The Atlantic Richfield organization (ARCO) consists of a number of semi-autonomous operating companies, with a corporate overseeing unit. The operating companies are variously engaged in oil and gas development, petroleum products and services, coal, copper, chemicals, transportation, international oil and gas development, and new ventures. The major companies are scattered around the USA, with major operating arms having headquarters in Los Angeles, Dallas, Philadelphia and Denver. The management philosophy historically was, and continues to be, one of decentralization and local autonomy.

While many other companies were still considering whether to introduce teleconferencing, debating whether it was an effective tool or a technological fad, ARCO took the lead. As early as 1979, ARCO had began to consider this option.

Two years in after its introduction by ARCO's electronics and telecommunication (E&T) department, ARCO operates a seven-site full-motion video-conferencing system linking facilities in Alaska and the continental US, which has received praise from many satisfied users. Over 90 per cent of the users evaluated ARCO vision (the name given to the company's video conference) as successful and a useful tool for enhancing business communications.

The video conferencing success story is underpinned by successful internal marketing. The journey began with internal market research to investigate the appropriateness of the product for the company.

The challenge

Like any pioneers, ARCO faced a major challenge when it first thought of overhauling ARCOnet (Atlantic Richfield's voice/data network) into a video-conferencing service. Although they were spurred by an enthusiastic CEO who felt video conferencing could supersede the Boeing 747 as a vehicle for long-distance communications, the electronics and telecommunications (E&T) department faced uncertainty on a number of fronts.

   In 1979, no vendor could provide a satellite-based system that served both the continental US and Alaska, which was a basic requirement for the ARCO system.

   Teleconferencing had a decidedly mixed record of accomplishment. Success stories for video conferencing were so few that its very viability was in question. Systems installed on an experimental basis often went begging for use.

   The telecommunication planners did not know whether they faced a receptive or a resistant audience for this new technology. They had no clear notion of who the prospective users were and how they might use video teleconferencing. Essentially, they did not have a good handle on the Atlantic Richfield marketplace.

At the time, ARCO constituted nine semi-autonomous operating companies with major operating company headquarters in Los Angeles, Dallas, Philadelphia and Denver, and with larger operational arms located in Anchorage, Prudhoe Bay (Alaska's North Slope), Houston (Channelview), Louisville, Independence (Kansas) and Waterbury (Connecticut). Even though the operating companies shared the parental umbrella of ARCO Richfield, there were many differences among them, especially in terms of their receptivity to new ideas. A communication service initiated by corporate planners had the potential to be seen either as a good idea or as an unwanted infringement on the operating company autonomy.

Determined to succeed in E&T, planners turned to the Telecommunications Research Group (TRG) – part of the Annenberg School of Communications, University of Southern California – for advice. TRG, who were familiar with the technology and the difficulties of introducing new ideas in corporate settings, set about helping the ARCO team ask and answer the questions necessary to successfully design and implement an innovative communication service. TRG's advice was that the design team consider the Atlantic Richfield organization as a marketplace, and video conferencing as a new product that the team wished to introduce.

TRG proposed a two-pronged research programme:

   gather detailed information about the Atlantic Richfield marketplace;

   initiate interest via ‘marketing’ of video conferencing.

The logic behind this was that prospective users were largely unaware of the technology and of Atlantic Richfield's plans to implement it. Thus, there was a need to inform or create ‘positive’ awareness in the market-place, and the design teams needed information about the operating companies, the potential users and uses, and the system requirements.

Internal market research

With the two aims in mind, TRG began internal market research at ARCO by conducting 135 interviews with management to introduce the concept of video conferencing and get an early gauge on potential users’ reactions and requirements.

The internal market investigation provided many valuable insights. It highlighted:

   Receptivity to the concept. ARCO's management appeared receptive to the idea of ‘electronic meetings’. They saw many potential possibilities, yet were cautious about embracing the idea without better knowledge of how it would influence the way they worked.

