Telemarketing is still a reliable and effective form of marketing that develops valuable sales leads for companies. However, not all companies have the skill set or desire to execute it and turn to outsourced telemarketing companies to complete the role instead. So, before you think about outsourcing telemarketing consider if you can get a return on investment. In recent years the Internet, on-line marketing and e-mail marketing has meant that companies with low value products in a crowded market place have gained easy and unprecedented access to buyers right at the point they are looking to buy at a far lower average cost per sale.

Telemarketing will always be a cost effective route to buyers of high value products in specialist markets, where the buyer has little or no knowledge of the potential solution to their business pains. So, how do you actually evaluate where telemarketing will provide you a return on investment and whether outsourcing to telemarketing companies will work for you?

First of all consider:

• The expected profit generated for each sale?

• How many sales appointments you would expect to attend to gain a sale?

• What is the expected cost of generating each sales meeting?

• How long do you expect it will take to make a sale from the first meeting?

With this information you can make some initial estimates based upon the feed back you get from a potential telemarketing supplier. Firstly, telemarketing companies will be able to estimate the number of qualified sales meeting to expect each week or month.

With this you can apply your expected profit from each sale, a ratio of how many of the sales meetings you would expect to close and how long the sales lead time is between the initial making of the appointment and revenue.

Take a look at this example and then look at how you can apply this to your own business.

Company A’s product produces an expected lifetime gross profit of £10,000.00. The sales team usually win contracts from 1 in 6 meetings they attend and their sales cycle is 4 months. Company A expects each sales appointment generated by telemarketing to cost in the region of £300.00.

This would mean the cost per sale for telemarketing would be £1,800.00, but will provide a return on investment of over 450% as it will result in £10,000.00 profit. However, company A should not expect to receive any revenue from this marketing for a minimum of 5 months after the campaign commenced. Which means it could expect to invest £5,000.00 - £8,000.00 before they should expect to be receiving any revenue from the campaign.

Telemarketing will always be in the marketing mix, but look at it critically and make sure you can make profit before you outsource to a telemarketing company. Not every business can make it pay and sometimes you need deep pockets to bridge the gap between starting the campaign and making a return on investment.