When it comes to generating more revenue for your business, outbound calling is a tried-and-true tactic that can pay serious dividends.
Outbound calling can produce new leads, re-engage older leads, and nurture existing relationships. There are countless opportunities to turn outbound call campaigns into sales, and it's a relatively efficient and cost-effective method to boot.
In this post, we’ll explore exactly what outbound calling is, and how to optimize your approach to outbound calling to bolster your results.
What Is an Outbound Call?
Simply put, an outbound call is any call placed by a representative to a client or potential customer on behalf of the business they work for or a third party. These calls are usually made for the purposes of lead generation, sales, telemarketing, and client retention.
For example, let's say the contract with your home internet provider is about to expire. Shortly before the expiration date, a company representative will contact you in hopes of having you renew your service with them. This is a common example of outbound calling.
Along with customer retention, outbound calling can also be done in hopes of securing new business or growing current accounts. For example, at one time or another, most people have received a call from their mobile service provider trying to sell them a larger data package or phone upgrade. This is another example of outbound calling.
Other examples include:
- Market research
- Fundraising for nonprofit or charity
- Marketing calls
- Debt collection
- Sales calls
- Follow-up calls
- Reaching out to potential customers
Inbound calling is the opposite of outbound calling and includes all calls initiated by a third party to a company representative. Typically, an inbound call center will deal with customer service issues but may also deal in order placement, payment processing, and any other questions or concerns a person or business may have.
While inbound call agents service a wide variety of inquiries, they are usually employed in one or more of the following roles:
- Servicing calls from potential customers
- Order processing
- General help desk and tech support
- Inbound sales calls
- Operating as a general contact center for all incoming calls
Outbound sales calls can also be responsive. A prospective customer may visit your website and request more information, for example.
This can be the result of a successful pay per click (PPC) ad campaign on Google or Facebook. The prospect, intrigued by your offer, clicks on the ad, and is taken to a page on your website to share their information.
In this scenario, your sales agent will reach out directly to your lead via an outbound call.
Outbound calls can also be used for non-sales related purposes, such as debt collection, market research and surveys, fundraising, information dissemination, and ongoing relationship nurturing.
Inbound Vs. Outbound Call Centers
There are three types of call centers: outbound, inbound, and dual or blended (i.e., a center that handles both incoming and outgoing calls).
All three types of sales call centers are focused on the same thing: Converting prospects to customers, but they go about it differently.
Outbound Sales Call Center
In an outbound sales call center, the agent initiates calls to prospective customers. Outbound sales agents call prospects from a prepared list based on market research. Typically, these calls are cold calls.
Cold calling is a popular sales technique where a sales agent reaches out to a prospect either without previous contact, or to a known contact who is not expecting the call. In other words, a cold call is unsolicited. The prospect on the other end of the phone call may not know who the company or agent is or what they offer. The agent has a limited time to state their case and begin engaging the prospect.
Cold calling can be intimidating for agents, especially if they’re unprepared. However, cold calling is still a go-to marketing technique for many businesses because it can be very effective. Many agents have been able to win over new customers from a cold call simply by gaining their trust and demonstrating immediate value or a solution to a pain point. The ability for an agent to have success is largely dependent on the quality of list for the product or service being sold.
Outbound sales calls are not always “cold.” Outbound sales calls can also be the result of email follow-ups or based on a scheduled appointment. If your sales agent has already been in contact with a prospect, they may continue to nurture the relationship through a series of outbound calls.
Outbound call centers have special phone equipment that enables agents to make outgoing calls to previous, current, and prospective customers. Modern workplaces often use special call center software like predictive dialer software or power dialer software, to maximize their productivity and minimize common sales management stressors, such as lead distribution.
Outbound call centers are also powered by customer relationship management software, or CRM for short. CRMs help sales teams manage communication history with each contact and deliver a personalized sales experience.
The main challenge of an outbound call process is that prospective customers are not initiating the contact. This means that you could be calling at an inconvenient time or they may simply screen calls and not pick up because they don't recognize the number. Outbound sales calling is a numbers game. To successfully meet your sales objectives, you need to increase the total number of calls made.
In an outbound setup, sales agents need to be more outgoing and willing to do what it takes to generate leads. They should be ready for rejection and have a plan to counter hesitations.
Inbound Sales Call Center
In an inbound sales call center, the agent receives calls from prospective, current, or previous customers.
Typically, inbound sales call centers handle calls from prospects who want to learn more about your products or services. If your prospects have questions before purchase, they may reach out to you via your inbound sales call center. Your agents can then answer questions to reduce hesitation and persuade the prospect to make the purchase.
