Telemarketing Services Help Companies Stay on Offense during a Downturn

When a recession strikes, managers naturally look for ways to cut costs. Thats a necessary tactic to protect earnings--and for some companies, to ensure survival. However, cutting sales and service resources too drastically will not preserve earnings. Quite the contrary: it can turn a downturn in the economy into a downward spiral for a company. Thats why it is important for sales efforts to stay on offense, even during a business downturn. Telemarketing services can help.

The Downward Spiral of Sales and Service Cuts
Cutting sales and service resources can be a false economy. Customer service, for example, may not be adding revenues, but the revenues it preserves by helping retain customers generally have a much higher profit margin than new business revenues because of acquisition costs. Cutting customer service puts these high-margin revenues at risk. Worse, it does so at a time when customers may be considering a change because of their own budget concerns.

Even with excellent service, some businesses can be lost to attrition. If sales efforts are curtailed due to budget cuts, it may be difficult to replace lost business. As a result, overall revenues can shrink further, precipitating more budget cuts. This is how cutting sales resources can lead to a downward spiral for the business as a whole.

It may be especially tempting for people without a sales background to target telemarketing services for budget cuts. Telemarketing calls are early in the sales cycle, and they seem far removed from any revenue generation. This leads to their immediate impact being muted. Without a consistent telemarketing effort to lay the groundwork for future sales, new production may soon be choked off, and the downward spiral can set in.

Using Telemarketing to Stay on Offense
Far from cutting telemarketing services during a downturn, a company would be well served to use telemarketing calls to stay on offense. When competitors are losing customers because of service cutbacks, it is a great time to step in aggressively and pick up market share. This can mitigate the impact of a shrinking market and super-charge growth when business recovers.

The following are a few examples of using telemarketing to stay on offense during a downturn:

• Making extra service calls. Contacting people with helpful reminders--about such things as an expiring warranty or an upgraded version of a prior purchase now being available--shows customers that the organization is service oriented. When times are tight, this can make all the difference in retaining a relationship, and it can even be an opportunity for additional sales.
• Analyzing customer buying cycles. Some products and services are bought on regular cycles. Synchronizing telemarketing calls with customer buying patterns can squeeze the most out of a weak market by making sure that opportunities do not slip by.
• Launching new sales contacts. Being assertive about sales is a demonstration of a companys strength. What better time to do this than when a tight economy has competitors showing signs of weakness?

Cutting Costs on Telemarketing Calls
Some intelligent cuts can be made in the telemarketing budget without sacrificing capacity. Outsourcing reduces fixed costs and management oversight. Automated calls are a cheaper alternative for routine reminders in which the customer does not need to talk to a human representative.

Sources
New York Times, New Ways to Think About Selling
New York Times, For Half a Cent, a Call that Informs, and Annoys