Pay Attention to What's Behind the Curtain1 Aug, 2009 By: Jacqueline Renfrow Response
While some new technology is creating more user-friendly systems, others simply protect against fraud and reduce charge-backs. Travis Gomez, sales manager of Vista, Calif.-based CambridgeCommerce, explains that technology helps marketers capture incremental efficiencies like never before. "One of our clients was able to eliminate 12 percent of its bad debt with the implementation of real-time prepaid card identification system," says Gomez. "We also have clients that have experienced 1-to-3-percent higher clearances by implementing some decline management tools and strategies."
One of the biggest shifts that Gomez has noticed is the change in buying channels for consumers. It used to be that radio and DRTV marketers would drive about 20 percent of their business from Internet sales, but for many, this has shifted to closer to 50 percent. In turn, the shift to online has driven more fraud prevention technologies because, "the anonymity of the Internet allows fraudsters to be more aggressive compared to primarily radio and TV campaigns," says Gomez.
It's not just about lowering fees and increasing revenue, cash flow and profitability. It's also about creating value, says Alison Schmidt, senior account manager of Portland, Maine-based PowerPay Direct. "Today's experienced payment processors — those that understand the DR industry as well as card-not-present payments — offer a wide range of services and possess a progressive attitude toward the opportunities and challenges facing the DR industry, adding value for their DR clients far beyond lowering fees."
Perhaps the most important piece of value is customer service and keeping the consumer happy. According to Schmidt, merchants with higher product value, using multi-pay, continuity and up-sell or cross-sell program strategies can impact the number of times you hit a customer's credit card. "The more charges or authorizations are attempted on a customer's account, the higher the chance he or she will be unsatisfied," she says.
Gomez agrees that value is everything when it comes to creating a customer-worthy payment processing system. "The real value good processors bring to the table is their understanding and knowledge of the nuanced risk associated with the various marketing components of a campaign and assisting marketers in mitigating them through experience, technology and underwriting that is tailored to their campaign," he says. "We see new payment processors pop up in the DR space every year, but few stick around because the processing demands of DR are unlike that of any other industry."
Processing The Future
What's on the horizon? The near future is about educating all vendors on multi-channel processing, whether it is for accepting sales or reporting analytics back to clients. But Schmidt warns, "As mobile payment processing applications are used more frequently, it still becomes increasingly important to maintain the security of these transactions."
In addition, some new technology will help marketers make more money by reducing overall processing costs and optimizing efficiency. For instance, the integration of cardholder data capture for card-not-present transactions — whether through phone or Internet — eliminates the need for a third-party gateway. Also, remote deposit capture (RDC) technology, which has been out for a few years for banks and is now just moving into the DR space. RDC is an electronic check imaging system that allows businesses to scan paper checks and deposit those checks as electronic items to their bank account via the automated clearinghouse.
The Communication Hub
Make no mistake — it's not just customer service as usual. The first rule of picking a call center is the same as with a payment processor: the vendor must know the nuances of DR. "A company familiar with DR knows to be ready when the media campaign runs and the calls begin," says David Grubb, director of sales operations for Willow Grove, Pa.-based AnswerNet.
After finding a DR-centric company, the three most important criteria include: well-trained agents; the capacity to handle customer growth quickly; and an in-house IT department that matches the needs of the customers. "Correct staffing with the right amount of agents is critical to the DR offer and has a small window of time each day to make this work," says Grubb.
As with the other segments of support services, technology is on the lips of those in the call center business. "For instance, I see a day soon where it will be very common to chat with your call agent while watching your DR show streaming in a window in the upper left-hand corner of your notebook," says Grubb. Already, technology has increased what is known in the call center arena as "in the cloud" network software, which makes it possible for support services to run as deep as your agent base. According to Grubb, this area of fast growth has led to increased outsourcing in the space and will only grow in years to come.
Other advantages to recent technological upgrades include a cheaper rate to get calls from one point to another and easier ways to get insight into data. But perhaps one of the biggest advantages for the customers is the possibility for multi-channel communication. Customers can potentially communicate with a call center through digital means such as E-mail, texting and chat windows. "People don't have to call in anymore," says Neal Topf, president of Miami-based CallZilla, a center that caters to the Hispanic market. "They can text in their interest, opt-in, which creates leads."
Topf wants the industry to buck the idea that a call center is a call center is a call center. Some focus on niche areas and often the processes for handling a call are different from one center to another. It is important to communicate what is expected and what expertise the call center can contribute before you begin business. He recommends marketers find out what type of products the company has worked with before, ask about price points, get references and make sure the call center understands the metrics that the marketers wants to target in the campaign.
