The Key
March 8, 2006

Entelechy's Newsletter for Trainers, Managers, 
HR Professionals and Others Responsible 
for the Performance of Others.

Letter from the Editor 

If you remember from the last newsletter, I was all goosebumpy with excitement after working with Thomas Friedman, Pulitzer-prize-winning author of The World is Flat. He posits that the world has changed significantly in the past 10 years and many of us have yet to realize it. While the Internet paved the way and software has opened the door, only recently are we seeing people connecting and collaborating in ways that were unimaginable 10 years ago.

One example of this type of collaboration is a marketing piece that Entelechy recently completed. It’s a Flash file that outlines the benefits of customizing training. Upside Learning (www.upsidelearning.com) did the storyboarding and coding in India. David K. Jones (www.jonesatlarge.com) did the voiceover in Florida. I’ve never met (or talked to) either. A Google search found Upside Learning. A posting on www.voice123.com resulted in over 100 interested voice professionals; David was first to respond.

Connection is old hat. What people are doing together – enabled by that connection – IS new.

You can check out our new marketing piece at www.unlockit.com/Why_Customize/index.htm. Let me know what you think.

Terry

Part 1: Effectively Using Cross-Selling to Increase Revenue AND Customer Service

Caution: Work In Progress!

We’re writing a white paper on the potential and pitfalls of cross-selling. We believe that while cross-selling and up-selling have grown in popularity with businesses, many efforts fail to meet projections. Many factors contribute to a successful cross-selling/up-selling campaign; the most critical – and the one presenting the greatest challenge for companies – is the skill set of the customer service representatives. The following is a piece from this paper.

Most Cross-Selling Initiatives Fail

Gartner estimates that 70% to 90% of all cross-selling efforts fail¹. Why? 

It certainly isn’t because we haven’t tried to capture and make sense out of customer data. Many millions of dollars have been spent on sophisticated Customer Relationship Management (CRM) systems to provide companies with data to help them target customers for additional products and services. Forrester Research Inc. found that only 10 percent of business and information technology executives surveyed strongly agreed that business results anticipated from implementing CRM were met or exceeded². Several years ago, Yankee Group, Boston, estimated that “20% of CRM systems purchased in the last two years were never installed, and that 30% of have gone no further than the first stage of deployment a year after acquisition.”³ 

While it appears that CRM systems are beginning to regain respect and credibility⁴, they are no longer considered the technological panacea to increased customer retention, satisfaction, and sales.

It certainly isn’t because of a lack of effort on our part to “reach out and touch” customers. While we try harder – direct mail has increased by 6% last year to over 100 billion pieces mailed⁵ – our customers are saying it’s not working: 

• Over 70% of Personal Video Recorder (PVR) users skip through television commercials (and Yankee Group estimates that fully half of US households will have this technology in four years!⁶)
• Satellite radio has eight million customers and expected to double to over 19 million subscribers by 2007.⁷ 
• Over 100 million people have signed up for the Do-Not-Call list, with severe penalties to companies violating the law (in December, 2005, DIRECTV was slapped with a $5.3 MILLION penalty for Do Not Call violations).
• Spam is uniformly despised and its eradication has become big business; according to market researcher The Radicati Group, spending on anti-spam products and services increased to nearly $1 billion in 2004, up 50% from the previous year.⁸ 

Return rates for the types of outbound marketing and advertising efforts listed above have fallen below 3%.⁹ Consumers are clear in their directive to us: stop the bombardment of irrelevant, ill-timed advertising.

Look Where the Gold Is

It’s not that consumers have stopped consuming. On the contrary, they are buying; for example, consumers spent over $20 trillion dollars on household goods and services in 2003, four times what they spent in 1960 according to The Worldwatch Institute.¹⁰ 

And there are increasingly more and more consumers. The Worldwatch Institute reports that more than 25 percent of the world’s population is now part of the “consumer culture,” purchasing television sets, automobiles, and thousands of other products and services. 

And there are more things to buy. The Worldwatch Institute estimates that each year more than 50,000 new products hit the market.

As a result of the lackluster results of outbound marketing and the increasingly limited reach of traditional advertising, more and more companies are looking to optimize opportunities in inbound customer calls and use service reps to take advantage of ongoing contacts with customers to position additional products or services. 

With 2.1 million customer service representatives in the US¹¹ handling billions of customer calls annually, inbound customer service calls provide a huge opportunity for cross-selling – if done successfully.

So, what’s the answer? In short, we believe that a companies best source of increased revenue is from existing customers. However, companies who initiate a cross-selling effort unsuccessfully risk losing the ONLY source of revenue they have! Tune in next month where we share the answers from our research.

¹ Referenced in “Crossing the Balance Sheet: Identifying Best Practices When Designing a Cross Selling Initiative Between Capital and Credit Market Teams.” A UNC Kenan-Flagler Business School White Paper, Ian Patrick, April 29, 2003.
² “Evaluation of Top Enterprise CRM Software Vendors Across 177 Criteria,” Forrester Research, 2005 www.forrester.com 
³ “When CRM Fails,” Frontline Solutions, Mar 2003, http://archives.frontlinetoday.com/frontline/article/articleDetail.jsp?id=48635 
⁴ “CRM Done Right,” Harvard Business Review, Nov 2004.
⁵ “Direct Marketing Can’t Get Lost in the Mail,” Advertising Age, Jan 16, 2006, Vol. 77 Issue 3, p15.
⁶ “DVR/PVR Pave the Way to IPTV,” Telephony, Dec 12, 2005, Vol. 246 Issue 24, Special section p2-3.
⁷ “Satellite Radio,” eMarketer, Nov 2005, http://www.emarketer.com/Report.aspx?radio_sat_jan06 
⁸ “Anti-spam Industry Consolidating,” USA Today, Jul 20, 2004, http://www.usatoday.com/money/industries/technology/2004-07-20-spam_x.htm 
⁹ “The Elusive Prize Effective Cross Selling,” Insurance and Technology Sept. 2005 http://www.insurancetech.com/news/showArticle.jhtml?articleID=170704148  
¹⁰ “The State of the World: Consumption by the Numbers,” The Worldwatch Institute, 2004.
¹¹ Occupational Outlook Handbook, 2006-2007 edition, Customer Service Representatives, Bureau of Labor Statistics, U.S. Department of Labor, http://www.bls.gov/oco/ocos280.htm 

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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Terence Traut, President of Entelechy "unlocking potential"
ttraut@unlockit.com   
phone: 603-424-1237
fax: 603-424-6361
http://www.unlockit.com