Why Zellerbach's Customer Service Reps
Aren't Paper Tigers

From: The Human Resources Professional - Winter 1991

Thanks to collaboration between human resources professionals and sales staff, Zellerbach revamped its customer service efforts to meet customer demands and increase sales volume.

Clay Garner and Howard Stevens

In American business, every decade has its "trend." Market and customer focus was the battle cry of the 1970's. In the 1980s, quality was the popular buzzword. In the 1990s, customer service will be key.

Since the issue of service has been around as long as companies have sold products and services, why is it so important today? The reasons vary significantly from consumer to business-to-business markets. However, they boil down to three critical issues: rising sales costs, changing customer buying habits and service needs, and companies' intense desire to secure and maintain competitive advantage. Joe Piergrossi, National Director of Training and Development at Advo Systems, Inc., explains it simply: "Buyers have become a lot better at buying than sellers have become at selling."

To address these strategic issues, companies are exploring a wide variety of telephone sales roles that are often classified under the label of customer service or inside sales. These include:

• Inbound order taking. Customer service or customer relationship representatives take inbound telephone orders, assist in product/service selection, and, with limits, quote prices.
• Outbound client dedication. Similar to the above, but reps initiate calls to assigned clients on a regular basis to solicit orders and introduce new products and services. They focus on building a phone "relationship" with their "book" of customers.
• Outbound lead qualification. Reps are specially trained to assess prospects' needs and readiness to buy and to inform them of the benefits of the company's products and services. Generally, reps act in response to a prospect's request for information from a lead-generating activity.
• Outbound telemarketing. Reps are responsible for finding well-qualified new prospects for either outside or inside salespeople. They are compensated for leads generated and/or sales.
• Outside/inside sales teams. Inside salespeople team with field salespeople to improve service and increase penetration of both new and major accounts.

To implement these roles successfully, companies usually require strong teamwork between the human resources and sales departments. This teamwork can help guide a company through the potential pitfalls of planning, organizational accountability, cultural resistance, and compensation. Then, in implementation, the team can direct the critical staffing and training that guarantee success.

Zellerbach's Success Story

Zellerbach is a major distribution division of Mead Corporation, one of the world's largest manufacturers of paper, coated paperboard, and multiple packaging. Zellerbach markets fine paper, packaging, industrial supplies, and business supplies made by manufacturers throughout the world.

In April of 1988, Zellerbach launched a comprehensive customer service program that has had a major cultural and financial impact on its organization. The program requires a complete change in both attitudes and actions of 500 customer service (now "inside sales") representatives at more than 50 locations across the United States. Because of the number of people involved, the transformation has had a significant impact on thousands of other employees in related areas, like field sales, inventory control, and delivery.

The entire rollout of this effort will not be completed until mid-1991. However, the company is already reaping rewards and investment payback. Keys to the company's success include:

• Focus on new sales skills, training, and a new, significant compensation program necessary to turbo-charge an aggressive inside sales force;
• A strong customer orientation;
• Key individuals determined to champion the change process; and
• Sound planning.

Customers Drove Them to It

In 1987, several milestones led Zellerbach to rethink and restructure its customer service position. A major branch had significant shortfalls in its sales and profit results, despite the fact that marketing and operations seemed to be working smoothly. At the same time, a different division conducted a series of focus groups with its larger customers to better understand their service needs. This research indicated that larger customers wanted to call in their restocking orders 80 percent of the time. In fact, they wanted to:

1. Call a customer service rep;
2. Be informed about product availability;
3. Discuss any product availability options;
4. Agree to a cost;
5. Agree to a delivery date; and
6. Place the order immediately.

If customers could not place orders on the spot--by phone--they would simply call a different distributor.

Based on these findings, Zellerbach conducted two workshops at the problem location (one with field salespeople and one with customer service reps) to construct a scenario of the ideal customer service relationship. After developing the scenario, however, participants at both workshops discussed at length why this "ideal" could not be achieved, given the customer service reps' current situation.

During the discussions, five major barriers surfaced:

1. Customer service reps lacked the training to deal with complex product decisions.
2. They had no authority to negotiate price or commit to delivery dates.
3. Return calls were usually too late to capture orders.
4. The current system did not compensate customer service reps to motivate customer responsive sales.
5. No criteria existed to define the skills and characteristics necessary for customer service representatives to deliver the superior inside sales/service that customers demanded. This barrier was the most difficult to overcome.

Against this backdrop, Phil Morris, Vice President of Human Resources, and Elizabeth Cooper, Project Director, realized that a change to more customer-driven service would require a major cultural shift within Zellerbach. Together, they crafted a transformation plan and an internal sales strategy that focused on winning approval (of concept and cost) from top management.

The Critical Changes

One of Zellerbach's first steps was to define a success profile of potential top-performing inside salespeople through a process involving task analysis and a position validation.

The validation study revealed that top inside sales performers had seven key characteristics:

1. Results orientation;
2. A strong, untiring work ethic;
3. Respect for tradition and resistance to change;
4. A demand for "hands on" personal control;
5. Caution and average risk-taking;
6. The desire to be team players versus political ambition; and
7. Objectivity and analytical problem-solving ability.

Armed with this data, Morris and Cooper developed Zellerbach's first formal inside sales selection system. Previously, individual manager intuition was the basis for selection. According to Cooper, "Just about anyone could qualify for the position --from an experienced pro to a clerk who only had to answer the phone."

In Zellerbach's new system, recruiting takes place through planned networking and referrals, as well as classified advertising that features benefits most likely to attract top performers. Key selection elements include interviews structured to the success profile and an assessment test that profiles levels of strength in each of the seven characteristics (based on the validation study) and produces a highly accurate numerical forecast of a candidate's probability of success.

Zellerbach also hired a professional educator to develop a proprietary and highly specialized training program for both current and new employees. This program involves a series of self-paced, self-taught product training modules as well as classroom training in computer use and sales. The training teaches basic sales skills, but the real benefit, according to Morris, is attitude change: "This is really the first time that our inside people have been treated like salespeople. You can almost see the attitude change this creates as they start talking in terms of satisfying customer needs."

As a result of the selection and training approach, newcomers to the organization with little experience have become fully functional and top producers in less than one year.

To Part 2