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International Toll-Free Numbers Boost US Firms' Foreign Business.

US companies simply have to export more aggressively if this country's yawning trade deficit is to be closed and if they're serious about maintaining or recapturing leadership in world markets. That's the general opinion of m any, including Yonna Cherkosky. She's vice president of the New Yoek City offices of Service 800, a Swiss-based international telecommunications firm that offers a unique international tol6-free service.

"To get into exporting in a big way," says Cherkosky, "the learning curve for American business is steep. While most American business people are all in favor of expanding international trade, promoting free markets and taking valiant stands against protectionism, barely a handful of them are actually explliting foreign markets themselves. Eighty percent of all US exports are accounted for by just one percent of American companies. Fortunately, the greatest obstacles to progress are psychological rather than structural."

She points out that "in some industries, competition has heated up to the point where US companies find they can no longer compete with foreign imports unless they cut costs by out-sourcing or moving production overseas to cheal labor markets. But while moving factories and production out of the US may help individual companies under certain conditions, the outflow of capital cuts the nation's tax base and causes, at best, short-term local unemployment. Perhaps what needs to be done before many more corporations take the radical step of shifting to offshore production, is to consider the proposition of expanding revenues by increasing sales to foreign markets, instead of moving operations abroad to defend an eroding share of the American market." Remington Shaves Losses

As a case in point, she cites Remington Products of Bridgeport, Connecticut. "This electric-shaver maker, best known for its charismatic chairman, Victor Kiam (the man who liked the shaver so much, he bought the company), shut its foreign plants in 1979, concentrating production in the high-labor-cost US. By instituting rigorous quality controls, profit sharing and an agenda for aggressive exporting, the company doubled its US market share, tripled its total sales and now exports one-third of its annual sales of Remington shavers to 32 countries. This dramatic recovery was accomplished in less than five years and during a severe recession."

Many companies, of course, already know a market exists for them somewhere in Europe or Asia, but the capital to establish offices and hire staff to get going just isn't available. Obviously, it would be helpful to be able to do business in forign cities without having to have a physicasl presence there. Enter an international version of the domestic 800 toll-free phone number.

According to Yonna Cherkosky, "In a high-tech age of teleconferencing and instantaneous communications over enormous distances, toll-free telephone numbers that cross national borders seem like a relatively primitive development. Yet only three countries in the world currently have even nationwide domestic toll-free systems--Australia, Denmark and the United States." Working for Compatibility

She explains that "the establishment of an international toll-free telephone network has been blocked until recently by the incompatibility of the numerous national telephone networks. In Europe, for example, the PTTs are national agencies, each one using equipment of varying sophistication and capability. A Pan-European toll-free system that would work like the one we have in the US--where callers could reach a specific party toll-free by dialing the same telephone number from anywhere on the continent--would require all of the PTTs to be able to interconnect each other and reverse charges without operator assistance.

"In many European countries, placing an international collect or credit-card call requires giving the operator the number you want to reach and the number where you can be rung back when the connection is made. For people on the go or who need to receive or convey information immediately, having to wait for the operator to call back isn't very practical."

Service 800 numbers are local telephone numbers in foreign cities. When prospects or clients dial the local number, the calls are automatically redirected by Service 800 ito the subscriber's office in a neighboring country or on the other side of the world. The caller pays only for the local call, the subscriber is billed for the international part of the call at direct-dial rates.

Service 800 solved the network incompatibility challenge by installing a network of call diverters on the premises of telephone exchangers around the world. Together, these call diverters constitute a point-to-point toll-free system. Although a call using a Service 800 number ends up as an international connection, it begins as a local call. The call diverter accepts the local number and then direct dials the appropriate international number. The charges are reversed without operator assistance, which is important when you're calling from a pay phone, looking to avoid those hotel surcharges on international calls, or simply in a hurry. Also, the diverters are strategically located within the local exchanges, with the help of the telephone authorities, to minimize the likelihood of busy circuits.

Today, Service 800 provides more than 150 companies with local telephone numbers in Europe, Asia, the Middle East and the US that will ring into any country in the world where direct dialing between the calling and receiving country is possible. The cost for each number, in addition to the monthly tolls, is $340 per month.

