Start Up Starts Up Quickly By Outsourcing Its CRM | Article

digital music(Click here for Lessons from the Outsourcing Journal).

Sonos, Inc., a developer of retail digital music systems, was encountering a challenge many start-up companies face: staffing to service 12 hours of sales and support calls in American and European time zones with minimal capital investment. A key need was a call-handling process that could route a call based on skill and availability of the next agent without regard to geography since it had to service customers.

Sonos needed to harness both sophisticated on-demand contact center software and business telecommunication services to support its technical support and sales agents.

Chris Fowler, Director of Support and Operations for Sonos, knew that outsourcing was the only way to accomplish these integrated call management objectives. But as a start up, Sonos was beginning with only a few customer service agents although anticipated growth would afford expansion many times over in a relatively short time. “I wanted all these sophisticated features; every enterprise provider said, ‘Come back when you hit 5,000 seats.’ Our opportunity just wasn’t big enough to interest them.”

“Small-to-medium businesses (SMB) are the greenfield in the market,” says Chris Selland, Principal Analyst at Covington Associates. “The enterprise CRM suppliers have all taken passes at getting into the SMB market.”

Bigger Bang for Fewer Bucks

According to a recent article in the Harvard Business Review, companies that increase customer retention rates by as little as five percent can realize higher profits ranging from 25-to-95 percent. This underscores an important fact: businesses that place a premium on responsive customer contact retain a higher number of loyal customers. For start up Sonos, this was a vital key to its new business model.

As it was developing this model, the unusual customer service needs of the firm eventually brought it to the doorstep of UCN, an outsourcer of on-demand, integrated long distance voice and data services; many are specifically designed for contact centers of any size.

The solution that proved best for Sonos was UCN’s inContact, a network-hosted solution, supporting Sonos’ technical support and sales agents located in geographically dispersed offices via the provider’s long distance network.

The cost for this solution averages about $1,000 a month, which includes all customer relationship management (CRM) representative seats, supervisor log ins, and voice minutes across its 45 toll free numbers, which currently average over 21,000 minutes per month. This eliminates the need for a third-party long distance carrier, which, according to Fowler, “would have certainly cost us a lot of additional expense.”

To manage this network-based application, Sonos leverages the inControl programming tool. InControl empowers Sonos’ programmers to customize the system for specific call management needs. Sales and support personnel now receive calls on their work phone, their cell phone, or their home office phone. When the company is short on representatives in the office, the system automatically calls the leader of the sales or support group, who then calls in additional people to assist customers.

“It’s not just how many agents you have,” says Erin Kinikin, Vice President and Research Director at Forrester. It’s how many different locations and contact points — things like mobile phones and email — that come into play. A small company with traveling road warriors who answer customer calls often has more sophisticated needs than a larger firm with a single, shared office.”

“One of our advantages,” says Jan Johnson, Vice President of Marketing and Training for UCN, “is our ability to bring sophisticated, affordable call management solutions to small and medium-sized business, many of whom would not be able to pay the large up-front costs associated with the solutions offered by traditional phone system vendors and related add-on product providers.”

She adds the entire suite of services is scalable. Firms are able to grow but still pay only for what they use as used. This eliminates onsite equipment obligations and growth-related big ‘step upgrades.’ “Many customers also appreciate our assigning a single UCN professional to shepherd them through all the sequential steps of the new customer experience,” she adds.

Speed to Market, Vital for a Start Up

Sonos and RealNetworks provide the popular RhapsodyÆ subscription online music service. Sonos customers can enjoy the largest legal collection of digital music, plus Internet radio stations, in every room in their homes by utilizing the retail players sold to the public that interface with their home computers. So the retailer knew that in order to capture significant share of this exploding market, speedy implementation of all sales and service aspects, including its customer care service, would determine success.

UCN’s suite took about a day to create the call handling processes Sonos wanted. “We were up and running essentially within a day,” says Fowler. He adds that the service allows his programmers to change call handling port capacity up or down on a weekly basis from a Web-based interface.

The company started with two ports. It has since grown to ten, a number that will continue to expand as the company grows.

Monitoring of representative activity and the time devoted to individual call events is also easy, according to Fowler.

Sonos has tied inContact’s call detail records to a trouble ticket number. On a daily basis, the support team looks at the call detail record, researching all calls that take longer than 30 minutes. Because the trouble ticket number is automatically inserted into the call detail record, the team can quickly pull up the trouble ticket and review the issues associated with that call for analysis and review.

This also allows Sonos customer reps to work from anywhere, even their homes–a customer management option that is becoming more popular and affordable. By using inContact’s ability to support at home and in-office workers simultaneously, Sonos’ is able to maximize its “lean and mean” support staff.

Every day certain pre-scheduled staff members located on the east and west coast log in from home. There they work for several hours until their respective local office opens. Then the early-at-home-workers log out, grab breakfast, then go to the office to complete their workday. “This ability to work from either location provides our people with maximum convenience and scheduling flexibility,” says Fowler.

Forrester’s Kinikin firmly believes the next wave of outsourcing is “home sourcing,” which takes advantage of cost-effective part-time or remote workers located far from a business center, is upon us now. “The ability to adjust a contact management system quickly to take advantage of labor shifts can save money and improve service coverage.”

Let’s Get Small(er)

Once the system was operating, Sonos learned some important lessons that enabled it to further maximize customer service operations. Initially, the firm opened three customer support centers: one on the east coast, one on the west coast, and one in the Netherlands.

If a customer was located in a country without an international number, they were routed to a Salt Lake City, Utah number, which then routed him or her to a European-based support person. Essentially, all calls came to the US-based inContact server center where the call’s origin point was noted as it was sent to the appropriate support center either in the US or Europe.

But this data revealed to Sonos that most support calls for its home-oriented sound system product were made in the evenings — after office hours in Europe but during office hours in the US.

In a short time, Sonos changed its strategy. It closed the European call center and routed all calls to the US-based agents. This enabled the company to convert its European phone support people to field support who then began focusing on the European-based distribution channels.

Kinikin observes that companies can’t ignore local cultural or language issues, but notes that the first requirement of good customer support is to answer calls quickly with a resource that understands the product and how it works. “Because of this,” she says, “we’re seeing a number of companies shift from a distributed service force to a mixed approach with a central service group and then distributed local experts for the local market.”

“In the final analysis,” says Fowler, “outsourcing this to a capable provider was really the only solution that met our needs because it was affordable, scalable, up quickly, and designed to grow along with us.”

Lessons from the Outsourcing Journal:

  • Start ups turn to outsourcing for critical processes that required sophisticated expertise and significant cash outlays.
  • Small-to-medium businesses can play with the big boys by outsourcing, which gives them access to costly CRM tools.
  • Successful CRM requires a multitude of contact points.
  • Today’s CRM technology allows providers to have their employees work at home or at the call center, which keeps costs low for buyers.

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