As is the case with payment processors, different DR verticals require different call center skills. "Each product category is vastly different from the next," says Topf. "It's a different script, how we communicate with the caller, the decision making process the caller goes through. For example, health-and-beauty is a longer talk time than things like hardware or housewares. In addition, in hardware you don't usually have continuity, but you often do with beauty, so product differentiates the scripting and how you approach the call."
Once a call center is chosen for a campaign, success relies on communication between the client, the media buying agency and someone at the call center. Marketers must stay abreast of "training, supervision, understanding metrics, account management and performance calculations," says Topf. Plus, the business does not breed in a vacuum, since media buys and offers change, so those at the call center need to be informed of changes.
Dan Coen, president of Call Center Today, based in Tarzana, Calif., says that the name call center has now engineered itself into a "contact center." And while call centers are seeing a shift to the Internet, customers are still set in their ways when it comes to dialing 800 numbers, so both options must be available. "We have had great success teaching our clients how to use the telephone and other marketing channels to capitalize on Internet sales," says Coen. "I believe strongly that the process begins after the order is placed or after the phone rings, while some of our clients had believed in the past that's when the process ended. So we flip the paradigm, encourage innovation and try to capitalize on the DR advertising that they run."
Moreover, Coen says the sale does not have to be made to a customer on his or her first call. Once the phone rings, a DR client has a defined ROI for the call. In fact, call centers and clients often give up after first calls and Coen believes that cost-per-acquisition goes up with continuous follow-up to those who called in.
"We tend to spend tons of money on the advertising part — the creative, the message, the placement of media — and then we forget about the most critical piece, which is what happens to your investment when the telephone rings." says Coen. "Find a call center that has the right people in place because when that phone rings, your ROI is on the line. Even the best front-end media campaigns look terrible when the call center doesn't have the right people in place."
PACKAGING AND FULFILLMENT
Fulfillment is more than distribution. "It is essentially the entire back-end of your operation," says Loren Crannell, vice president, sales of Van Nuys, Calif.-based Moulton Logistics Management. "The right fulfillment company can allow the front-end marketing team to analyze results and make decisions on offers and price point combinations that will yield successful campaigns."
When looking for a fulfillment company, Crannell recommends finding a vendor that specializes in the vertical or distribution horizontal that matches your product's uniqueness. The physical dimensions of products lead material handling situations both in terms of equipment and product flow layouts, security, climate control and more. "Let's not forget that the product type shipped has a direct effect on the customer service call types, quantities, conversation duration, and ability to 'save the sale,'" adds Crannell.
Drew Graham, president and founder of Ship-Right Solutions, based in South Portland, Maine, agrees that the individuality of a product is important and that the devil can be in the details. Whether it's fulfilling an order of health supplements or fitness DVDs, the product type should dictate everything from packaging requirements and inventory tracking to return processing protocols and carrier selection. As an example, Graham noted that Ship-Right Solutions provides fulfillment and customer support for a number of dietary supplement marketers that advertise free trial offers, so optimizing freight rates and continuity plans are critical elements to clients' successes.
Andy Arvidson, owner of Torrance, Calif.-based Imagine Fulfillment, recommends picking a fulfillment house first, then looking to the vendor to help find media and payment processing partners. Why? According to Arvidson, a fulfillment house has the data that can increase your ROI; it is the last impression of the consumer's overall buying experience; a satisfied customer is great for branding and advertising products; it can protect your ROI from potential problems such as high return rate; it ensures products and shipping and handling are profit centers; and it has PCI for compliance for data security.
Crannell warns that fulfillment center operations have grown more complex in the past five years and will continue to be so as companies fight to stay efficient against increasing prices of labor, transportation, real estate, goods, etc. Also of notice more recently is the trend to outsource. "With the speed and complexity of DRTV service providers, many companies that handle this service in-house have realized that they cannot do it as well, or economically as a company that specialized in that support field," says Crannell.
According to Graham, the big difference in today's fulfillment centers is speed. "Prospects want quick quotes; clients need to be up and running faster and everyone along the food chain wants instant information," he says. Clients expect instant access to this information, from calls that are recorded to data that is captured. Luckily, the cost and availability of technology has leveled off in recent years, making platforms for real-time information access more accessible. "New clients will test specific offers, roll out new channels, introduce new products and then turn on a dime with something unexpected and as a service partner, we have to keep up."