Archive for December, 2009

Embrace Voicemail Messages To Trigger Action

Sunday, December 27th, 2009

In India, it’s customary for people to take calls on their mobile phones even when they’re busy in meetings or while they’re driving – most often only to tell the caller party that they’re busy at the moment and will call back later.  Somehow, activating voicemail and leaving a signon message to do the same thing in an automated manner, is not common. Even the few people, including me, who’ve a functioning voicemail on their mobile phones rarely find a message in their voicemail boxes from any caller from India.

Coming from such backgrounds, telemarketers and inside sales people tend to get put off when they hit their contacts’ voicemails while running telephone campaigns to target markets in the US or Europe.

They shouldn’t be.

Whether it’s due to fundamental cultural differences or simply because they’ve being using mobile phones for a longer period and have by now realized the efficiency (and safety, like while driving) of using voicemail, many people in the Western world use voicemails extensively – both to receive  and to leave messages. Letting a call go to their voicemails is not a sign of disrespect or lack of interest in talking to you. In fact, I know some people who virtually let all incoming calls go to their voicemail box but listen to the messages immediately after the call ends. Again, if the voicemail is clear and detailed enough, they go ahead and take action on the basis of the message instead of waiting to speak to the caller. In some places, middle-aged decision makers might accord greater priority to voicemails than to emails. As an extreme example, take for instance Hank Paulson, who was the Chairman of Goldman Sachs before he became the Treasury Secretary of the United States. In a FORTUNE magazine interview a few years ago, he averred that he never used emails, instead doing 80-90 voicemails per day on an average.

While it’s ideal to get through to a prospect on the other end of the telephone (“live call”), telemarketers and inside sales personnel should accept voicemail as a way of doing business in many parts of the world. Instead of getting disheartened by it, they should actively seek ways to invoke the desired response to their voicemail messages. For starters, they need to do better than to leave a staid message saying they’d called and could the prospect please call them back: Not many people call back without a good enough reason. Just as telemarketers and inside sales staff hope to get responses to their emails, they should embrace voicemail messages to trigger calls to action. At the same time, since voicemail is a very different mode  of communication compared to email, a verbal rendition of an email won’t work as a voicemail message.

By crafting good voicemail messages, and delivering them effectively, it’s not only possible to invoke some form of action but to actually generate better responses from voicemails than from emails. In a sequel to this post, we’ll share our thoughts and experiences about doing that. Watch this space…

Mass Brands Can Acquire – And Retain – Customers Of Class Brands In This Recession

Thursday, December 24th, 2009

If there’s one thing that’s different about this recession from the ones before, it’s the permanent shift of customers from premium to value brands. In a recent report, McKinsey says that marketers of premium goods who are waiting for a return to normality following the recession may be disappointed. “Their customers have tried cheaper products—and actually like them”, warns the report.

But, in another way, this recession is not very different: as can be expected, the percentage of consumers “in play” – that is those who’ve tried out a cheaper brand and are happy with the experience – is lower for beer (<4%) and other high-involvement product categories as compared to cold and allergy medicine (>10%) and other low-involvement ones.

Purveyors of value for money brands in low-involvement categories can seize this once-in-a-lifetime opportunity to grab customers of premium brands – and retain them even after the economy recovers. But, this needs a highly nuanced approach and direct mailers, search engine marketing, online shopping and other one-to-one tactics might work the best.

Credit Cards Don’t Lead To Overspending

Sunday, December 20th, 2009

Retailers incur a cost for accepting credit cards from their consumers. Known by various names like ‘merchant discount’ and ‘swipe fee’, it is usually levied as a percentage of the sale value and used to pay for the services rendered by the various entities that enable a credit card transaction. While the exact percentage depends upon the merchant category, card type, type of merchandise, mode of acceptance and other parameters, it can be as high as 3.5%. According to a recent report from the United States Government Accountability Office, merchants typically receive $97.80 for a $100 sale, which indicates an average cost of 2.2% in the United States. Costs in other countries around the world are not very different.

