From the GE CASE FILES no 6 

Beyond Telemarketing ... Real Time Marketing

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

What lies beyond telemarketing? We think it might be what we have labelled real time marketing, where we allow new technologies to further enhance the possibilities for improved communications and customer focus throughout the marketing cycle.

Back in the fall of 1984, GE like so many companies was recognising it had about exhausted many traditional ways of increasing the productivity of the marketing dollar. We had squeezed it countless ways. Expenses had been cut to the bone, sales territories enlarged and still the job wasn't finished.

We were ready for a new idea ... a tool that held the promise of picking up where our old tools had left off.

Enter telemarketing. Here was a new tool, introduced to us by our friends at AT&T, that held that promise. As we listened to our operations describing their problems, two roles emerged that were to become our initial telemarketing workhorses.

First, was the handling of small accounts that our sales forces could no longer afford to call on regularly. The second was to improve the process of inquiry qualification to enable the field to focus on best opportunities. The common thread running through both of these was to take cost out ... a bottom line orientation that dominated our thinking back then and remains an important driver.

What we found was that telemarketing was up to the task, yielding example after example of successful cost take outs. For example, one of the early reports came from our medical systems. They were using telemarketing to call on their accessory and supplies market, reducing the cost of sales by 50%. Our lighting business was also discovering it could take a major chunk out of the cost of a sales call in tests they were conducting. Meanwhile our Programmable Control component was using telemarketing to improve its conversion to sales rate by 25% on incoming inquiries.

One of our first examples was when some of our GE Supply Company customers told us they preferred being serviced by phone. Service contract customers increasingly used our 1800 numbers to ask questions that led to immediate contract renewal. It was also interesting to note that the value of orders from the telephone contracts ran out about $25 higher per order than by mail.

Our Consumer Electronics dealers saw timely flow of critical information as key to telemarketing's added value for them. And a study conducted by our GE Answer Centre pinpointed that the centre had a significant impact on the future sales of appliances. And perhaps one of the most gratifying responses came from our RCA Global Communications customers who chose to stay with telemarketing even after their annual purchases had grown past the typical cut-off.

As we began to watch this phenomenon more closely, we began to realise the impact this subject could have on the top line of the business was as great as, or perhaps greater than, the bottom line. And we were beginning to gain insight into how information technology could create new product value.

To give you an example, one of our service components provides on-going information support to its customers ranging from technical to administrative responses. A group of customers began asking if certain enhancements could be added to the service to meet their particular needs. The decision was "Yes we could provide it at an additional cost" which was agreed upon. Here, information not only added value to the product but added revenue to the sale.

What we were now beginning to see was telemarketing's ability to create competitive advantage. What had started out as a cost-out productivity improvement with a functional focus was growing in two directions.

First, we were seeing the cost-out tool was now being perceived as an added value due principally to the improved information and accessibility combined with renewed customer concern. Now, like the GE Answer Centre research we mentioned earlier, our efforts were beginning to create competitive advantages.

Paralleling this growth was the growth from the original functional focus such as inquiry or order handling, to a business focus where the entire "Anatomy of a Sale" was explored for telemarketing opportunity, to a company focus. The latter case was best demonstrated by two company wide call centres. The GE Answer Centre and the GE Business Information Centre handle the broadest company based questions such as "Where do I find?".

The next step was to network calls anywhere within the company to make the organisational intricacies transparent to the customer with multiple needs by transporting them electronically from point to point.

The way the company went to market was being changed over a broad range of products and services. Thirty-four call centres and twelve third-party programs were incorporating telemarketing into component businesses plus the two company wide centres. There were forty-one applications in the presale mode, twenty in the transactional or sales mode and seventeen in the post sale period.

However our feeling of satisfaction with the direction the subject was moving was now being interrupted by feelings of discontent. Decision support systems, expert systems and Electronic Data Interchange were the kind of phrases that were again raising the question "Where can innovation lead the marketing of our products and services?"

So we tried to step back not only from telemarketing but from marketing itself with the hope that this distancing would help us put these ideas into better focus.

1. One of the first things we noticed was that telemarketing was a good teacher and disciplinarian of marketing basics as well as a high touch vehicle to complement these high tech subjects that offered new opportunities to raise the power of our subject.

2. Next, it was becoming more obvious that buyers were driving this change as much as sellers. What we were finding out soon after beginning a project was that the buying process was undergoing the demand for increased productivity as much as the selling process. Many of our buyers were looking to lower inventory costs by placing orders more frequently and for smaller quantities. They needed a rapid response system.

