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Telemarketing (sometimes known as inside sales, or telesales in the UK and Ireland) is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequent face to face or Web conferencing appointment scheduled during the call. Telemarketing can also include recorded sales pitches programmed to be played over the phone via automatic dialing.
The term telemarketing was first used extensively in the late 1970s to describe Bell System communications which related to new uses for the outbound WATS and inbound Toll-free services.
The rise of telemarketing can be traced back to the 19th century telephonists, or switchboard operators. Trans-cultural hiring of switchboard operators (mostly women) became especially popular in North America throughout the 20th century, partially due to popularity gained through advertising. After the shift from public switched telephone network to computer-based electronic switching system, the job of switchboard operators gradually diminished. However, with the rise of advertising and with the popularity of the telephone use, new jobs, including telemarketing jobs, were created.
Telemarketing, as it was the case with telephone operators, is one of the fields known to be occupied mostly by women. The central reason for hiring women operators lied in the fact that women's work was considered a form of cheap labor: female telemarketers earned about one-half to one-quarter of men's wages. It was also highlighted, however, that women were more polite and well mannered than male operators. Moreover, the calming, more delicate nature of a woman's voice was considered to be women's natural quality. This naturalization led to normalizing the perception of women as telephone operators and consultants, which is currently reflected in the telemarketing industry.
An effective telemarketing process often involves two or more calls. The first call (or series of calls) determines the customer’s needs. The final call (or series of calls) motivates the customer to make a purchase. Prospective customers are identified by various means, including past purchase history, previous requests for information, credit limit, competition entry forms, and application forms. Names may also be purchased from another company's consumer database or obtained from a telephone directory or another public list. The qualification process is intended to determine which customers are most likely to purchase the product or service.
Charitable organizations, alumni associations, and political parties often use telemarketing to solicit donations. Marketing research companies use telemarketing techniques to survey the prospective or past customers of a client’s business in order to assess market acceptance of or satisfaction with a particular product, service, brand, or company. Public opinion polls are conducted in a similar manner.
Telemarketing has been negatively associated with various scams and frauds, such as pyramid schemes, and with deceptively overpriced products and services. Fraudulent telemarketing companies are frequently referred to as "telemarketing boiler rooms" or simply "boiler rooms". Telemarketing is often criticized as an unethical business practice due to the perception of high-pressure sales techniques during unsolicited calls. Telemarketers marketing telephone companies may participate in telephone slamming, the practice of switching a customer's telephone service without their knowledge or authorization.
Telemarketing calls are often considered an annoyance, especially when they occur during the dinner hour, early in the morning, or late in the evening. Another, potentially serious side-effect of "nuisance" telemarketer calling is that it prompts some exasperated people to begin only answering calls from numbers that they actually recognize on their caller-ID displays, preventing emergency calls and calls from loved ones using pay-phones or someone else's phone from getting through, as well as other legitimate calls made by "unknown but honest" persons who are calling for the first time, such as new acquaintances or responders to a classifieds ad.
Some companies have capitalized on these negative emotions. Since 2007 several forums have sprouted and act as complaint boards where consumers can voice their concerns and criticism. In response some telemarketing companies have filed lawsuits against these portals. The current legal system in the U.S grants such forums a certain degree of protection through "Communications Decency Act, 47 U.S.C 230" and California's Anti-SLAPP law.
A recent trend in telemarketing is to use robocalls: automated telephone calls that use both computerized autodialers and computer-delivered pre-recorded messages in a sales pitch. Some can simulate a personalized phone call through personalized pre-recorded messages. These calls often include intentionally deceptive tactics, with computer recorded messages saying things like "Don't panic but this is your final notice" or "We have already attempted to contact you through the mail." The messages are often outright lies, intended to incite concern or fear in the potential customer.
Robocalls are known for failing to add numbers to their do-not-call list and repeatedly interrupting individuals at all hours of the day.
