The GE Case Files

by Niels Kjellerup, editor & Senior Partner of Resource International.

In 1991 Fortune magasine wrote of General Electric :

" GE wrote the book on management. Now Jack Welch is rewriting it - to tap into employees' brainpower." " Calling GE just a company is like calling California just a state. GE has 298,000 employees. Last year they were paid $ 13 billion. GE grossed $ 58.4 billion; its sales growth - $3.8 billion - exceeds the total sales of all but 126 Fortune 500 Industrial companies. Few Companies are bigger; none is more complex. GE Makes 65-cent light bulbs, 400,000-pound locomotives, and billion dollar power plants. It manages more credit cards than American Express and owns more commercial aircraft than American Airlines. Of the seven billion pounds of hamburger Americans tote home each year, 36% keeps fresh in GE refrigerators, and after dinner, one out of five couch potatoes tunes in to GE's network, NBC. This is the outfit that Chairman John F. Welch Jr. wants to run like a small business".

In 1990 Vice Chairman & Executive Officer of GE Lawrence A. Bossidy made the following notable highpoints in a speech : " In the '80s we changed our companies. In the '90s we've got change ourselves." "... we were trying to eliminate, via automation, the human element, the very fountainhead of creativity and productivity that we now see as the cornerstone of our future". "Veteran middle managers have drawers full of T-shirts and coffee mugs imprinted with slogans and panaceas of long-forgotten campaigns and long departed managers. Only sustained action, results, can convince the doubters." " It is my belief that productivity, more than any other factor, will decide who wins and who winds up in the dustbin in the '90s." and finally: " The implication that satisfying customers is anything other than the number-one mission of any business institution is crazy " . ( Bossidy is now the CEO of Allied Signal Industries).

GE has been the leader in establishing Call Centres in the USA. The GE Answer Center in Louisville Kentucky, established in 1981, became the World Class Benchmark for all other Customer Service Centres. So successful was this centre that Manager Powell Taylor had to restrict visits to the GE Answer center and charge for other Industrial companies to get a guided tour. From 1980 -1989 GE established 52 independent Call Centres in its 14 business divisions. It's a great privilege to have permission to re-publish the GE Case Files on this site.

 

GE Case File I - GE Light

GE Case File II - Customer Service

GE Case File III - Lead Qualification and Generation

GE Case File IV - Using Telemarketing for Competitive Advantage

GE Case File V - Developing Business to Business Telemarketing in GE

GE Case File VI - Beyond Telemarketing... Real-Time-Marketing;

 


About the author Richard J. Heuther.

Dick retired from GE Corporate Marketing staff in 1992 and is today a guest professor at Notre Dame & New York Universities. He is a native of Schenectady, New York and graduated from Notre Dame University with a degree in marketing. His career began with General Electric in its Advertising and Public Relations Department. In 1983 Dick became Manager GE Telemarketing Development, Corporate Marketing. Very few individuals have successfully helped setup and implement 52 call centres inside a large corporation which such success. Today the GE Answer Centre and the GE Business Information Centre (GEBIC) are considered in a Class of their own.

(Personal note : Ever since I first met Dick Heuther I have admired his reasoned and strategic approach to Call Centres. His ability to outline to senior management the benefits of a call centre strategy will, in my view, when the history books are written, be seen as the Milestone for Phone Channel strategies and Call Centre Development as we have seen them unfold in the 90'ies. Niels Kjellerup)


From the GE CASE FILES no I.

GE Lighting Confronts Rapidly Growing Cost of Face-to-Face Customer Contact - Selectively Combines Telemarketing and Direct Mail to Solve the Problem.

By Richard J. Heuther Manager GE Telemarketing Development

 

In three years, GE Light Sales grew from a district to a regional test centre with 300 small accounts and 6% growth in sales, to a national centre with 4,000 direct and indirect serviced customers, with sales of over $7.5 million US. These impressive results confirm the effectiveness of the telephone as a small account management tool. What they don't explain is why - or more importantly, how - GE Light Sales achieved its current success. Manager Jim Moore, was there when it all began.

