? How are call efforts monitored? Will the agents work my program exclusively? You’ll quickly discover companies that are well organized, procedurally sound, and equipped to make the best use of your marketing dollars.

Second, you can avoid many of these pitfalls by selecting a provider with strong business continuity and quality guarantees. Any telemarketing program is powered by the call agents who make the actual phone calls. When shopping for a third-party vendor, be sure to ask about the agent selection process. You deserve to know who represents your company, their work experience and why they are best suited to represent your organization. All quality telemarketing companies should give you the opportunity to meet and get to know the agents who represent you. If they don’t, consider it a red flag. The relationship and communication between the agent, management and the client has a great impact on performance. Top-tier firms strengthen business continuity by paying agents by the hour and rewarding them through incentives for quality results. After all, you want your telemarketer to focus on delivering the right message and not wonder where your next paycheck will come from.

Last but not least, the company you are investigating must have appropriate systems in place to monitor their program effectively. The best providers out there have management software and give clients access to their program data and reports. Everyone wants results, but credible companies want you to get those results with an explanation of how they were achieved. Marketing is a continuous learning process and not something that just happens. A call center’s ability to monitor activities, make reviews and track efforts will ultimately present a clear picture of your company’s successes.

The next time you decide to seek the assistance of a third-party telemarketing company, keep in mind that asking the right questions will give you the right answers. Whether you’re a start-up or an established company, the key to success is finding a company that focuses on agent talent, embraces a strong management team, and provides modern technologies to help track and build an adaptive marketing program and successful. I assure you that your return on investment and your overall experience will be greatly improved if you follow these simple steps in your selection process. Bottom line, avoid pay-for-performance plans.

Copyright (c) 2008 Grindstone Inc.