Your inbound sales agents can assist current customers with upsell or cross-sell recommendations. They can also handle renewals (although this is typically assigned to an outbound call center).
In addition to sales, an inbound call center may handle customer service and technical support issues. A prospect may call with questions, concerns, and complaints, and agents will be trained and equipped to successfully help them.
The main challenge for an inbound call center is agent empowerment. Your agents should understand the ins and outs of your products/services and be good at listening and problem-solving. They need to exercise patience when handling customer complaints and guiding them through a solution.
Types of Outbound Calls
Now that we have established the difference between inbound and outbound calling, it's time to look at two types of calls that typically come out of an outbound calling center, cold and warm calls.
1. Cold Calls
Cold calling involves making unsolicited calls to random people or businesses in hopes of finding someone interested in the product or service being sold. In some cases, cold calls can also be done by people conducting surveys, doing market research, or running a fundraising campaign.
Sometimes, cold calls may be done using a pre-recorded message, power dialer, and an interactive voice response system, although most of the time, they are performed by agents employed by outbound call centers.
2. Warm Calls
By contrast, warm calling involves placing calls to a person or business that has already expressed interest in the product or service in question. Most of the time, outbound agents will work from a list of leads compiled using a variety of methods.
For example, someone might have left a comment on the company's LinkedIn page, requested a callback, or signed up for a newsletter or mailing list.
4 Benefits of Outbound Calling
Here are the main benefits you'll gain by including outbound calls in your marketing strategy:
1. Generate New Leads
The primary benefit of outbound calling is the identification and qualification of new leads. Whether it be an in-house team or a contracted third party, the overall goal of outbound call centers is to dig up new business for their clients or employers.
With a good list, and a solution to a pressing need or pain point, outbound calling can be very effective in driving interest and engagement. A thoughtful script can help generate interest and establish an opportunity to start building a relationship that can be nurtured with discovery, and a follow-up cadence.
While it varies by industry and product, the average prospect needs to engage with your business between 9 to 12 times before they decide to buy. A phone call can be an excellent starting point.
2. Increased Customer Satisfaction and Retention Rates
In the world of business, there is much debate over what's more important: customer acquisition or retention. The truth is, they’re both important.
As a result, a good portion of all outgoing calls are made to existing clients in the hopes of having them increase or extend their service. Depending on the business model, outbound sales calls to existing clients may instead focus on offering the client new products or convincing them to increase their current purchasing numbers.
3. More Cost-Effective than Traditional Sales Teams
In the past, sales representatives traveled from town to town, meeting with people and businesses in hopes of making a sale. As one can imagine, this method was not very cost-effective, nor did it make a very good use of time and company resources.
Today, all potential and current customers can be easily reached via outbound sales calls, making the sales and customer acquisition process significantly more cost-effective than ever before.
Furthermore, companies have found that they can save even more money by outsourcing this role to outbound call centers. By doing this, not only do they save money on time and training, but it also frees them from having to make the initial investment required to run such an operation.
4. Test Your Outbound Calling Approach Right Away
When you do outbound calling, you can monitor your approach, measure its effectiveness, and iterate or pivot quickly in real time. How are prospects responding to your script? Is your offer resonating? Are you missing any important talking points?
You can also monitor your agents to discover individual weaknesses and strengths during their outbound calls. Then, in your one-on-one meetings with your sales reps, you can help them improve or double down on their strategies.
Best Practices for Outbound Calling
Now that we’ve defined outbound calling, let’s discuss how to optimize your calling process.
1. Make Sure to Comply With Federal and Local Laws
First and foremost, know the law. Be sure that your outbound call practices are in compliance. According to the Telephone Consumer Protection Act of 1991 (TCPA), here are just some of the rules to abide by:
- Adhere to the National Do-Not-Call Registry
- Know what times of day you can legally call contacts in different states
- Identify yourself and your company, and include your number on voicemails so prospects can call back and request removal
- Provide your contacts with the right to opt out, and if they do, you must comply
- You can’t block your phone number on the caller ID
Click here to learn more about the Telephone Consumer Protection Act.
There are many other regulations, including the TSR (Telemarketing Sales Rule) that you must abide by as well.
This is list is by no means exhaustive, and you should always consult an attorney prior to outreach.
2. Create and Test a Script
Create a script specific to your current outbound campaign and list. A good script reduces agent call reluctance/anxiety, highlights a solution to a pressing need or pain point and opens the door to a conversation, and ensures consistency in customer interactions. Remind your agents to use the script as an outline and not to follow it word for word. Otherwise, they may end up sounding robotic.