Jim Moore: "There were five critical ingredients to our success as an outbound, proactive telemarketing sales organisation.

1. A clearly defined sales objective and the commitment and resources from management to achieve it.

2. The right people with the right training.

3. The right tools and work environment.

4. An intensive, targeted direct mail effort.

5. The imagination and willingness to take risks."

Question: Let's take them one at a time. How did you define your objectives and get that commitment from management?

Jim Moore: "I don't know anyone in business who doesn't do some form of telemarketing. They may not realise they are, or call it that, but they do. Electronic data interchange (EDI), order processing, customer service, consumer catalogues with 1800 numbers, are all telemarketing applications. For us, it was a question of which application fitted our needs, what we could do more of and how we could better serve our customers.

We examined our marginal account base - customers doing less than $2,000 per year; low volume, low growth, but good profit margin customers that we wanted to keep but couldn't manage cost effectively. We saw telemarketing as a way to create a proactive, high contact sales organisation that would help us serve these people more productively and less expensively.

Management agreed to a test. With the help of the field sales people, we identified 120 accounts. It was a real one-person band. I did all the mailing, made all the calls. There was no sales increase in that first year, but I was able to clean up our database on those customers and management felt this was a significant first step. The following year, I was given an assistant so that we could test an entire region - more than 300 accounts. We increased sales by 6%. These results were presented to management with the recommendation that we go national. And we did, the following year."

Question: So, in addition to clearly defining the market and your objectives, you had to test the application to gain management confidence?

Jim Moore: "Yes. But, looking back, I don't think we needed such a lengthy test. Now, I would recommend - to anyone - that a simple needs assessment would accomplish the same thing. Hire a telemarketing consultant or professional to interview the key people in sales, marketing and distribution; determine what things you're doing now that are telemarketing, what success you're having, and where the fit would be. A needs assessment will tell you this and you can get started. I would still advocate starting out in a small way, however. You should still have a slow, controlled rollout so that you can train your people, test your resources, get yourself and management directly on the learning curve."

Question: Where would you advocate testing?

Jim Moore: "With a specific program - a pilot where you want to do something new."

Question: How about your next critical factor - people?

Jim Moore: "When we decided to go national, we spent a lot of time creating the profile of the kind of phone person we wanted. I visited other telemarketing centres and consulted with other telemarketing professionals - within GE and outside with businesses similar to ours. I looked at their applications, how they selected their people, came up with a profile and went through a rigorous selection process. Were they self-starting, sales-oriented people, and so on? After that, you train them, train them, and keep training them. We have four on staff now and will add another later in the year."

Question: So you networked to gain expertise?

Jim Moore: "Absolutely. Go out and identify the key resources available within your own organisation and use them. That expertise is available within our company. Outside, look for people doing similar applications, in similar industries."

Question: Okay, your staff and tools are in place. Let's talk about driving orders. Are there any general rules?

Jim Moore: "We found that dollar size doesn't dictate how often a customer should be called. We started out that way - calling larger accounts more frequently. We don't do that anymore. Frequency of contact is customer-driven. They tell us how often they want to be called. Our customers want us to call them only when we have something to tell them.

And, direct mail is imperative to us. If we didn't do it we could still call the customer, of course, but sending out a direct mail piece gives us a reason to call, puts something in the customer's hands, and helps drive inbound calls as well."

Question: It's important then, even though your call structure is outbound, to provide inbound capability?

Jim Moore: "Yes, again, for the convenience of customers and prospects. We provide a 1800 number and use it in our direct mail. That helps drive incoming call volume from which there will be a certain number of orders placed and sales made."

Question: Do you send literature to all your customers?

We have a very large product offering, but not all our customers are candidates for all our products. So, our mailings are targeted. We do at least one a week. But there are no hard rules. The beauty of the telephone in a sales environment is its flexibility. It takes a great deal of time and money to mobilise a field sales force to sell new products and to attack new markets. In a telemarketing organisation, you can turn ideas around very quickly and inexpensively. That's where imagination comes in. You must be willing to test any new approach - just as you would if you were selling face-to-face."

