Many companies are realizing the efficiency of telemarketing in the face of soaring sales force costs. Whereas an average cost of a business-to-business sales call by an outside salesperson costs more than $300, the cost of a telemarketing sales call can be as little as $5 to $20. And telemarketers can make 20 to 33 decision maker contacts per day to a salesperson€™s 4 per day. This has gotten the attention of many business-to-business marketers€” where telemarketing can be very effective.
1. Refer to Appendix 2, Marketing by the Numbers, to determine the marketing return on sales (marketing ROS) and return on marketing investment (marketing ROI) for Company A and Company B in the chart below. Which company is performing better? Explain.
2. Should all companies consider reducing their sales forces in favor of telemarketing? Discuss the pros and cons of thisaction.

Transcribed Image Text:

Company A (sales force only) Company B (telemarketing only) $850,000 $425,000 $100,000 Net sals $1,000,000 st of goods sold 500,000 $300,000 Sales expenses