Businesses often just calculate agent’s costs as the overall telemarketing expense. If you did the same thing, you may probably end up with a burden.
In reality, telemarketing can significantly cost you more in the long run. Scaling issues, unpredictable cost per lead or any other sudden market changes can create a cost hike.
This blog will help to overcome any of these issues. It will discuss all the costs components of a telemarketing operation and will guide you to create one for yourself.
What is Telemarketing Budgeting?
Telemarketing budgeting is a process of estimating the total cost of a telemarketing campaign. It’s done by analyzing call volume, conversion rate, agents’ time and the overall sales outcome. It does not just calculate agents’ hourly rates, rather it also covers all related expenses like how much each call, lead and sales actually costs.
Businesses often consider telemarketing services as a fixed expense. However, in practice, it acts more like a performance-oriented cost system. Even a small change in funnel flow and sales velocity can impact revenue intensely.
Telemarketing budgeting calculates all these components:
- Agent working hours (labor costs)
- Tech and infrastructure costs e.g. CRM, VoIP, power dialer
- Cost Per Lead (CPL)
- Average Handling Time (AHT)
- Lead qualification rate
- Sales conversion rate
- Cost Per Acquisition (CPA)
- Burn Rate (how fast agents complete reaching leads)
- Overhead cost (management for monitoring)
It’s clear by now that the telemarketing budget doesn’t just calculate agents’ wages; there are different components to cover as well.
When a business fails to cover all these in their budgeting, it brings some severe operational issues. Inappropriate budgeting can lead to:
- Inaccurate ROI forecast and financial mishaps
- Slower sales cycle and less productive agents
- Miscalculating offshore and onshore telemarketing costs and their capabilities
What is Cost Per Call in Telemarketing & How Much Does One Call Cost?
Cost per call is the amount of money it takes to make one call. Typically, it ranges from $2 to $10. But in general, telemarketing or call center services can cost about $5 per call. How much a call will cost depends on industry, complexity, management overhead, infrastructure, wages to a wide range of other factors.
Cost per call (CPC) is the base cost of a telemarketing campaign. All other cost areas like CPS, CPL, CPA are based on it.
Cost per call in telemarketing depends on different components:
- Employee wages and benefits
- HR and office support expenses
- Call center overhead
- Software subscriptions
- Total calls answered by agents
- Training and development costs
- Maintenance and support costs
Average Cost Per Call Benchmarks for a Telemarketing Campaign
The location of a telemarketing campaign affects the overall cost components. In-house operations can cost more in the long run than outsourcing. It happens due to the minimum wage limit, culture, expertise and different time zone-related issues.
US companies manage their telemarketing operation in three common ways:
- Offshore agents
- Onshore agents
- Nearshore agents
Here is the breakdown of these 3 type’s cost per call benchmarks:
| Region | Typical Agent Hourly Rate | Estimated Avg Calls/Hour | Estimated Cost per Call | Quality/Notes |
| Offshore (Philippines, India, Pakistan, Bangladesh, etc.) | $8 – $18/hr | ~10–15 calls/hr | ~$0.50 – $1.80 / call | Lowest labor cost; may need more training/oversight. |
| Nearshore (LATAM / Mexico / Costa Rica) | $12 – $25/hr | ~8–12 calls/hr | ~$1.50 – $3.10 / call | Time-zone & cultural fit with the US; middle ground quality. |
| Onshore ( Domestic sources) | $28 – $65/hr+ | ~6–10 calls/hr | ~$3.00 – $10.80 / call | Highest pay & language/cultural alignment; stronger compliance. |
US companies are recently leaning more towards offshore services due to low capital expenditure (CAPEX) and total cost of ownership.
Formula to Calculate Cost Per Call in Telemarketing
The cost per call formula shows how much one call costs for an employer.
Formula
Cost Per Call (CPC) = Total Cost ÷ Total Calls
Total cost includes wages, payroll taxes, management overheads, dialer, CRM costs etc.
Total calls include all the calls that are connected, rejected and got voicemail responses.
Example Calculation:
For example, your telemarketing operation costs you $6000 a month and at the same time, they handle 2700 calls. Then your cost per call will be:
CPC = 6000 ÷ 2700 = 2.22
It means, per call, it costs an employer $2.22.
