By Angela Garfinkel
One of the best things about outbound telemarketing is that everything can be measured. Key measurements include sales, sales conversion rate, sales per hour, contacts, contacts per hour, leads finalized, leads finalized per hour, list penetration rate, dials, dials per hour, average order size, average talk time, average handle time, cost per sale, and refusal reasons.
Outbound telemarketing managers and those in the business of outsourced telemarketing services often make the mistake of not communicating what their key performance indicators (KPIs) are. And the reality is that it’s virtually impossible for a team to focus on more than two or three KPIs. I’ve heard telemarketing program managers state that “all of the metrics are the most important KPIs.” That approach is not advisable because when the team works on the program, their focus can be diluted. Even worse, some KPIs can be metrics that are at odds with other metrics.
Some Metrics Affect Other Metrics: Higher telemarketing sales conversion rates may cause a decrease in contacts per hour. Why? Because it takes longer to lock down a sale versus handling a refusal. The average handle time for a sale may be seven minutes, and the average handle time for a refusal may be two minutes. The more sales you have, typically you will see lower contacts per hour.
Higher average order size also may cause a decrease in contacts per hour. If your telemarketing sales agents are up-selling and cross-selling during the call, this should result in a higher average order size. However, both up-selling and cross-selling take time and increase the handle time for that call. Again, the higher the average order size, typically you will see lower contacts per hour.
Higher dials per hour typically are associated with low contacts per hour. If your telemarketing sales team is not speaking with decision-makers, the calls usually will be very brief, and this results in higher dials per hour. I’ve seen some call center managers that set dial goals for the day. In fact, I observed one manager who set a goal of 150 dials per day for each of his staff. For the most part the staff was meeting their dial goal every day, but sales were very low, and the manager wondered why. His staff was being driven to achieve a quantity of dials versus being driven to perform and make the dials productive. When the staff would reach a voicemail for a business-decision maker, they would happily mark the call disposition as “not available” versus what they should have done: Press zero and ask the receptionist for an alternate way to reach that decision-maker or another decision-maker in that office.
How Should a Telemarketing Program Manager Determine KPIs? First, determine the desired results you need on a monthly or weekly basis. Is it a set number of sales? Is it a dollar amount in revenue? Next, determine the resources (telemarketing agents) that you have assigned to the program. How many sales and how much revenue should each person be responsible for? This should be the primary KPI you motivate the individuals of the team to accomplish in order to achieve bonuses or commissions. Finally, train your team on the two or three secondary performance indicators (SPIs) that, if achieved, will aid the telemarketing sales reps in achieving their KPI goal. Typically these SPIs will be contacts per hour and sales conversion rate. A third SPI is often the average order size, since once you have agents reaching their contacts per hour and sales conversion rate goals, the average order size is typically the next item to work toward improving.
If you have an agent who isn’t hitting his or her contacts-per-hour goal, it could be one of two things: 1) they aren’t dialing rapidly enough and are wasting time in average call work or pre-call work; and 2) they aren’t reaching the decision-maker contact and are taking the easy road when they reach voicemail or an unhelpful receptionist. They may need to be coached on ways to be more aggressive or resourceful.
If an agent isn’t hitting sales conversion goals, it is most likely a combination of sales skills and product knowledge weakness. Identify where he or she is weak and provide immediate training to overcome the weakness. People love being coached if the coaching is positive and genuinely helpful. It can be beneficial to have agents listen to another agent who is strong, instructing them to take detailed notes to aid in handling their own sales calls more effectively.
If you’re still unsure how to identify the most important key performance indicators, determine what your boss is being rewarded for. Is it sales? Is it staying below a certain budget? Is it cost per sale? If that doesn’t help, look to the market. By achieving your KPI goals, will your company be in a better market position? That may help guide the answer to the KPI question.
Angela Garfinkel is the president and founder of Quality Contact Solutions, a leading outsourced telemarketing services organization with a telemanagement model. Angela has the pleasure of leading a talented team that runs thousands of outbound telemarketing program hours on a daily basis. Angela can be reached at email@example.com or 516-656-5118.