Outsourcing E-mail Proves to Be a Wise Investment for Schwab | Article

email outsourcingAs the new millennium dawned, financial services provider Charles Schwab & Co. of San Francisco, California faced a growing problem. The number of phone calls from customers asking about their portfolios was increasing. These calls were expensive–costing as much as $10 each. Schwab wanted to provide superior customer service and at a lower cost.

The solution: personalized email updates that enhance customer service and reduce cost now supported by Quris (pronounced Cure-iss), of Denver, Colorado. Quris created personalized email updates that enhanced customer service and reduced costs. The outsourced relationship with Quris, which began in 2000, continues to pay dividends for Schwab.

Schwab had done limited emailing since 1995 and recognized customer relationship management (CRM) using the new medium was not a core competency. “Email became more and more valuable as people increasingly used it for daily business,” says Michael Raneri, senior vice president for Schwab. “To get permission to enter that window of attention is a very special thing.”

In addition, the broker wanted to send customers reports by experts pertaining to their portfolio. This involved individual customization, another expensive process, Raneri points out. Quris customized its solution to meet Schwab’s business needs: to enhance the speed and value of information to its clients in a personal way.

Cutting the Number of Calls in Half

Initially, Quris founder and CEO John Funk, acting as a consultant, designed a new in-house email system for Schwab since Schwab had to keep some email, particularly those involving financial transactions, in-house. Quris, which opened its doors in 1999, mirrored this system and established a virtual private network (VPN) to relay information.

Quris deployed a sophisticated system using optical character recognition (OCR) technology to “read” incoming emails from clients, then forward them to the proper person expediently. The supplier sent Schwab CRM analytics to provide greater visibility into the mailings. The service provider created a testing lab to ensure proper display on any mailing.

Schwab contacted its clients, asking them if they wanted to receive a daily update on their portfolios by email within 90 minutes of the market’s close. The broker also extended this offer on its Web site. After the January 2000 rollout, 1000 subscribers opted in. Over a half a million customers had joined by September 2000. Today, that figure exceeds six million.

The result: The number of phone calls was cut in half.

Communication and Collaboration

The relationship between Quris and Schwab has continued to grow and benefit Schwab clients. The service provider has added more products based upon customer demand ascertained through its CRM functions. Schwab customers discovered the company not only listens, but also promptly responds.

Kent Allen, research director, E-business/E-CRM for Aberdeen Group of Boston, Massachusetts, is impressed by this relationship. “The good thing that those two have done is realize that you need a CRM feeder to the email system. They have a customer lifecycle messaging approach. It is not just about hitting people with emails.”

Robert Sofman, senior vice president for Schwab, says, “Quris’ consulting skills, email specific expertise, and knowledge of our business provides the ability to create better new products and continually improve our existing product set. The reporting they provide us is invaluable.”

Funk continues, “We want to ensure that we make email a highly effective part of a client’s multi-channel marketing and customer service business objectives. We act as a strategic market for our clients’ customers.”

Getting Through the Spam Gauntlet

Spam is an annoyance for individuals and a big problem for permission-based emailers. The Federal Trade Commission receives 130,000 complaints about spam daily. The US Congress just passed an anti-spam law with large fines for violators. “Spam is the biggest problem for marketers,” Allen adds.

The implementation of filters requires constant diligence for Funk. He says Internet service providers are continuously changing how they identify email as spam. The Quris lab tracks these ever-changing rules and tests to minimize the chances of its emails being erroneously identified as spam.

Sofman believes outsourcing the email function is the best way to deal with the spam challenge. “The spam regulations and filter technologies are literally changing daily. Quris helps us stay ahead of the issues to ensure that our products get delivered.”

Allen concludes, “The customer has changed. If you don’t approach email in a programmatic fashion, you lose competitive advantage.” Outsourcing helped Schwab be on top of that market.

Lessons from the Outsourcing Journal:

  • Companies sending legitimate email to their customers face continued difficulty getting past spam filters, especially with the new US regulations.
  • Email suppliers keep up with the ever-changing trends and have greater success with delivery than in-house mailings.
  • The use of email as a marketing tool is more successful if it is tied to a CRM analytics system because customized messages are more effective than general mass mailings.
  • Outsourcing the email function allowed Schwab to send personal portfolio updates 90 minutes after the market closed. This was a value-added service to customers, making them more loyal to their broker.
  • It also cut costs because the email information reduced the need for customers to phone the broker with questions. After outsourcing, the number of phone calls was cut in half.


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