Key Drivers for Cost Per Call
Cost per call varies as per employer requirements. Especially, outbound call center service costs can be different for setting appointments, lead generation or for a market survey campaign. Each type of task requires different expertise, strategy, nurturing method and timeframe.
Agent Hourly Wages for Telemarketing
Agents’ hourly rates vary from region to region. Depending on the type of operation, e.g., onsite (domestic), offshore, or nearshore, costs shift considerably.
For example, in the USA, average annual pay for a telemarketer is $38,329 or around $18.43 an hour. The rate also varies from state to state. In Berkeley, California the average hourly rate is $22.56 per hour.
On the other hand, offshore services start from only $6 an hour. This shows that location is a significant factor for telemarketing costs.
Dialer Efficiency’s Impact on CPC
Dialing each prospect manually is time-consuming. It significantly increases agents’ idle time and the overall costs per call.
The more accurate dialer tools perform, the greater the chance of obtaining a lower CPC. Predictive and power dialers increase agents’ performance. When the overall dialing tools and software work seamlessly, it generates more calls in a given time.
On the contrary, when dialers don’t work effectively, it increases the agent’s manual workload and eventually CPC.
Call Duration Affects Cost Per Call
Longer call duration doesn’t mean better performance. After longer calls, if the marketers face rejections, it indicates that there are shortcomings in scripts or agents’ skills. It also indicates misalignment between targeting and segmentation.
All these drivers lead to longer calls and, eventually, higher CPL and CPC.
Call Center Management Costs
Call centers have some management-related costs similar to any other business department. A call center isn’t just run by telemarketing agents; it requires management overheads, operational costs and subscription fees to keep the flow going.
These ancillary expenses are also included in total costs and these influence CPC as well. When marketers are able to minimize these, it makes an impact on the overall CPC.
Cost Per Lead in Telemarketing
Cost per lead (CPL) refers to how much you need to spend to generate one lead. With telemarketing, it could cost you $35-$60. It is calculated by measuring how much you need to spend and the number of leads you will be able to generate by a campaign.
Different factors affect CPL, such as precise targeting, penetrating buying committee gatekeepers, call disposition rate and overall the number of leads generated.
Average Cost Per Lead Benchmarks in Telemarketing
Cost per lead changes with the complexity of the market. CPL rate is higher in telemarketing than other channels. But it can provide a higher average deal size compared to traditional channels.
Here is a basic comparison of CPL in different types of markets:
| Campaign Type | Average CPL | Lead Quality | Best Use Case |
| B2C – General Offers | $20–$80 | High volume, moderate qualification | Simple products with short buying cycles |
| B2B – General | $80–$150 | Decision-maker focused, stronger qualification | Standard B2B offers with moderate complexity |
| High-Ticket B2B (SaaS, Finance, Enterprise) | $180–$600+ | Low volume, high intent | Complex, high-value deals where agent skill is critical |
Cost Per Lead Formula in Telemarketing
Cost per lead calculates the total costs and divides them by the number of leads generated.
Formula
Cost Per Lead = Total Telemarketing Cost ÷ Total Qualified Leads
Total telemarketing cost includes:
- Agent salaries
- Contact acquisition
- Dialer and CRM tools
- Management and QA
Qualified leads are only prospects with high interest and the potential to purchase from you. Inaccurate CPL creates false forecasts.
Factors That Impact Lead Cost in Telemarketing
Lead costs fluctuate with ideal customer profile and buyer persona factors. When you have clear market segmentation, precise targeting scripts and skilled telemarketers, CPL automatically decreases.
Specific Target Audience
When the target audience is specific, agents normally require less time and effort to convert them. It happens because these are mostly warm prospects who already possess interest in your product.
These leads have a shorter sales cycle, take less time in the funnel stages and their average deal size is higher. That’s why when reps have a specific target audience, it reduces lead cost.
List Quality and Updated Data
In telemarketing, updated contact data and overall list quality drive lead cost. An accurate contact list means a higher connection rate, higher agency occupancy and an overall better chance to qualify leads.
When list quality decreases, it automatically increases agents’ idle time, resulting in more expense without any results.