Published with special permission from Professor R. J Heuther, former Manager GE Telemarketing Development.

 


From the GE CASE FILES no II

Three Divisions Meet the Challenge to Improve Productivity and Customer Service in Order Entry - through Call Centre Development

By Richard J. Heuther Manager GE Telemarketing Development

Today, many business managers are asking themselves this question: "Can I improve productivity by centralising my currently decentralised order entry procedures without compromising customer service?"

The answer from GE order entry centres is yes. To hear how, we talked to the centre managers of three different businesses that have gone through the process of centralising order entry under telemarketing - and seen the results. They are Jim Poehling of Plastics Sales Service Centre, Earl Howell of Electrical Distribution & Control Sales National Service Centre and Bill Robertson of Mobile Communications Priority Delivery Program.

Jim Poehling: "Multiple enhancements are what separate us from the competition."

In the case of Plastics, most order transactions were already handled by phone from the district offices. Sales co-ordinator face-to-face contact with the customer was minimal anyway. So it made sense to centralise this effort: to put all the people and systems in one place and give the customer one number to call for everything he or she needs. That word everything is important because the secret to consolidated order entry is not just order taking but answering questions, expediting orders, stock checking, tracking delivery, scheduling - all the types of information enhancements we can use to set ourselves apart from the competition.

These are very difficult services to co-ordinate, or even offer, in a decentralised mode. The cost alone of buying equipment and software, installing it, hiring and training all the people necessary to run it in 15 or more district offices would be prohibitive.

We've made our biggest order entry productivity hits through improving systems and procedures like our computerised order-ship-bill system and electronic data interchange (EDI) - which we're currently piloting - plus more sophisticated measurement techniques to help us improve our performance.

For example, when we started, the sales co-ordinators answered all incoming calls. Customers got busy signals, hung up in frustration, calls were abandoned and so on. This didn't necessarily amount to diminished customer service. Face it. Customers experienced similar problems when we were decentralised. But it certainly was no improvement.

Today we've virtually eliminated all that. We created four front line 'call director' positions and equipped them with CRT's that monitor co-ordinator availability. Call directors take all the calls and direct them to appropriate co-ordinators. Abandoned calls due to busy signals are now less than .05%. Our speed of answer averages five seconds. 80% of the time the customer gets his or her co-ordinator on the first call - reducing the level of callbacks. The call director concept is one important reason why our order volume is now growing by 15 to 20% a year. More calls from more customers are getting through, therefore more orders are being placed.

We tell our reps, "You do the selling, we'll take care of the customer service." Now, because of the improvements we've made - and are continuing to make - in our order entry systems and procedures (and the results we've shown), our reps and customers feel confident we can fulfil that promise.

Earl Howell: "Our customers need fast product and information delivery and don't care where they come from."

Our business centralised over time, over several years. Originally, order entry was handled by about 120 individual sales offices. We later went to six regional sales offices that were managed for us. So we didn't move directly from doing order entry in 120 locations to doing it in one. We got the benefit of seeing how a certain amount of centralisation improved our efficiency over six years.

Then , we decided we wanted to assume control of our own service destiny - to have no one between the customer and us. This was not simply a cost-cutting decision. We wanted to serve customers better and more efficiently by dealing with them directly. To do so, we selected a suitable location and centralised our order entry.

Our biggest driver for consolidating order entry was the opportunity to use 'systems' to impact the service equation. And it's much simpler, easier and less expensive to apply these systems to a single operation than to distribute them all over the country.

We're a catalogue-number-driven business. We process about 750 order per day. 70% of them are keyed here - the rest come in through interfaces that link directly to our order-ship-bill system. That system will tell the operator if, for example, there's a bad catalogue number so that it can be corrected immediately on-line. Previously, bad catalogue numbers might have taken up to two hours to discover and correct.

