From The GE Case Files no 4

Using Telemarketing to Create a Competitive Advantage 

by Richard J. Heuther, Manager GE Telemarketing Development, Corporate Marketing

When I am asked why I think Telemarketing has prospered at General Electric, the temptation is to try to come up with a deep, intensely illuminating principle that has guided all our actions. I must admit, for as hard as I have tried, the reason that continues to make the most sense is simply that it works.

Some years ago, we found that we were able to get information offered in our ads into customers' hands faster when they called a 1800 number. Around the same time, we were finding that when we applied telemarketing to our customer service functions we could improve communications, address specific questions, and more important, eliminate ordering mistakes. And there again we were able to respond faster.

But what has made telemarketing so essential in General Electric marketing toady is that early successes encouraged further experimentation which created more successes, and that cycle is continuing today. And by far the biggest lesson we've learned is to listen to our customers. Not just what they are saying, but what they mean.

For example, when customers call in response to an ad, we are all set to send a brochure on the product because that's what we and the ad said they wanted. As we learned to listen better, we sometimes found out they really wanted something else, like to place an order, or they were looking for specific application information.

And customers were ready to extend their relationship with us if we could provide what they needed.

When we listened carefully, we would often discover they were offering us the opportunity to gain ownership of solving their problems. Translated, they were giving us the opportunity to tailor their solution to our product or service.

In some cases help in problem analysis was needed or the customer was searching for information having to do with specifications, ranging from technical to application data.

Sometimes, the simple willingness to accept an order gained ownership and prevented that customer from returning to the open market where the competition would have a chance of capturing the sale.

Where the initial applications had been focused on a single task, with the bottom line of taking out cost, listening was helping us beyond these self-imposed limitations. How? By listening, we were led to new roles. Often we found these roles were adding new value to products and service ... not just eliminating cost.

For example, the recognition that we were creating new product values with data bases started becoming obvious when customers started asking if they could call and ask for this information when they needed it, rather than waiting for our call.

So looking back, telemarketing's evolution in GE is probably best characterised by a progression from cost out to value in contribution, and from an internally driven to a customer driven process, and finally, from single task to multi task focus.

More recently, this process has helped us join other telemarketers who are beginning to recognise that telemarketing can also help create a competitive advantage.


1. First, by cutting order response time, thus reducing customer inventory cost. Today, if customers are dependent on your salesman's visit to place an order or arrange delivery dates, competition has the opportunity to improve his position with telemarketing. Simply providing customers the opportunity to place orders on their schedule rather than yours can reduce their inventory costs and increase your competitive advantage.

2. Second, increasing sales force's focus on the customer by reducing their clerical tasks, can gain you competitive advantage. Most of us invest heavily in our sales forces in training and motivation to help them represent our companies as contemporary thinking, quality focussed institutions.

But then what do we do? Well, too often we place them out on a large circular trail connecting customer locations that was laid out when the territory was covered by horseback, with the principal responsibility of writing orders. For many years, this may have been the best way to get the job done, but it's time we all asked the question again. In many cases, customers need to place orders in minutes to obtain needed products and keep inventories down. They need your representatives to help them apply your product and improve their utilisation of all that has gone into your product or service.

Now the salesforce, often fewer in number, can increase service to your customer on those issues that set you apart from your competition.

3. Third, telemarketing can develop more responsive strategies and programs through real time customer feedback and market intelligence. We often forget that the telephone provides two-way communication and offers us the opportunity to gain useful market intelligence on a timely basis.

We are not talking about traditional market research, where a statistical sample is queried at an arbitrary time based on when we choose to conduct the project, but rather research conducted on a real time basis where you are witnessing the customer thought process when it is actually impacting on your business. Collectively, this information can dramatically improve the quality of your decisions. And, as more functional areas like product service and application engineering become involved in using the telephone, the more chance you have to validate your inputs and to improve your decision making. How? By modifying functional only views with a more customer driven viewpoint throughout your organisation.

4. Lastly, we need to talk about telemarketing's ability to convert information you have stored into added features for your products and services by making this information directly accessible by customers. Customers' sales histories can become a tool for their inventory management. Application information can become a consulting resource for the customers' engineering departments. And we have documented evidence that these values can lead to a price premium.

As we list the accomplishments of telemarketing over its relatively short life, we must admit that the subject has a rather astounding record. From a mechanism designed to take cost out of the marketing process, it has progressed to one that adds in value to the point where it can claim the ability to create competitive advantages.

And the indications are that we might still just be scratching the surface.

Are we beginning to understand the full potential of the telephone? Perhaps so, but only beginning.

For instance, operationally we seem to be into the third working definition of the subject. The first focussed on the tools of the subject as we began to understand what it was composed of. This gave way eventually to a definition that focused on the customer and what it could do for him or her. Toady, it tends to combine both as we focus on what seems to unlock its greatest potential ... that of reducing the information between our customers and ourselves.

The ability to respond quickly and completely when the ball is in your court (for example: "Thank you for the call. The information you requested will be on your desk in the morning.") and to quickly sense and initiate when the ball is in the customer's court (for example: "Did you receive our proposal and do you need any more detail?") accomplishes a level of service that's hard to duplicate consistently in any other way.

A second thought, which is really just an extension of the first, is that ... telemarketing is beginning to make companies more transparent to customers, making its real strengths more accessible, reducing the role of gate keepers that slow down or garble customer communications.

How can we prevent this openness from cutting down efficiency in other ways? Here is where new technologies offer great opportunities.

Artificial intelligence (or pre-packaged responses and logic) is a major contributor whereby telemarketers can access and provide highly technical tailored solutions instantly without having to have specific functional talents continuously "on call".

Other technologies are also accelerating telemarketing effectiveness. The list of software programs tailored for the telemarketer is growing at an astonishing rate. And, electronic data interchange is reducing the information float for other than verbal communications. The ability to transfer funds, establish credit, or transmit graphics are the early accomplishments of the giant opportunity.

Last, all this high tech opportunity continues to reinforce need for a high touch system to operate in parallel with it. Here is where telemarketing shines because all of what we have talked about orbits around the individuals who are specifically selected, trained, facilitated motivated and measured to interface with customers ... to provide the interest in the customer, recognise the priorities of the customer, adjust to the mood of the customer, reassure the customer and share the accomplishment of this experience with the customer.

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


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