This reduction is significant not only because of the reduction in costs, but because it shows how this company has uncovered problems with their online processes.  Too often this number stays stagnant or increases.  You may never be able to get rid of web orders that need to be completed in the call center but you need to identify why the calls occur.

Stronger companies will categorize and analyze why calls occur and develop a strategy for solving them, this will eventually lead to a reduction in the inbound calls to assist customers with web orders.  Here are some of the most commonly found reasons for customers completing their orders in the call center:

1.       In-sufficient product related information, including use and care or technical documentation.

2.       In-sufficient product photos accurately depicting the product.  Not just one or two photos but all aspects of the product, dimensions and colors.  Often times videos are needed to demonstrate a product or provide customer reassurance.

3.       Confusing product availability or expected ship dates for a product.

4.       Obscure or non-existent shipping & processing fees until the point of check out.

5.       Clunky check out process with confusing pricing, taxes and shipping and processing options.

6.       Forced, cumbersome registration processes.

7.       No ability to do customer self help on the site.

If your customer hasn’t just totally abandoned the cart and has opted to call you, then you better make sure that you record what the problem was in addition to placing the order for them.  The goal needs to be to analyze the various problems and quickly implement solutions to resolve the issues.

Companies that have a larger amount of inbound calls pertaining to web orders more than likely have a large percent of abandoned carts on the website.  Many marketing related guru’s may look at the cart abandonment but not consider the increased inbound calls.  By looking at both the marketing and call center aspects, you will be solving both – increasing the gross demand through efficient and effective web applications and reducing the call center costs from inbound calls.

When was the last time you reviewed this metric for your call center?  How often are you taking customer calls because your website isn’t functioning in a way that focuses on the customer?

Identifying call center problems and developing a strategy for improving the issues and measurements is F. Curtis Barry & Company’s core competency — let us help you.

Brian Barry is a Senior Consultant with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

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Dear Curt -

We met briefly at the NCOF conference in Vegas, and I wanted to reach out  to you regarding performance errors.  I was hoping you could provide  me with some insight into how other 3 PL fulfillment companies manage employee errors.  Currently, we don’t have a strong policy in place to  deal with these issues.

Some questions that arise in my mind are:

1.  How many mistakes is too many?

2.  Should the consequence be different in receiving than picking or packing?

3.  If there is a larger mistake that causes our company should there be a more severe consequence?

I understand that everyone makes mistakes and I would like to allow  for learning and coaching, but I also want to make sure that our  employees have a formalized consequence to ongoing errors, and they  know what to expect.  If you have any feedback on this I would really  appreciate it.  Or, if you know any warehouse managers I could speak with to get ideas on what they do that would be great!

Thank you so much for your time!

Sharon, VP of Client Services, 3PL Company

Dear Sharon -

In my opinion, there are a couple levels of issues:

1. Weekly productivity reporting by person through out the call center and fulfillment.  Our clients display these by department and person on white boards, reports and monitors throughout the facilities.
2. Contact center monitoring should be in place.  There should be a form for evaluating the calls and a weighting system for the responses.  What are your standards for monitoring experienced core employees versus new hires?  Companies have developed coaching approaches to improve employees, get them to accept responsibility for improvement or a basis for asking them to leave the company.
3. Personnel policy that deals with severe HR issues.  These include theft, embezzlement, sexual harassment, etc.  These should have clear documented policies which employees understand.

In terms of error rates, we would expect that controllable error rates would be only 0.5%. Meaning, 99.5% of all major transactions are error free.  In bar coded systems it will be much higher.

In a speech a number of years ago when I made the statement about error rates of 0.5%, a national FedEx manager pointed out that meant 73,000 of their customers would not get their package on time in any given day. What is your management’s attitude about errors?  And you are in a 3 PL service so what guarantees are you making to clients?  Hope this helps.  Call me if I can further explain.

Curt Barry

Hey, blog readers, what’s your company’s approach?

