Most people do not like to be telemarketed to, period. That's why the vast majority of phone numbers have already been placed on the do not call list. It's fine and grand for you to call me to welcome me as a new customer, and then perhaps explain some details of the service offered, etc. That's a friendly call, worth my taking the time to answer the phone.
But the minute that this "welcome call" becomes a sales pitch, I will turn off completely. When that happens, you will be destroying my trust in you, because I thought (silly me!) that you were just calling to be helpful. I thought you were calling me because it was in my interest for you to do so, but now I find out you're really calling me because it's in your interest to do so. So, unless I'm a lonely widower living on a farm 10 miles from the nearest town and in desperate need of human contact – any contact – it's likely that I'll be irritated by this.
If you want to cross-sell or up-sell to me by phone, then you need to get my permission to do this. There's nothing wrong with asking me for that permission during the welcome call, but just don't presume I'll give it to you.
Now, here's what might happen when you take my answer to your question back to your management team. It's quite possible that the manager in charge of the welcome call program will say, "Hey, look at the sales we're generating with these calls! For every 20 calls we make, we generate one additional sale, netting a profit of $50, on average, which helps pay for the cost of the calls! How can anyone suggest we should cancel that program?"
In response, all you need to do is point out that if you make one sale for every 20 calls, this means you made no sale 95% of the time. And that each time you didn't make a sale, there was some chance – a large chance – that the customer being solicited has become just a smidge less likely to buy in the future. So in return for generating one current sale, you may have eroded the value of 19 other customers.
The only reason your program looks profitable at all is because you're not recording the lose in value from those who refused. You're ONLY counting the stuff in the win column, because that's easy to tally. The loss column is almost certainly much larger, it's just not as easy to tabulate.
If you want to quantify the damage, then do a control test. Use cross-selling in welcome calls to a thousand customers, as per usual, but make another thousand calls to a statistically identical group of a thousand customers with no cross-selling, and then track each group's buying and performance over time. I can almost guarantee that when you do the back-end analysis you'll find that the welcome calls without the cross-selling will generate far more value for the firm over the long term.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.
This was first published in September 2008