Stoffer's Soapbox

Competition in Online Education

Business Week posted an interesting article about increased competition facing for-profit education providers in 2006. It reinforces the point I made in my post Traditional Schools Moving Online, that when traditional schools with local brand equity move online, for-profits will have difficulty competing.

The article quotes Signal Hill Capital analyst Trace Urdan. "Nonprofits have begun to employ the student acquisition techniques of the for-profit universe, further crowding the field of student recruiters. Urdan warns this isn't good news for Apollo Group Inc., and expects traditional schools that have strength in certain niche areas to "peck away" at Apollo's market share in 2007."    

"People that might have gone to the University of Phoenix are now going elsewhere," Urdan says. "Apollo's approach of being 'all things to all people' was the right approach when the market was brand new."

The article also references the lower price of traditional schools, echoing my post Room for a Value Play in Online Education. Citibank analyst Paul Beland states: "Nothing beats in-state tuitions at traditional publics, which for an online degree can be 20 percent of the cost."

It's a tough slog ahead in my industry: a great deal of creativity and gumption will be required to create operating models that are sustainable and profitable as market competition continues to increase rapidly.

Staffing the Call Center

Thanks to the OBP research group of the Vrije Universiteit Amsterdam for their work on call and contact centers. They have a great website which features free call center tools and a free book explaining the mathematics behind call center staffing models.

It's easy to plug arrival time, average handle time, etc. into a calculator and get a swag at what your staffing should be. What this book does is give the layman (you need some statistics knowledge, but trust me, not much) information on the different variables that can affect staffing. It certainly provides a rubric for decision making in a call center environment.

The author of the book, Ger Koole, writes "This book is written for everybody who is dedicated to improving call center performance. It offers a scientific method to understanding and improving call centers. It explains all generic aspects of call and contact centers, from the basic Erlang formula to advanced topics such as skill-based routing and multi-channel environments. It does this without using complicated mathematical formulae, but by stressing the meaning of the mathematics. Moreover, there is a companion web page where many calculations can be executed. Next to understanding call center phenomena we show how to use this insight to improve call center performance in a systematic way."

Enjoy!

Insurance Q&A: Outbound Sales

Insuarance & Technology magazine featured a great Q&A on outbound telesales in the insurance industry. A few key takewaways are as follows:

1. Effective Call Recording and Monitoring Can Lead to Improved Customer Satisfaction. Sharon Ritchey, SVP Property-Casualty Service Operations at The Hartford explains, "The Hartford shifted its focus from cost to customer, developing a system to record 100 percent of the voice and screen activity across eight separate call centers and 3,500 agents. By recording the sound and visual cues of how those agents were serving their customers, and tagging this with data about the customer and about the agent, we could review efficiency, effectiveness and customer impact of calls. Our Customer Experience Management System captures, evaluates and analyzes customers' experiences for continuous measurable, sustainable improvement."
2. Put the Right Information at the Agent's Fingertips Real Time. Joseph Heinen, VP Strategic MArketing at Genesys Labs says "The right contact center technology can allow insurance companies to segment customers and use real-time data to capitalize on valuable up-selling opportunities. It's not just about cutting costs. For example, you might see that a caller is a prime candidate for an up-sell and then route them to a specialized sales agent -- maybe even someone outside the contact center."
3. Outsourcing Can Be Effective, But Keep Your Core Business Processes In-House. Mike Sheridan, VP Strategy for Aspect Software says, "Outsourcing can potentially play an important role in an insurer's contact center strategy. It is key to segment interaction types and possibly limit outsourcing to routine tasks, at least in the beginning phases of an outsourced program. It is also helpful to have an outsourcer available during unexpected spikes or peak times to provide important backup resources."

Blockbuster: Upselling Me All the Way to Netflix

At Blockbuster this past weekend, I stood in line with a few movies as the employees lackadaisically served the customers in front of me.

When I did get to the front of the line, the clerk, with her eyes averted, mumbled "Welcome to Blockbuster." Then, she turned away from me to help her fellow employee figure out to sell someone a DVD. Finally, the extended and ineffective upsell began. She mumbled, "Would you like a soda or popcorn with those movies?"  I said, "No, thank you." Then she quickly spit out under her breath, "Would you like to join Blockbuster Online, where  you get unlimited DVD rentals for $17.99 a month?"

I just don't get it. First of all, when I go to the supermarket, the checkout aisle, like Blockbuster, is chock full of soda and candy. And never am I asked whether I want to buy it - supermarket's  management knows that if I did, I would just reach over and grab the soda and candy right next to the checkout counter. Secondly, there is a computer set up near the checkout counter at Blockbuster with a big sign touting all the features of Blockbuster Online and letting people sign up today. Is there really the need to ask again?

It was readily apparent that the Blockbuster employee was getting mystery shopped on occasion to make sure she said the scripted upsells. But the Blockbuster employee never made eye contact or even flashed a smile - if she is mystery shopped, shouldn't this be part of the evaluation criteria? I can say with certainty that a combination of unfriendly customer service and irritating upsells is an unprofitable strategy - any revenue gained by upsells is lost by turned off customers going to the store less frequently or, as I did, surfing to netflix.com as soon as they come home.

Executives at Blockbuster face a huge challenge to stay alive as new channels to buy movies continue to encroach on its traditional rental business. They will have to look farther than selling more soda to find the key to survival.

Great SNL Clip Wishing You a Happy Holiday!

Just when I thought Saturday Night Live had lost all relevancy, it puts out this great little sketch. It is one of the first times a TV network has used the Internet to put an uncensored clip of a broadcast out to the public.