The internal market research also highlighted that although ARCO had thus far justified video conferencing using a travel displacement rationale, most people stressed positive rather than negative aspects of travel. While employees did not appear to be averse to eliminating some of their travel (long trips for short meetings, trips to locations with particularly difficult access – Alaska in the winter, for example), in general, travel substitution seemed an ‘unwise’ marketing theme.

Overall, it seemed ARCO personnel were much more intrigued with video conferencing's potential to improve or enhance communications with remote locations. What excited them about video conferencing was the potential to do things that currently were impossible or impractical to accomplish. Conversely, only those at the highest organizational levels seemed to get excited about a reduced travel budget.

   User needs. The internal market research also picked up on user requirements for the system. They wanted a system that approximated as closely as possible to face-to-face communications. It also had to be reliable, very easy to use, unobtrusive and flexible. This meant designing a system that would be 'simple and transparent’. Busy executives wanted to be able to walk into the room and meet. Users also wanted a room that felt like a typical ARCO conference room, not a television studio. Security was another precondition for success, because much of the work within ARCO (such as oil-lease bidding) involved highly sensitive materials.

The internal market research helped:

   Planners set design parameters, i.e. easy to use, reliable, flexible, secure, comfortable, like other Atlantic Richfield conference rooms, etc. These preferences ran counter to many earlier video conference designs, which provided users with total control over cameras and other system components but were not particularly easy to use.

   Alert the team to change the marketing theme. The initial marketing stressed ARCO's plans to introduce video conferencing as travel and cost savings. This led to user concerns about costs: Was this a wise investment? How much would it cost to use the system once it was installed?

It became clear that planners had to take great care to emphasize the positive and eliminate the negative. Creating positive pre-dispositions toward video conferencing during the design phase was an important first step toward building a ready market for the service. The ensuing publicity and talks with potential users downplayed system costs and emphasized using video conferencing to replace undesirable or nuisance travel.

While system planners directed their attention to the technical matters such as how to provide full-motion, colour and life-size images, TRG set about building a more detailed profile of potential users and their needs. This was done through a random-sample survey of 980 management employees from the different ARCO operating companies. The survey sample design was designed to be representative for all ARCO operations, i.e. location, job types and management levels.

Good internal market research can, by itself, spark interest and involvement in eventual consumers. The in-depth research survey of employees did just that. The 12-page questionnaire got an overwhelming response (87 per cent), with some employees even calling in to ask why they had not received the questionnaires. Many responding employees elaborated in detail how they would use it, what kinds of graphic support they would need and what other locations should be considered, while others provided insights and suggestions about internal marketing, training and how to support usage over the long term.

The survey results revealed not just support and interest in the concept of video teleconferencing, but also differences in perception between different levels and job types over the how and whys.

For example, engineers indicated the highest use of the system because of their heavy travel schedules. Employee relations personnel wanted more face-to-face contact with those in remote locations. They wanted an easy-to-use system that could capture high levels of detail (facial expressions, for example).

Motivational triggers also varied for the different management levels:

   lower-level managers were motivated by the desire for better communications with remote locations;

   higher-level executives were motivated by having an easy-to-use alternative to travel.

Job type and level profiles developed from the survey results permitted ARCO room co-ordinators to tailor their introductory demonstrations to the needs and interests of the different user groups.

The survey also highlighted network modifications. Based on current travel and communication patterns, and employee projections of use, it became evident that system planners needed to add Channelview (Houston) and drop the New York City node, where there was little support for the concept.

A further survey of 300 was conducted over the telephone to get a better picture of the kinds of meetings that potential users were willing to video conference. The emerging profile indicated that meetings averaged about eight participants, with over three-quarters of all meetings involving 12 people or less. Company meetings were typically supported with a variety of visual aids, including viewgraphs, slides, chalkboard, geophysical maps, written documents and computer printouts. The meeting profile directly influenced design of the room and facilities, including how many seats to place in the room and the range of graphic aids. These needs were used to build conference room facilities.

