October 31, 2005, 12:00 AM

Beating the Storm

(Page 2 of 3)

Although it lay directly in the path of Rita, Golfballs.com managed to escape severe physical -damage, but the broad scope of Rita`s as well as Katrina`s impact paralyzed much of its communications infrastructure, causing it to lose 15% of expected September revenue, Cox says. Its toll-free customer service line as well as all of its land-line and cell phone service was out of commission for more than two weeks and it was forced to unplug and move its e-mail servers to another state. When Katrina hit, it knocked out main telephone switches in New Orleans that left a large area without reliable telephone service. "Nearly everything in our area had spotty connectivity," Cox says.

Like ShoppersChoice and other retailers, Golfballs.com kept its web site up because its server is maintained in a protected location. "Our web site never went down; it`s bunkered in a data center off-site," Cox says.

But like many retailers, Golfballs.com and ShoppersChoice didn`t have back-up outsourced customer service operations--a move many merchants have resisted because of the need to train contact center agents in policies and product lines, experts say. "They already do a lot of work to get their regular customer service reps up to speed," Gupta says, adding that she knows of several well-known retailers who don`t have outsourced contact centers as backup.

But first-hand experience with the recent hurricanes is -changing the minds of some retailers, -causing them to consider -outsourcing -customer service for the first time or pushing ahead prior plans to do so. "We hate to do it, because we want our customer service to be different from other retailers` and to train people in an outsourced operation on all of our grill products will be hard to do." Hackley says. "But we`re going to have to look at an outsourced call center because a lot of -customers making $3,000 to $5,000 purchases want to talk to you."

Cox adds that Golfballs.com has been planning to arrange for back-up outsourced contact center operations to accommodate -growing sales, but that now he expects to have an outsourcing arrangement in place this fall. Golfballs.com is -taking other steps as well. After moving its StrongMail Systems e-mail marketing server in September to Seattle, where it coincidentally has maintained other servers to -support supplemental sales through Amazon.com, it has decided to conduct all e-mail marketing through Seattle permanently. "It doesn`t -matter where we e-mail from, so it might as well come from a place that doesn`t have hurricanes," Cox says.

Next time: Better prepared

Golfballs.com has also invested in a permanent generator as an alternate power source for critical systems in its Lafayette headquarters, including its printing machines for personalizing products, and it is looking into arranging for back-up, out-of-state telephone service that could switch calls to other lines when local service is out. "With an investment of about $20,000 or $30,000, we can protect ourselves," Cox says, adding that his headquarters is already located in a secure commercial building with few windows. "There`s no question we`ll be better prepared next time."

ShoppersChoice usually operates with 25 employees in Baton Rouge, including 12 customer service agents, but only six or seven people were able to get to work for about a week and a half after Katrina. It managed to keep up contact with customers throughout the hurricane`s aftermath, but it had to scramble and innovate with available resources. For starters, it had to acquire a back-up generator for electric power, and a mixture of -employees and managers used cell phones to contact customers. "People in marketing, techies and managers all of a sudden became customer service reps," Hackley says. "We had to take care of the customer."

While its toll-free customer service number was out of commission, it placed its regular 225-Area Code number on its web site--which operated uninterrupted from its Dallas-based servers. In addition, it expanded to its customer service contact page a new feature, Call Me Now, that ShoppersChoice had originally placed only in its shopping cart to reduce cart abandonment. The feature lets customers e-mail their phone number to a customer service rep, who calls back. "It`s been a great way to keep up customer relationships," Hackley says.

Calling all customers

ShoppersChoice also stepped up customer service in other ways. As part of a recently launched rewards program, customer service agents are required to contact -customers by e-mail whenever an order is more than three days late and explain the hold-up. But figuring the hurricanes called for more personal service, Hackley required agents to contact customers by telephone. "A lot of customers may have thought they wouldn`t get their orders because we`re based in Baton Rouge, so we alleviated their concerns by calling every customer," Hackley says.

As it expands its retail scope with its planned 10 million SKUs, however, ShoppersChoice will need the help of an outsourced contact center for back-up, Hackley says. Although ShoppersChoice has yet to work out a policy for how, when and exactly what it will outsource, it has taken the initial steps of identifying in management meetings the best way to get through future disasters. "Our meetings consist of how to make things run normal," Hackley says.

While fulfillment and customer service can present more open-ended challenges for disaster-stricken retailers, the protection of software systems and critical data is more routine.

Still, each retailer must decide the extent to which it will protect information. Computer and accessories retailer ComputerGeeks.com, which hosts its own web site at its home base of Oceanside in -earthquake-prone Southern California, backs up all customer transaction data every day to an -off-site location, says CIO Greg Hansen. "The big thing in Oceanside is power outages," he says.

Automatic backup

ComputerGeeks automatically backs up transactional data as well as data on customer and supplier records every 30 minutes to an on-site data center. One of the site`s IT -engineers carries tapes of that recorded data each day to an off-site secured fireproof vault. The same process is followed to maintain off-site records of weekly, monthly and yearly files.

In case of damage to ComputerGeeks.com`s site server, the IT engineer would take the most recent 24-hour file to co-located computers at Yahoo Internet Services in San Diego, which would enable ComputerGeeks to continue taking orders, Hansen says. "We have too much data to keep it real time, so the worst case is that we lose the last 30 minutes of transaction data," he says.

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