From The GE Case Files - No 5
Developing Business to Business Telemarketing in GE.
by Richard J. Heuther, Manager GE Telemarketing Development, Corporate Marketing
Telemarketing's impact on General Electric in recent years has been ... to quote the youth of today ... awesome. It all began several years ago when pockets around the company began experimenting with the phone to accelerate media inquiries or to enhance the responsiveness of their order service operations.
But few GE people at the time realised the potential of this new marketing tool. That came later. Then ... we were only beginning to get brief glimpses of what telemarketing offered.
It was only a short time before that we had first realised the need to help accelerate the use of the telephone was a corporate priority.
Parenthetically, many other corporations had the same idea at the same time ... which may have contributed greatly to telemarketing's recent dramatic growth.
In the first three years, the number of call centres within GE grew from 3 to over 20. Over the same period, the use of 1800 numbers used in advertising grew from a handful here and there to "it's a rarity if it's not included."
Initially, telemarketing generally meant inquiry handling, lead generation and order entry. The list of applications continued to grow with business information centres joining various products components to extend the applications to include product information, sales lead prospecting, sales call scheduling, initial sales, add-on sales, order management, delivery scheduling and select account management.
The drivers that led to this array of applications fell generally into two major categories.
The first was the need to apply telemarketing to make GE sales forces more productive. Here we were witnessing cost pressures that made it necessary for sales people to cover more territory with greater speed to produce greater return continuously, just to maintain profitability.
There was an obvious need to investigate new options. We needed to focus our sales forces where they could do the greatest good. And that meant breaking with traditional circuit rider patterns that dated back to the days when salesmen covered their territories on horseback.
The second driver was the realisation that the buying process was undergoing rapid change. Customers needed information faster ... to make decisions faster and to have them acted on faster ... and they needed more than just price and delivery information.
They also needed application assistance information, product test results, and feasibility investigations faster. Why? To become more agile and responsive themselves.
When we began to realise the synergy that was inherent in these needs and telemarketing's capabilities, was when telemarketing took off on a rapid upward spiral ... and it is still climbing. But this is no fireworks display ... or roman candle effect that grows larger only to fade away. For instance, the foundation for much of our telemarketing growth came from the traditional and imperative roles of inquiry handling and order service.
Here's and example: our Plastics Business Group initiated an enquiry handling program. This in turn gave rise to several outbound prospecting programs. Eighteen months later, Plastics opened an international sales service centre with a staff of 25 sales specialists.
Another example: our Cogeneration Applications Department was an early user of "800" numbers. Their "product" - a multi million dollar system - presented an interesting problem to both the caller and GE. Was cogeneration a good fit for the caller's need? Determining this in traditional ways was beginning to create a backlog - until one of the engineers came up with a computer program that could give a good indication of the fit. And the information needed could be easily gathered by phone.
Here again the value of telemarketing grew, this time by assuming greater responsibility within the selling cycle, and thus improving the quality of the lead for the subsequent personal sales call.
Order entry has been another telemarketing growth area. This function has been expanded with add-on selling, inventory management ... up to full account service.
The GE Information Service Company (GEISCO) began consolidating order service desks in the mid 70's. In the early 80's they enlarged this service by adding ad inquiry handling and then further expanded to outbound prospect calling. Collectively, these steps led to taking over the entire management of a growing number of small accounts.
A commercial commodity product operation also had excellent results from an order entry application. Their logical extension was to assume a proactive role in seasonal selling. And expanding to outbound service became the next step.
In our Carboloy Products business, an inbound order processing function for key accounts and an inbound technical resource centre for distributors led to a combination of these two to create a complete account management program for distributors.
Other GE operations are on the same track. But if it was inquiry handling and order processing applications that served as the foundation blocks, it was the application to direct sales ala account management that was the main accelerator.
For example, one of our industrial product sales components achieved a 94% cost reduction without loss of volume when they assigned smaller accounts in one office to telemarketing. Since then the idea has been expanded to the district and now regional level.
In another industrial/commercial distribution operation, they were having trouble profitably serving small and remote locations for large national accounts. So they decided to try telemarketing. Their results were so good that the idea was picked up by their regions as a way to serve small local accounts as well.
Our Medical Systems business is another example. They turned to telemarketing when it became uneconomical to have a sales force responsible for selling large million dollar medical imaging systems as well as supplies costing $1.98. With the accessory and supply business accounts transferred to telemarketing, sales costs were reduced by 50% with excellent customer response. They then proceeded to add equipment sales to their centre's responsibility.
