August 25, 2004, 12:00 AM

To outsource or not to outsource: Palm Beach faces the call center question

Palm Beach Jewelry trims $500,000 from its overhead by outsourcing to the web-enabled call center of Global Response. As the phone already is, e-mail and chat will become active upselling channels for the retailer with the launch of its new web site.

It’s a question wrestled with by every direct seller: Is it better to outsource the contact center operation, or keep it in house? For Palm Beach Jewelry, the multi-channel jewelry brand of Seta Corp., a new answer to the question started to emerge after it decided to consolidate its two contact centers within the past few years in order to save on redundant capacity. Today, contact center manager Tim Holody figures its current outsource solution cuts the company’s administrative overhead costs by about $500,000 a year, with no drop in performance levels or customer satisfaction.

The bulk of those savings comes from the fact that Seta Corp. no longer operates either of its former two call centers, instead outsourcing those functions, both the sales and the customer service sides, to the web-enabled facility of outsource call center provider Global Response Inc. To ensure that phone, e-mail and chat customer contact was covered during peak traffic after it cut back to one call center, Seta initially retained Global Response to handle overflow. Eventually it assigned the entire function to the outsource provider after it measured its performance against that of its in-house center.

Holody says the outsource provider did “as good as or better than” its own in-house center on metrics such as the percentage of calls that are answered without going on hold, the order abandonment rate, and other service metrics. “All the calls answered on our behalf by Global are answered by live agents, which we felt was particularly important,” he says.

Seta also looks at sales generated through the call center given that Palm Beach Jewelry has developed tightly scripted upsell and cross sell language for agents, with a focus on offering customers added value. Of customers offered the chance to learn about additional offers, such as complementary items or discounts on additional purchases, 85% agreed to hear the offers. Of that number, 15% to 20% accepted them. “That’s what we were getting in-house, and Global has been able to maintain that,” says Holody.

Currently, the upsell and cross sell offers are to phone customers only, but when Palm Beach Jewelry launches its new web site this October, that will extend to e-mail and chat. Until then, e-mail and chat will remain primarily vehicles for customer support. Holody believes that offering the same upsells and cross sells through web-based touch points to customers poised to order will eventually produce a sales lift similar to what the company now experiences in upselling by phone.

“That will also depend on how well the products are presented on the web site as well as how it’s handled by agents through chat and e-mail," he says – one reason Palm Beach Jewelry will wait for the improvements in its new site before expanding e-mail and chat into active selling channels.


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