Jay Abraham's Case Study #344
From: David Cruz
To: Jay Abraham
Sent: Tuesday, August 13, 2002 4:21 PM
Hi Jay,
I've been a big fan of yours for quite some time ever since I got wind of your material from the web, and later through your book "Getting Everything You Can".
I own along with some partners a small telecommunications company based in Manila, Philippines. Your material contained so much ideas that we had to force rank and select the technique which was most applicable considering the unique way the industry is structured here in the Philippines.
For us, this was the diving board versus multiple pillar method of growing the business. Because of the power of this idea, we managed to grow our monthly gross sales 226% in a span of 8 months since applying this idea. Here's the case study:
1. Prior to applying this method, our company One Touch Communications (engaged in the business of international long distance voice communications) had one primary way of bringing in business and this was through direct sales done by our 4 account managers assigned to corporate selling. On November 2001, our management committee agreed to follow essentially the multiple pillar method of growing our business. First, we brainstormed and identified what these possible pillars would be.
Among the several options we generated, we decided to stick with setting-up 2 additional "pillars", and this was to:
- generate additional sales from third party channels and resellers as an outsourced sales force who had an existing client base which we can cross sell our international long distance voice too, and
- form alliances with companies with complementary products such as PABX vendors, Phone Handset Vendors, Wire Cabling vendors, and electrical contractors.
2. For the additional channels "pillar", we first hired a channels and resellers manager as the single point of contact to develop our non-direct sales "channels" business. We asked him to recruit, train, and negotiate reseller agreements with other companies who have an existing customer base within a different market niche than that of our direct sales business.
Our channels were then compensated against commissions on results, and did not require any salary nor overhead. We then agreed on a sales letter with them where they endorsed our products for its merits to their existing customer base. The response to the sales letter and subsequently, the existing customers of our reseller who were cross-sold were overwhelming. We then repeated the process and fine-tuned the letter through further testing until we almost have it down pat. We have managed to grow this pillar to almost 40% of all our sales.
3. To improve our repeat purchase cycle, we likewise struck deals with other complementary product vendors such as PABX, server, software, and phone systems. We then sold these complementary products with a margin agreed with the product vendor. This immediately boosted our profits with our own existing customers since some customers bought several pieces of equipment easily from us since they trusted us versus the other product vendors who were strangers to them.
By doing so we had maximized the sales per account and profit per account. We are now continuing to explore further complementary products with higher per unit margins to boost our profitability even further. The end result by June 2002, is a 226% improvement in our monthly sales versus November 2001, and it appears that the only way to go is higher up!
4. What we learned is that we don't have to reinvent the wheel by developing new products or developing new customers when there are easier ways to do this through partnerships, alliances and building other "pillars", which can strengthen the business' foundation for a long time. Also, we now know that one idea can be multiplied many times over to generate returns in multiples instead of a straight linear growth.
Thank you Jay, and am looking forward to others' testimonies on how they used their techniques to build their respective businesses.
Regards,
ONE TOUCH COMMUNICTIONS, INC
David Cruz
General Manager