3. State Why You're Calling Immediately
Avoid too much small talk at the beginning of your call. Your prospects are busy. Respect their time by getting to who you are and the reason you are calling. Unless your opening pitch captures their interest and suggests a conversation would be of value to them, they'll have no need to stay on the phone with you.
If it’s not a good time, agree on a time in the future to call. If it’s a good time to talk, be clear with them how long you’ll take on the call, and don’t go over that limit.
4. Use Their Name and Ask Questions
People don't like to feel like a number, or someone on a long contact list. A personalized approach that uses their name and company name can help with engagement. Even more important are questions that establish whether they even have a need for your solution in the first place. Stop selling and start solving. Of course, you can't solve a problem until you've identified one with good questions and listening skills. Only then can you seal the deal with an approach that speaks to their needs.
5. Use a Local Phone Number
People are less likely to answer phone calls from area codes that they don’t recognize. To encourage the prospect to pick up the call, use a phone system like PhoneBurner that automatically assigns you local Caller IDs for locations you regularly call.
Using local numbers as you can dial - as opposed to having every call originate from one number - can also help mitigate the risk of scam likely flags. Call volume is one of many factors carriers use to apply these flags, so rotating numbers may reduce volume below important thresholds.
6. Follow Up
Success doesn’t happen in one call. It's a process. Persistence is what separates top sales pros from their peers. Use a cadence complete with calls, emails, and texts to engage contacts, and take a coordinated approach to solving their problem with your solution. Often, timing is everything so take the long approach over now or never. Be sure to take detailed notes in your CRM so that your timing and messaging matches their needs.
And if you need to respond to a customer's request to reduce price, make sure you're armed and ready with responses.
4 Ways to Measure Outbound Call Effectiveness
Any outbound call strategy can be measured for effectiveness so long as the right sales metrics and KPIs are used. For those who are unaware, KPIs stand for Key Performance Indicators and are analytic tools businesses use to track and measure their level of progress towards a particular goal or outcome. While there is a seemingly endless number of KPIs to choose from, some are far more applicable in certain situations than others.
Below is a list of the top four KPIs every business should use to measure the effectiveness of their outbound calling strategy or approach.
1. Average Handle Time
The first, and most widely used KPI is Average Handle Time(AHT). This metric measures the average length of contact between a customer and the outbound center agent in either seconds or minutes.
Calculating AHT is done using the following calculation:
(Talk time + Hold time + Follow Up Time) / Total Calls
One of the most common questions people have on this topic is, “What is a good ATH?” The answer is not straightforward, as each company will have a different approach to their sales strategy and customer experience depending upon what product or service they are selling.
However, it is important to note that a short ATH time is not necessarily better than a long one. Instead, businesses should analyze their data to determine in which range the majority of their sales are occurring and have their outbound call center agents take it into account.
2. Conversion Rate
Conversion rate is a reasonably simple metric that measures the total number of sales vs. the total number of outbound calls. Once again, the ideal conversion rate will change greatly depending upon the type of business in question and the type of calling being used. In almost all cases, warm calls will produce a higher conversion rate than cold calls.
3. First Call Close Rate
First call close rate (FCR) is another useful KPI that measures the number of sales made during first contact as a percentage. If a sale occurs, but the customer or business had to be contacted more than once to close it, it doesn't count towards the first call close rate.
Interpreting this KPI can be tricky at times and should always be compared with the conversion rate. If the latter is much higher than the former, it may lead management to conclude that the sales cycle is not as efficient as it could be. Generally speaking, the closer the FCR is to the conversation rate, the better.
4. Occupancy Rate
Occupancy rate measures how much time a sales agent spends on calls vs. how much time they spend off calls. Like FCR, occupancy rate is measured as a percentage and gives management insight into how productive their agents are. After all, no sales occur when an agent isn't on the phone with someone.
Generally speaking, most outbound call center managers aim for an occupancy rate between 85% and 90%. Trying to push agents to higher levels can backfire as people end up feeling stressed and overworked, which can lead to decreased productivity.
Become an Outbound Call Pro
At this point, you should have a sound idea of exactly what outbound calling entails and what it's used for. Moreover, it should be reasonably clear by now that outbound calls are an integral part of business growth and development, and any business not employing this tactic in one form or another will have a hard time attracting new clients and expanding current accounts.
If you and your business are having a hard time acquiring new clients, it may be time to see what kind of outbound marketing solutions are a good fit. PhoneBurner may be one of those solutions that can help—check out what our platform offers for teams focused on outbound calls.