Early History

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Telemarketing is a registered trademark owned by Nadji Tehrani^* who founded TeleMarketing Magazine in 1982. Prior to that, the term was used extensively in Bell System communications relating to new uses for the outbound (WATS) and inbound (Toll-Free 800)services introduced in the late 1970s. It is a form of direct marketing where a salesperson uses the telephone to solicit prospective customers to sell products or services.

Categories

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There are two major categories of telemarketing: Business-to-business and Business-to-consumer.

Within these two categories are two other broad divisions: Lead Generation, where the objective is to obtain information and Sales, where the object is to get someone to buy something.

Within these two categories, there are two other broad categories: Outbound and Inbound. Outbound telemarketing efforts are proactive, with the marketing person making phone calls to prospects or existing customers. Inbound telemarketing efforts are reactive, where the agent processes requests for information or takes orders. The demand is generally created by advertising, publicity or the efforts of outside salespeople.

Telemarketing may be done from a company’s office, a call center or increasingly from someone’s home. (See also Homesourcing.)

Effective telemarketing programs often involve a two or more call process: The first call (or series of calls) determines the prospect or existing customer’s needs. The final call (or series of calls) motivates the prospect or existing customer to make a purchase.

Negative Perceptions

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Telemarketing has also been negatively associated with various scams or frauds like multilevel marketing, pyramid schemes or with fraudulently overpriced products or services.

The prospective customers are identified and qualified by various means, including past purchase histories, previous requests for information, credit limit, competition entry forms or application forms. Names may also be purchased from another company's customer database, or obtained from a telephone directory or some other public list or forum. The qualification process is intended to find those prospective customers most likely to purchase the product or service being sold or advertised. Charitable organizations, alumni associations and political parties often use telemarketing to solicit donations.

Market survey companies often use telemarketing techniques to survey prospective or past customers of a client business to assess market acceptance or satisfaction with a particular product, service, brand or company. Public opinion polls are conducted in a similar manner.

Telemarketing techniques can also be applied to other forms of electronic marketing using e-mail or fax messages. (See spamming.)

Telemarketing is often criticized as being an unethical business practice as some companies make unsolicited calls, using high-pressure sales techniques. Such practices may be subject to regulatory or legislative controls related to consumer privacy and protection. In particular, telemarking in the U.S. is restricted at a federal level by the FCC's Telephone Consumer Protection Act of 1991 and the FTC's Telemarketing Sales Rule. Many professional associations of telemarketers do have codes of ethics and standards that member businesses follow to win public confidence.

Do Not Call Listings

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Some jurisdictions have implemented "Do Not Call" listings, either through industry organizations or legislation, in which consumers can indicate that they do not wish to be called by telemarketers. Legislative versions often provide for heavy penalties for companies calling individuals on these listings. The U.S. Federal Trade Commission has now implemented a National Do Not Call Registry in an attempt to reduce intrusive telemarketing on a national basis. Although challenged by telemarketing corporations and trade groups as a violation of commercial speech rights, the National Do Not Call Registry was upheld by the U.S. 10th Circuit Court of Appeals on February 17, 2004.

Avoiding Telemarketing Calls

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There are several methods that people use to avoid telemarketing calls. Using caller ID or a privacy manager can allow the targeted subscriber to identify the caller before the call is answered and make the decision not to answer. Answering machines and voicemail can also be used to screen calls, as telemarketers generally do not leave messages. A device called the Telezapper foils telemarketing calls by issuing a tone which causes the autodialer at the call center to log the number as out of service.

See also: marketing, spamming, direct marketing, call center, autodialer, predictive dialer

External links

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• American Teleservices Association
• Federal Trade Commission Information about Telemarketing Rules and Scams
• Federal Trade Commission Do Not Call Registry
• List of State Do Not Call Lists
• Congressional Research Service (CRS) Reports regarding Telemarketing
• Telephone Preference Service - UK Do Not Call Registry
• Who's Calling, Please? describes methods for making telemarketing a more effective sales tool.

Telemarketing | Direct marketing | Promotion and marketing communications | Marketing

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