Internal market research on the potential consumers (ARCO management and professional personnel) and the product (ARCOvision) was the first step of the programme. It contributed significantly to the auspicious start. Internal market research was used by the design team to help it create the ‘right’ tool for the ARCO ‘marketplace’. Internal market research collected invaluable information about potential users and their work, the corporate culture and the technology. Clearly, knowing the ‘market’ pays off, more than 40 per cent of the firm's managerial and professional employees tried ARCOvision in its first year, with only a few indicating that they would not be using it again. Since the system was launched, in Autumn 1983, usage climbed steadily. It was evident that the planners had understood the internal users and designed a ‘product’ that proved highly useful right from the very beginning.

Supporting components of ARCO's internal marketing

The company utilized a range of activities to reinforce its internal marketing.

Media interest

The 'selling of ARCOvision’ began with a mass media send-off. Members of the press were invited to tours in each conferencing site and intercity press conferences were held, such as Los Angeles reporters interviewing Philadelphia officials via ARCOvision. This led to a great deal of both national and local coverage. Articles were also written in ARCO's internal newspaper, announcing the launch of the system and providing details on how to arrange demonstrations.

Video communications

Two videotapes were produced to help market the network internally and support its usage. The first tape described ARCO's communication history and entrance into the world of video communications, and gave a brief overview of the system. This partly humorous tape was used as part of lunchtime (‘brown-bag’) seminars to ARCO employees. The second was a 5-minute tape explaining how to use ARCOvision. The ‘how-to’ tape, available in the ARCOvision waiting rooms, was usually played before each meeting in the early months of the system's operations.

Poster campaigns for constant communication

Poster campaigns emphasizing the advantages of video conferencing over travel, the easy-to-use nature of the system, and video conferencing's value as a decision-making tool were also developed and distributed periodically to all ARCOvision locations. Users were also given ARCOvision pins to mark their first video conference. This proved to be a very popular practice and it was to continue for many years.

Promotional efforts

Internal marketing was continuous throughout the first year of operations and involved a range of promotional activities. These included:

   a contest at holiday time with a video conference for family and friends as the prize;

   a slogan contest for ARCOvision coffee mugs.

To keep reminding users of the facility and get them to use it, mugs with the winning slogan, such as ‘Keep Productivity in Focus’, on the front and ‘I use ARCOvision’ on the back were awarded for five uses of the service.

To keep the momentum going and also troubleshoot any problems, a conference co-ordinator staffed each ARCOvision room. The co-ordinator was made responsible for conference scheduling, solving routine problems, and developing and maintaining internal marketing momentum. These individuals were carefully selected for their ability to interact successfully with other personnel. They were instrumental in making users comfortable with video conferencing and encouraging repeat usage. They served as system advocates in each of their respective locations, seeking out new users and following up with reminders to ‘old’ customers of the service. The co-ordinators’ demonstration sessions were an extremely useful opportunity for marketing the tool. They demystified the system and encouraged usage through 'success stories’ passed on to them. Many users credited the co-ordinators with getting video conferencing off to a good start. Early feedback forms were overflowing with comments about the helpfulness and importance of the conference co-ordinator.

Outcomes

The system's real market test was during the first few months of operations. It was important to make a positive impression on the system's initial users, because both good and bad news travel fast. ARCOvision, because of good internal marketing, did make a good impression on its first customers, who were pleased with what they experienced and were able to provide valuable feedback on how to make the new service even better.

Indeed, when problems were detected system implementers were quick to act on sources of dissatisfaction. Chairs were changed, graphics capabilities improved, graphics guidelines provided and screens altered to improve image quality along the edge of the picture. Users saw their suggestions reap results. Approval ratings climbed along with usage.

Usage did not happen automatically. Internal marketing training and follow-up support were important factors in getting employees to internalize the availability and utility of a new communications option.

ARCO's CEO was right. Video teleconferencing could compete effectively with the Boeing 747. However, making it successfully happen was more about good internal marketing than it was about technology.

Source: Svenning, L. and Ruchinskas, J. (1986). Internal ‘market research’ program is yielding successful videoconferencing foe ARCOvision. Communications News, 23 (2), February, 48–52.