Articles - Written by Arthur Hughes - 1 Comment
Helping Franchisees to Succeed
How do you build your business, if you have to depend on 130 independent franchisees to build it for you? Voice-Tel Enterprises, of Cleveland, Ohio, the largest voice messaging company in North America, is solving this problem in a unique way. Voice-Tel operates a digital telecommunications network that connects people within and outside their companies, wherever there is a touch tone phone.
Voice-Tel was founded in 1986 and serves 3,500 cities in the US, Canada, Australia and New Zealand. It is used by Realtors to communicate easily with banks and mortgage firms, by sales managers to talk with hundreds of agents in the field, by national associations to talk to members and field offices.
The Voice-Tel customer development program is called PACER — a Process for Acquiring Customers and Enhancing Retention. It combines a prospect database, contact management software, and a retention and referral program designed to provide a real service to franchise owners. PACER was designed by Andy Birol, Senior Marketing Manager, and a graduate of the Database Marketing Institute Seminar. He developed it by modifying sales management software from WinSales Corp. in Kent Washington. RCS Management of Cuyahoga Falls did the program modifications.
PACER is built on the concept of Acquisition and Retention Funnels which look like this:
- Prospects X X X X X X X X
- Contacted X X X X X X X
- Qualified X X X X X X
- Developed X X X X X
- Closed X X X X
- Activated & Trained X X X
- Referred X X
- Retained X
Traditionally, marketers are not aware of the capacity of their sales force. They tend to create massive campaigns which clog the funnel with prospects. There is seldom enough time for the sales force to contact the prospects before they lose interest in the product, or succumb to another vendor. PACER aims to keep the funnel full at all times with a manageable group of prospects that are rapidly being contacted, qualified, developed and closed. Listen to how Bud Field, a franchisee in the Western Carolinas, describes the process:
” We start with MarketPlace” (the VoiceTel Prospect Database obtained from Dunn & Bradstreet and other sources). “My Director of Customer Service operates MarketPlace because it costs money when you pull names off, and she knows my criteria for picking names…We pull out prospects that have a minimum of 10 people with at least two locations and narrow the list down until we get a count that is about 25 — because that is the number we can handle with mailings and phone calls. When we run out of these we go in and pull out another batch… Using PACER, I am able to generate a monthly report that shows the name of the prospects in the funnel, when they were put in, their PACER status (suspect, prospect, contact, qualified, developed, closed, activated/trained, and retained)…We feel very good about closing within the first six weeks on 10% of the names we pull from MarketPlace and manage through PACER. And, we expect to close 20% to 30% over some reasonable period of time.”
What is a prospect?
Andy Birol developed a set of questions called Target Customer Profile (TCP) which help to determine if a suspect is a prospect. Each of the following TCP questions is assigned a point value that enables marketers to determine whether a company is a prospect, a better prospect, or not a prospect at all. The questions are:
- 10 to 100 Employees per location? 0 or 1
- Sales Organization? 0 or 1
- Multiple Locations? 0 or 2
- Suspect in a Target Market? 0 or 1
- Suspect with more than 10 mailboxes? 0 or 2
- Suspect is a Referral? 0 or 2
- Other customers in this Business? 0 or 1
- Possible TCP Score 10
A score of 3 or 4 is a prospect, 5 to 10 is a better prospect, and below 3 is not a prospect at all. A similar set of questions is used to qualify prospects. These include:
- Frequent communications with the same people?
- Frequently notifies others of new information?
- Communicate with remote locations?
- Your customer gave a positive referral?
How does PACER help with the lower funnel — customer retention? It is quite expensive to assign staff to call on customers on a regular basis to make sure that they are making full use of the system — but that is what it takes to build and maintain loyalty. To simplify the process, Birol has developed a Target Customer Questionnaire (TCQ) which helps in rating the value of each customer, and hence the importance of retention building activities. The questions asked about active customers are:
- Is the customer buying multiple boxes?
- Is the customer making effective use of Voice-Tel?
- Is there a champion at your customer’s office?
- Does your customer have affinity groups to message with?
- Is your customer classified in a high priority SIC code?
- Does your customer have more than one location to communicate with?
- Does your customer have more than 10 employees?
- Do less than 50% of the employees have a Voice-Tel mailbox?
If three or more of these questions are answered with a yes, then the franchisee can justify assigning a Retention Specialist to follow up with mailings, outbound calls and messages and, in some cases, on site visits. Experience shows that customers who leave are those for whom the messaging habit has not been developed — they have not become dependent on Voice-Tel service.
As described by Keith Cupp in Voice-Tel in Seattle, “Our goal is to use PACER relationally to bring customers in who don’t understand that they need Voice-Tel, but we know that they do…When a prospect becomes a customer we have relational data such as birthdays and family information so our customer service people can use it to make proactive calls, wish Happy Birthdays and do the relational side as well as the business side.”
Results of the Pacer Program
What has been the result of two years work on this program? Forty franchisees have joined the program, purchased the software and necessary hardware, and trained their employees in the system. Using the system, inside salespeople can handle as much as 50% more calls than before. In addition, they can quickly screen out the worthless leads so as to concentrate on those that have the potential to pay off. Active user Bud Field has found his 1995 sales were up more than 60% over 1994, half of which is due to the PACER system. The system “allows us to spend more time on those prospects that our salespeople should see”, he explained.
Voice-Tel’s size is now doubling every two years. Network usage is growing by 10% each month. Voice-Tel is ranked as the ninth most valuable franchise to own by Success Magazine. How much of this success is due to PACER, and how much to the general dynamism of a very active new company? It is hard to tell, because of the decentralized nature of Voice-Tel’s distribution system. PACER, however, is clearly an example of combining the best principles of database marketing and sales automation.
Arthur Middleton Hughes, vice president of The Database Marketing Institute, has presented 28 seminars on database and email marketing. Arthur has also authored several books includingStrategic Database Marketing 4th Edition (McGraw-Hill 2012). He and Andrew Kordek, chief strategist and co-founder of Trendline Interactive, are hosting a two-day Email Strategy Study Group in Fort Lauderdale March 26-27, 2013, featuring group competition for email marketers responsible for subscriber acquisition, lifetime value, ratings and reviews, boosting their email budget, and doubling their ROI. To learn how to attend the Study Group, click here
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