Taking the multichannel-service route delivers savings of roughly 40 percent.
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When done right e-commerce can remove the strain of packed retail shops from the shopping experience, especially during the already stressful holiday season. But for online retailers like Overstock.com, alleviating stress for consumers means taking on much of the burden itself. For the company, which secures about 40 percent of its business over one 45-day stretch (typically spanning November 1 to mid-December), seasonality translates into thriving sales packaged with sharp uptake in customer queries.
To handle the call and Web inquiry surge, the company turned to a temporary agency, expanding its in-house CSRs between 50 percent and 100 percent depending on the year, according to Tad Martin, senior vice president of merchandising and operations at Overstock. In fact, the company, which experienced a five-year CAGR from 2000 to 2004 of 102 percent, roughly doubled its in-house CSRs in 200. Martin estimates that in 2004 the number of agents deployed by Overstock during the nonpeak portion of the year hovered at about 400 and scaled to about 700 to handle the holiday season.
One of the hurdles associated with temporarily increasing head count is getting new agents up to speed. It's "the training that's painful," Martin says. "You have to bring in new agents and try to get them up to speed in such a short period of time. What you end up doing is ramping up sooner than you really need them, to you make sure you have enough time to get people comfortable and ready, which comes at an added cost." At $11 to $13 per hour for each agent, that cost can become quite sizeable.
Looking to cap its seasonal-staffing headache, Overstock put out an RFP evaluating mostly Utah-based companies, primarily because during its selection process location was a prime factor for the Salt Lake City--rooted firm. "We had great resources here in our backyard, and by doing it in Utah it allowed us to help with the training and it gave us closer proximity," Martin says.
Overstock tapped Sento, a contact center outsourcing company, to facilitate a swift ramp up of trained agents. The retailer went live with Sento's outsourced solution in the first quarter of 2004 and has since expanded its agent pool.
Overstock, which uses Sento's functionality year round, has also extended the depth of the relationship one year later by flipping the switch on Sento's Right Channeling solution, a mix of channels including self-help, chat, email, and phone. With Right Channeling, customers can select their preferred communication channel, which enables the retailer to trim costs while improving service quality. The solution was deployed in the first quarter of 2005.
"What we're helping them do is cost-effectively communicate with their customers," says Sento President and CEO Patrick O'Neal. Overstock has saved about 30 percent to 40 percent in costs associated with overall customer care.
"By leveraging their multiple contact centers we've been able to scale more quickly and more efficiently, which getting ready for the peak season helps us mitigate risk against contact volume," Martin says. It "ultimately results in better quality."
By selecting Sento services and solutions, Overstock.com has:
saved about 30 percent to 40 percent in overall customer care costs;
experienced only a 17 percent escalation to a live agent of customers who visit Overstock's support portal; and
more effectively and efficiently handled customer queries during the holiday season and throughout the year.
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