And the list of successes keeps growing. The question is where was all this leading GE?
The answer we see as having five points:
1. There's a growing understanding in GE that the telephone can produce fast results. Its outstanding ability to shorten communication time and provide rapid feedback, combined with its growing success in producing sales, means telemarketing, in its simplest form, has earned a permanent role in the arsenal of tactical marketing tools. TM's relative simplicity and ease of implementation also means that it can be a tool for national or local application.
2. Add-ons will enable many telemarketing applications to cover more decision points leading to the sale. Telemarketing people can generally sense when they have the opportunity to cover an additional base leading to the sale. Our experience is that customers, via the telemarketer, often become the greatest advocates for growth in service. For example, adding application information. Or the ability to transfer the call to a technical person. Or to track purchase of the product from previous years. Or to accept the order.
3. Marketing Communications will have a growing impact on the success of telemarketing. Telemarketing is an interactive audio medium. It is, however, best when supplemented with other communication tools. For instance, mailings just before calls are made visually reinforce what is being said and can even let the customer touch the product sample. Ads and press articles help reinforce commitment to the product's benefits as well as giving a 1800 number to call. Catalogues not only serve as a product reference but are also an ideal billboard for 1800 numbers.
One of our components has used the combination of advertising, direct mail, catalogues and 1800 number since early 70's as its only sales force.
4. Value added will rival productivity improvements as telemarketing's major contribution to the business. Initially telemarketing is often judged by its ability to reduce selling cost, increase market coverage and generally contribute to the productivity of the selling process.
But there are added values being created simultaneously. These grow from making your organisation more transparent to your customers and by making it easier for them to access information when they need it.
Databases put in place to provide technical support of an outbound sales call become a value added when made accessible to the same customer at his time schedule. Information on previous purchases used to initiate the selling process in the outbound mode becomes a value added to customers looking to this information to assist in inventory control in the inbound mode.
The ability to access an individual who can quickly focus on that customer with information that customer needs can enhance brand image and add still more value. And it all can be a by-product of your own productivity program by simply letting customers access the information on their time schedule, as well. This ability is currently affording one component in excess of 15% price premium from established customers.
5. A shared view of the customer, made possible by telemarketing, can unify functional views in a business to increase the quality of its decisions. Telemarketing's ability to be located in many different places in the organisation enables a customer's input to be received all the way from the smallest local office to an engineering information centre to the chairman's desk. The composite of these contacts reflects the market, how it's changing and, very often, what's driving that change. Analysing this input to get market intelligence reports will help every participating component develop a position based on customer view, replacing the all-too-often "function only" view.
As for what the future may hold for telemarketing in GE - and perhaps in your company too - I'd like to close with an example.
Imagine you are all design engineers for a new product that will be motor driven, battery powered and encased in a lightweight shell. You arrive at your office one morning with the following list of things to accomplish.
You must determine what material has the necessary strength to achieve your weight limitation ... what the current state of the art is in motor efficiency for the size needed ... and if there's a current battery available with the size and performance characteristics desired.
Sitting at your desk, you reach for the phone book, look up General Electric and - under the heading "Plastics" - find a listing for application assistance with a local number. You dial and are automatically transferred to a national plastics application centre.
After communicating your problem, and using the same telephone line, you transfer the CAD image from your desk computer terminal to the application engineer at the other end. Together, you view moving visual images and text data and draw a preliminary conclusion of the material needed.
In addition, you mention your interest in motor information and the GE applications engineers transfers you to GE's Business Information Centre. Now you discuss your motor needs with yet another expert and you hear that there is a new motor coming on the market shortly that will meet your needs. At that point, you are connected to a technical rep who has the current specs and expected delivery dates.
Then you are transferred back to the Business Information Centre to discuss you last item, batteries. You are told that the technical data you are looking for on batteries can be accessed on your desk top terminal. Presto! You now have everything you set out to find.
You are feeling rather good now (and so are we). You got your answers. And you probably never realised that you've travelled over 4,000 miles, interfaced with three sales forces and an equal number of product departments. You got your answers and the internal maze of the GE organisation was transparent.
In closing, telemarketing is changing the definition of marketing. In fact it no longer can be looked at as a facet of the subject but as an instrument of change that is rewriting the definition of marketing itself.
Published with special permission from Professor R. J. Heuther, former Manager GE Telemarketing Development.
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