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Read The Full Article

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Recently, one of our clients outsourced 300,000 phone calls off shore, resulting in a substantial reduction in costs. How substantial? This client’s fully loaded internal cost per minute was $0.72, while a fully loaded off-shore cost per minute for this client is $0.42—and most of the customer service remains in house. Additionally, the client’s 90,000 mail/fax orders cost only $0.15 per order: scanned, transmitted to Asia, keyed overnight and available on-line for picking and customer service the next morning.

Clearly, you need to look at the potential savings of offshore outsourcing. How should you approach doing this type of study?

Know your internal costs. In order to compare your internal costs to outsourcing, you need to identify your fully loaded internal costs. “Fully loaded” includes direct and indirect labor, occupancy and telecom costs.  This needs to be converted to a cost-per-minute basis, which is how outsourcing will generally be proposed and invoiced. You may say that you can’t control occupancy costs, however, there may be other uses for that space, if call center is outsourced.

Competitively bid out to multiple vendors. It goes without saying that you need to competitively bid the potential project to a short list of qualified bidders. This is the only way to get the lowest costs.

Formalize an ROI (Request For Proposal). This should include:

• A pro forma for your business, meaning the types and volumes of transactions (actual and multi-year forward projections)
• Required services
• Service level standards for total call length, abandonment rate, and average call service level standards
• Request references and boilerplate contract
• Details about order management systems needed, systems integrations including e-commerce site, etc.

Decide what to keep in house. In my opinion, you should keep your custom service internal. This gives you a way to monitor the service levels of the outsource company.

Ask other critical questions. Among the things you’ll want to know:

• How will training be conducted about your product(s) and company policies?
• Is the provider PCI credit compliant and certified?
• How will you monitor your customers’ calls?
• Who are the company’s references? Come up with standardized questions to ask each of the references so you can compare their responses.

Domestic outsourcing has some advantages over off shore. Here are a few that I think are important:

• There may be an advantage in the area of English speech. However, I am greatly impressed with how well the Philippines has performed for some of our clients.
• Shorter travel distance means you can visit centers more often.
• Understands US culture.
• Keeps jobs in the USA. This may or may not be as much of a factor for you.

Of course, domestic outsource providers’ costs will be higher than off shore, but that is not necessarily a dead end. We have one client, a major non-profit with a high average order, that outsourced 100% of its direct orders domestically while keeping customer service in house. They were able to successfully renegotiate with their domestic outsource provider so that the costs were not so widely different.

Tocky Lawrence is Vice President of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at www.fcbco.com.

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Taurus Software highlighted its business intelligence solution, Manage Metrix, developed in collaboration with co-exhibitor F. Curtis Barry & Company to provide intelligence across an entire retail enterprise. “It is unique in that it not only consolidates all the information across the enterprise into a single repository where business users can access it to do analysis, but it goes a step further in providing proactive, key performance indicators,” said Taurus president Cailen Sherman. “So it’s actually searching through the data and producing recommended solutions to problems that it spots in the system.” To learn more about Taurus Software, visit www.taurus.com

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Our team understands the issues and challenges facing multichannel businesses and provides insight on the following topics:

• Business Management – including “Developing Your Corporate Dashboard Of Key Performance Metrics”
• Contact Centers & Call Centers – including “Managing Your Cost Per Call”
• Forecasting & Inventory Management – including “10 Ways To Improve Vendor Quality Control”
• Direct Commerce Systems – including “How to Select Any Business System: Four Steps To Take Now”
• Warehouse & Distribution -including “Rising Transportation Costs – And What To Do About Them”

With over 45 articles filled with data, results and in-the-trenches experience, we compiled this information to provide a how-to and best practices resource to our clients and others in the industry. The articles in this book reflect the type of in-depth knowledge that a consulting firm with 250+ published articles in US and European trade publications should have – the type of knowledge and experience that F. Curtis Barry & Company brings to every client engagement. Each article was reviewed by our team and edited with timely updates.

