Case In Brief: DirectBuy San Diego Lowers Customer Acquisition Costs

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Customer Service
Customer Service
Upgrading its contact center system has helped the membership-based company to reduce customer acquisition costs by 30 percent.

Customer acquisition is a crucial process for organizations. However, this can be a costly process and organizations need to make sure they're not spending more than they should in customer acquisition efforts.

DirectBuy San Diego was facing such a challenge. The company is part of the Indiana-based franchise DirectBuy which allows paying members to buy merchandise, like home furnishings, home improvement items, and outdoor furnishings, directly from 700 manufacturers and suppliers, helping them avoid any price markups. According to Melanie Denischuk, the former marketing manager at DirectBuy San Diego, the company's revenue comes from selling memberships to consumers.

DirectBuy San Diego was spending on average more than $1,000 in acquisition efforts for each new member. A good part of the cost stemmed from the number of staff members the franchise needed to acquire these members, with agents spending a lot of time making calls that never reached a customer. Denischuk says a major hindrance was the outdated contact center system which only allowed one-to-one calls and had no efficient way of removing customers on "do not call" lists. "There were struggles getting hold of contacts," Denischuk, who has since taken a similar job at DirectBuy San Antonio says.

This difficult work environment was having another negative impact on DirectBuy San Diego. Frustrated with the results of their outreach initiatives, agents were leaving the company. "They were getting bored," Denischuk explains. "In their minds, they were wasting their day."

Last year Denischuk decided to resolve its acquisition challenges. Recognizing that the biggest hurdle lay within the contact center, Denischuk started looking at both software and hardware solutions before deciding to implement Five9's Power Dialer cloud-based solution that would allow DirectBuy San Diego to automate outbound calling campaigns, automatically detect answering machines and busy signals, and prevent the dialing of "do not call" numbers.

Results

The company saw results pretty quickly after implementing the solution in May 2012 and Denischuk's eight-strong team was able to be more efficient. "Before they were reaching answering machines or busy numbers," she notes. Agents were reaching between 30 and 50 customers per day, but this number has tripled, allowing agents to reach up to 150 people, helping agents more effectively use their time. Increased efficiency drove cost-per-member by about 30 percent. Denischuk hopes that the current cost, which stands at $700, will go down even further through additional agent training.

Data from calls is integrated into DirectBuy's contact management system, allowing agents to have a clearer picture of each customer who contacts the organization. "It makes customers feel that everyone in the contact center knows them," Denischuk says.

Denischuk became an avid promoter of the new contact system and estimates that 40 different DirectBuy franchises have since implemented the system.

Lessons Learned

Upgrade inefficient systems: Savvy business leaders identify systems that aren't working well and invest in replacing or upgrading them.

Make the most of employees' time: Staff members want to be productive and will appreciate work systems that help them do so.

Repeat successes: Successful companies will extend successful strategies to the rest of the organization.

EXPERT OPINION
EXPERT OPINION