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Letter from the Editor
I just returned from Las Vegas where I participated in a workshop and conference sponsored by the Society of Human Resource Management (SHRM); see
http://www.shrm.org/conferences/global/
for more info. The subject was globalization, a subject that you know excites me beyond excitement. (See the previous two issues of The Key and you’ll see I even use words like “goosebumpy” when talking about the potential of a connected, collaborative world.)
Why would a trainer attend an HR conference? Our recent customized training projects have taken us outside the US and I want our company to be able to leverage our expertise in customized GLOBAL training. There are issues associated with off-shoring that impact training; and I want to make sure that we’re anticipating these challenges – from compensation to culture, from leadership to language – to ensure that our training works for our clients and their off-shored vendors.
In this newsletter, I’ll summarize a few key points that I picked up at the workshop and conference, including:
- Routine work – work that can be structured, ordered, and quantified – will be increasingly outsourced to cheaper (and often smarter) labor elsewhere.
- Creative work – innovation, problem-solving, leadership – less likely to be outsourced;
unfortunately, schools are not preparing our children for this world nor are we prepared to “manage” this work in corporations today.
- Innovation comes NOT from tight work-teams, but from loosely-linked groups who come together briefly for a common purpose and then disband. Those who can leverage these connections will be the real innovators.
Also in this newsletter we’ll present Part 2 of our recently completed white paper on customer service and cross-selling. I believe that the topic fits perfectly to a global world. Our potential customers – while increasing in numbers – are increasingly closing traditional
marketing channels – advertising, direct mail, etc. – simply because EVERYONE is now selling to them. In fact, people are proactively closing these channels through registration on the Do-Not-Call list, subscribing to commercial-free satellite radio, purchasing TiVO, and so forth.
In Part 2, we suggest that our existing customer base is the best untapped market for new products and services and we highlight the key “defining moment” that results in a loyal consumer or a disenfranchised and vocal dissident.
Terry
Summary of SHRM Conference on Globalization
In addition to netting $100 at the roulette tables in Vegas, I “won” in other ways. Meeting a number of HR professionals was one of those wins. Learning about the complexities in global compensation and the challenges of expatriates was another. Realizing that Entelechy’s philosophy towards business and training are well-suited for globalization was yet another.
I want to highlight just a few of my key learnings from this conference in hope that they may be of benefit to you, the
reader.
Dan Pink, author of Free Agent Nation and A Whole New Mind, keynoted the conference. I knew it was going to be a good presentation when he kicked of the presentation with the statement, “There are three elements to a great presentation: levity, brevity, and repetition; let me repeat that….”
Dan kept us laughing and engaged as he provided a number of examples to illustrate his beliefs:
- Left-brain work – accounting, providing information, software engineering, answering questions, anything that can be sequenced, linear-ized, or routine-ized – is likely to be outsourced to others.
- Schools, parents, and corporations have prepared us to excel at left-brain work. In fact, “a good, secure job” was one that fit the left-brain. We can measure left-brain work – it’s quantifiable, objective, and repeatable. Unfortunately, it’s also the most outsource-able.
- Schools, parents, and corporations have tended to NOT encourage right-brained, creative development due to many factors.
- Unless there’s a requirement for local service – your barber, plumber, doctor, dentist, auto mechanic – there may be no reason NOT to have the work done by someone in another country. Why SHOULDN’T your taxes be done by an accountant in India for 1/3 the price?
- Even elements of local work may be subject to off-shoring. Why SHOULDN’T X-rays taken by an emergency room technician at midnight in Aimes, Iowa be read by a qualified radiologist in Australia?
Additionally, Dan provided some eye-opening statistics that made me quiver with excitement. The populations of India and China represent a HUGE potential consumer market. Even if only 3% of the population of India moved to a consuming middle class over the next five years, that’s 300,000,000 – more than the entire population of the US!
Dr. Lynda Gratton, Professor of Management Practice at London Business School where she directs the school’s executive program “Human Resource Strategy in Transforming Organizations,” closed the conference. Her presentation focused on innovation and how to create innovation in corporations.
