Inbound mainstay turning to customer service Internet sales growth is forcing established direct marketer Vermont Teddy Bear Co. to use the telephone more for customer service and order processing. But even as the teddy bear delivery service’s ratio of telephone sales is decreasing, its inbound call volume is increasing.
The company’s Web site (www.VermontTeddyBear.com) and direct response radio spots are generating growing numbers of phone inquiries from new customers seeking information about products or how to navigate the Web site.
“We’re getting a lower conversion rate on inbound calls because more phone inquiries are coming from the Web,” says Chris Powell, telephone sales manager at the firm.
In addition, patterns involving inbound calls, e-mail and online orders are emerging. It seems many customers prefer to place orders by phone and use e-mail when making subsequent customer service inquiries.
It’s not unusual for inbound callers to phone Vermont Teddy Bear immediately after placing an online order to verify that their order was received, adds Lisa McGee, customer service manager. Vermont Teddy Bear also finds its radio spots generate inbound calls from drivers with car phones.
The company operates an in-house customer interaction center with 45 stations at headquarters in Shelburne, VT. On peak sales volume days the company generates close to 55,000 inbound calls, plus Internets orders. During slow periods like August the volume runs closer to 1,500 calls per day.
Christmas, St. Valentine’s Day and Mother’s Day are the busiest times for Vermont Teddy Bear. During busy times overflow calls are outsourced to Canicom, a Denver-based teleservices agency.
For several consecutive quarters Vermont Teddy Bear has achieved 50% growth rates. The most current figures available show net revenue increased 55% to $23.4 million for a nine-month period through March 31. This includes a 50% increase in second quarter net revenue totaling $10.9 million.
Vermont Teddy Bear uses radio advertising read live by disc jockeys on 500 stations nationwide and catalog mailings to generate inbound phone orders and more recently Web site traffic.
Inbound sales calls typically last four to six minutes, as agents offer customers numerous options to customize teddy bears gift cards for delivery. More than 100 styles are available in four colors and numerous clothing outfit styles and embroidery. Customer service calls average four minutes in length.
Radio generates the majority of phone sales and traffic for the Web site. All radio spots are tagged with the Web site address and the company’s toll free phone number. Catalogs, direct response print advertisements and the phone orders they generate represent only about 12% of total orders received.
Between 35% to 40% of all orders at Vermont Teddy Bear are processed online and that percentage increases monthly, Powell says. He estimates phone orders decrease about 20% at Vermont Teddy Bear for every 30% increase in orders received online, while the number of phone contacts decreases about 1% for every 2% increase in online customer contacts
In light of these changed business conditions, Vermont Teddy Bear has begun training customer service agents to also handle inbound and outbound e-mail.
Agents handling inbound sales calls typically don’t use e-mail. The majority of inbound e-mails concern customer service issues and separate group of agents handles customer service contacts.
Between calls agents check inbound e-mail, compose and send outbound e-mail replies following e-mail script guidelines, while personalizing each e-mail that goes out. Agents typically use standardized e-mail response replies only during peak volume periods. “When calls come in they can put the e-mail on hold,” McGee says.
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