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How do retailers recover this cost?

Barring a few exceptions of countries like Australia and high-cost merchandise like jewellery, retailers are prevented by their agreement with card networks (e.g. Visa, MasterCard) from passing on this cost by way of increased price (often called “surcharge”) to consumers paying by credit card – prices have to be the same for all consumers, whether they pay by cash or credit card. (Even in the case of jewellery, which is one category of merchants historically known to levy surcharges for credit card payments, there’s the recent trend whereby they differentiate between items like gold coins where they continue to levy surcharge versus ornaments where they’ve stopped levying them.)

Under this situation, marking up prices across the board might be the only way for retailers to recover card acceptance costs. In other words, they charge higher prices to all their consumers, whether using a credit card or not. Credit card  holders can recover  at least a portion of this higher price by way of reward points and cashback offers whereas noncardholding consumers lack such avenues and land up paying more for shunning credit cards. This  flies against the face of conventional wisdom in India and other conservative societies that using credit cards leads to overspending.

This contrary reality – that is, not using credit cards results in overspending – provides a powerful go to market theme for banks to promote more widespread usage of credit cards in such conservative markets. When that is augmented with greater convenience, deferred payment, higher safety (if you’ve tried to reverse a fraudulent debit card charge, you’ll know how difficult it is) and other benefits offered by credit cards, banks have a great potential to boost credit card spend volumes from such markets.

McDonald’s Is Number 1, But It Still Tries Harder

Saturday, December 12th, 2009

Unlike Hertz, which didn’t or couldn’t stop Avis a few years ago from making a credible claim to “try harder” because it was the #2 in the car rental business, McDonald’s seems to be doing a lot of things to prevent whoever is the fast food business’ #2 (KFC? Burger King? Pizza Hut?) from doing an Avis on it.

  1. mcds_pic_01With its trademark arch, its outlets are visible from far away. In the US, UK and Germany, where tall structures are commonplace, there are any number of examples I can cite. But, even  in India, with its relative scarcity of tall signs, I can quote the example of the McDonald’s restaurant in the food mall on the Bombay-Pune Expressway where its arch is clearly visible from far away as you drive towards Bombay / Mumbai.
  2. It provides the best roadside directions to reach its outlets. The outlet at the end of the Bombay-Pune Expressway on the right hand side as you approach Bombay / Mumbai is an excellent example of detailed signage in a place that’s just realizing the need to assist motorists with prominent signs.   
  3. Its ketchup satchets have the best quality perforation – you can tear them with your fingers, even when they’re wet.
  4. On the back of the 26/11 terror attacks in Bombay / Mumbai last year, all malls in India instituted tight security measures on people, goods and vehicles entering their premises. This has led to body frisking and inspection of your bags, not to mention long queues of cars waiting to be checked at the gate. Considering what happened last year, these steps might be understandable, but there’s no denying that they’ve added considerable friction to an everday shopping experience. McDonald’s seems to have realized this and is doing something about it. At least in three malls that I’ve noticed – Mariplex Mall in Pune, Hub Mall in Goregaon (East) in Bombay / Mumbai and another mall in Chinchwad (Pune) whose name I don’t recall – McDonald’s is the ONLY outlet you can enter without going through the security barrier.

I’m sure that there are skeptics who might be thinking that McDonald’s is generating more business for itself by “trying hard”.  However, the point is, by making sure that it’s delivering a superior customer experience along the way, McDonald’s is being true to the principles of MARKETING 101.

And, as the following anectdote will illustrate, its efforts even work on a three-year old.

mcds_pic_02By the time she was a three year old toddler, my daughter had already fallen hook-line-and-sinker for McDonald’s – for its burgers, fries and milkshakes and not for  its marketing, I’m sure! – and would never pass by a McDonald’s restaurant without stepping in. We used to be living in Germany those days and there’s this leading department store in Frankfurt that has a McDonald’s outlet on the third floor (it’s the C&A outside Konstablerwache railway station, for those of you familiar with Frankfurt). One day, when we’d gone shopping for clothes at this C&A, we stumbled on to the third floor. Since my daughter wasn’t keeping well that day, my wife and I wanted to keep her away from the McDonald’s restaurant and therefore hurriedly tugged her away before she realized there was one right there. Alas, we were no match for McDonald’s legendary arch, which my daughter spotted at just the nick of time. Well, I don’t have to say what happened next!

