March 1, 2011, 12:00 AM

Smarter Service

As retailers offer more customer service channels, they're finding new ways to keep costs in check.

Zak Stambor

Managing Editor

Lead Photo

As soon as a consumer dials 1-800-GO-DEPOT, the customer service number of Office Depot Inc., the office supplies retailer is gathering information about the customer.

While the consumer hears the automated message, "Hello and welcome to Office Depot. Please tell me the reason for your call today. You can say things like, 'I'd like to place an order,' or 'I need to check order status.' So, how may I help you?" Office Depot's system—which uses West Corp.'s customer relationship management technology—determines whether the consumer has called Office Depot before, what his previous customer service experiences with the retailer have entailed, and, if he's a member of the retailer's Worklife Rewards program, nearly every item he's ordered in the past.

"The more information we have, the better chance we can provide the best possible service to our customer in whatever way they prefer," says Tim McGrath, the retailer's vice president of customer service. For roughly 5% of the retailer's callers that means never speaking to a call center agent because the automated system can take orders. For the other 95% it means efficiently answering and routing calls to one of the hundreds of outsourced agents the retailer works with at Alpine Access Inc., an outsource provider of home-based agents.

Working with vendors streamlines Office Depot's customer service channel, enabling the retailer to keep its service levels high and its costs low, says McGrath. "It's an extreme value driver for us," he says. "Helping customers get the help they need as efficiently as possible helps our customers and it helps us."

Retailers like Office Depot are driving to become more efficient at customer service as they provide service to online shoppers in more ways. A new Datamonitor survey shows 98% of companies offer phone support, 90% e-mail support and 25% live chat. The increase in service channels puts a higher premium on cost control, says Peter Ryan, an analyst at Datamonitor, a market research firm based in the United Kingdom. "Everyone in retail is looking to minimize their costs but without having a negative effect on the customer service experience," he says. "How that works won't be the same for each retailer. But what does stay consistent is that the more efficiently a retailer can help customers, the better results they'll have."

Office Depot ensures its operations run smoothly by working with Alpine Access to offer customer service 24 hours a day, seven days a week while only staffing enough agents to meet its anticipated demand. The number of agents the retailer has answering calls varies because the retailer schedules staff using a six-week, hour-by-hour forecast based on the retailer's call volume for the previous three years, with an additional 10% tacked on to ensure sufficient coverage. Office Depot then uses a formula that equates that call volume to the requisite number of agents, which it then gives to Alpine Access to solicit Office Depot-trained agents to sign up for the hours.

Using an outside company's home-based agents, who often are willing to work for a few hours at a stretch, enables Office Depot to match coverage to demand without overspending, says McGrath. "If we had our own bricks-and-mortar call center, everyone would want to work from eight to five and it would be far more difficult to get the schedules equated to the exact call flow—that's where we see the great value of outsourcing," he says.

Office Depot realizes other savings from outsourcing its call center operations. The retailer doesn't have to rent bricks-and-mortar facilities, pay benefits or deal with bad weather shutting down a contact center. "When weather knocks out an area, we never miss a beat in terms of answering customers' calls," he says.

Routing calls
Office Depot tries to keep customers happy by using West's call-routing system, which quickly moves calls to the appropriate agent. Its effectiveness enables the retailer to answer calls on average in under eight seconds; fewer than 1% of callers hang up before speaking to an agent.

Making sure consumers end up at the right place without transfers leads to satisfied customers, says Datamonitor's Ryan. "We've all been through the experience where you go from one agent to another and another when all you have is a simple question," he says. "It's important the retailers avoid giving consumers that experience."

The simplest way to avoid repeated transfers is by giving consumers prompts that direct them to the right agent, or, at times, simply providing answers via an automated message, he says. For instance, electronics retailer Crutchfield Corp. gives consumers four options—one routes calls to agents who can provide information about an item or help place an order; another routes calls to agents who can offer technical assistance; another offers financing options; and a fourth provides automated catalog-related assistance.

The automated system handles basic assistance issues, like checking an order's status, which frees up agents to handle more complicated issues, says Doug Smythers, the retailer's contact center operations director. With two bricks-and-mortar call centers in Virginia, the routing system ensures that Crutchfield directs callers to the right customer service team.

Crutchfield doesn't rely on technology to get to the crux of a customer's question, but rather on training agents in providing good service, says Smythers. "We teach our agents the skills to ask the right questions that find out what the customer needs without being pushy," he says. For instance, the retailer urges agents to ask four or five questions such as, "How do you plan to use the product?" and "What is your price point?" to quickly zero in on the right product.

Because its products are often purchased by tech-savvy consumers, the retailer also offers online chat, using technology from Moxie Software. Chat reduces costs because agents can multitask and handle several consumers' queries at once.

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