Best Practices in Multichannel Operations & Fulfillment provides quick tips and thoughtful answers to companies working to increase their profitability, improve efficiency & productivity and reduce costs.

To order visit: http://www.fcbco.com/book.asp.

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Over the past 23 years F. Curtis Barry & Company’s work with multichannel companies in operations and fulfillment consulting has allowed us to compile these 70+ ways that can cut costs and increase productivity, which will ultimately lead to an improvement in customer service. We have focused our cost reduction and productivity assessment efforts in the following four major areas:

Contact Center (Call Center)
Scheduling and staffing models, service levels and technology in the call center are all affected by the increasing eCommerce order volumes. What are the ways to be more efficient and serve the customer better from the contact center? Learn how to reduce costs and increase productivity in your contact center.

Warehouse & Distribution
With most companies coming out of a less than perfect holiday season, there is a real need to increase productivity without having to make major capital purchases to do so. Discover ways to reduce your warehouse cost per order, increase capacity without expansion and improve service levels.

Forecasting & Inventory Management
Inventory is most companies’ largest balance sheet asset. How it’s managed determines customer service and profitability. Learn ways to improve the management and forecasting of inventory.

Multichannel Business Systems
Order management, warehouse, e-commerce and inventory management systems are at the heart of the company. These systems affect the productivity and sales of all departments including merchandising, marketing, fulfillment and contact center. Investigate ways to plan for, select and implement effective Multichannel Business Systems.

We ask that you please consider using F. Curtis Barry & Company’s consulting services to tailor a cost reduction and productivity improvement assessment to your company’s needs in order to evaluate, develop and implement these improvements and cost reduction practices.

Download the PDF: 70 Ways to Reduce Costs, Increase Productivity and Improve Customer Service

For more information contact Jeff Barry at 804-740-8743 or email jbarry@fcbco.com.

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Upcoming solution will bring together multiple data sources to analyze business performance, aid merchandise analysis, analyze productivity in call centers and fulfillment centers

Redwood City, CA, and Richmond, VA; April 2, 2008

For 20 years, Taurus Software has been “making data liquid” for over 700 companies world-wide, with over 80 clients being in the direct marketing business. Founded in 1984, F. Curtis Barry & Company is a nationally recognized operations, fulfillment and warehouse consulting firm serving the multichannel industry, developing solutions that combine proven industry best practices with the latest technology available. Now, in a joint venture, the two companies are developing a software product that provides:

• A management dashboard of key performance indicators (KPIs)
• Pro-active alerts that identify areas where you can improve your business and save hard dollars
• Ability for managers to easily “point, click and drag” for analysis and reports
• Online updates to these dashboards and analysis tools from the underlying databases
• Modifiable templates that can be tailored for each business
• Analytical modules including e-commerce, marketing, merchandising, inventory control, operations and finance
• Ability to import plans, budgets and history (e.g., calls, orders, shipments, etc.)

The combination of F. Curtis Barry’s unparalleled industry knowledge of what to look for to improve your business, and Taurus’ ability to draw together data from any source and provide dynamic analysis, provides an entirely new way to view your business. Instead of having to find what’s wrong, these metrics will point it out to you.

The joint venture’s first application module will concentrate on merchandising, with an analytical series for measuring product profitability using net contribution to profit, including fulfillment and overhead expenses to the SKU level. Analytical sequences include:

• Promotion, category, sub-category
• Page and depiction
• New versus repeat product
• Import versus domestic product
• Price range report

Consulting services will be provided by F. Curtis Barry & Company to interpret the KPIs and industry benchmarks, as well as to assist in planning strategies to improve their businesses.