Mobile Subscribers Will Vote With Their Handsets, err… Wallets

Saturday, December 5th, 2009

I recently inquired with my mobile network operator how I could opt for one of their newly announced per second billing plans – assuming, of course, that I’d find one of them suitable for my mobile phone usage patterns (click here to learn why a blind choice of  a per second billing plan is not a good idea).

I was surprised to learn that their PSB plans were available only for prepaid / PAYG subscribers. Since I had a contract, they told me that I wasn’t eligible for PSB. This came as a bit of surprise. While I knew from my experience abroad that subscribers had to specifically opt in for per second billing, I’d generally found them to be available for the asking.  (I’m not sure if restricting PSB plans to only a segment of the subscriber base – albeit a large one considering a huge majority of India uses prepaid plans – is not an unfair trade practice or one that every other MNO has resorted to. But I digress). 

Prompted by this experience, I was keen on figuring out if there were any more suprises in store for subscribers in the way they perceived per second billing plans versus how MNOs were offering them. For example, given all the buzz around how per second billing woud lower calling costs, subscribers might be led to believe that, under a per second billing regime, they’d be charged for actual seconds of usage on whatever existing plans they had. In other words, that they’d be charged 0.5 paisa per second if they had a current per minute plan costing 30 paise per minute (aka PLAN-0M that I’d introduced in one of my recent posts).   

Those of you tuned in to the raft of per second billing plans announced by one MNO after the other in the past 3-4 weeks would know that (a) existing per minute plans continue to be billed on a per minute basis only – in other words they don’t automatically shift to per second billing (b) all per second billing plans seem to be costing 1 paisa per second, not lower or higher than that figure.

This is a serious disconnect and can ignite ire among subscribers. There have already been cases where subscribers have moved to per second billing plans, only to find their bills soar, like the one reported by the Economic Times. According to this report,  one Mr. Sahil Shah got a rude shock when he found his fortnight’s talktime getting over in just a week after switching over to a per second billing plan.

MNOs might want to educate their customers proactively about the intricacies of per second billing before this disconnect becomes more deep-rooted and there are many more disgruntled subscribers like Mr. Sahil Shah. I like IDEA Cellular’s initiatives in this context. This Top5 MNO has already started suggesting in its hoardings that its newly launched per second plan (1 paisa / second, you guessed it!) is suitable for short duration speakers whereas longer duration callers would be better off selecting its 50 paise / minute plan.

Apart from IDEA, I haven’t come across any other MNO who has taken any steps in this direction. Failure to clear the confusion might result into snowballing of customer dissatisfaction or, worse still, the regulator’s intervention – neither of which is a very pleasant prospect for MNOs. The last time that the Indian telecom regulator had supposedly weighed in on this subject, readers might recall the bloodbath that ensued in the Indian stock markets, when the stock price of Bharti, India’s largest MNO with 110 million subscribers, crashed 15% in the Bombay Stock Exchange one day after rumors surfaced – and later denied – that TRAI was going to force all MNOs to switch over to per second billing.

Before subscribers vote with their handsets, err… wallets, to avoid facing the same fate as Mr. Sahil Shah, they can express their views by expressing their views on the following poll.

You Can’t Do Without Cold Calling Although You Can Do It Better – Part 2

Tuesday, December 1st, 2009

In Part-1 of this post, we’d seen why you can’t do without cold calling if you’re in the B2B technology business with relatively large ticket sizes (>$100K per deal) and narrowly defined target markets (enterprises and small businesses only, no individuals). In this Part-2, we’ll describe ways to do cold calling better and achieve manifold increase in opportunity pipelines.