Sharp and Effective Call Scripts
Agents had only 5-10 seconds to hook a contact, which is why effective call scripts are crucial for meaningful conversations. When scripts are customized for a specific segment, conversation duration increases.
It gives reps more opportunity to identify pain points and deliver a clear message. But without a good script, conversion velocity and number are reduced.
Agents Qualification Standard and Time
Experience representatives typically take less time to qualify a lead than junior agents. As reps are paid an hourly rate, faster qualification directly affects CPL.
Call to Lead Conversion
On average, only 1-3% of the calls actually turn into a lead or set meeting. A slight increase in this number can reduce the CPL significantly.
What is Cost Per Sale in Telemarketing?
Cost per sale (CPS) divides total expenses by the number of total closed deals. This provides an average cost of selling one product or service. These total expenses include all marketing efforts, such as calling costs, reps’ wages, data purchases and sales-related expenditures. It’s often referred to as Customer Acquisition Cost (CAC), as well.
CPS or CAC highly depends on the strategy of setting a meeting, techniques of generating leads or selling products or services. In telemarketing, this is considered as a core metric to measure the outcome.
Proactive marketers always use customer lifetime value (LTV), average order volume and average deal size to evaluate CPS’s actual performance.
Average Cost Per Sale Benchmarks in Telemarketing
When the Lifetime Value (LTV) is 3x of CPS, it’s considered an ideal deal. This benchmark is recognized by diverse industries and markets.
Benchmark for Cost Per Sale
The ratio between lifetime value and cost per sale is used to determine telemarketing success.
Low-Ticket B2C Offers:
In the B2C market acceptable CPS is considered under 30% of the product price
For example, if a product price is $100. Here,
$100 product → CPS below $30
High-Ticket or B2B Offers
In B2B or high-end business deals, acceptable CPS ranges from $ 1,000 to $ 5,000. But it completely depends on the type of campaign.
High performing sectors like finance lead generation, housing or where average deal size is in millions, CPS is significantly higher. But eventually, no metric provides a more distinct evaluation than the LTV-to-CAC ratio.
What this ratio defines:
- Below 1:1 – Each sale costs more than it returns. It means the overall model and the process are not profitable.
- At 1:1 – The business is in a break-even situation. Sales are generating only the cost of acquisition and there is no margin for operational costs or profit.
- At 3:1 – Cost per sale is optimized for sustainable growth, balancing profitability and scale. It is considered an ideal benchmark for telemarketing.
- Above 4:1 – Indicates strong performance of the telemarketing campaign. But it also indicates that more investment is needed in the campaign because scalability is viable.
Formula to Calculate Cost Per Sale in Telemarketing
As discussed, the cost per sale measures the cost to sell each product or service.
Formula
Cost Per Sale = Total Telemarketing Expenses Agents ÷ Total Number of Closed Sales
These expenses include all types of costs related to the telemarketing campaign and sales functions. It ranges from calling costs and management overhead to software subscriptions and all other cost components.
Sample Calculation
Let’s say, for a telemarketing campaign, these are your expenses:
- Agents salary: $10,000
- List purchase: $2650
- Call costs: $790
- Ancillary costs: 570
- Total Number of Deals Closed: 467
So the CPS: (10000+2650+790+570) ÷ 467 = $30
Factors on Which Sales Conversion is Highly Dependent
The primary objective of a telemarketing campaign is to make prospects ready for a sales pitch. It requires reps to nurture leads through a funnel. Outbound telemarketing first generates awareness (TOFU), then position themselves by creating interest (MOFU) and lastly let them in a considerable position (BOFU).
In this whole process, there are different components that directly influence sales conversion.
Lead Quality From the Telemarketing Campaign
Lead quality pushes sales velocity. When lead qualification and scoring are done right, the sales team gets a clear idea about their target’s position and trigger events. These all drive a better sales conversion rate.
Telemarketers use BANT to identify prospects, budget, authority, need and timing to score leads. This sets priority for outreach and sales teams.
Clear Offer, Pricing and CTA (Call to Action)
In B2B, purchase decisions are made by a buying committee. These decisions are sensitive and committee members are keen to make the best choice. Here providing a clear offer and pricing heavily influences sales conversion.
