Sometimes an online retailer wants customer service reps thinking about something else
By Mary Wagner
Leveraging natural resources can be one sure-fire way to business success. For a number of smaller online retailers who deal in very specialized goods, that means local people already steeped in knowledge of the product. These retailers turn away from the argument that outsourcing can be the most cost-effective way to handle customer service, and instead assign that function to in-house enthusiasts, figuring that when it comes to closing sales, passion for the product more than offsets an initial lack of web or call center skills.
Take tiny CDChoice.com, an online-only retailer of a very narrow range of CDs. The Philadelphia-based company closed its store two years ago, and now focuses on its Internet business, anticipating sales of about $250,000 this year and its first profitable month in a year in September. “Our target is customers who are interested in classical music, even 20th Century, and jazz. It’s necessary for all of us to have the background and the knowledge to be able to articulate what we are selling and to be familiar with the composers so we understand what our customers are looking for,” says marketing manager Mark Christman. “It would be very difficult for someone without that background to come in here and wing it.”
And for some retailers, that goes double for outsourcing of call center functions. Outdoor gear retailer BackcountryStore.com, located in the prime snow country of Heber, Utah, hires only dedicated and hard-core outdoor sports athletes for its call center. It recently analyzed the differences between its own call center reps’ sales and sales by the outsourced service it uses for overflow and weekends. Its in-house staff closed 25%more sales at $50 more per sale than the outsourced center. “When a customer calls to ask about a stove and a gear expert is able to say, ‘I had problems lighting that stove when I used it last weekend,’ that’s powerful,” says John Bresee, vice president of marketing. “We figured that if these were the people at our call center, we would have a huge advantage. It’s probably our main differentiator in the category.”
Though the 10-person staff at BackcountryStore.com’s web-enabled call center also learn from in-house equipment clinics that manufacturers provide to call center staff, their product knowledge is based on their own experience as users and goes far beyond such training sessions, Bresee says.
“When our affiliate manager took a vacation, he summited Mount Rainier,” he says. “Our customer service guys are doing things like hiking the Grand Tetons in the spring, a very difficult thing to do.”
Product specialization is, of course, only one component in a winning formula for online selling, as 800.com demonstrated. A consumer electronics site that made a big deal out of how knowledgeable its customer service reps were, 800.com folded earlier this year after being unable to create the scale it needed after four years of trying. Furthermore, specialization becomes more difficult to achieve as a retailer grows. It’s one thing to find a dozen qualified ski enthusiasts or jazz aficionados, and another to find a couple hundred.
Nonetheless, Bresee says gear experts are critical to BackcountryStore’s business model, which has been profitable since the company’s web site went live in 1996. While the company’s home territory has plenty of educated, hard core ski bums, Bresee says the right employees are still difficult to find, a reason he has a standing ad in the local newspaper. “For every 10 people we interview, we hire one,” he says. “There comes a time in the lives of these guys where they are ready to work full time for their happiness, sanity and stability—but they have to be sitting in that chair wishing they were out on the mountain. It’s an elusive characteristic, but when we see it, we know it.”
The ones that BackcountryStore thinks will be successful are attracted to the company by a wage structure that progresses from hourly to salary-based compensation with tenure. The package includes health benefits, and perqs such as flexible hours to accommodate skiing plans plus deep discounts on equipment and free ski passes.
BackcountryStore’s employee training focus is different from other retailers’ because its workers already have category expertise. “Because experience with the gear is more important to us than familiarity with Windows, for example, we do have some technology training costs,” Bresee says.
What’s a slice?
At 5-year-old golf equipment retailer Golfgods.com, COO Louis Preziosi Jr. says the company has never had to spend more than a day training call center staff on internal software that lets staff find products, check inventory and place or check an order. “I’ve yet to meet anyone who doesn’t already have a basic idea of how to maneuver on the Internet,” he says.
The company taps a local supply of hard-core golfers and former golf pros in its home base of Tampa, Fla., one of the country’s most popular areas for golf, for its six-person call center. “It’s almost impossible to sell this product if you don’t play the game,” Preziosi adds. “There are so many nuances about the game and the equipment that people wouldn’t realize unless they are out there playing.”
With several courses within five miles of company headquarters, he adds, there’s no shortage of club pros who no longer want to be out on the course all day and who are interested in selling products. “We recruit them and they come over,” says Preziosi. The company particularly likes golf instructors; they make ideal call center staff because they are used to answering questions from students about the game and about equipment.
