It works very well for Tango and First Direct, so why does it have such
a tacky image? Caroline Marshall plots the rise and rise of
telemarketing as a tool for brand building
For some advertising snobs, telemarketing is still the double-glazing
salesman who interrupts dinner and won’t let you go till your dumplings
freeze over. At the same time, recent BT/Channel 4 research reveals the
astonishing growth of the medium: 19 per cent of TV commercials now
carry a phone number, 43 per cent up on a similar 1993 survey.
So who’s right? Can the advertising purists really champion the
inalienable position of traditional TV ads as the only brand builder in
the face of such stalwart competition? Well, no.
On the other hand, can the disciples of telemarketing really prove its
intrinsic ability as a brand builder? Well, yes. However, few want to
argue this point for they do not see telemarketing as a standalone
medium. It is more a supporter and nurturer of brand values than a
creator of them.
However, there are cases where the telephone has created brands,
particularly for some of the big and early adopters of telemarketing
such as First Direct and Direct Line Insurance. These companies have
built their entire brand strategy around phone marketing.
First Direct, the Midland-owned telephone banking operation, was
launched in 1989 and now recruits 10,000 new customers a month. Three
quarters transfer their accounts from banks other than the Midland, so
they cannot be conveniently explained away as cross-sold converts. And
recently the Prudential, Britain’s largest life assurer, appointed the
former chief executive of First Direct, Michael Harris, to spearhead its
new move into phone banking.
Among the strong voices in the pro-telemarketing camp is Mark Fiddes,
managing director of the marketing communications agency, Touch. Fiddes
is a former partner at Howell Henry Chaldecott Lury, an agency that
pioneered some of telemarketing’s most compelling case studies through
its work for First Direct and Britvic’s Tango.
Fiddes - whose agency has sold the concept of telemarketing to Brooke
Bond and Smithkline Beecham - dismisses the double-glazing analogy
outright: ‘Nothing could be further from the truth,’ he says.
‘Telemarketing can bring you closer, much closer to the brand; it can
amplify the brand through a personal medium. Used properly,
telemarketing is the most sensitive, powerful communication medium
going.’
Fiddes cites work by Touch for the international development charity,
CARE, which has boosted donations by 50 per cent. ‘We changed the brand
experience of being a supporter by opening an 0891 number called
Dispatches,’ he explains. ‘The idea is that people call in and listen to
virtually live reports from field workers, recorded from satellite
phones in some of the world’s worst poverty spots. Thus the telephone
brings the supporter and the supported together in a meaningful way, as
well as offering a more emotive appeal to requests for more donations.’
Other major companies have pinned their colours firmly to the power of
telemarketing. IBM’s new global brand campaign this year through Ogilvy
and Mather relied on the telephone, if not to build, then certainly to
help deliver the promise of the new IBM through ‘solutions for a small
planet’.
Some of this work was through predictable customer-support strategies.
But to help shake off the inaccessible ‘big blue’ image, IBM decided
that all communication across Europe should carry a clear phone number,
and that all telemarketing had to be consistent if the giant corporation
was to succeed in building its new image and sales.
To achieve this, O&M Teleservices developed an award-winning campaign
based around a manual to ensure consistent tone and manner in building
IBM’s new image. While this does not sound revolutionary, it is a fact
that the call handling of many computer companies is either inconsistent
with their advertising - or worse, contradicts it.
Joerg Peters, manager of advertising and promotion for IBM Europe, says:
‘People are buying people, not products. When that first contact goes
wrong, consumers will feel that, if you can’t answer the phone properly,
you cannot build a good product.’
Meanwhile Britvic’s Tango is on a roll, partly due to its telemarketing
efforts which are in harmony with Howell Henry’s off-the-wall branding
campaign.
Recently, Britvic wanted to offer more involvement and interactivity
with its mostly young consumers and enhance Tango’s irreverent image. In
its direct response TV campaign, Tango offered consumers a bizarre Tango
‘doll of Gotan’ to support its ‘you’ve been Tango’d’ creative approach.
Using automated response telemarketing, provided by Broadsystem, Tango
created a ‘sound-world experience’ lasting more than six minutes on a
premium-rate network. A six-minute call made the offer self-liquidating,
and also reinforced the imagery of the television commercial.
Robert Dirskowski, the sales manager of Broadsystem, says: ‘The response
to the promotion was high. Brand values were enhanced. Consumers were
able to develop their unique relationship with the brand as more than a
drinking experience. It had become a more involving experience and sales
increased.’
And there are plenty of other, more mainstream, examples of brands using
telemarketing to build and enhance their offerings. Financial services
is still the leading product category for the medium. Now Richard
Branson’s Virgin Direct is selling PEPs by phone: try calling the number
and you hear Branson himself on the other end of the line. Other growth
areas are charities, business-to-business and the holiday market.