Without a clear offer and CTA, the desired outcome is difficult to achieve.
Deal Closing Skills of Agents
Agents have the capability to turn a mediocre offer into a large deal. This totally depends on the skills of representatives. A small number of high-performing agents can bring significantly larger ROI. That’s why training and management overhead is important for sales conversion.
Follow-up Process for Prospects and Previous Customers
Telemarketing nurtures a lead by their consultative conversations. Follow-ups slowly turn a warm lead into a paying customer. Observation is a key here, because objections and resistance not always entirely closes a deal. Rather, it provides key insights where more resources are needed to allocate.
Follow-ups also reduce churn rate by being able to retain and upsell previous customers.
Sales Cycle Length from Telemarketing Campaign
Sales velocity depends on the cycle length. Different industries have different sales cycles. For example, commercial insurance can take up-to 6 months to reach a decision.
Common strategies reduce sales cycles, but industry practice remains as a key factor here.
Telemarketing Cost Funnel Breakdown
A telemarketing cost funnel shows how expenses are turned into revenue through multiple stages. This process fully depends on how you’re planning telemarketing campaign. Every step adds a layer of cost and by the end of the funnel when deals are closed, it provides a clear CPS.
Businesses either run an in-house ops or outsource it from offshore or nearshore providers. In every case, funnel costs are different.
Telemarketing Cost Funnel for In-house Operations
Let’s say, you are opening an entirely new telemarketing operation. Here is how your cost funnel will look like:
Establishment Costs: These expenses are often referred as TOC or total cost of ownership. These are expenses to just start the operation. It includes
- Employee recruitment cost and salaries
- Equipment purchase costs
- Rent
- Electricity
- Software and tool purchase
- Office amenities
- And all other ancillary cost related to start the operation
Data Costs: Every successful telemarketing campaign is built upon an accurate data or contact list. These contact lists are either created by in-house operation, or often by purchasing it from a third party.
Data costs highly depend on industry-specific segments and their complexities, updated contacts and what regulations (compliance) it needs to follow
Dialing Costs: This cost covers calling fees, dialer software subscription to all expenses directly related to making the call.
Conversation Costs: B2B purchase decisions take time to accomplish. In telemarketing, time means money, because agents’ wages, calling fees are deeply related to it. Unqualified leads and wrong lead scoring can cost you a lot.
Lead Conversion: Telemarketing’s primary objective is to turn mere contacts into sales-qualified leads (SQLs). This is the BOFU stage and after this leads are handed off to sales for pitching.
In the contact development or purchase period, efficiency plays one of the most critical role. A 10% more accurate and updated contact list can reduce CPS to 20-30%.
Telemarketing Cost Funnel for Outsourcing
Outsourcing telemarketing campaigns for lead generation, setting appointments, market surveys and selling products or services are rapidly increasing. It’s happening because TCO for outsourcing is far less in the long run than owning an in-house operation.
In most B2B telemarketing related cases, both parties agree to a contract that clears out operational costs and future upscale requirements.
As discussed earlier, outsourcing telemarketing can cost you $6-$80 an hour depending on from where you are taking the services.
In case you need upscaling, telemarketing services are happy to provide you the same expert services, with situational fees. Normally, a sudden update can cost you 5-10% more than the base price.
This may seem like a large sum of money. But when you compare it with the CAPEX (capital expenditure) needed to upscale an operation in-house, this amount feels more viable.
How to Reduce Telemarketing Campaign Costs?
To reduce telemarketing costs, you need to improve your expenditure on basic telemarketing components. These components include software and technologies, operation structure, contact and list quality and skilled workforce. When these factors work efficiently overall campaign expenses reduce remarkably. Remember, reducing costs doesn’t mean relying on inexpensive and inexperienced tools and employees, it means enhancing all parts of your operation.
Utilizing Technology to Improve Efficiency
Telemarketing related technologies have improved quite a lot in recent years. Using them not just improves productivity, it assists in gaining better performances. Utilizing cloud-based systems, auto dialers, VAs, VoIP and AI to integrate the overall operation cuts down costs 40-50%
Telemarketing requires updating contact details and information in real time and on a regular basis. CRM and cloud-based infrastructure are very crucial to run a budget-friendly yet productive operation. It allows marketers to introduce remote agents which reduces costs too.
