Madison Reed has raised $32.1 million since launching 15 months ago.
Some online retailers are finding their most successful call center sales reps are people who are passionate about a hobby or a sport. “Sometimes you want them sitting in that chair wishing they were out on the mountain,” says a ski retailer
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.