A QUESTION OF TIMING
A professor
at a Business School organised for the CEO of a large local company to
come and talk to a small group of his brightest students about life in
the ‘real’ world.
At the end of the wide-ranging talk, the CEO asked if there were any
questions.
One student raised his hand. “Sir, you mentioned you have a large call
centre. What is the major challenge you have operating that facility?”
The CEO was pleased to have the opportunity to show how complex running a
business really was. He said that containing costs was both very important
and very difficult to do, and at the same time, they had to keep the customer
more or less happy. “Call centres are expensive to run, son, and customers
just love to talk. Our challenge is to answer their query or perform the transaction
they request as quickly as possible. That way we can keep the calls short and
handle more calls with fewer staff. Of course, that means that customers usually
have to wait in a queue before their call is answered but that’s just
the way it’s got to be if we are to reduce the costs of operating a call
centre.” He smiled kindly at the student.
The student nodded. “And if I may ask, Sir, what is the biggest challenge
that faces your business generally?”
Again, the CEO was happy to illustrate just how tough it was to succeed in
today’s crowded and competitive market. He explained that growing the
business was his biggest challenge overall. “Shareholders want to see
growth, and that means more sales, and that in turn means we are constantly
working to attract more customers.” He went on to describe how in his
company they did this by aggressive marketing. “We spend a lot of time
and money developing ads for TV and radio, and to put in magazines and newspapers.
We also conduct at least three direct mail campaigns every year,” he
added. “These are major campaigns with three or four pieces of marketing
material being sent out to over 250,000 homes.” He was pleased to see
the impact these numbers had on the students.
The student looked like he was going to ask another question and the professor
moved to stop him, but the CEO indicated the student should be allowed to continue. “And
what is your biggest challenge when advertising to attract new customers?” asked
the persistent student.
“Again the cost,” answered the CEO. “And the effectiveness
of the campaign, of course,” he explained patiently. “You see,
TV advertising is very expensive and many people just get up and leave the
room when the ad comes on. Radio is less expensive but still costly and there
are so many stations you need to advertise on to reach a large number of prospective
customers. And even then, who knows if the listener is really listening when
the ad comes on. Perhaps they just tune out.”
The student nodded. He seemed grateful to receive these words of wisdom. The
CEO leaned forward to continue his lecture. “As for print advertising,
research shows that you have only two seconds to grab the reader’s attention
as they flip though the magazine or newspaper. And, as for direct mail and
telemarketing” laughed the CEO, “well, you’d be lucky to
get a three percent response. Getting new customers, son, is not very easy
these days. I mean, even getting them to pay attention to your advertisement
or listen to your telemarketing pitch is very difficult. You have to understand
that people have so many things competing for their attention.”
The student took a moment to think about what he’d heard. “So
let me see if I’ve got this right,” he said finally. “When
your customers are really interested in talking to you, your main priority
is keeping the call short to keep the cost down?” It was the CEO’s
turn to nod.
“But when potential and existing customers are not the least bit interested
in talking to you,” continued the student, “because they have so
many other things going on in their lives, that’s when you are prepared
to spend a lot of money to persuade them to buy your products, even though
you know most of the money will produce little result?” The CEO admitted
this was the case.
The student was too polite to ask whether that made any sense.
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