There is also the consistency factor - service doesn't vary. You create a hiring template for people so that over time, everyone receives the same level of training and develops an expected level of expertise. That's very difficult to achieve without centralisation.

Today, we're processing up to 15% more orders with 30% fewer people and doing a better job of it. Our customers need fast product and information delivery and don't care where it comes from.

Bill Robertson: "To get more dealers to use the phone, we stopped requiring a confirmation purchase order from many of them."

Mobile's Priority Delivery Program was a centralised effort to begin with. Where we've made the greatest headway is in streamlining our order entry process, making it work faster and more effectively, so that more dealers will use us.

Our main customer service problem was mail time. 100% of our orders were mailed in; that took up to seven days. We began making a telephone order entry option available to encourage dealers to use our short-cycle program at no extra cost to them. We also offered an electronic mail system through orders could be placed.

To get more dealers to use the phone, we stopped requiring a confirmation purchase order from many of them. They no longer have to do any paperwork - just pick up the phone and call.

Published with special permission from Professor R. J. Heuther, former Manager GE Telemarketing Development.

 


From the GE CASE FILES no III

Lead Prioritisation Helps Focus on Hottest Prospects

By Richard J. Heuther Manager GE Telemarketing Development

Calma Company, a wholly owned subsidiary of GE, began using the telephone to qualify prospects for its high ticket CAD/CAM systems. The outbound program is directed at three markets: electronics, mechanical and architecture-engineering construction. Through effective advertising, press relations and trade show participation, Calma has been generating as many as 2,500 leads per month.

"Making a sale is very time consuming and with a lot of new reps coming on board, it was impossible to keep up with these inquiries," says Marketing Communications Manager Marvin Mauer. "There was a definite need to screen and qualify leads and improve follow-up activity; telemarketing seemed the logical solution. The problem was that we didn't have the resources to conduct the program in-house."

Third-Party Supplier Effectively Handles All Calls

On a recommendation, Mauer chose a third party supplier to handle inquiries and make the outbound calls. The telemarketers qualify prospects on two points: What is their application? And do the funds exist to purchase the equipment?

Lead are broken down into several prospect categories: "hot" (evaluating systems and plan to buy within six months), "lukewarm" (interested with plans to buy sometime in the future), and "cold" (not interested at all).

Qualifying prospects in terms of available budget and readiness to buy are important considerations in view of the fact that and average system is about $150,000 and the sales cycle can average between 6 and 18 months.

"That's basically all we want to learn from the call, Mauer says. "This is tele-qualifying, not telesales. We're able to use a third-party because the calls do not involve a lot of technical information. That's not the goal of the program. The goal is to improve the efficiency of the sales force by providing them with only "hot" prospects."

10,000 Leads Qualified - More than 150 Prove "Hot"

The outbound call effort targets more than 500 people per week. In the program's first five months, 10,000 calls were handled, resulting in 1,500 solid prospects - more than 10% of them "hot" - and over $300,000 in sales. And an additional $1,000,000 in sales is anticipated in the first quarter of the new year. The first sale alone paid for the entire telemarketing program.

The sales force is very supportive; the program's effectiveness in sorting out "hot" leads has boosted morale considerably - and enabled the sales force to make better use of time.

Prospect Database Keeps Track of all Leads for On-Going and Future Contact

Telemarketing has yielded additional long term benefits. All prospect information, regardless of the source, is put into our database. A good up-to-date prospect database is invaluable. It enables us to maintain contact with prospects, keeping them informed of new products and developments. We're also able to generate a list of "hot" leads in a specific area at a moment's notice - and target them for special mailings, promotions or trade shows.

Account maintenance is also part of the telemarketing effort. "We conduct surveys of current customers on a programmed basis" says Mauer. "The surveys seek to learn what a customer's current needs are, what (if any) changes are occurring, and if any new sales opportunities are developing. This data is interpreted and, where appropriate, turned into new leads for the sales force."

Published with special permission from Professor R. J. Heuther, former Manager GE Telemarketing Development.

 

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