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Why Outsource Telemarketing Services? Just Add Up the Costs

Cost/benefit analysis should not be the only reason for outsourcing telemarketing services, but it is an important one. Before deciding whether or not outsourcing telemarketing adds up, managers must make sure all the cost factors are included.

There are some costs which are natural offsets. For example, direct payroll costs saved by cutting a telemarketing department will probably be largely offset by outsourced wage costs passed on as part of the charge for telemarketing services. A significant exception to this might be where location allows lower-cost labor to be accessed. Another natural offset is equipment. While it is likely that seasonal telemarketers would find it more efficient to outsource, those who make telemarketing calls year round probably get a comparable amount of productivity out of the equipment as a third-party organization would.

However, once one gets past the base costs of labor and equipment, there are a number of clear cost efficiencies to be gained by outsourcing telemarketing.

While direct labor costs may largely offset, that is hardly the only cost associated with personnel. Recruiting can be extremely expensive, what with fees to personnel agencies, and management time spent interviewing. These costs are magnified in departments where turnover tends to be on the high side.

Perhaps even worse than those measurable recruiting costs are the opportunity costs when an organization cant make enough telemarketing calls because it is short on staff. Being able to tap into a fully-stocked team of telemarketers via a third-party telemarketing services firm is a clear advantage over incurring the costs associated with recruiting.

Of course, personnel costs dont stop with recruiting. Training is essential, and it is not an area for skimping on costs. After all, these people will be representing the company and its products. That makes professionalism a must.

Unfortunately, this means designing an extensive training program, and keeping it current with the most up-to-date training techniques. Most of all, it means an intensive amount of time spend training each new wave of telemarketers.

In contrast, third-party telemarketing firms maintain fully-trained staffs, and because they specialize in telemarketing and spread the costs of training out over multiple clients, they can more cost-effectively update training methods and instruct new employees.

Legal Issues
From the passage of the Telephone Consumer Protection Act in 1991 through multiple subsequent changes, restrictions on telemarketing calls have been steadily tightening. For organizations that make telemarketing calls across multiple states, the regulatory picture becomes even more confusing, as differing state laws and do-not-call-lists intersect and overlap with their federal counterparts.

It would take an extensive legal effort to keep up with all this. On the other hand, this is just part of doing business for a telemarketing firm, so outsourcing is one way of tapping into an existing legal effort.

Finally, another cost of in-house telemarketing is space for the department. Certainly, a third-party firm will pass along some of the space costs in their fees, but this is another cost factor that can be spread among many clients. Also, outsourcing may create access to lower-cost space than what is available in the companys existing locations, and may also help avoid expansion decisions that would be forced by space limitations.

These additional cost factors are among the reasons why outsourcing telemarketing can add up to net savings.

Federal Communications Commission

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