Telemarketing has recently been advanced to implement a programmed women’s voice as the operator instead of hiring a real women to perform the task (see example of Samantha West). This attempt showed to be unsuccessful. However, some scholars may argue that such technological advancements reinforce commoditization of a woman’s speech as a marketable entity and lead to “gendered hierarchy of communication”.
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It is not known exactly when, or possibly if telemarketing officially became legal in the United States of America. Telemarketing in the United States of America is restricted at the federal level by the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227) and the FTC's Telemarketing Sales Rule (TSR). The FCC derives regulatory authority from the TCPA, adopted as CFR 64.1200 and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 6101-6108. Many professional associations of telemarketers have codes of ethics and standards that member businesses follow to encourage public confidence.
Some jurisdictions have implemented "Do Not Call" lists through industry organizations or legislation; telemarketers are restricted from initiating contact with participating consumers. Legislative versions often provide for heavy penalties on companies which call individuals on these listings. The U.S. Federal Trade Commission has implemented a National Do Not Call Registry in an attempt to reduce intrusive telemarketing nationwide. Telemarketing corporations and trade groups challenged this as a violation of commercial speech rights. However, the U.S. 10th Circuit Court of Appeals upheld the National Do Not Call Registry on February 17, 2004.
Companies that use telemarketing as a sales tool are governed by the United States Federal regulations outlined in the TSR (amended on January 29, 2003 originally issued in 1995) and the TCPA. In addition to these Federal regulations, telemarketers calling nationally must also adhere to separate state regulations. Most states have adapted "do not call" files of their own, of which only some states share with the U.S. Federal Do Not Call registry. Each U.S. state also has its own regulations concerning: permission to record, permission to continue, no rebuttaling statutes, Sunday and Holiday calls; as well as the fines and punishments exacted for violations. September 1, 2009, FTC regulations banning most robocall went into effect.
Telemarketing techniques are increasingly used in political campaigns. Because of free-speech issues, the laws governing political phone calls are much less stringent than those applying to commercial messages. Even so, a number of states have barred or restricted political robocalls.
The National Do Not Call Registry has helped to substantially curb telemarketing calls to landlines and has also helped with the increasing trend for telemarketer to target mobile phones. As a result there has been a greater push for mobile applications to help with unwanted calls from telemarketers, like PrivacyStar. These companies have helped to log thousands of complaints to the DNC Registry, since the inception of the registry itself.
In Canada, telemarketing is regulated by Federal Government, specifically handled by Canadian Radio-television and Telecommunications Commission.
Telemarketing in Australia is restricted by the Australian Federal Government and policed by the Australian Communications and Media Authority (ACMA). Australian Federal legislation provides for a restriction in calling hours for both Research and Marketing calls.
In 2007 a Do Not Call Register was established for Australian inbound telephone numbers. The register allows a user to register private use telephone numbers. Australian Federal Legislation limits the types of marketing calls that can be made to these registered telephone numbers; however, research calls are allowed. Other exemptions include calls made by charities and political members, parties and candidates however any organisation that is instructed by the recipient of a telemarketing call, not to call that number again, is legally obliged to comply, and must remove the phone number from the organisations calling list(s).
Inbound telemarketing is another major industry. It involves both live operators and IVR—Interactive Voice Response. IVR is also known as audiotext or automated call processing. Usually, major television campaigns and advertisers use toll-free telephone number that are answered by IVR service bureaus. Such service bureaus have the technology and call capacity to process the large amounts of simultaneous calls that occur when an toll-free telephone number is advertised on television.
In Finland call centres employ an estimated 100,000 people, but most work with customer relations in larger companies. 10,000 people are working for companies involved with telemarketing. Telemarketing often is the first job young people get. But it is also a way out or back to the labour market for handicapped, immigrants and pensioners. In Finland the profession has had a bad reputation because of work-related injuries. The strain on neck, shoulders, eyes and ears can be considerable. Health problems have however been reduced considerably thanks to lightweight headsets, ergonomic working stations and more tasks, like documentation, done automatically by computers.