Paul Holmes 10 May 2001 // 11:00PM GMT
July 10, 2000. More than four years after enactment of the landmark Telecommunications Act of 1996, the eyes of the industry were on Texas. One of the most sweeping changes promised by the Act was the entry of the Bell operating companies into the interstate long-distance market that had been off limits to them since 1984. On this historic day, SBC Communications’ Southwestern Bell subsidiary stood poised to deliver on this promise, having won FCC approval to provide long-distance service in Texas. As the company prepared to invade AT&T’s turf, SBC’s leadership believed a fast start was crucial -- to inspire investor confidence in one of its key strategic growth initiatives, to quickly generate sales momentum for the new offering, and to set a high benchmark for 11other SBC states that hoped to enter the long-distance market as quickly as possible. They set an ambitious goal: Win a million new customers by the end of 2000. Achieving that goal would take more than a traditional marketing and advertising campaign. SBC needed to deploy a secret weapon. It needed to unleash the marketing clout of its 46,000 Texas employees. Through an effective internal communications campaign focused on employee performance, the company not only converted its Texas work force into SBC long-distance customers, but also into a powerful sales force that helped SBC hit its million-customer mark, not in six months, but in an amazing 14 weeks.
A random sample telephone survey of 800 customers in major Texas markets conducted in early 2000 underscored consumers were clearly fed up with traditional sales tactics: Three out of five Texans said they find long-distance advertising confusing, and more than 80 percent said they are “extremely frustrated” by the sales and marketing practices of long-distance companies. The research demonstrated that Texas consumers were open to new marketing methods, which led Southwestern Bell to enlist its employees as frontline marketing troops – to leverage their daily contact with customers and strengthen the credibility of its new long-distance product.
Internal research about how to encourage employees to refer the service to their family and friends unearthed a gem: Southwestern Bell’s Employee Referral Services (ERS), a program under which employees could earn “points” for referring sales. While ERS had been in existence for many years, it was essentially a well-kept secret, with only
20 percent of employees participating. Fleishman-Hillard and SBC marketing then conducted additional research via employee focus groups and management interviews to learn how to incent and reward employees for participation and how to encourage new employees to take part in the ERS program. The research influenced the number of “points” employees could earn for long-distance referrals and created an additional reward tier of prizes. Importantly, the ERS program ultimately provided the infrastructure to support the entire employee campaign.
- Persuade employees to sign up for Southwestern Bell Long Distance service.
- Use employees to generate significant customer referrals through participation in the ERS program.
- Generate significant numbers of new customers in a short period of time to produce revenue and market share.
- Develop an internal communications platform to leverage the existing ERS infrastructure to stimulate employee participation.
- Use a memorable, unifying theme to signal the behavior sought from employees.
- Create a clear, actionable metric to signify the goal … and importance of … the long-distance initiative.
- Create pre-approval awareness among SBC leaders and employees of the importance of a fast start.
- Use recognition and reward strategies to stimulate employee participation.
- Engage leadership at every level to communicate, by word and action, the importance of participation.
A communications platform with the theme Go the Distance, and an action program called “1+3” drove the campaign. The “1+3” program encouraged employees to sign themselves up for Southwestern Bell Long Distance services (“1”) and to make a minimum of three consumer or small business referrals (“3”). Major tactics in support of the program included:
Face-to-face leadership meetings throughout the state during the months immediately preceding FCC approval helped create business unit support for the employee efforts. During those sessions, SBC unit and functional leaders learned about the launch plans and the role they needed to play in mustering employee support to achieve long-distance financial targets.
A referral task force of Southwestern Bell communicators and business unit leaders generated unit-level support and enthusiasm for the campaign. Members created and shared ideas on how to stimulate employee support.
Manager briefing packets were distributed to third-level managers and above (500 total) that included communications tools and a timeline of launch activities to assist them in their communications role.
A voice mail from the chairman announced FCC approval to all Texas employees and asked them to Go the Distance by participating in the 1+3 program. This message was reinforced by the functional leaders, who used a template memo as basis for a personal message to their managers and employees about the importance of long distance to SBC’s growth strategy.
Employee referral kits containing a Southwestern Bell Long Distance T-shirt, lapel pin, and referral contest teaser were distributed to all Texas employees on launch day. A pamphlet provided an overview of the 1+3 program, information on how to sign up for service, how to submit referrals, referral contest guidelines, product and pricing information and frequently asked questions and answers. A physical kit was used, instead of a Web-based kit, to fortify the message that this initiative merited special attention. Employees were told that their managers were to discuss the kit, thus helping ensure manager involvement in the communication process.
An interactive long-distance intranet site became the real-time information and participation source. It included relevant information about the long-distance product and a tool kit to assist managers in their face-to-face meetings with employees. On the information side, the site contained a pre-recorded sound bite from the chairman; re-creation of the employee pocket piece; referral contest materials; frequently asked questions and answers; product and pricing information; a real-time, daily update on the growing number of employee referrals; and all external information on the FCC filing in Texas. On the interactive side, the site included two links – one for employee sign up and one for customer referrals.
An incentive program administered by ERS provided rewards for employees who made customer referrals. The program provided employees the equivalent of $5 for every “closed” long-distance referral. To further stimulate referrals, ERS created an additional long-distance merchandise reward tier for employees who submitted 30 or more referrals, and major travel and brand merchandise rewards for the top sellers. To sustain employee participation, information on the incentive program was distributed to employees throughout the first 60 days of the campaign.
Inbound referral cards, which could be handed to potential customers, served as an easy alternative method for submitting employee referrals for those who wanted to help the company, but did not want to participate in the formal referral program.
Toll-free telephone numbers, online ordering tools and a faxable letter of authorization were established to make it simple for employees in any location or job to switch their long-distance carriers.
Publicity in the company’s employee publication and Go the Distance posters provided additional information about the 1+3 program, reminding employees of the referral process, informing employees about the status of long distance in other SBC territories and touting the success of employees’ long-distance efforts in Texas.
MEASUREMENT OF SUCCESS
The campaign, created by Fleishman-Hillard and SBC internal communications, was a striking success.
More than 10,000 employee referrals were submitted within the first week of the campaign, and nearly
42,000 referrals within the first month.
To date, Southwestern Bell employees throughout Texas have submitted more than 65,500 long-distance referrals and continue to submit an average of 200 referrals a day.
Annualized revenue associated with sold/closed employee referrals exceeds $6 million.
Of the nearly 36,000 employees eligible to sign up for Southwestern Bell Long Distance service, 23,290 employees (63 percent) have switched their long-distance carrier to Southwestern Bell Long Distance.
Considerable anecdotal evidence suggests that employee referrals far surpass the number submitted through the formal ERS process, though no research has been conducted to date.
With its tremendous employee support, Southwestern Bell Long Distance achieved its 1 millionth subscriber on October 18 … just 14 weeks after the launch of the new service. (That compares with rival Verizon (Bell Atlantic), which took a full seven months to achieve the same milestone in New York.)