London-based HRI Hotels has 17 Service 800 numbers ringing into the company's London confirmation reservation center toll free. Each number represents a European city where residents can call HRI in London directl y by dialing a local telephone number. HRI advertises its Service 800 numbers, just like companies in the US display their 800 numbers, to encourage people to call toll free. Here, the "800" prefix tells people the call is toll free. Abroad, a distintive Service 800 logo--the number "800" encased in a small red telephone--signifies toll free to the calling parties.

the hotel and travel-related industry is the second-largest user of international toll-free telephone numbers, according to Cherkosky. Twenty-four international hotel chains, including Hilton, Holiday Inn, Hyatt, Marriott, Ramada and Sheraton, plus four international travel agencies and 16 airlines use Service 800. Service-oriented industries that depend on clients and prospects being able to contact them quickly and inexpensively are naturally attracted to toll-free telephone numbers, notes Cherkosky. Not only do these numbers serve as a local presence, they can also serve as after-hours hot lines when local offices are closed.

She says the largest user of international toll-free numbers is the brokerage and investment banking industry. Seven of the world's 10 largest brokerage firms use these numbers. Throughout Asia and Europe, special clients of firms like Goldman Sachs, Kidder Peabody, Morgan Stanley and Salomon Brothers can get in touch with their brokers, who usually are stationed in Hong Kong or London, by dialing a local telephone number.

According to Cherkosky, "The special advantages afforded to clients are they can be dialed not just from the office but from a restaurant or home, important because of the time differences between the major markets. The servie provides instantaneous and very user-friendly communication; everyone knows how to use a telephone. For brokers, the obvious advantage to using international toll-free numbers is their clients are inclined to call more often and generate more commissions when the call is toll free and convenient to place." Boon to Brokers

Firms of all sizes appear to be using the numbers, including smaller regional brokerage firms. Take the example of two Minneapolis brokers, Piper Jaffray Hopwood and Dain Bosworth, who once had no foreign business at all, but now have five international toll-free numbers ringing into their offices from major European financial centers.

The brokers substantially expanded their sales base, without opening a single new office, by equipping their international traders with the toll-free sales tool. Brace Bennitt, vice president and director of communications at Piper, reports that the firm's international traders now receive about 250 calls per week on their international toll-free numbers--250 more sales calls from abroad than they were receiving before the numbers were installed.

"Our Service 800 numbers in Europe are powerful marketing tools for us," says Bennitt. "Without a single foreign office, our international toll-free numbers enable us to compete against the largest brokers in the world who have offices in every major international city. If clients had to pay to make the international call to us, they simply wouldn't do it. Now they can call as though our office were right down the block from them."

Cherkosky points out that another large user of international toll-free numbers is Digital Equipment Corporation. Three years ago, DEC decided to centralize its European field operations using international toll-free numbers. It now has 18 toll-free numbers ringing into the company's Remote Telediagnosis Center in Valbonne, France from all over Europe, forming what Cherkosky calls "the only extensive international toll-free computer service hot line in the world."

DEC engineers speaking the caller's language answer the telephones. After bringing up on their screen a comprehensive service and configuration record of the customer's DEC equipment, diagnostic procedures, including computer-to-computer diagnosis using modems, are initiated. Saves Dispatch Time

DEC reports that more than 60 percent of equipment-related calls into Valbonne are resolved without dispatching field technicians. When it's necessary to send technician to the customer site, the service person arrives having been briefed on the nature of the problem by the Valbonne engineer.

Of course the toll-free lines can transmit data as well as voice. DEC encourages its European customers to obtain a discount on their maintenance contracts by allowing DEC's diagnostic computers in valbonne to perform regularly scheduled maintenance via telephone after hours. Customers agreeing to provide after-hours access to their systems chop 10 percent off of their maintenance contracts.

Other current users of the internatoinal toll-free numbers include major credit-card and travelers-check companies, airlines, banks, insurance companies and exporters. Revolution In the Making

As far as Service 800's Yonna Cherkosky is concerned, "It all adds up to the beginnings of the revolution in international sales and marketing that occurred in the US 20 years ago with the introduction of the domestic toll-free system. The arrival of the often-talked-about global product or worldwide brand is hastened by the spread of an international toll-free system that in many ways makes selling in Hong Kong or Zurich from the US not much more difficult than selling in Wisconsin from a South Carolina office."

Cherkosky emphasizes that European firms have already made extensive use of international toll-free numbers because "their mindset is more oriented toward international commerce than that of American companies. Slowly though, the possibility of selling abroad using international toll-free numbes instead of costly foreign offices and staff is sinking in here. This is one very positive development in the movement to encourage American business to look abroad of for expanding markets instead of assuming defensive postures hre to protect shrinking market shares."
COPYRIGHT 1984 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Publication:Communications News
Date:Aug 1, 1984
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