Taurus’ President, Cailean Sherman, explains, “For the last five years we’ve been helping multichannel retail businesses gain ad hoc access to their data. But this has required that the users work through their data to uncover problems and inefficiencies. We knew that there must be a way to offer solutions, rather than just information. We knew that if we could gather all of the information necessary to answer a question how are my products really performing? including costs and budgets and overhead and sales that we could identify which products were truly making money, and which were losing money.
Adds Curt Barry, President of F. Curtis Barry & Company, Combining F. Curtis Barry’s experience and expertise with Taurus’ tools allows us to create a unique pro-active analytical package. It is platform and source system independent, which means any customer can take advantage of the metrics regardless of their application package.

About Taurus
Taurus Software has been making data liquid since 1987. Taurus offers an entire range of solutions that incorporate products such as DataBridger—a robust open platform data foundation creation tool, and application specific data models such as Ecomedate for Ecometry customers and Analysis Suite—a powerful analytical and reporting toolset. Taurus is a member of the HPe3000 Transition Partners Program and has technology partnerships with DirectTech, Quest Software, Lund Performance Solutions, Managed Business Solutions, Escalate Retail, Orbit Software, Pathway Pacific, DST Health Solutions and Acumium. To learn more about Taurus Software, visit www.taurus.com or call 650-482-2022 x1.

About F. Curtis Barry & Company
F. Curtis Barry & Company is a consultancy specializing in multichannel operations and fulfillment for catalog, e-commerce, and retail businesses. F. Curtis Barry & Company offer clients expertise in business process and order management systems, inventory management systems, warehouse management systems; warehousing and distribution; contact center services; inventory management and forecasting solutions; and strategic, financial, and operational planning for all business channels. To learn more about F. Curtis Barry & Company, visit www.fcbco.com or call 804-740-8743.

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1. Production chases low cost labor. Where Japan and Taiwan were the centers before China, production is starting to move from China to other Asian countries such as Indonesia, Vietnam and Cambodia as well as Mexico, Central and South American countries.

2. China will not guarantee price beyond the current purchase order in many cases. Inflation in China is at an 11-year high. Some clients are expecting product cost increases of 5% to 10% or higher in 2008. Energy and material costs are going up dramatically. New labor standards and environmental regulations are adding costs.

3. Complexity of the supply chain has greatly increased. Today’s multichannel companies need the people resources (internal or outsourced) in place to deal with the ever-changing production and supply chain.

4. Product lead times are lengthening. Many products’ lead times are 18 to 24 weeks or more.

5. Vendor minimums are high, which forces many smaller businesses to promote products for two or more seasons just to meet the production minimums. That can be every risky if it’s a new product and doesn’t sell well.

6. Transportation costs for imports are 6% to 12% of gross sales – and as we all know, fuel charges are rapidly pushing up costs. So there isn’t any relief in sight.

The bottom line is, when you look at fully loaded costs for imports, the combination of all these factors is stripping the gross margin advantage many imported products gave multichannel companies.

Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

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E-commerce has just received another kudo. “Customer satisfaction with the e-commerce sector hits an all time high” begins a February 19 press release from the University of Michigan regarding its latest American Customer Satisfaction Index (ACSI).

On a 100-point scale, Amazon ranks #2 at an all time high of 88, in the survey of 200 companies across different sectors. Newegg debuts at 87 and Netflix at 84. Amazon is ahead of consumer pleasing companies Apple and Southwest Airlines.

“The improvement in e-commerce is impressive, given the downward trend in the national ACSI” ratings, said the head of the ACSI at University of Michigan.

I think they are right on in some of their observations.

• Amazon’s efforts are paying off—and not only in its high ranking in this survey. Amazon recorded its biggest fourth quarter revenue ever. Are there very many brick and mortar stores or catalog businesses that can say that about 2007?

• Against the backdrop of the weakening economy and the transition that catalog must go through because of paper and postage price escalation, e-commerce is a channel we must find the appropriate strategies to grow.

Customers find the convenience of Web shopping, the product and service research capabilities, the ability to price compare, and the order tracking capabilities a good fit to their business lifestyles.

Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

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