In our experience, cold calling can be ineffective – if not thankless – for products and technology service lines using brochures, feature lists and capability documents. There’s a big gap between what a technology can do and what a prospective customer wants. In a crowded market, the vendor has to take the trouble to bridge this gap. That’s why we’ve seen manifold increase in opportunity pipelines when cold calling is done after creating razor-sharp marketable items supported by marketing collateral that is developed with the clear mandate that it should be suitable for an unreceptive audience. Since it’s impossible to make much headway with commoditized technology service  offerings like application development maintenance, implementation, upgrade and the like, it’s important to identify business pain areas and create marketable items that specifically address them. A marketable item should immediately convey how your product or service ‘creates gain’ or ‘solves pain’. You can throw a 20 page capability document at a qualified prospect with some hope that they’d read it, but when you try that on someone who doesn’t know you or your company (and possibly has a flourishing relationship for several years with your competitors), your marketing collateral has the chance of a snowball in hell of being read. To generate leads using cold calling, you need concise items like flyers, datasheets and offering detail notes – none of them exceeding 1-2 pages – that pack a lot of punch.

At this stage, companies you reach out to are not likely to spend time with you to discuss their specific requirements, so you’ve to carry out research into business pain areas and hot industry topics as they apply to an industry on a whole, map them with respect to your company’s internal strengths, and derive a shortlist of marketable items that are signed off by your marketing, sales and delivery organizations. For example, if you pitch a shrinkage reduction offering, retailers in most parts of the world are likely to be far more interested in talking to you further than if you tried offering application development and maintenance services to a WalMart, TARGET, Tesco or a Marks & Spencers, to name a few leading retailers, and expected them to tell  you that they’re looking for a shrinkage reduction solution. Once your first pitch is successful and your prospective customer asks for more information, you won’t have the luxury of then starting to prepare custom collateral and getting back after 2-3 weeks, so you have to ensure that  you’ve some boilerplate material before you begin your cold calling campaign. Agreed that skills and bandwidth required to create such marketable items and develop the associated marketing collateral might not be available within your company, so you might need to seek external assistance.

Apart from cold calling, inbound marketing presents a “next generation” practice to generate leads. Blogs, search engine marketing, landing pages, abandonment tracking and abandonment remarketing are some useful inbound marketing tools that can be used to create a “pull effect” in order to supplement the traditional “push” based methods of outbound marketing like email marketing and cold calling. Since customers are increasingly tiring of the growing barrage of cold calls from high-tech inside sales teams, inbound marketing is not only likely to gain further traction going forward but might even prove indispensable for many categories of high-tech products and services. Having said that, if you’re in the B2B technology business, outbound marketing will not slip out of your marketing mix anytime soon. Inbound marketing can at best supplement your email marketing and cold calling efforts.

If we get down to the brass tack, success in cold calling depends upon the ability of its practitioners to empathize with prospective customers, understand local market nuances, think on their feet to capitalize upon subtle cues, spot unstated requirements, communicate effectively to a largely-unreceptive audience and, above all, overcome the fear of rejection that comes abundantly with the territory. If you belong to the majority of humankind that lacks these skills, cold calling is not for you. However, for those of you that belong to the minority, accept cold  calling as a major contributor to your firm’s success. And, if your field sales people tell you that 50% of leads generated by inside sales are of no use, don’t hesitate to point out that, in their own admission, the other 50% is useful, so they have enough leads to run with and close orders!

For more details of our experience and insight with creation of marketable offerings, development of related marketing collateral, designing and executing lead generation campaigns via outbound and inbound marketing, please look up the following articles:

http://www.gtm360.com/Marketable_Offerings.htm

http://sketharaman.com/blog/2009/06/18/why-inside-sales-guys-dont-stick-around-for-long/

http://sketharaman.com/blog/2009/09/02/don%e2%80%99t-let-your-competitors%e2%80%99-inbound-marketing-steal-your-leads-from-cold-calls/

http://www.gtm360.com/Boost_Inside_Sales_Effectiveness.htm

Happy Selling!