Among the newer entrants to telemarketing are fmcg brands with
carelines. It is not long since Kraft, Van den Berghs and Kellogg’s made
headlines by becoming the earliest UK converts to carelines. Now the
telemarketing consultancy, the L&R Group, reports that the proportion of
main brands to carry a careline number has risen from 8 per cent to 22
per cent in just two years. And the US is even more advanced. There,
according to L&R’s recent survey, four out of five brands across the
same span of products bear a phone number.
While the medium is clearly gaining share, the industry is on alert for
the potentially deadly implications of a possible Europe-wide ban on all
unsolicited calls - part of the European Parliament’s Distance Selling
Directive -which would essentially kill off the outbound telemarketing
business. If it goes through, telemarketers will need written consent
before they are allowed to contact new prospects, and even existing
customers.
The next few years will also bring some fundamental changes for the
providers of telemarketing services. While BT still controls the high
ground with the biggest network and more users, Mercury burst on to the
scene four years ago with its own 0500 and 0645 numbers, equivalent to
BT’s 0800 and 0345 respectively.
Meanwhile, following legislation this year, Oftel is selling off number
blocks to the newer telecommunications providers. Energis and AT&T are
tipped to follow BT and Mercury into telemarketing and consequently
there is the juicy prospect of continuing price cuts for advertisers,
tempting them into an increasingly competitive market.
Despite all this activity, telemarketing still has something to prove
over the coming years. Forecasting, training, media planning and
scheduling for the medium will all be in the spotlight as the decade
rolls on.
Wrapped up in these issues lie some of the intrinsic problems of
telemarketing. Some of these difficulties are to do with the medium
itself, others with the way agencies use it, and with the level of
communication between agency account handlers and call-handling
facilities.
Failure to forecast the right level of response will inevitably lead to
handling nightmares, calls left unanswered and consumer frustration at
constantly engaged lines. One hapless advertiser cited in the BT/Channel
4 research used a primetime TV spot to generate 1,200 live calls, while
a staggering 54,000 calls went unanswered. That advertiser should have
been told that 75 per cent of response to a DRTV ad comes in the first
15 minutes after the spot has gone on air. The implication for media
buyers is obvious: for DRTV, off-peak spots are preferable to primetime.
Howard Sandom, head of telemarketing communications at BT, says of the
failure to forecast the right level of response: ‘Telephone handling is
too rarely part of the original agency brief. The account planner still
needs to have more consultation with the call handler at the brief
stage.’
That said, telemarketing has come a long way. Media owners such as
Channel 4, which had a mere handful of clients when it first drew up a
DRTV sales strategy in 1992, now take the medium seriously. They preach
that DRTV can be used to build on strong creative advertising to offer a
year-round stream of new leads. These commercials shout ‘get on that
phone and talk to us now’.
Sandom points out the value of accountability in telemarketing, an
attribute central to any successful communications medium: ‘If clients
put a phone number on screen for more than ten seconds, they stand a
three fold chance of getting a response. A voiceover stating the number
offers a further threefold chance of response.’
As clients increasingly move to payment by results, perhaps this is what
will ensure the continuing growth of the telemarketing industry.
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The phone maze: what BT’s numbers mean (part one)
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Product Cost to caller Cost to provider
Freefone 0800 Nil 12p per minute
(daytime), 9p per
minute (cheap)
International Nil. In some Price per minute
Freefone 0800 countries the charged (varies by
local rate country)
charges apply
Lo-call 0345 Local rate 9p per minute
(daytime) 6p per
minute (cheap)
Nationalcall 0990 National long- Nil
distance
Value call services
0891 49/39p per minute -
0894 35p per call -
(flat rate)
0897 pounds 1.50 per min -
------------------------------------------------------------------------
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The phone maze: what BT’s numbers mean (part two)
------------------------------------------------------------------------
Product Revenue earned What it’s for
Freefone 0800 - Lead generation, order-
taking, customer care,
DRTV
International - To give presence in overseas
Freefone 0800 markets at minimum cost
Lo-call 0345 - Inbound ordering line,
customer support
Nationalcall 0990 - DRTV, information line,
brochure line
Value call services
0891 24.78p per minute Information line,
subsidising
promotional costs
0894 16.3p per call Brochure requests, coupon
(8.5p for under replies
ten secs)
0897 1.62p per sec High-value information eg
97.2p per minute consultancy, legal services
------------------------------------------------------------------------
------------------------------------------------------------------------
The phone maze: what BT’s numbers mean (part three)
------------------------------------------------------------------------
Product Who uses it?
Freefone 0800 Freemans, Racing Green,
American Express, Rank
Xerox, Boots, Amstrad,
Bupa, PPP, Apple, Forte
International Thomas Cook, Shell, American
Freefone 0800 Express, Marriott Hotels
Lo-call 0345 Children in Need, Next, Porsche
Cars (GB), Royal Mail
Nationalcall 0990 Walt Disney, Center Parcs,
Eurotunnel
Value call services
0891 Ford, RAC
0894 Benetton, Radio Atlantic 252
0897 Music by Fax, FT Cityline
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