A couple of years ago my agency created catalogues for an office supplies company – different catalogues for different areas of their business and different types of customers.
They had a catalogue for typical office stationery, another for bulk purchases of products delivered on pallets, and other specialty catalogues. They did some sophisticated testing, with the objective of moving clients to order via their website to reduce the dependence upon the call centre, as it took the majority of the orders. They also believed they’d make more money with online ordering.
The test results revealed some interesting insights. When the company migrated customers to online orders, they lost revenue. The average order size via the website was much less than the average order via the call centre. The reason is simple and one which any salesperson can explain.
Online sales reduced average sales value and revenue…Once the customer was on the phone, the customer service person could upsell via questions and sell even more products than the customer might have bought if they simply went to the website. The customers who did use the website for orders, usually only bought a small number of items.
Another insight they discovered was that most customers had the catalogue with them when they called to order by phone. This gives the customer service person another way to engage with the customer, by referring to the catalogue pages and discussing them together.
customers have the catalogue with them when they call…The grim discovery was that the move to online ordering had the potential to damage the business and reduce sales. While website sales can possibly cost less to process, the average sale value was less than telephone sales.
The company had to work a delicate balance of telephone and website sales and eventually hit on a strategy of telephone follow-up to online sales. As online orders were received, the outbound telemarketers would call the customer and upsell based on the products in the online order.
This became a productive use of the call centre staff, giving them options for inbound and outbound selling. Customers appreciated the ‘service calls’ and nearly always increased their order value.
let me help you spend more money…So don’t believe everything you hear about the marvels of digital disruption – it can damage your business rather than improve it.
The old adage continues to apply – just because you can doesn’t mean you should…
3 Comments
Great post Malcolm and a very important point. An illustration of the dangers of apparent efficiency impacting on actual effectiveness. Broader point is understanding how the sales process works and the behaviour of the customer. I would say a “Well done” to your client for recognising the problem (clearly tracking in the first place) and then taking thoughtful and appropriate action.
As an aside, personally I love examples like this in what is generally considered a “mundane” business.
Thanks for the post!
Kevin Francis
Thanks Kevin, what’s even more interesting is the value of the printed catalgues. They have a shelf life of 3 to 6 months and clients keep them. Migrating to digital versions is not an optipn as testing proved. The tangible and physical nature of the catalogue means it is kept and referred to regularly by clients…
Another example of the continuing value of physical media (such as newsletters)…as I think you (and others like Dan Kennedy) have been pointing out for some time. “The Revenge of Analogue” and all that 🙂
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