While there’s little training needed on how to use the Internet, the call center staff gets frequent updates on new equipment from vendors who visit monthly. Golf companies generally introduce product lines just ahead of the spring golfing season, with updates or line extensions in a six-month cycle. It’s rare for any product line to be anything but a closeout after two years, and thus the call center staff faces a challenge staying current with equipment, Preziosi says. That’s one reason the company isn’t looking at outsourcing to handle heavier loads as sales are projected to jump to about $5 million this year from last year’s total of just under $3 million. And the call center staff is a vital component of sales; with about 35% of sales taking place over the phone after customers have perused the web site.
“We see every vendor monthly,” says Preziosi. “We would have to be thoroughly convinced that someone would know the product that well to replace the people we have in house. How could we be sure that they would be getting the same contact with the vendors and the new products that we would give them?”
Fixing problems, making sales
Golfgods.com employees get hourly compensation and benefits through a local payroll company that leases the employees back to the company. Golfgods picks up half the health benefits tab while the leasing company also picks up a share. “Leasing gives the employees a better deal on benefits since it makes them part of a larger company,” Preziosi says.
But it’s Golfgods that does all the recruiting and hiring. And as in BackcountryStore.com’s case, the local population offers a big pool of enthusiasts, but the job requires more than that. “Golf knowledge is one thing we look for; the right attitude is the rest. We’ve found that with any kind of Internet or phone sales, the customer is calling for a couple of reasons,” Preziosi says. “Either they are looking for something they can’t find, so they’re a little bit frustrated, or they’re calling because there is some kind of a problem. The same staff handles both kinds of calls so they have to be problem-solvers.”
Web lighting and furniture retailer Bellacor.com counts on its product specialists to solve customers’ problems—and to up-sell. Bellacor customers who work with a product specialist after reviewing the web site represent order values twice as high as those of customers who buy without that assistance, says CEO Jan Andersen. Though Bellacor doesn’t reveal current sales volume, Andersen says the company had sales of $3 million to $5 million in 2000, its first year, and that sales have doubled annually since then, delivering the company’s first profits a year and a half ago.
Bellacor recruits only long-term retail employees with an in-depth knowledge of the furniture industry as product specialists. “If people have product knowledge and the attitude of enjoying customer service and sales, teaching them how to do that by a different means is very simple,” Andersen says. “The hurdle of having to learn computers and the web is greatly overrated. But it takes many years to acquire product knowledge in our field. The one is much easier to do than the other.”
Bellacor has enough contacts in the local retail furniture community that it does not need to advertise for product specialists. The job appeals to retail veterans with its offer of greater flexibility—product specialists have general sales targets but a great deal of autonomy to make deals—and a chance to work in a stimulating environment. “It’s more fun than standing around waiting for someone to walk through the front door,” Andersen says. “They are a lot busier with us than they are in a store.”
One more question
Andersen says the company has occasionally tried out product specialists without deep industry experience, and the experiment failed in all cases when the employee couldn’t convey a compelling sense of the product. Bellacor looks for call center agents who know furniture manufacturers and the differences among their products, the attributes of various color combinations, the qualities of fabrics, relative price points of manufacturers and products and durability of construction methods.
The company has never bothered to try outsourcing because it is convinced results would be similarly poor. “I’m not going to outsource something this critical to someone who may not know all that much about the products,” Andersen says. “You end up with someone who might know marginally more than the customer, because they may be supporting several different web sites. It’s one thing to be talked through a site and get an answer on order status, but we want to do so much more.”
Most Bellacor customers who use product specialists do so after using the web site first. Staff interacts with customers via e-mail and phone. Though Bellacor’s product specialists have done a limited test of live chat, Andersen doesn’t yet see the demand or need for it, believing that a phone conversation is more powerful than having a message pop up on a screen for his overwhelmingly female customers. “Our customers like the personal touch and the ability to call and say ‘I’m about to place an order but I have one question first’ is a great thing,” he says.
For Bellacor, BackountryStore.com and other retailers like them, it may be technology that makes their business possible, but it’s people with product experience that have made it profitable. When the product line is specification-heavy, as in camping gear that must hold up at 20 degrees below zero, for example, or requires multiple choices that the shopper may have little knowledge of, such as a home lighting solution, these retailers are finding that nothing closes a sale like years of first-hand experience with the industry segment and the merchandise.
“There are things that we can do great online with technology, but that doesn’t
replace everything else,” says Andersen. “The key is taking the best of both
worlds and combining them for optimum results.”
mary@verticalwebmedia.com
