07-22-1991 Council Packet - Laserfiche WebLink

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Operations Cash-raising Case Study When system revenue must be increased, what can a manager do? *niE Manager of a Sl.OOO-aub- I acriber ■yticm. Corporate haa just giscfi yo« ci|hl mootha lo increase rev- CMK$119,000 » or risV. being fired. Thai chaOtngc ara'* one of the case Miiea prea eiHtd la participants during Wmmm In CiMt’a NatiMal N' »-nient CanfcrcMe on June 2/'in Denvv. Teanwof a banl oli,il people from vari- nna dadplnio in die cable biduoiry used their eoMhlMd tvlodom to develop the ■ccmingly obvi- MM aolutions for beefing up rev enue fast — adding a pay chawrl. adding j shopping channel, adding pay-per- •Xat the solu- as ex- gUHd If Iwy btanhal, vke president af the oMolaro dMrion af TeteConanuni- bosk than I The IhBited U rm franw af eight 5-' r ''Thf avtrage systam is going to boar from 1 to 2 porcant of its customars a month; what a great oppor tunity to ask for the o^ar.'* Barry Marshall via pmident wfstern division Tele-Commnmratiotis Inc. acquisition campaigns. ■ Sales strategy for new customers with a multi-pay component. (Fur exam ple, basic plus two pays plus two re motes.) ■ Aggressive sales and retention ef forts fur the new homes passed. ■ Targeted discounting of prices, of fering discounts in only the low<hurn ar eas. Regarding the bonuses for CSRa and s al espeople. Marshall suggested going a step further srith a policy similar to one that in uaes to give all employees an in centive fnr arHitv. For example, installers get $5 far each pay networli lltey sell wtiiie in the home, and CSRs and oilier employ- ccs get $2 per pay sale. MarslMil said. *They (employees) suddenly have this incentive to gn answer the phone or go run lo the counter to help a customer be cause they just might sell something. ThM's a different ndod-set as opposed to a person who sita in the back and says. Tm an aoroutium. I don't do that.' Ail of a sudden, they aren ’t so busy anymore, snd lunch hours are easier to cover.* MaraiuR also emphas.zed that asking for m upgra de or a a^ at every opportit- nity la a aound buameaa tactic th« moat *Ihr av erag e syalem is going to hear mouth; srhat a great opportunity to ask far the order,* MarshaM said *8ervice technicians and even diapalchers should aaklarlhrorder, h'sKkethedoor^iMloor aulas guy who knows he is gomg to get turned dowu W times; he's happy to keep h* knows tie is gamg to not going to buy X and Y.* The experts suggested that once a system has its 'blocking and tackling* in order, it then can focus on the strategic and long-term issues of the pay business. For example, will systems change the way they approach the pay business or simply “milk* it while it defines? Marshall said. The answer is clearly no. because the operative word there is 'declining. If you milk it now. you're not going lo have it.* Tlie experts also had ideas that they believed would double the revenue of the one pay-per-view channel carried by the case study's system: ■ Rearrange the channel lineup to add another pay-per-view channel and a bark er channel. ■ Start a training program to make ev eryone a pay-per-view sal es perso n, e^ie- daily CSI^ ■ Schedule more aggressive cross channel pron-otkm of pay-per-view. Advertising dso was seen to have the potential for growth at this system, with only 2.5 percent of avails being sold and revenue of $10 per lubacriber per year. “llie general manager nc^a lo look at the operation to see what is holding revenue down,* the experts said *lt would not be unrealistic to expect rev enue of $12 oer sub per year.* Other idna: • increase rates charged to commer- cial i»- ■ Sell some ad avails to 900-number commercial bus inesses. ■ Start a daaaiRed ad channel Jack FMtIe. opera tiona vice preaident with Rifkin A Aaas rinteu, faum sd an iw- creaaed cmpliaaia on advertising. He nos ed thm npermon can eape ct about a SO said operalora can eapect a low proAt margin about $1 ahopi second shopping channel r of a a king in some projecta arc better than olbera.* IViUlc said. *1 the real wnrid. proiecta om there that *Cvea though the customers call m costa In a and oak for .X, that dnesn l im-an diey're pnuntixe your bwkf /tmn* 24. 1991