Catalog and Direct Selling: Get on the Horn
Build additional sales through an outbound call program
Even in the face of increasing privacy legislation and mounting consumer backlash, there is a place for outbound telemarketing programs in consumer catalogers’ contact strategy. Like any customer contact, an outbound call program is most effective when relevant to the customers who receive it.
There are advantages and disadvantages to using outbound call programs to build additional sales for your catalog business. On the upside, the call is a highly personal contact point with customers that allows you to directly communicate an offer that, ideally, has some urgency. And much like e-mail campaigns, offers that are working (or tanking) can be modified quickly to allow for maximum success. On the downside, outbound call programs can be expensive to execute and, if done poorly, can really tick off customers.
Outbound call programs can work for just about any consumer cataloger. The recipe for success includes knowing your audience, crafting your offers and effectively executing your program.
Know Your Audience
All of the data needed to determine the best prospects to receive a sales call should be available in your database. First and foremost, determine who on your customer file has a valid phone number. If you’re testing the program, don’t put resources toward acquiring phone numbers from outside data sources right off the bat; use the information on hand to craft your test.
If you have the luxury of long-term planning on your side and can afford the extra expense, ask customers to opt in to a call list when they place an order. A customer who gives you permission to call is far less likely to be turned off when you call than one who has not given permission.
If time isn’t on your side, dip your toes in the pool before you jump. You’ll need to start with a small—but measurable—sampling of your best customers and diligently gauge their reactions on the phone. If there’s more resistance than receptivity, reconsider. If your very best customers don’t want you to call, it likely will only get worse as you move down your file.
Segmenting the customer file for your outbound call program also is important. Simple RFM will give you a start, but a successful program is built on product-related buying behaviors at the customer-segment level. Knowing what customers buy—and when and how they use the products you sell—will help you craft offers that make sense to the consumer on the other end of the line.
It also will help if you’re able to segment buyers by season. For example, if a customer is only a holiday gift buyer, you can put her lower on the list for a summer-time call than a customer who is known to buy during warm-weather months (unless a product-level affinity indicates she may be a likely buyer).
Start with customers who have purchased from you in the past by phone, perhaps even exclusively by phone. The purchasing channel preference should be a good indicator of initial success. If you test a program to phone purchasers from the top of your file using seasonal selections and good product-level analysis from the beginning, you should be able to establish performance guidelines for the balance of your customer list moving forward.
Finally, if your business is predominantly based in gift-giving, start the process by looking at customers who also are self-purchasers. For example, if you sell specialty fruit by mail and you identify high frequency purchasers that regularly ship to themselves year-round, you probably have a target for an outbound call program.
Craft the Offer
Ideally, outbound offers should be unique, special-value propositions unavailable through other channels. The phone itself suggests a sense of urgency that mail does not. There should be both urgency and “specialness” to the offers you put together and test for your call program. And your phone reps should never hit the phones with only a single offer in hand.
A good offer strategy will build several promotions into a single call—as few as two to as many as your customers, and your brand, will allow. For highly promotional mailers, it may be perfectly acceptable to keep a customer on the phone for as long as 10 minutes working the sale and driving up the average ticket. Other companies will take the more conservative approach, extending the primary and secondary offers only, and not wanting to become a pest in the ear of the customer.
A good strategy also will test several offers against one another. Call programs are among the most invasive contact methods, and offers have to press the right buttons in order to succeed and get customers over the annoyance factor. Going to market and failing with a single offer—if it isn’t the right offer for the audience you’re reaching—could give you the false impression that outbound programs aren’t for your business. Only testing will verify that for sure.
Evaluate your customers’ purchase patterns. Can you put your buyers into “buckets” that identify customers who buy from category A versus category B versus category C, etc.? If so, build offer strategies that tie into the categories these customer groups typically buy from. Bundling core products with, say, inventory overstocks, will accomplish two goals:
1. It will add value to the overall promotion by way of the inclusion of the core product.
2. It will decrease inventory levels of a product that can’t move on its own.
Test offers against one another. Do you find after several completed calls that the first offer in your line-up is weaker at generating response than the second? Switch them up, and begin a new test. You also should be working at least two offer sets against one another at all times, just as you would with e-mail subject lines or creative tests in print. The key to this strategy is to understand customers’ behaviors and purchasing patterns, then build manageable offers that are customer relevant.
Finally, with respect to offers, have clearly defined success thresholds in place. As with any promotion targeted to existing customers and top customers in particular, your goal should include some modicum of profitability. Without a definition of success, there is no way to determine if an outbound call program truly can succeed.
Execute the Program
In outbound sales terms, your operators/call reps are your creative. And your operators can make or break the initiative. Some operators just have “the gift” of selling, while others couldn’t sell an umbrella in a downpour. If you’re employing an outside service to make calls, this shouldn’t be as great an issue. If you’re executing your call program in-house, however, you may find that some of your best inbound reps simply are terrible at making outbound calls. Understand who these people are.
When a program is done, analyze the results thoroughly. For frequent mailers, introducing an outbound program while a catalog is in the mail will affect sales from the book. What is important, is to understand how much. Holdout groups built into the segmentation can help illuminate the effect of the calls. The question is simple: Are you better off, from a sales and profitability standpoint, with or without the call program?
Outbound call programs can augment most catalogers mail and online initiatives. Real success comes from knowing what the market wants and how to pitch it.
Steve Trollinger is vice president of client marketing, J. Schmid & Associates. He can be reached at (913) 236-8988 or via e-mail at firstname.lastname@example.org.