The retail community is caught on the horns of a dilemma. It faces the financial challenge of shrinking cost margins at a time when consumers have grown more demanding. Today retailers have to deliver better service just to retain their current customers.
It was tough enough being a start-up for North Adams, Massachusetts-based Eziba, a multi-channel retail brand that sells hand-crafted jewelry and artifacts from around the world. When Eziba opened its doors in 1999, it did not have the resources to build an efficient fulfillment and customer relationship management infrastructure.
“We needed the ability to grow quickly without absorbing the high costs associated with building out these operations,” says Dean Frost, vice president of operations at Eziba. He knew from the outset the company did not want to concentrate its efforts on logistics and business processes that were not core to its business expertise even though they were vital for the company to grow.
Retailer Goes Shopping for a Service Provider
As a result, Eziba looked to outsourcing for its customer relationship management services. After its first service provider went through a consolidation, Eziba began evaluating other providers, narrowing its options to three service providers. Frost says the management team ultimately selected ClientLogic, a Nashville, Tennessee firm that has been providing integrated customer management solutions for 30 years, “because of its experience, flexibility and competitive pricing,”
ClientLogic, which began working with Eziba in July, 2001, operates throughout North America and Europe, delivering customer management solutions including customer contact, fulfillment and marketing services. Its 250 clients include Hewlett-Packard, Sony and the Internet Service Provider, Juno/NetZero.
Eziba had initially requested stand-alone fulfillment and distribution services. However, Channing Rollo, business intelligence manager at ClientLogic, felt an integrated offering would best suit Eziba’s unique business retail model and product offerings. Now ClientLogic strategically houses Eziba’s contact center and fulfillment operations in one facility.
Working on the Relationship
Rollo says that to keep the bond strong between the two companies, Eziba’s founders often visit the contact center to explain new products and personally train the agents about Eziba’s core values and vision.
As for service level agreements, ClientLogic’s call center is expected to answer calls within 20 seconds and the warehouse needs to ship orders within 24 hours. Says Frost: “Both of these service levels get measured daily, reported weekly and are discussed in a cross-company staff meeting each week.”
Frost adds that ClientLogic also has a model for governing the relationship that works well. “They have a single account manager responsible for client relations, but also allow for direct access to key management personnel within the operations. This is very important in building strong relationships and teamwork,” he explains.
The result has been an improvement in both customer care and fulfillment. ClientLogic’s technologies mean that Eziba can offer live chat on its Web site and be able to take customer calls at its corporate headquarters. “Both of these technologies are very important to us,” says Frost.
In addition, Eziba’s fulfillment needs require a very high touch environment including gift-wrapping, protective packaging to prevent breakage, and the insertion of story cards. ClientLogic also provides the required “meticulous” inbound quality inspections.
The Ability to Scale Quickly
Frost says the advantage of outsourcing its call center and order fulfillment operations has been the ability to scale quickly by using ClientLogic’s existing infrastructure. In addition to cost savings, Ebiza was happy to let ClientLogic find and hire staff with the level of experience it needed.
Outsourcing this business process to ClientLogic has allowed Eziba to concentrate on defining and growing its online and catalog business and “maintain a stellar level of service while saving thousands on infrastructure, hiring and training costs,” Frost says.
“Lack of scalability on a global scale, inability to properly facilitate multi-channel customer care and the challenges associated with deploying and managing complex contact center technology” make outsourcing these business processes an alluring alternative, says Brian Bingham, a senior analyst at market research firm IDC.
Frost argues that many small and medium-sized businesses need to recognize the benefits of business process outsourcing: it keeps costs own and supports unexpected quick growth. “Their concern is often about losing control and losing touch with their customers, but the key is to manage your outsourcer relationship very closely,” he says.
Lessons from the Outsourcing Journal:
- Outsourcing customer care and fulfillment operations create international reach and scalability.
- CRM outsourcing provides customers with a wide range of integrated technologies without investment in the infrastructure.
- Outsourcing allows companies complete focus on core business rather than support issues.
- Outsourcing reduces support costs and improves ROI through faster fulfillment/ transit times to satisfy increasingly demanding customer expectations.