American Paging Inc. is restructuring three of its key operating areas – sales and marketing, administration and customer service – to achieve an improved customer mix, reduced administrative costs and improved customer service.
“Our plan is simple – to add and retain high-quality customers and increase cash flow growth we need to provide better service with a lower cost structure,” explained John Schaaf, president and chief executive officer of American Paging. “This strategy will build the strong platform needed for continued growth in our current paging systems and in the future roll-out of two-way paging,” Schaaf added.
The Minneapolis-based company is increasing the number of salespeople calling on corporate accounts to increase direct paging sales in its overall customer mix. The approach yields greater cash flow per unit – three times that of sales through re-sellers, the company noted. In the first six months of the year, the company reported adding 39 percent of its new customers through direct sales and 61 percent via re-seller and retail channels.
Organizational changes include realigning the sales force to report directly to Tom Poulos, vice president sales and marketing, the company said.
This realignment, scheduled to occur in the third quarter, is “intended to clarify responsibilities, streamline communications and improve sales force productivity.”
The company said it plans to taper its administrative cost by consolidating into two regional offices, combining customer service, administrative, billing and collections functions. Administrative offices currently are coupled with 17 of American Paging’s 37 sales offices.
American Paging said it will provide customer service 24 hours a day, seven days a week. Currently the company operates 10 hours daily, five days a week.
Costs of the restructuring – which is expected to continue through the second half of 1996 – include personnel severance and retraining, upgrading customer service information systems and lease buyouts associated with existing operations centers. These configuration changes may reduce earnings before interest, taxes, depreciation and amortization from between $5 million and $6 million over the next year, and pre-tax earnings may end higher due to acceleration of depreciation charges on certain equipment and facilities, said American Paging.
American Paging is an 82.4 percent owned subsidiary of Telephone and Data Systems Inc., headquartered in Chicago.
