TELEMARKETING: Does telemarketing build brands?

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

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


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


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


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


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


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


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


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.


The phone maze: what BT’s numbers mean (part one)


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


Value call services

0891                49/39p per minute     -

0894                35p per call          -

                    (flat rate)

0897                pounds 1.50 per min   -



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,


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,


                                          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,


Value call services

0891                      Ford, RAC

0894                      Benetton, Radio Atlantic 252

0897                      Music by Fax, FT Cityline


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