Qualitative Marketing Research for Tampa Bay and Clearwater

Marketing survey research reveals million-dollar gap in the marketplace

When Robert Cefail started marketing telecom systems to correctional facilities (pay phones for inmate use), the conventional wisdom among salespeople in the industry was that wardens bought the phone system that offered the largest commission.  Though the industry segment wasn’t well known at the time, it was big business: over a billion dollars a year, with a portion of the revenue from calls usually going into an inmate welfare fund.

Determined to understand the needs of his customers, Cefail departed from conventional wisdom.  He commissioned On Target Research to do a thorough survey of U.S. wardens and sheriffs to confirm their views on inmate telecom systems.

“Prior to the survey, our focus was the same as our competitors: how much could we pay each facility in commissions to get the contract,” says Cefail.  “It was a vortex of upping commission rates to get business.  To beat competitors, we would have kept raising commissions and decreasing our own profitability.  This was the prevalent wisdom in the industry.”

“On Target surveys revealed something unexpected.”

However, the On Target surveys revealed something unexpected.  Commission size wasn’t the number-one reason wardens chose a certain telephone system.  Or the second, third, or fourth most important factor in the buying decision.  Commissions ranked eighth – way down toward the bottom of the list.

The surveys found that the sheriffs and wardens who ran jails and prisons had their attention fixed on one thing: tension.  It came up again and again.  They didn’t want tension in their prisons because it led to fights, riots, bad publicity, and the potential loss of job, position, or pension.

“We had been competing in the marketplace and giving away our profits on a non-issue – but didn’t know it until we surveyed,” says Cefail.  “Our customer base of sheriffs and wardens hardly cared about inmate pay phone commission rates.  What they did care about was reducing tension in their facilities.  This meant making sure the phones were indestructible and stayed in service, so inmates could talk with their families and didn’t take out their anger on guards or other inmates.”

Consequently, Cefail’s company positioned its phone system as indestructible, something that would reduce tension in correctional facilities – which was true, because inmates who could call home, or wherever, were less tense and troublesome than those who couldn’t.

On Target Research also surveyed wardens and sheriffs on what image came to mind when they thought of something indestructible.  The answer, “tank,” gave rise to “The Tank Phone” brand.  Cefail honed his company’s position as one of preventive rather than reactive maintenance.  His company continually monitored the phones and initiated repairs before problems could escalate.  He also incorporated built-in security features such as number blocking and duration control.

The result: Cefail’s company grew from zero to $30 million a year in just three years to become the number one independent provider of inmate telecom systems in the country.  Why?  Because it surveyed its public before engaging in a marketing campaign based on what “everybody knew.”

“Due to surveying, we saved at least $10 million in commission payments”

“Due to surveying, we saved at least $10 million in commission payments over five years on total revenue of about $120 million,” says Cefail.  “With a true understanding of our customer’s needs, we were able to zero in on their ‘hot buttons’ and re-sign their contracts years in advance.  Our competitors had no idea how we did it.”

“Since we no longer competed on commission, we paid about half the commissions our competitors were paying,” continues Cefail.  “This provided 10 percent greater margins than we otherwise would’ve realized, and enabled us to sell the company for an extra $6 million when we decided to sell it.  Our main advantage was simply understanding our customers better than the competition and marketing to their true needs.  Our secret was accurate surveying.”