How To Run The Numbers
on Telemarketing
How to Run The Numbers on
Telemarketing
By Marlon Sanders
Let’s say you’re selling to businesses.
That means in the U.S. you can call businesses
without hassles with the current do-not-call
legislation. Of course, legislation changes
quickly, so by the time you’re reading this, the
laws could be different.
Let’s assume you can telemarket to businesses.
Or that you’re in a country where telemarketing
is OK.
Let’s say your telemarketers get 3 people per
hour to ask you to send ‘em a letter on your
product.
And let’s assume 10% who request the
information buy. That number could be 5%. It
could be 15%. 10% is a reasonable number to
work with.
At 3 per hour, 10 leads will require 3 ½ hours of
calling. At $25.00 per hour for a telemarketing
firm, you’d pay $87.50 for those leads.
You close 1 sale and you’ve brought in $100.
That leaves you with $12.50 per sale.
You’d need 560 sales per week to make the
$7,000, quite a hefty figure.
What’s more, we haven’t taken into account the
cost of the literature mailed out.
There’s just not much juice in this model as it
stands.
If you had low overhead, maybe you could get
your 2 G’s a week by selling $3,000. That’s 240
sales per week. Looks to me like you would
need to sell a higher ticket.
Let’s say you’re selling a $500 product. You
spend $87.50 to get your10 leads, you spend
$7.00 per lead sending a series of follow ups by
mail. That is another $70.00.
Your break even, not taking into account any
overhead, is $157.50. If you were selling a ticket
for $300-$500, those numbers don’t look bad.
Especially if you have several big tickets on the
back end.
In a month, you sell 70 people a week times 4
weeks. That is 280 people per month.
If 10% buy a $1000 something or the other, then
you have 28 more sales times 1 G or $28,000.
Say it costs you 50% in direct mail and/or sales
person costs to grab the 28 G’s.
That is STILL 14 G’s for the month. All you need
per month to make your 100 G’s is around 8.5
G’s net per month.
If you snagged 14 G’s per month, that is 168 G’s
net per year. Not too shabby.
That means you could pay a sales person 40%
commissions to pitch the $1,000 follow up ticket,
allocate 10% for product cost and net out your
50%, assuming your front-end sales covered
your other overhead costs.
You figure you’re going to pay a G a month to an
accountant to make sure all your corporate
papers are filed with the government for taxes
and so forth.
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You figure a G a month to have an assistant
come into your office and help out.
You figure a G a month for rent on an office.
Although with this business model, you’re using
outside telemarketers at $25.00 per hour.
So you could skip the office and the personal
assistant if you wanted to. But any business has
paperwork. Arggh. And you’re probably going
to want someone to help out. Maybe you get
them part time for $100 a week and you spend
$400 a month.
Basically, if you’re using a telemarketing model
and you got something 10% of the people will
buy front end and another 10% back end, you
have a GREAT business model going there.
How do you come up with a product they’ll want
and keep your product cost down to 10% on a
$1,000 product?
That’s the purpose of the actiongrid.com course.
To show you how to do that. It’s very step-by-
step and in depth.
Oh, if the costs ended up being a problem, you
could either:
a. Hire someone at home to do the
telemarketing and pay LESS than 25 bucks per
hour.
b. Get an office and bring in telemarketers at
$7-$10 per hour.
But figure you’ll need another $12 per hour on
top of that for someone to manage them. Say
you had 3 telemarketers at $7 per hour and 1
manager at $12.
That is $33.00 per hour. But you’re running
THREE telemarketers, not 1.
If you get 3 leads per hour per telemarketer,
you have 9 leads per hour for a lead cost of
$3.66. Figure you run the telemarketers 4 hours
per day. That is 36 leads per day or 180 per
week.
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Close 10% on a $500 ticket and you have 18 sales
x $500 = $9,000.
You can lease an office for the telemarketers for a
G. That leaves $8,000.
You have $1,000 to spend following up with 180
prospects = $5.55 in follow up for direct mail.
That’s maybe a skinny rabbit direct mail program
because you’re trying to sell a big ticket item.
Plus, you have to pay someone to get the direct
mail out to the leads.
Sounds like what you do is have the telemarketers
INVITE the prospects to be on a teleconference
call where you sell them.
Then you spend the $5.50 on 1 sales letter
inviting them onto the teleconference and several
follow up postcards.
Or you sell a ticket for more than $500. Say
$697.00. And that gives you more juice for direct
mail.
Or you tack on a back end sale to the $500 folks.
If you had 180 leads per week, that is 720 per
month. Maybe you can go back to those people
and get them on other teleconferences for other
products. Or send them a letter for a $100
product.
What if 10% bought a $100 product? That is 72
sales times $100 or $7,200. Minus $720 costs at
a buck a letter, or $6480.
That alone is very near what we needed to net our
2 G’s.
So if you made $3-5 G’s upfront on a $500
product and 5-7 G’s back end on the follow up
mailing for the $100 “downsell” version, that
wouldn’t be bad. I call it a “down sell” because it
sells them down from $500 to $100 for a “starter
kit” or something like that. And then, you “upsell”
10% of the downsells back UP to the $500.
But let’s say you only broke even upfront on the
telemarketing and the $500 product. You could
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pretty much meet your projections with a back

end downsell for $100. What’s more, if out of
the 72 buyers @ $100, 7.2 upsold back to $500,
that is another $3600.00 to help with overhead
or go toward profit.
Think of this:

Your GOAL is to net 2 G’s a week, right? That

way, you can make 100 G’s a year.

If the front-end $500 broke even, and the back

end $100 sale to the 720 people broke even, if
ALL YOU MADE was the upsell on 7 buyers of the
$100starter kit to the $500 ticket, you’d EXCEED
your 2 G’s net goal, as long as the other
promotions covered your overhead.

I mean, your CPA, accountant (or whatever you

UK and Australia guys and gals call ‘em) is
gonna want a G a month to crunch your taxes
for you.

And so forth. But if your nut was covered, you

can pretty much snag your 100 g’s a year off
the upsell. And if the other promotions brought
in money, maybe you’d be making $200,000 or
$300,000 net a year instead of 100 G’s.

What a pity THAT would be!

Best Wishes,
Marlon Sanders