Share this story
Close X
Switch to Desktop Site

Those 800 numbers tuning in quicker, cheaper sales

Telemarketing - ''It helps you do more business every business day.'' So hums the jingle from the American Telephone & Telegraph Company (AT&T) about selling and servicing products by using the telephone in combination with the computer.

Watching these AT&T ads on TV, it's hard to be impressed with any sense of new-wave high technology. After all, the airlines have been using toll-free 800 numbers for years, taking reservations and answering customer questions. And, much to the annoyance of families trying to preserve their one hour of togetherness - dinner time - manufacturers have been selling over the phone for several years, too.

About these ads

''The only thing new about telemarketing is the name,'' says Gary Tobin, a spokesman for MCI Communications Corporation, an AT&T competitor. Still, last week MCI began offering ''MCI WATS.'' MCI uses its own service for 70 percent of the calls and leases the rest from AT&T (for lower rates than AT&T's). WATS lines - wide-area telecommunications service - are a cheaper way of making long-distance calls for big companies.

Reportedly, AT&T has spent $13 million to $15 million annually to put new spark in telemarketing. Everyone, including AT&T executives, agrees the concept stems from an old idea, reaching customers by phone. But more businesses are using telemarketing; they are finding new ways to use it; it's getting more attention in the business schools; and even a magazine called Telemarketing began publishing bimonthly last year.

Other than the advertising blitz coming from AT&T, experts say there is one primary reason the demand for telemarketing is increasing. ''It's the cost factor,'' says Hubert Hennessey, a marketing professor at Babson College in Wellesley, Mass. In 1982, the number of 800 numbers increased by 29 percent over the year before. AT&T's own telemarketing center - where consumers and clients can call for information about AT&T products - pulled in more than $100 million in new revenues last year.

Mr. Hennessey just finished a study comparing telemarketing with on-site selling. An on-site sales call on an industrial client last year cost an average

On the other hand, depending on the kind of product being sold and the type of client, a phone call can cost $4 to $5 or $20 to $40. The company would still have to make a few calls before closing a sale, he said.

John Wyman, senior vice-president of marketing for AT&T's long lines division , says businesses are using telemarketing in a variety of ways. He mapped out some of them in an interview here.

A total information center. Companies such as Procter & Gamble and General Electric set up telemarketing centers to answer questions from consumers.

About these ads

GE's center, which just swung into full operation in October, handles about 4 ,000 calls a day from consumers who want to know more about GE products and how to fix them. The people who answer the calls can get answers to 500,000 possible questions through computer terminals on their desks - or from technical experts on the staff. ''Since we started the 800 number, our research has shown us that the image of GE has improved,'' Powell Taylor, manager of the GE answer center, asserts. ''People tend to buy GE products now because they have this security blanket.''

These companies make the 800 number widely available. For instance, Procter & Gamble prints the number on all its products.

Direct marketing by phone. At Kelly-Springfield Tire Company in Cumberland, Md., ''telemarketing is a supplement to going out in the field,'' says Howard Zendt, manager of its three-year-old telemarketing center. ''If we haven't gotten an order from a customer in a while, we'll give them a call.'' Mr. Zendt says telemarketing helps the customer. ''We can reduce our dealers' inventories and speed up shipment.'' He says telemarketing has been ''extremely effective'' because the computer helps in keeping tabs on accounts, while the phone ''helps us maintain people touch.'' Companies and consultants are quick to point out, though, that ''professional'' telemarketers don't badger consumers with calls. In fact, the emphasis is on business-to-business calls, Babson's Mr. Hennessey says.

Tracking advertising. Last fall Beech Aircraft began to advertise an 800 number regionally. ''It's helped us see how effective our ads are,'' says George Rodgers, domestic marketing vice-president for Beech. ''We also use it to quickly follow up on leads.'' Recently, a dentist called the number and asked to have someone contact him locally. Beech phoned the nearest retailer, who had lunch with the dentist that afternoon, and the company made a sale. ''I wish that happened every day,'' Mr. Rodgers said.

In setting up their own telemarketing centers, companies have run into common problems. At Telemarketing magazine, based in Norwalk, Conn., the advertising was generated in part through telemarketing. ''Our first two years of telemarketing were so traumatic I don't even want to think about it,'' says Nadji Tehrani, the editor. By trial and error, the magazine discovered that a person selling face to face can't always sell over the phone; that a person must be well trained in product knowledge; that it's helpful to have him meet clients instead of always using the phone.

Despite heightened interest in telemarketing, ''growth has not been dramatic, '' AT&T's Mr. Wyman said. For the past 18 months, he has been giving telemarketing seminars to Fortune 500 companies to help increase awareness. Switching to telemarketing may mean a new way of doing business, he says, which takes time.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.