David Litman is a fan of outsourcing, pure and simple. He is probably best known as a founding partner of Hotels.com. Litman and another “Hotels” partner Robert Diener did quite well from the sale of their 12-year-old online hotel reservation agency to IACI.
But entrepreneurs get the itch to get back into the game. So in April, 2009, after emerging from their obligatory non-compete arising from the 2003 sale, the two men established getaroom.com. In a short time it now operates throughout the United States and Canada and is just entering Europe.
“We improved our original business model with getaroom,” Litman says. “And we enhanced it with an experienced customer care outsourcing provider.”
Getaroom created a Web presence that offers additional unpublished savings for visitors if they call a toll-free number. The Web site, instead of performing transactions online, funnels qualified buyers to its contact service center where the transaction takes place. This differs from the former Hotels.com model where the Web site performed the transactions and the call center dealt more with customer support.
Most travel and vacation Web sites are “transaction heavy,” which can sometimes work against them, according to Jakob Nielsen, Founder of the Nielsen Norman Group, which monitors and analyzes Web site usability in all industries. “Features like making a series of multiple choices or entering coupon numbers slow down the transaction process and can become an obstacle to performing Web-centric business.”
Litman sees his getaroom.com more like a resume. “Resumes get you the interview, and your personal presentation gets you the job. It’s the same thing. Our Web site drives qualified traffic to our toll-free number where outsourced call center travel professionals deliver our brand and close the deal in numbers that please us.”
Provider replicates success for the new/old buyer
Getaroom’s provider in this venture today is the same one Litman used for Hotels.com, Dallas-based Working Solutions. The provider hires skilled remote customer care professionals; most of them work from dedicated home offices.
The getaroom.com buyer experience begins with a call to the site’s toll free number. Caller and agent then spend a few minutes discussing hotels that offer unpublished rates available in the call center only. When the customer gives the agent a credit card, the customer service agent reveals the price. Discounts range from 10 to 50 percent off typical Web rates, Litman says.
“It’s the personal interaction during the customer walk-through that is the key to this success,” says Litman. “Web-only, interactive voice recognition (IVR) or offshore agents with little cultural similarities to the caller don’t produce the close ratios that getaroom.com must have,” posits Working Solutions CEO Tim Houlne.
The getaroom founders wanted to populate the center with “crËme’ de la crËme’ professionals.” And there’s no way we could sustain such a network within our lean-and-mean ‘getaroom’,” Litman admits.
“Contact centers are complex and expensive,” says Richard Snow, Vice President/Research Director for Contact Center Performance Management at Ventana Research, “which is why more companies outsource them as an alternative.” He cites main buyer drivers as a desire to keep to core business, avoid high levels of necessary start-up capital investment, and reduce recurring operational costs.
But that’s just the gravy for getaroom. “The customers’ personal relationship with these high-quality professionals produces the highest sales percentage,” says Litman. It’s a simple, yet vital lesson he took from his Hotels.com experience.
At the time of its sale to IACI, Hotels.com had one customer care provider. Litman has worked with Houlne since 2001, when the provider parlayed a proposed “supplemental home agent” pilot program into its ultimate role as that buyer’s sole customer contact provider in less than two years.
Based on getaroom’s need for sophisticated agents, it was logical for Litman to share his new venture with Houlne. And like Hotels.com before, it was a perfect fit. “We have tens of thousands of knowledgeable travel industry workers throughout North America to choose from,” notes Houlne. “They have the discipline, drive, and technological acumen to work from wherever they’re most comfortable. And fewer of these prime professionals want to work in a centralized center.” He adds that Working Solutions’ experience at managing the HR and the oversight aspects of a widely distributed network are also key to service delivery.
“We have better things to do than manage a large employee network,” notes Litman. “And the success secret of outsourcing, other than administering our engagements effectively, is to partner with companies that do better the tasks we don’t want to do ourselves to begin with.”
Outsourced customer care is service and knowledge delivery
Michael DeSalles, Strategic Analyst with Frost & Sullivan, notes the at-home customer agent attrition rate of 10 percent, compared to over 50 percent in the brick-and-mortar world, inspires companies to start looking at the home-based agent model “whether they outsource the entire service or just the provider knowledge base to use in setting up their own people to populate a work-from-home network.”
That’s why in 2008, Working Solutions entered into a partnership with technology provider WS iNet and began selectively offering the hardware and software that power distributed customer care centers in addition to its strategic and tactical advisory experience. “Some might view it as Software as a Service (SaaS),” says Houlne. “But it’s really more like Software AND A Service, because we consult and advise others how to build their own distributed customer care enterprise, how to make it produce, and how to efficiently manage it.”
There’s a benefit to gradually morphing from a singular service provider to one that is a bit more top-down. “It makes some of our outsourcing partnerships less-susceptible to commoditization,” concludes Houlne.
But in the case of getaroom.com, the services are primarily, but not completely, tactical. Houlne notes that when Litman and his associates are prepared to more fully penetrate international markets, Working Solutions should be in a position to continue partnering with the buyer. “It’s no secret that we’ve been looking to broaden our footprint offshore. Helping getaroom carry its personal message overseas could be a vehicle for that,” he says.
Litman doesn’t discount the possibility. “We’ve been successful with Working Solutions twice now, so there’s no reason to think that success can’t be further leveraged.”
Lessons from the Outsourcing Journal:
- Now that the home customer relationship management (CRM) agent model is mature, companies can choose to either outsource the entire process or hire the outsourcing provider to help them set up their own remote agent networks.
- Service-based startups that partner with best-of-breed outsourcing providers have a good chance of becoming profitable because outsourcing keeps them lean and mean.
- Some retail businesses such as travel have higher close ratios when the interactions are more personal. Outsourcing allows these buyers to afford the top-notch agents they need to provide high levels of customer service.