She cited research indicating that innovation and creativity does NOT come from in-tact, well-oiled teams as one might suspect. These team members, she said, are bonded by
tight links, and – while efficient and productive – may have established patterns and norms that prevent thinking outside of the box.
Gratton indicated that innovation comes from loosely-linked individuals who come together for a brief time for a specific purpose – and then disband.
I took the perspectives from Pink and Gratton and put them into the context of training, specifically Entelechy’s approach to training. I concluded that we’re doing many things right:
- We provide customized training for non-routine work – sales, management, complex customer service. We help participants “think outside of the box” in the performance of their jobs.
- Classroom training – as opposed to WBT and other forms of distance learning – connects
loosely-linked people for a brief time for a specific reason. Innovation and creativity can foster in this type of environment. (Note: I’m not a Luddite! My background is Computer-Based Training and Entelechy does WBT! It’s just that there’s something significant missing from CBT/WBT and other distance learning; that something is
connection.)
- By customizing training, we address the company’s specific issues. What’s critical today is NOT what will be critical tomorrow. The way we sell or manage or service customers today is NOT how we’ll sell, manage, or service tomorrow. “One-size-fits-all” doesn’t work in today’s flattened world!
Part 2: Effectively Using Cross-Selling to Increase Revenue AND Customer Service
Hot off the presses, Entelechy presents its white paper on cross-selling. We sought to answer the question: what is required for customer service reps or sales reps to successfully cross-sell. While our beliefs – based on our experience in customer service training – were largely upheld, the investigation revealed that the rewards and the risks involved with cross-selling are
much greater than we realized. Do it right and not only increase revenue, but also build customer loyalty. Do it wrong and not only lose customers, but face an increasingly hardened prospect pool.
Want to download your own copy of Effectively Using Cross-Selling to Increase Revenue AND Customer Service? Click here:
http://unlockit.com/TS-HPCS.htm#
and select the Effective Cross-Selling White Paper icon.
In the previous issue of The Key, we explored why most cross-selling initiatives fail.
The Key is Connecting with the Customer
Cross-selling failure isn’t because consumers aren’t willing to purchase additional products or services from customer service representatives. In a 2004 Forum Corporation survey of 1,624 world-wide respondents – averaging 43 years old and with an annual family income of $56,000 – it was found that:
- 88% of customers value service reps who suggest alternative products or services that better meet their needs.
- 73% are interested in learning about new products or services the company is promoting.
- 61% tend to ask service reps about these products or services.
- 42% said they purchased additional products or services “sometimes” or “frequently”.18
The Forum survey found that consumers are most likely to buy when the customer service rep:
- Focuses on the customer’s needs instead of pushing a product.
- Solves the customer’s problem first, before talking about additional products or services.
- Describes how the products or services will benefit the
customer.19
Conversely, when a customer service representative didn’t seem to pay attention to customer needs (i.e., used a script, continued to sell after the customer said “no”, or pushed products that were not useful to the customer), customers were not only unlikely to buy, but became highly
irritated.20
Defining Moments - The Ultimate Connection
Terence Traut, President of Entelechy, Inc., a training services company with notable success in helping companies cross-sell successfully, believes that, “There are moments in customer service when the true relationship between the customer and the company is defined. When an overdraft occurs, when luggage is lost, when the credit limit is reached, or when a hard drive crashes, and the customer – with emotions running high – calls customer service. What happens in the next minute will define the relationship between the customer and the company – either positively or negatively – for the coming years.”
Traut continues, “Defining moments in customer service do not usually occur in the simple or mundane tasks – opening an account, asking a simple question, making a straightforward transaction – although these experiences can shape the customer’s overall perspective of the company.
Defining moments are personal to the customer: a concern about MY bill, a problem with MY service, or losing MY data on MY computer due to a disk crash. Some defining moments are little deals and others are huge deals; and some deals that appear to the customer service rep as small may actually be huge deals to the customer.”
“Customers who experience a negative defining moment become frustrated, discouraged, and disenfranchised – sometimes
 passionately. We all know that disgruntled customers not only leave, they tell others about their bad experience. Conversely, customers whose expectations are exceeded in that defining moment not only experience satisfaction – and in some cases delight – they become company supporters and loyalists.”
