The perfect cost per appointment

How much should you pay per appointment from a telemarketing firm?

Unfortunately, the answer is..."it depends". Primarily it depends on one piece of information: the value of a customer to your business. Of course there are many ways to calculate that value...net profit, gross margin, etc...but what really matter is that you just pick one, know why you did and then stick with it.

Here's an easy-to-use method for calculating customer value in this article.

Once you know your typical customer value, decide how much of that you are willing to spend acquiring a new customer. This is usually a percentage of the customer value and varies widely between industries, depending on typical gross margin and market maturity. We've had clients pay anywhere between $150 and $1,200 per appointment and in every case the number represented a reasonable percentage of customer value.

Most important, realize the cost per appointment will typically increase as your appointment-setting program matures. Your telemarketing firm should be able to explain when this will happen and what can be done to keep the cost from jumping substantially.

Keeping the leads coming...

When you're implementing a telephone prospecting program it's important to understand the effect of time.

What happens after you've called everyone once and landed appointments with all those interested? Will you get similar results by simply going back through the list again? Of course not! You've already plucked the low-hanging fruit.

Now you have two choices: 1) wait 6 months until everyone has forgotten your first call and call again, hoping a competitor didn't get to them first. 2) develop a plan for nurturing those with limited or no interest from the first call, until their situation changes and they accept your invitation for a conversation.

Obviously, the second option takes more work (and your results won't be as amazing as the first time the list was called), but you'll be there when the prospect recognizes their need. And get them signed up before your competition!

Honesty above all

Arne-Per, our VP of Sales, just forwarded to me a blog entry by Seth Godin describing a horrific experience receiving a telemarketing call from a woman trying to insist she was really calling from a local organization, even though he knew better.

Really, it all comes down to honesty and having the courage to be truthful...and requiring your prospecting staff to do the same. The standing rule for our calling staff is, if someone asks you where you are calling from, don't hesitate to give them our firm's name and the direct line to the president (me!).

And the biggest surprise which has come from this? About twice a month, a prospect starts questioning one of our callers and pushing them for information about our telemarketing firm...because they want to know how to hire us!