July 18, 2007

Multichannel Retailing Week: Call Centers And Distribution Centers

How many multichannel retail executives view their call center and distribution center as a "cost center"?

It is easy to think of operations as a cost center. After accounting for shipping/handling revenue, it costs between ten and fifteen cents of every dollar of sales to field phone calls, manage live chat, respond to e-mails, and pick/pack/ship items.

You don't view your call center or distribution center as a cost center if you spend any time in these facilities. You'll find yourself rubbing shoulders with individuals more committed to your brand than you are. These folks aren't killing time, waiting for their stock options to vest.

You'll see individuals eagerly attacking contests to improve productivity. You'll find employees who are taking calls, even though their Aunt passed away earlier that morning. You'll find employees who milked cows at 5:00am, showered, and made it in to work through a snowstorm to begin their 8:00am shift five minutes early. You'll see co-workers bringing sub sandwiches, cookies, and treats to work. Food is a motivator for folks who don't earn enough money.

These folks work eight hour shifts for just $11 an hour. After taxes, that's an eight hour day that nets the employee around $70.

We expect an awful lot out of individuals who take home $70 a day.

We expect every single order to be processed correctly.

We expect all e-mails to be responded to within four hours.

We expect orders to be taken with joy, we expect our complaints and criticisms to be met with empathy.

We want these individuals to communicate our frustration with soldout items to an inventory management team they never get to work with.

We want these individuals to absorb the abuse we toss at them because we are frustrated with cost-cutting management teams that hold us hostage in telephone-based CRM systems.

I had the privilege of working in a call center in the late 1980s. I can tell you that it was one of the harder jobs I've ever had. I had to ask customers if their AT&T repair service was done accurately and on-time. Ask a seventy-six year old angry man if he was "very satisfied", "somewhat satisfied", "satisfied", "somewhat unsatisfied", or "very unsatisfied", and I promise you, you'll receive some "feedback".

When I worked at Eddie Bauer, I frequently got to visit our parent company, Spiegel. The executive team worked in a section of the building that had leather floors.

People in call centers and distribution centers work in buildings with dirty floors.

I do think that many multichannel retailers will begin to see call centers and distribution centers as "knowledge centers" over the next decade. Nobody knows more about the "vibe of the customer" than these individuals. We've used these people to increase the "cross-sell" rates from 9% to 14%, netting us significant increases in profits. Over the next decade, we can partner with these individuals to learn more about what our customers truly want.

We can literally pull customer information from these individuals. Today, we push promotions at them, hoping they will push them at the customer.

Instead of talking about corporate blogging, we should talk about call center and distribution center blogging. We could have internal blogs that allow these employees to have a dialogue with business leaders --- passing information back and forth. If the executive won't make the trip to the call center, let technology bridge the gap. We can give these folks a voice. If we want to implement a promotion, we can float the idea through the call center blog, and let our call center employees advocate on behalf of the customer.

If we want to create a better experience for the customer, we can start by creating a better experience for the call center and distribution center employee. We could view these individuals as "knowledge centers" instead of "cost centers".


  1. Kevin,
    It's nice to read kudos to call centers. I, too, have spent lots of time with reps (typically in the telecom space--these were people selling wireless service or hooking up local phone service). I love the enthusiasm on the floor; those contests get me going, too :)

    I like the opportunity you raised about turning the call centers into knowledge centers. After all, they are touching the customer all day long. It's a natural fit.

    Interesting, I think that India may have already figured this one out. And, they can do it less expensively, too...

  2. Amen, and God bless those dedicated people in the call centers and distribution centers. I once performed an analysis for the managing director of a small subsidiary of a large corporation, and one of the metrics, a sort of sidebar calculation to something else, was units per order, and a distribution of orders by number of units, x% of orders were 1 unit, y% were 2 units, z% were three units, etc. This guy was somewhat surprised at the proportion of single unit orders and then noted to himself "But I guess anyone in the phone center could have told me that."

    Leather floors?

  3. Suzanne --- thanks for the comment. Maybe the leaders of US-based call centers can start thinking of the competitive advantages of a US-based call center, and market those advantages.

    Curmudgeon --- yes, leather floors.

  4. Anonymous10:10 AM

    > Over the next decade, we can partner with these individuals to learn more about what our customers truly want.

    I've never worked in a place where this was not true, but perhaps it was because I was in charge of Marketing. At HSN - and this was 10 years ago - we never, ever conceived of or dropped a promotion without customer service involvement and approval.

    They were free to criticize any marketing and point out the problems it could cause. Revisions would reflect their opinions. Then every rep had a copy of it 2 weeks before the drop and was trained on it.

    This kind of interaction should be standard procedure...why is it so hard to imagine the value this creates / costs it saves?

    I know, I know - the marketing folks don't think it is part of their job. They're wrong.

    As long as it's not part of their job, they will have their power sucked away by Chief Customer Officers and the like.

  5. Jim, I agree, every place I've worked allows the call center and distribution center to communicate with marketing on promotions, promotion dates.

    As you know, if an executive simply talks to call center individuals, s/he will learn these people know far more about the "target customer" than the executive knows ... lots of untapped potential.

  6. Anonymous5:53 AM

    I guess it's probably a catalog / Database Marketing thing - since the whole company revolves around customer value, you have a culture where people simply can't think of doing it any other way.

    This whole "customer experince movement" is really quite ironic when viewed through the lens of a business model where these ideas have been a fundamental part of the business for several decades already.

  7. Ironic would be a good choice of words, Jim!


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