How Overstock saved nearly $14 million with a web-hosted contact center

Overstock.com Inc. realized its call center infrastructure was overloaded.

Katie Evans

About eight years after its launch in 1997, web-only retailer Overstock.com Inc. realized its call center infrastructure was overloaded.

The retailer, No. 31 in Internet Retailer's 2013 Top 500 Guide, had been using a combination of on-site hardware, hosted software applications from vendors and its own homegrown software and manual systems for its call center operations. The several systems combined were inefficient, the retailer says. For example, the overall system could not match the caller to the agent trained to help answer a caller’s specific questions, such as queries about returns or shipping.

Overstock.com also relied on a vendor to supplement its in-house agents during high-volume call times, such as over the holidays. That created more complexity as the outside and internal call center systems operated on separate platforms. All the different systems and programs led to several problems, including long hold times, says Carter Lee, vice president of information systems and technology. Additionally, agents couldn’t easily access the information they needed to help customers. And, since consumers and agents touched so many different systems, Overstock couldn’t easily track call center performance, such as checking how quickly calls were answered and if consumers got the help they needed.

The system was also costly, Lee says. Overstock’s in-house hardware call center system required back-up equipment in case it crashed. And, to support all the moving parts, Overstock had three full-time I.T. staffers dedicated solely to ensuring the call center was up and running. It also paid for ongoing consulting help from an outside firm.

To solve the headaches and save money, Overstock in 2005 switched all its fragmented systems to one “cloud-based” or web-hosted contact center management system from Echopass. The migration to the new system took 90 days, Overstock says, and was up and running smoothly well before the onset of the busy holiday shopping season. The new system also saves Overstock.com money it was spending on the outside consultancy help, and the internal I.T. workers dedicated to the center were able to be reassigned to other areas of the retailer’s business that could help grow the revenue, the retailer says.

The new call center technology also was able to scale up to meet additional demand. For example, in 2010 Overstock added a second call center in Salt Lake City with 90 new agents. Both of the retailer’s centers are managed as a single virtual contact center through Echopass. Overstock can also now easily pull consumer service reports and see how the centers are performing as the system captures and stores all customer call data, such as how long a customer was on hold and the number of agents who helped her.

Overstock’s old system cost $19.828 million over five years. The new web-based system cost Overstock $5.920 million over the same period, representing a cost-savings of $13.908 million over five years, the retailer says. What’s more, many customer service metrics improved, it adds. For example, the average time a customer was on hold fell from more than 22 seconds to less than two seconds. In fact, Overstock’s agents now answer more than 99% of calls within in two seconds, beating the retailer’s goal of answering 80% of calls within 30 seconds.

In addition, easily accessible data analytics and call records help supervisors quickly react to any bottlenecks and spot any looming issues, Overstock says. Average handle time—that is, the time agents spend with shoppers on the phone—fell by 21%, to 7 minutes from 8.9 minutes. Overstock also now needs 30 fewer full-time agents, saving it $930,000 per year, the retailer says.

Moreover, caller abandonment rates fell 85%, to less than 0.4%. And, since migrating to Echopass, Overstock.com has been ranked as one of the top five retailers in terms of customer service for the past five years by the National Retail Federation trade group.

“Implementing Echopass has proven to be a great choice,” Lee says. The cloud-based system, which uses a collection of web-hosted network servers, helped reduce hardware and the many separate systems the retailer had used before Echopass, by offering one virtual system accessible by all staff, Overstock says.

“When we chose the solution, the term cloud wasn’t really used and many people questioned our decision to move our contact center solution to a fully hosted solution,” he says. “Today, people don’t question that type of decision, because many realize the benefits of putting certain technologies into the cloud. Ultimately, the decision to go with Echopass has allowed us to focus our time and energy on providing great customer service instead of being distracted by supporting customer service technology.”


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