Defining moments that increase the positive relationship increase the opportunities for cross-selling. McKinsey research on retail banking in Europe – and confirmed in the US – indicates that after a positive defining moment, more than 85% of customers purchased more products or invested more of their assets with the bank; conversely, more than 70% of customers having negative defining moments reduced their commitment to the bank in the form of closed accounts or significant reductions in assets handled by the
bank.21
Similar results have been shown in other industries. MediaOne, a national cable television provider (purchased by AT&T Broadband and subsequently acquired by Comcast), implemented a well-planned cross-selling strategy to position premium channel packages through their service team. Says their Manager of Corporate Training and Development: “We improved listening and questioning skills, focused on customer needs and overcame some sales reluctance.” The pay off? An additional $16 million in annual
revenue.22
Where Cross-Selling Fails
In training thousands of customer service reps, field service reps, and others who have the opportunity to cross-sell, we have found that it takes a holistic, concerted effort to succeed. A company wishing to use inbound customer service reps to position additional products and services faces a number of challenges. Among these are:
- Incentives/metrics. Customer service reps are typically measured on call time and number of calls taken. Taking time to position additional products or services may be seen as preventing the achievement of those goals. Additionally, the call center may be viewed as a cost center rather than as a potential profit center, driving behavior towards call efficiency rather than sales effectiveness.
- Department/company culture. The department or company may foster a culture of problem solving and courtesy, and consciously or subconsciously prevent a culture of “selling as an extension of service.” This culture could be fostered by peers and/or management.
- Predisposition against sales. Many customer service reps abhor sales or anything that resembles sales. They view sales as pushy, obnoxious, and manipulative.
- Knowledge of products and potential benefits to customers. Customer service reps need to know about the products and services they’re cross-selling; most importantly, they need to know how specific products and services may benefit certain customers.
- Skill and confidence. Effectively positioning relevant products and services in a helpful manner requires skills in listening, questioning, and presenting. It requires confidence in using those skills.
While incentives/metrics and department culture are absolutely critical to a successful initiative, they will not be discussed in this paper so we can focus on the last three bulleted items above. Tune in next month where we share more insight from our research.
18 “How Customers View Cross-Selling,” The Forum Corporation, 2004.
19 Ibid.
20 Ibid.
21“How Europe's Banks can Profit from Loyal Customers,” Marc
Beaujean, Vincent Cremers, and Francisco Pedro Goncalves Pereira, The McKinsey Quarterly, Web exclusive, Nov 2005.
22 “Changing a Culture and Increasing Revenue through Improved Customer Service:
MediaOne/AT&T Broadband Customer Service Case Study,” Entelechy, Inc. 2005
http://www.unlockit.com/....pdf
Entelechy’s High Performance Customer Service Training
Entelechy’s High Performance Customer Service (HPCS) modules are very flexible and can be customized, organized and delivered to achieve the desired results in your organization. Contact us to discuss your customer service performance requirements.
Customizable High Performance Customer Service Modules:
Core Skills
> Impacting the Customer Experience
> Focusing on the Customer
> Exploring Social Styles & Motivators
> Enhancing Customer Courtesy Skills
> Communicating Effectively
> Handling Challenging Situations
> Balancing Business & Customer Needs
> Providing Products to Customers
> Recognizing Value
> You REALLY are the One at Your Company
Selling Skills for Customer Service
> Transitioning to Sales
> Developing a Campaign Strategy
> Listening & Questioning
> Positioning the Sale
> Managing Sales Objections
> Closing the Sale
> Integrating the Skills
> Improving Personal Effectiveness
Customer Service Management
> Leadership Support
Click on http://unlockit.com/TS-HPCS.htm
for detail on Entelechy’s High Performance Customer Service training.
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to be removed immediately from our mailing database with our apologies. (If you have trouble with the opt out link, please reply to this email directly and I'll personally remove your name.)
Send this email to your friends and colleagues who may be involved in training and the performance of others and could benefit from FREE performance tips, tools, and techniques.
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Terence Traut, President of Entelechy "unlocking potential"
ttraut@unlockit.com
phone: 603-424-1237
fax: 603-424-6361
http://www.unlockit.com
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