Phone Orders or Web orders? Which do you prefer?

There seems to be a push in this Internet driven world to encourage; even force customers to order online versus ordering by phone.   When multi-product/catalog organizations are more financially driven rather than marketing driven we often see the CEO or CFO advocate that online ordering saves the company operating costs and drive profitability.

While we understand the immediate savings of online ordering our marketing position is that to force customers online is a mistake that will damage differentiation and profitable, long-term customer relationships.   Our position would be to give the customer a choice of ordering channels and let them choose what channel is most convenient to them at any given time. We realize that most customers will likely be multi-channel customers, that is to say, in some circumstances they will prefer to order online, via mobile, by phone or, even, believe it or not, by mail and there are many variable customer behaviors that will determine through which channel they will order. Smart marketers understand they need to give the customer the choice, however, subtly drive the customer to the phone if possible.   Why?   The answer is simple.   Interacting with your customer over the phone allows you to provide individual service and differentiation.   It immediately separates your company from the herd of online sellers with no telephone service.   It allows your trained telephone sales person to sell the brand benefits and delivery a memorable shopping experience.   It allows the customer to talk about your products and get knowledgeable answers.  I recall once calling Lands End and asking about the softness of the various men’s socks that they offered.   The telephone rep knew which felt “scratchy” and “smooth” and could describe the socks in a way no online copywriter could ever do.   Also think about the brand personality and trust that is established during a conversation.   These are the experiences the keep customers coming back.

We often suggest looking at the average order value and median order value of your phone Internet orders.   In addition, we like to examine the retention and move to multi-buyer status of phone orders versus online orders.   We even like to study retention by the last representative that a customer spoke to.   Sometimes you will be surprised by the variation.

Another tactic that we often recommend during an engagement that deals with this issue is to hire a “sales racehorse”.   Many companies make the mistake of hiring minimum/low wage personnel in their call centers, when in fact, if they hired someone with more sales and/or product experience they would likely find that the more qualified person would more than generate incremental sales to justify any increased payroll cost.   Don’t take our word for it. Test it.   Imagine the perfect employee for your call center with sales and product experience and then go hire that person at their market cost. Let’s say they cost double what you have been paying. Just calculate the incremental sales that are required to justify the payroll cost differential.   It will require them to have a better call-to-order conversion rate (close rate), a higher median and average order value, a higher new customer acquisition rate (also a factor of conversion) and a higher customer retention rate.   If you are able to measure all four of these key performance indicators you will likely find a significant variance.   A variance that far exceeds (often by a factor of two or three) what you need to justify the payroll expense.   Having higher quality phone reps almost always pays off.   There are many other intangible benefits that we often see as well.

So, if your organization is struggle to balance it’s strategy regarding phone versus online orders, please call us.   We can help you avoid the hard lessons learned by others.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221

Comments or questions are welcome.

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