Resource Online short stories

by Niels Kjellerup, Editor & Senior Partner of Resource International.

These articles & ideas are based on the know how and experience gained over the years working as a consultant with companies all over the world. The problems and issues seem always to be the same. If you can understand the ideas, they become yours to work with. All I ask is that you acknowledge the source. If you want to discuss issues raised or let me know some of your own insights please do contact me. The thorny issue of copyright means that you cannot commercially use my materials, issue them in any form as your own. Hopefully that won’t prevent you from applying the ideas to your Call Centre.

 

Short stories about companies using the phone channel

a. Otto Versand - the worlds most successful catalogue house

b. Viking Office Supply

c. Qantas Reservation - from service to sales

 

 


 

OTTO Versand , the story of the world's most successful Catalogue House,

When you order from OTTO Versand in Germany, you do so by phone. Let's say you order a Sony Camcorder plus film and you need it before next Saturday for your Mother's birthday. You give your name and address and a half hour time slot where you will receive the goods.

On that day the parcel is delivered to you by OTTO's own courier service, Hermes. You ask about payment and are told that the invoice is in the parcel; you have 14 days to test the goods and then pay. If you're not satisfied, call OTTO and the goods will be picked up free of charge.

Yes, please read again, you have the goods for 14 days for free. No COD, no credit card ... plain old-fashioned trust!

Asked how this worked, the CEO believes that unless OTTO can trust the customer how could OTTO expect the customer to trust a catalogue. The trust must be mutual.

OTTO does not take credit card payments ... Why?? They want to own the customer (not the credit card company). "Our bad debt is around 2.4 percent, why should we pay 3 or 4 percent to a credit card company?"

Maybe it's no mystery that the world's two largest mail order houses are from Germany and are both built on the same trust!

 

 

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Viking Office Products 

Irwin Helford, the founder and managing director of Viking Office Products has a very simple explanation for his success in the USA, UK, France and now Australia ...

"We make sure to attract business by offering very competitive pricing and then we keep the customers by offering customer service way above expectation. We deliver overnight all over Australia and if you have any complaints ... you are always right."

With this philosophy, he took only 3 years to become the largest office supply company in the UK. The added value is customer service way above expectations and on that concept alone, Viking has almost 10 doubled their turnover in 9 years; from a local California business in 1986 to a multinational supplier in 1995. (If you want to visit Viking Office Products click here).

I remember asking Ian Helford and Michael Dell (Dell Computer) the same question back in 1991 ... By telling others about their strategic success factor (add value customer service on the phone), weren't they risking some one would copy them? Both had the same answer.

No. There is no way the competition can equate better customer service with low prices. To them customer service is used to justify higher prices and their current structure (traditional selling method) does not allow them to copy us.

Summary: The only true way to know whether your customers are satisfied with the service you provide is to track each customer individually and measure the increase in revenue and profit.

Very few customers will stand up and say service is lousy ... instead they take their business elsewhere while rating your service as good or even above average. Don't ever expect the customer to help you nail your weaknesses directly. Listen and look yourself.

 

 

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Qantas Reservation - A case of major cultural change 

The Reservations Centres are very dynamic work places with a staff turnover of 60-70 percent pa. - not because it's a tough place to work, but because Qantas uses it as the primary entrance level and recruit from Reservations to other parts of the organisation.

In 1993, Qantas looked to upgrade selling skills of the reservations telephone people. A training project commenced in November, working with some 110 specially selected telephone sales reps from the Brisbane domestic centre; plus supervisors (who were potential trainers) from each of the other domestic and international Reservations centres.

As the training progressed, the further need for management training was identified; so that work carried out with the telephone people would not be lost as soon as they returned to their centres. These management seminars were attended by 72 senior staff from the five separate reservations centres.

At the time training commenced, the centres were all run as cost centres with revenue being attributed to the place of ticket collection. In light of this fact, for the purpose of looking at training results, we defined productivity as percentage of all calls that ended in a travel booking (Conversion rate). From November 93 to June 94, this key measure increased significantly, almost doubling in some centres.

However, the "side-effects" of the training were to have a much greater impact on the day-to-day operation of the centres ... and most importantly, on the way they were viewed in the organisational hierarchy.

According to Rhonda Chesterton, then Manager Domestic Reservations Sydney, the breakthrough was: being measured in Sales Revenue rather than the Service Level Percentage which had been the norm under the "cost centre" method.

The fact that Qantas reservations was recognised as a primary revenue channel had helped change the perception of the Reservations people in the rest of the organisation.

The Qantas case underlines that very often the way you measure your people's performance sets the motivational tone of the centre ... make sure the measures reflect the added value to the customer.

 

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