Sales & Marketing: The S&M Paradigm

Sales. Sales. Sales. It seems like that’s all anyone in the cable industry wants to talk about. OK, let’s talk about it, but if we’re going to talk about it let’s be honest—as an industry we are terrible when it comes to handling our sales channels. I’m sure every executive in cable will disagree with me on this, but look at our numbers—we are dropping the proverbial ball when it comes to making it easy for our customers to do business where they want to do business. It seems that while our competitors have become "sales & marketing organizations," the cable industry has been stuck in neutral trying to cultivate a profitable sales culture. Not true? Then name another industry that has a successful and competitive "sales culture organization." It doesn’t exist. Sales and marketing are inseparable today, and both need to be woven into the DNA of a company. In most instances the sales and marketing departments dictate how an entire organization runs, not just their respective departments. In most organizations engineering often takes its lead from the marketing department when scouting sites for new plants to maximize capacity and increase the customer base. But when was the last time the marketing and engineering departments at your company discussed new products or plant and technology plans with customer needs and revenue growth in mind? REEXAMINE SALES CULTURE It’s time for cable to take a hard look in the mirror when it comes to sales culture. Sales training in the cable industry is woefully inadequate. Sometimes it consists solely of training in how to input an order into billing systems despite the fact that we offer a host of products. The time has come for our sales efforts to match our product offerings, which means providing more extensive product training for customer-facing employees and enlisting the services of companies like Knowlagent, which offers real-time training for reps that expedites their product expertise. What’s more, reps can receive this training without ever leaving their desks. It’s inexcusable that most cable systems still rely on their call centers to do a majority of their sales. Also inexcusable is that some cable systems try to cut even more corners by using less-expensive customer care reps to handle sales calls. I say "less expensive" because by letting non-sales professionals manage sales-related calls, MSOs may actually end up hurting the bottom line by selling fewer products or missing out on sales opportunities altogether. And since we’re being honest, let’s admit that a sales professional is very different from a call center rep in training, passion and earning potential. For some reason, sales reps are perennially treated like the ugly stepsister of the cable family and are usually the first to go when the budget belt gets tightened. But the truth is an effective direct sales team that does its own installations can, and should, be one of a cable operator’s lowest-cost/highest-revenue channels. Even if you’re convinced that having an in-house sales division isn’t cost-effective, consider going variable and hiring a company that does it full time, like RCH in New Jersey, and pay for performance. MAKE CALL CENTERS PROFIT CENTERS Perhaps the problem lies in cable’s compensation structure for sales reps. In the wireless industry, 70-80% of a sales rep’s pay is performance based. The performance-based portion of a cable sales rep’s pay is only 50-60%. With so little at stake for sales reps, and with product and sales training practically nonexistent, it’s no wonder our customers often know more about our competitors than our sales reps do. We must do a better job of making our salespeople accountable for producing results by upping the percentage of pay at risk for sales reps and weeding out the underperformers. That, coupled with developing—and implementing—channel-specific skills training will transform our call centers into profit centers. Now there’s an idea. Now, you might be saying, "But we have a dedicated sales team and multiple distribution channels." Kudos. Do you have an effective method for tracking how many sales by RGU each channel generates? CHANNEL WISDOM FROM THE WIRELESS INDUSTRY The wireless industry has been incredibly successful in determining exactly how much it costs to connect each type of customer by channel. Why can’t cable do the same? This measurement is critical if we are to develop cost-effective sales channels and eliminate the underperformers. Wireless industry companies are very good at determining how much each customer is worth and driving the customer to the channel that is most appropriate for the customer’s value. These companies use offers driven by the value of the customer and the cost of the channel. Retail is a good example. Today retail is a very expensive channel in the cable industry, just as it once was in the wireless field, which keeps us from giving it as much attention as it deserves. But if we take a page out of the wireless playbook and dedicate ourselves to developing our retail channels we can make them thrive as wireless has. Another area that requires further inspection is the Internet. Cable still hasn’t figured out how to successfully do business online. We need to develop more Web-friendly methods for potential customers to access and purchase our services without a live body having to take an order out of e-mail and inputting it into the billing system. This is what our customers are demanding. Why aren’t we offering it? Last, it would be wise for cable to reassess the role of telemarketing. Most MSOs outsource their telemarketing or have in-house TM departments that are so small you’d never even know they existed. Similar to the sales reps, TM departments are often the first to feel the pinch when money is in short supply. That’s a shame because a well-trained TM department can strengthen existing customer relationships and cultivate new ones. And with customer relationships at a premium and the ever-increasing number of "Do Not Call" lists, that’s something we shouldn’t overlook. While the sky certainly is not falling, we have undoubtedly reached a glass ceiling in terms of product and sales training. We may be driving great RGUs, but only by making it easier for customers to buy our products and for our sales reps to sell them will we be able to blow our competitors out of the water. A Call to Action Cable’s sky isn’t falling, but it needs to revitalize sales and marketing to defeat the competition. Here’s how: Maggie Bellville is a partner in the Atlanta-based executive search firm Carter Baldwin. She can be reached at: [email protected]. [Special thanks to Lee Clayton and Kip Simonsen—M.B.]