What About the "Pay-for-Performance" Marketing Model?
Pay-for-performance marketing, on the surface, is an appealing notion. But, in the context of real-world, business-to-business lead generation and telemarketing, does the scheme really hold up to careful examination?
Again, the idea sounds great. Just think: select an outsourcing agency to do your telemarketing for you—and only pay them for the leads or appointments they actually provide. They assume all the risk, right? How can you beat that?
But if it's such a terrific model, why isn't it associated with other classic marketing techniques and channels?
- Broadcast and cable TV
- Radio
- Direct mail and e-mail
- Newspapers and magazines
- The Internet
The fact is, telemarketing is governed by many of the same core principles as these other marketing channels. So, while pay-for-performance schemes may seem to reduce risk, in reality, they typically result in poor returns, low-quality leads, higher training costs and the presentation of your offerings in a suboptimal light.
The Risks of Pay-for-Performance Telemarketing Schemes
No marketing program, now matter how well planned, produces immediate results. There's always a period of testing and trial and error. Given this reality, will it make "dollars sense" for an outsourcing firm that is paid only for results to invest in the upfront effort required to produce quality leads or appointments? Not likely. When the telemarketing representative who is paid for results alone does not achieve immediate success, he or she will be incented to push unqualified leads into the funnel—merely to obtain the necessary quota for "success" Which is one of the main reasons why pay-for-performance schemes hurt lead quality.
The forwarding of these poor-quality leads often results in the replacement of telemarketing reps—which, in turn, leads to higher-than-expected training costs. In an attempt to stay ahead of this curve, some outsourcing firms will simply boost their staffs of (often inexperienced) phone dialers, which only increases their exposure to the possibility that their offering—never mind their selling proposition—will be inadequately or adversely represented to their market. Is this a risk worth taking?
How Do You Select the Right Outsourcing Partner?
As is the case with choosing any vendor, affirming that the fundamentals are in place is essential when selecting a sales-outsourcing partner. What are these fundamentals? A solid, experienced management team. Formal systems and technologies for executing lead generation programs. And reliable methods for recruiting able sales professionals. The best vendors bill for services rendered because they have invested in the human and technical resources and processes required to produce best-practice operations and to enhance business continuity for their clients. Bearing these things in mind, consider how the vendor you are evaluating measures up to the following criteria:
- What processes are in place to ensure quality and business continuity? Be sure to inquire about the process by which the vendor selects its telemarketing representatives, because the quality of your telemarketing program will be determined, more than any other factor, by the telemarketing reps who place the phone calls. The experience, skills and education of these telemarketing agents will be central to the success of your program. Any sales outsourcing firm worth its salt will permit you to meet the sales professionals who will be presenting your offering to the public. And what of agent compensation plans? The best outsourcing agencies ensure business continuity by offering their sales representatives hourly compensation—then sweetening the package with incentives for achieving your desired goals. In this way, the sales rep remains focused on properly presenting your products and services, instead of on how he or she is going to pay the mortgage this month.
- Is the prospective vendor an established service provider? What are the details of the firm's structure and organization? Often enough, you'll discover that the lone salesman is also your program manager—and your telemarketer—all in one.
- How will the outsourcing agency monitor and report on the progress of your program? Does the vendor provide software that can give you direct access to prospect data and reports on sales program performance? This is a feature you deserve—and should demand from your outsourcing partner. Successful marketing never takes place in a vacuum: it doesn't "just happen." Even the best outsourcing partners will require a ramp-up period before a path to repeatable success can be established. Which is why an automated monitoring system is essential to track activities and make adjustments that lead to ultimate success.
Final Thoughts
So, make sure to choose a firm that possesses a seasoned team of managers. That boasts telesales professionals with deep skills and experience. And that leverages proven information technology, such as CRM software, that you can access directly to measure the success of your outsourced marketing efforts. Finally, steer clear of pay-for-performance telemarketing schemes. The old saw remains as true as ever: you get (precisely) what you pay for.