Top 100 Education Blogs

OECD just released a list of its Top 100 Education blogs. Unfortunately, the two month old Stoffer's Soapbox was nowhere to be found :(

Next year, I'm crossing my fingers it will be there.

Niche Programs as a Differentiator

The online education market is hypercompetitive and the same affiliate vendors are selling leads to dozens of schools. Check out the list of business schools at allbusinessschools.com (owned by lead vendor All Star Directories) or the list of technology programs at earnmydegree.com (owned by lead vendor World Class Strategy).

So to survive, an online institution has to define its points of differentiation. In the past I have talked about the differentiators of price (Room for a Value Play in Online Education?) and local brand equity (Traditional Schools Moving Online). Another way to differentiate in the crowded online marketplace is by offering a program unavailable elsewhere. Two great and recent examples are:

1. Western Governors University is offering accredited teacher licensure BA programs.  WGU is the only online teacher education institution in the nation to receive NCATE accreditation. NCATE is a specialized accrediting body for teacher preparation that accredits colleges of education that produce over two-thirds of the nation's new teacher graduates annually
2. Saint Joseph's College of Maine is now offering a Master of Arts in Pastoral Theology and a Bachelor of Arts in Theological Studies.

Other opportunities include focusing on ethnic markets (e.g. Hispanic market) and partnering with a large healthcare provider to offer Nursing programs (with clinicals at the provider partner site).

Five years from now, the competitive landscape will be far more defined. Those schools that are able to differentiate themselves to potential students will thrive - while others will struggle to survive.

Elf Tales: Viral Marketing in Education?

Schools like UOPX, Capella and Strayer spend a massive portion of their advertising budget buying leads through vendors like Quinstreet and Advertising.com. They ought to be doing more to drive traffic to their site organically - viral marketing is one avenue to do so.

A great example is Office Max's "Elf Yourself" site where you can paste your photo on the head of a dancing elf and send it out to friends. This dancing elf has come into my inbox at least a few times this hoiday season, has 975,000 results on a Google search and has received lots of mainstream press (see AP article). It's important to note that the Elf has nothing to do with office supplies but gets Office Max a ton of publicity and likely drives traffic to their stores.

Why can't online universities attempt to create similar viral  marketing campaigns to increase brand awareness and increase the number of free impressions they get online. Ultimately, by doing this they would increase their free lead flow and reduce dependence on outside vendors.

Sales in a Contact Center Environment

Is there any distinction between a service and a sales culture in the contact center? There shouldn't be! Don't the best real estate agents or financial advisors provide great service, even though they are in a sales position? Ulysses Learning has a great white paper called Race to Sales, which talks about sales in a contact center environment. There are four major points in the white paper, summarized below:

Sales is Great Service
This point is made eloquently in the pdf by Gerry Barder Vice President for CIAC, the Call Center Industry Advisory Council. "Without a doubt, our sales initiatives will fall short, if we forget the act of selling useful products and services, when done well, is the ultimate customer service," says Barber.

Judgement Reigns Supreme
Do you train your agents on listening and empower them to go off script and use their own judgement to make the right decision for the customer? "According to Nucleus Research, 80 percent of call center training is low-fidelity issues. Twenty percent is highfidelity training—customer service, sales, and coaching where the emphasis is on judgment skill development. The high-fidelity training is the hardest to do well but adds 80 percent to the value of your service."

Coaching is King
Do you have a monitoring and coaching process where your organization is able to identify the strengths and weaknesses of individual agents? Do you have the right mix of face to face, simulation and computer based trainings to effectively improve agent skills? Lenny Padron, Director of Sales for Intuit's Small Business Products Contact Center group, makes a great point about the importance of holding your training organization accountable for achieving results. “We’re convinced that coaching is the key to getting agents to have more consultative conversations with customers. “And you need a coaching process with clear accountabilities... a process that sets your coaches up for success.”

Think Evolution, Not Revolution
You can't transform your workforce overnight. Focus on continuous improvement and sharing of best practices to optimize your workforce for sales.

Pull vs. Push Lead Management

Do your sales reps only work new leads? Are thousands of old leads sitting dormant in your sales rep's lead management system? Do you depend on your team leads to reallocate leads and are they doing so effectively? Are you sales people ignoring leads with certain demographic characteristics? Do you have lots of leads allocated to reps who are no longer with your company? Bill Rice has an interesting PDF on his Better Closer blog that talks about a pull system for leads: "Pull your way to success."

In a pull lead management system, leads are served up one at a time - when a salesperson closes out one lead they need to click to get the next one. In contrast a traditional push system will push out a certain number of fresh leads to a sales rep. per day.

As I've discussed with Bill recently, a pull system also enables a company to test different contact strategies by deciding which leads to serve up to reps (based on lead source, age, time of day, frequency it has been worked previously). In a push system where the leads are "owned" by reps, each rep. has their own contact strategy. I'd argue that global optimization of contact strategy is more effective than leaving it to individual reps.

Bill writes "A push methodology will create an environment where sales people expect leads to be "given to them." This type of environment builds a sales attitude with less respect for the prospect and the importance of follow through on that prospects inquiry. In contrast, a pull methodology creates an expectation that every lead is "earned" by meeting the last customer's needs or at least
responding quickly to their request. If you are building a high velocity sales team, a significant edge goes to the pull methodology."

Definitely food for thought - a pull system is almost a no brainer for a greenfield operation, but it is a massive change to implement in an incumbent large sales organization.