But its continuing presence is proof that under the right conditions, telemarketing can be an effective tool for selling your products and services to the general public.

Options are the friend of every small business owner. Yet a lot of small business owners write off telemarketing for seemingly arbitrary reasons. Personal experiences and a widespread belief that telemarketing is simply too expensive for the average business owner sideline telemarketed sales initiatives before they even gt off the ground.

But before you dismiss telemarketing, you need to know the facts about how telemarketing works and how much it costs. Although every situation is different, here are a few guidelines to help you get started.

Types of Telemarketing

Telemarketing is generally a vague term that describes several types of phone-based marketing and sales alternatives. Although the two primary categories of telemarketing are inbound and outbound, most business owners are interested in outbound calls because they already have a system in place for handling inbound marketing initiatives.

Outbound telemarketing can be further broken down according to the kind of results you hope to achieve. Direct sales, lead generation, appointment setting, and survey-taking are all legitimate telemarketing options, so you will need to clarify your objectives before you can conduct a worthwhile cost assessment.

Outsourcing

Outsourcing is almost always the preferred option for telemarketing campaigns. The reason is that the infrastructure requirements for in-house telemarketing are cost prohibitive, especially for small businesses. Instead, small businesses regularly farm out their telemarketing needs to third-party providers.

Not surprisingly, third-party providers come in a variety of shapes and sizes. Telemarketing providers often specialize and may be more adept at marketing to a specific segment of the marketplace. Additionally, many telemarketing firms are located offshore – a less expensive alternative, but one that could potentially leave a bad taste in your customers' mouths.

Cost Factors

It's difficult (if not impossible) to provide a definitive cost estimate for third-party telemarketing services since price is influenced by a variety of factors. Once you have defined what you are looking for, you will need to do a side-by-side comparison of several providers.

Most telemarketing firms require a minimum order ranging from 1,000 to 10,000 hours of work. Fees are typically charged on an hourly basis and range from $25 to $60 per hour. However, deep discounts can be found in the offshore market where rates plunge to as little as $10 per hour. However, you should be aware that a lower cost provider could have a significant effect on the quality of the services provided. A discount provider can make more calls for less money, but the impact of the campaign could be severely muted by the lack of "bang" you get for your bucks.