Operational Structure Development
When your system works seamlessly it automatically improves cost effectiveness. Power dialer alone improves workflow by 20% to 30%. So when the overall operation from contact list development to auto dialer improves, cost to sell ratio automatically improves.
Develop or Purchase a Quality Contact List
Telemarketing success vastly depends on a quality contact list. When contact lists are accurate and consist of high-intent warm prospects, the overall performance of the operation automatically boosts up. Reps require less time to convert.
When the sales cycle becomes short and velocity increases, cost automatically reduces. Because faster conversion means less resource burn and more revenue.
That is why, purchasing a quality list or developing it in-house significantly enhances performance.
Skilled Workforce Development through Talent Acquisition and Training
This is the last and most important factor to get a cost-effective campaign. When agents are skilled, conversion rate jumps automatically. An experienced and skilled rep can make conversion even for a mediocre product.
Skilled agents convert more leads in less time, which means less costs but better CPL. A better CPL creates an opportunity for a better CPA. Overall improving the cost-effectiveness.
How to Forecast a Telemarketing Campaign Budget?
Budget means using previous data, current market trends, considering campaign objectives and estimate how it will cost to operate the campaign. It’s a completely data-driven process that helps to evaluate success for an operation.
For operating any telemarking, telesales and call center, it provides key insights for strategy development.
The Essential Telemarketing Budget Formula
AI-powered tools or manual calculation provides key insights on how actually the campaign will cost in the current market situation. Here is a simple formula to calculate telemarketing budget;
Formula:
Total Forecasted Budget = (Labor Rate × Total Calling Hours Needed) + (Cost per Lead × Volume) + (Software/Tech Stack Fees) + (20% Buffer for Ramp-up/Training)
Key Components to Develop an Accurate Budget Forecast for Telemarketing
To develop an accurate budget forecasting, you need to consider key expense elements. Here are some of the key cost drivers.
Labor Costs and Commissions
These are the direct costs to operate a telemarketing campaign. This cost is measured from current labor rate, historical data of how long the campaign may last and commission from sales.
Lead Acquisition or Development Costs
Depending on your average conversion rate and campaign goal, you need to spend on your list. For example, your reps have an average conversion rate of 3%. Your target is 100 sales. Then you will need roughly 3500 leads. That’s why your budget has to be for developing or purchasing this amount of lead.
Technology Stack Needed for Running The Campaign
Tech is a big factor for today’s telemarketing. It enables critical tasks like call records, automated CRM that would take an enormous effort if done manually. From CRM, dialer to basic hardware required for the operation is the tech stack cost.
Overall, these components assist to evaluate the CPL. After this, you will have all the necessary data to calculate what is a foreseeable budget for your campaign.
Conclusion
Telemarketing in general is not an expensive campaign to operate. What truly matters is the efficiency of the operation.Bad data quality, high idle time and lower connection rate affects your telemarketing operation. When these are in negative statistics, the whole operation can fall apart.
When you have a proper understanding of all the expenses, it helps you to forecast accurate costs and create a proper budget. These forecasts and budget plans eventually saves you from potential disasters and towards a healthy revenue.
FAQs
Is Telemarketing More Expensive Than Digital Ads?
Yes!
Telemarketing in general is more expensive than running digital ads. However, telemarketing has two key features that bring more ROI than digital ads. First, it can do precise targeting to only actual potential buyers.
Second, it can enable real-time direct communication to answer and respond to critical aspects that digital ads can’t.
How Many Calls Does It Take To Get One Sale?
There isn’t any consistent number, but in general it normally takes 6-14 calls to get a sale. Normally leads take 8 touchpoints to make an action but industry wise the number fluctuates.
In B2B the number is high due to purchase complexity and buying committee involvement. But for B2C the number is generally lower.
What is a Good Telemarketing ROI?
5:1 to 10:1 is considered as a good telemarketing ROI. For every $1 spending, it receives $5 to $10 in return.
But a good ROI ratio depends on the industry’s margin. In a high margin industry, 5:1 might look good. But in low margin industries, even 10:1 might not be considered as a good ROI.
