From the Dark Side of Productivity, Part 2 of 2

This month, in the final part of our two-part series examining the potential pitfalls of improving productivity by cutting costs, I provide several takeaway pointers to help your catalog/multichannel business make these changes with as little “pain” as possible.

(For part 1, click here.)

There are lessons we can take away from the two stories referenced in part 1, and you should consider them when you’re looking for ways to improve productivity and cut costs:

1. What’s the effect on the customer? Think about the reaction most people will have when reading the Ann Taylor story. Why would anybody want to work in retail? Service is already lacking in most retail stores. Is removing its last vestiges really a good thing?

2. Be careful what you ask for. I believe people will give you what you ask for. If you want lower costs per call and push your customer service reps to shorten their calls, they’ll deliver. But ask yourself: Is that the outcome you really want?

3. Are you measuring the key performance indicators? Many businesses still aren’t benchmarking internally. A $75 million personalized business with a complex call center recently had us implement its first cost-per-call, cost-per-order, cost-per-transaction reporting system — and it got some real surprises. Remember, you can’t improve something that you haven’t measured.

4. Direct has a real advantage. The president of a large, general merchandise catalog company recently told me he wanted efficiency, but not at the cost of sacrificing customer service. “Many of our customers tell us the casual, helpful, really interested call-center reps are why they deal with our business. Our knowledge of the products and their application is extremely important to making the sale … not a short, brisk conversation.” Direct companies come out on top if they provide a higher level of service.

Failure to fully understand where you’re starting from, what you hope to achieve and re-engineering through to all its possible consequences can lead to any number of unintended results. Winding up on the front page of The Wall Street Journal might be the least of your problems.

Bob Betke is vice president of F. Curtis Barry & Co., a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory and benchmarking. Learn more online at www.fcbco.com.