Telemarketing support both our goals. And as an additional benefit, the buyers were getting a feeling of greater control over the marketing process that was designed to serve them. And they were ready to reward us for this control.

3. Also the need for quality information quickly was more important than how we communicated. For example, a survey conducted by one of our distribution components ranking the importance of supplier values showed speed of response and knowledge by an inside salesperson as highly important while the importance of an outside salesperson was at the bottom of the list. Another component, that used direct mail to promote its product, discovered a 54% increase in inquiries when a 1800 number was provided as an alternative to return mail.

4. Perhaps our most helpful discovery was that the marketing cycle could be defined as a series of information exchanges, each designed to remove the barriers between buyers and sellers. From the point of identifying customer needs that might be initiated through a piece of marketing communications through the series of learning exchanges designed to develop the opportunity, leading to the transaction itself and continuing into the post sales relationship, our subject can be defined in terms of those information transactions whether the bulk of the exchanges take place over several months or in a single contact.

By defining and isolating these exchanges we are beginning to be able to better assign the most appropriate media to the task. For example, our seller might run an ad offering the buyer a 1800 number to request more information. Mail is probably the best vehicle for getting your four-colour brochure into your buyer's hand, where a 1800 number might be the best way for the buyer to request a sales call.

Here however, rather than simply sending a salesman out on what could be a low probability opportunity, telemarketing with support systems might be able to do a better job in determining whether the customer is in the learning or transactional part of the cycle and take one of several options depending on whether the prospect is looking to study some additional technical information, wants to ask a couple of application questions, or is ready to sign on the dotted line.

In each case, our response is selected on the basis of reducing "float" time to a minimum while assuring the desired quality of response. For example, in our case we might transceive technical data, call forward an application engineer, or let a sales engineer know that the customer is ready to sign. Hopefully the results of this process will encourage our prospects and customers to keep coming back to us rather than our competition due to both the quality and speed of our response.

5. Lastly, we were beginning to recognise that there were other technologies that lay just beyond our purview that seem to hold an opportunity to improve the process we were just discussing. Though the theory was right, the gnawing question was would the economics be right. The answer seems to be yes. First, we were learning that our customers were ready to reward suppliers who added value to the information exchanges or were able to increase the speed of communications. Second, these technologies show an ability to further enhance the productivity of telemarketing. And third, the cost of information technology continues to come down.

For example, we were being buried with requests for feasibility studies on a new program we had just announced. We knew we could hurt ourselves unless we found a way to respond quickly. The answer was a short computer program run through a telemarketing response centre that could be executed based on information gained during the original inquiry call. In this case we were able to use the telephone and technology to give an answer quickly, demonstrating customer interest and prioritising the effort for our application engineers by sorting out the real prospects for this level of investment.

The next question was "Where do these new technologies apply?" To answer this we had to take a look at the various roles being assigned to telemarketing. This matrix proved to be a good stage to position these new technologies (see below). For instance Electronic Data Interchange could be applied across the board at the Functional and Business level, where a Consumer and Business Information Centre would have a company focus.

 

Telemarketing is a Springboard to Other Growth Information Technologies

Competitive Advantage Added Value Productivity Improvement
Company Focus Consumer/Business Consumer/Business
Decision Support Systems Decision Support Systems Decision Support Systems
Business Focus EDI
EDI
EDI
Customer Service Centre Customer Service Centre Customer Service Centre
Expert Systems Expert Systems Expert Systems
Decision Support Systems Decision Support Systems Decision Support Systems
Functional Focus EDI EDI EDI
Expert Systems Expert Systems Expert Systems

Again it was time to back away to get an idea of what we might expect to see as the result of technology.

Improved quality and speed of communications when viewed as shortening lines of communications, as discussed earlier, gives us a clue. By reducing the time-to-complete any of these exchanges we are enabling the customer to move more quickly to the next step of the cycle.

As a matter of fact, as we get better at using technology we can begin to see ourselves moving into an era of "real time marketing" ... which would be that point in time when we can be equipped to move the customer along the decision path at his/her rate of speed without having to wait to get our attention or to play catch up with needed information, possibly enabling competition to step in and take the initiative from our grasp.

It is this increase in the ownership of the process where payback for this type of investment really resides, through we can't overlook that each of these technologies possess opportunities for both productivity improvements and added value in themselves.

If we are looking for a real life model for this real time marketing we only need to spend a few moments watching a TV shopping channel to see how marketers are growing the ability to escort buyers through the entire marketing cycle from awareness to sale in a matter of minutes. We may have only scratched the surface of this subject, but what it has shown us to date is a track record of outstanding reward for our efforts.

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

 

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