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The Telephone: A Cost, Time, and Energy Saver
Modern advances in computers, aerospace, and electronic technology have been astonishing. Yet the telephone, invented over a hundred years ago, still ranks as our number one technological sales tool. The reasons are evident. What businessperson doesn't place a high value on time? Who isn't concerned about spiraling costs and rising overhead? The telephone saves time, money, and energy.
As recently as the 1960s, a gallon of gasoline sold for less than 40 cents. For under $10.00, a traveling salesperson, could rent a decent motel room for the night. For another $10.00, he could eat three good meals a day. Today, breakfast alone in large cities such as New York and Boston can cost $20.00 and a decent hotel room will exceed $200.00! Rooms at the Plaza in Manhattan cost $45.00 to $55.00 in 1975; they cost $225.00 to $450.00 in 1990. It costs more to get there, too. An airline ticket from San Francisco to New York was $404.00 in 1976 and in 1990 it had risen to $967.00. Short distances like the round trip from Pittsburgh to New York went from $96.00 to $400.00 during the same period. Needless to say, these costs have skyrocketed. Whether you travel by automobile or airplane, getting there will cost you considerably more than it used to. Internal office expenses have risen correspondingly. In 1970 the average cost of a business letter dictated to a secretary was $3.05; by 1980 the price tag was $6.07. By 1990, the estimated cost of a dictated business letter exceeded $15.00!
While other costs haverisen steadily, the relative cost of telephone service has declined. For example, in 1949 the average industrial employee worked five hours and fifteen minutes to pay his monthly telephone bill. In 1979 the same industrial worker worked only one hour and twenty-two minutes for the same purpose. Fewer hours of work are now required to purchase most goods and services, but even so, the cost of telephone service has risen much less, proportionately, than the cost of the average commodity. Between 1973 and 1979, for instance, consumer prices in general rose nearly 70 percent, but the cost of residential telephone service went up only 14 percent. And since the breaking up of AT&T, the costs of long-distance telephone services substantially decreased in the late 1980s. In a five-year period between 1984 to 1989, for example, reductions of AT&T's interstate long-distance rates since the divestiture have dropped 39.8 percent. In Ohio, for instance, the intrastate prices were also reduced by 28.6 percent during, this same time frame. Telephone service is cheaper now, both in real terms and relative to the rest of the economy, than at any time in history.
Every business today has had to intensify its concern about expenses. In the past, sales volume alone was often considered the best indicator of success. However, in recent years numerous companies have experienced record revenues only to find them offset by record losses. The question must always be asked: What are the costs of attaining higher sales volume? Before any decision about sales strategy is made, the cost of the strategy involved must be determined.
Sometimes a company will be on the brink of disaster before it is willing to revise its sales methods. A small Iowa based company, for instance, lost four of its five sales representatives before it turned to telephone selling. One by one, the salespersons had resigned, complaining that at least one-third of the accounts they called on were no longer in the market for heating or air-conditioning supplies, or had gone out of business altogether. The salespersons weren't making any money and neither was the company.
In desperation, the manager and the remaining salesman laid out a telephone strategy. So the account files could be straightened out, the first stage called for the salesman to simply "qualify" customers by phone that is, to make sure they had both the need and the ability to pay for the company's products. When this resulted in a number of orders being placed, the sales strategy was rapidly revised. Now, all selling is done by this one salesman who produces more orders than all five did on the road! In analyzing results, the company realized that each personal sales visit to a local or out-of-town client, whether it was productive or not, had cost about $20. The telephone "sales visits" had cost the company approximately one-tenth as much.
In analyzing sales methods, the cost in time is of prime importance. Time is money; the failure to recognize that can be fatal. Every salesperson must determine how to get the highest possible return on the time and energy he invests. Experienced salespersons know that their time is their most valuable asset and guard it jealously. But the majority of salespeople actually spend a relatively small portion of their total working hours productively. It has been estimated that in the fields of real estate, insurance, and securities, the average sales representative wastes as much as 80 percent of his selling time.
A salesperson making outside visits in person runs into a long list of problems that consume time during the course of the day. Most of the problems are unavoidable. For example, there are traffic tie-ups, automobile breakdowns, poor driving conditions, long waits in reception areas, and broken appointments. Needless to say, the telephone salesperson does not have to cope with any of these time wasters.