Case Study: ClientLogic and Logitech: Page 2
Beyond the call center, Logitech has given ClientLogic additional roles to play over time. In 1997 included roles were in email tech support and end user sales. End user fulfillment was added in August 1998. In the spring of 2000, ClientLogic assumed responsibility for fulfillment of all product replacements as well as the ownership of the customer satisfaction survey process.
Shankardass explains the ability of the outsource provider in wearing many hats. "This is what we do for a living. We know what interactions and technologies will work for the client, as we know the consumers. In technology we can make a significant investment and know that we can leverage that technology across multiple clients. We essentially become an application service provider of sorts for our clients in various technologies. It is around economics where outsourcing invariably works in the economy of scale, ability to leverage across multiple agents, and clients not having to build capacity."
A major contribution to Logitech success in customer care has been in giving the fulfillment process to ClientLogic. Davi Rawlings, outsource account manager for Logitech, is pleased by ClientLogic taking over fulfillment and integrating it with customer care. "Logitech is served well by ClientLogic as its fulfillment center boasts an impressive 99.98 percent outbound order-accuracy rate. ClientLogic approaches fulfillment as a vital, integrated piece of the Logitech customer experience, not a disconnected back end or operations function. ClientLogic understands that the accuracy and timeliness of the 31.1 million packages it shipped during 2001 are the most tangible, memorable part of the customer purchasing experience."
Conversely, as the time and circumstances opened the window of opportunity, Logitech brought other processes back in-house, as Doyle explains. "Initially, we pretty much dumped everything on them; IVR, knowledge base, everything, to use their existing systems. We have moved some of those systems back in-house. An example would be knowledge management. The domain experts need to handle that and we brought that in-house. We brought the call tracking in-house when Web based applications became available. That technology was not as developed before as it is now. We brought in the tracking so that we could have flexibility in our data mining and analytics."
The changing roles have produced challenges in coordination that are pivotal to success of the team in communication. Shankardass explains that the dynamics are overseen by a group of account managers responsible for the ongoing relationship and client satisfaction. "They coordinate with the members of the customer care team within Logitech, Logitech vendors and within ClientLogic. They are the glue that holds that relationship together."
Brainstorming between all of the parties is fueled by reports generated by ClientLogic from its unique perspective from the frontlines of customer interaction. "We create very robust processes around escalations, sharing of information, reports and data. The data is done in several different ways and that is the challenge with so many disparate databases. Our architecture allows us to trap all of the data points needed to manage the relationship. One part of what the account management team does is to analyze trend data to report to the appropriate parties. As we have a birds eye view of the customer, we are in many ways the feedback mechanism for the customer to Logitech."
This dynamic growing relationship reflects the concept of operating as a team for a central purpose with changing roles as dictated by capabilities of the business, forces in the marketplace and technological advances over the continuum of time.
Katherine Shariq, industry analyst in the information and communications technologies for Frost & Sullivan out of San Jose, California, says "ClientLogic has created a very successful business model, which allows companies to enter into a working relationship with them at any level of operations. Like many clients, Logitech originally hired ClientLogic to perform multi-channel customer services. However, ClientLogic's scale and capabilities enabled it to offer Logitech a multi-facetted, dynamic partnership. Not only was ClientLogic able to provide an integrated view and analysis of the customer, they were able to segment and define the customer base and work with Logitech to design a highly-specific customer loyalty program, matched to each customer's personal preferences."
"This partnership demonstrates the dynamic evolution possible from a successful outsourcing relationship. While the model provides a map to the future for a successful collaboration, it also tracks the evolution of the ClientLogic/Logitech interaction."
Doyle simply points out, "It works better as a partnership rather than a client/vendor relationship." The results would tend to indicate that the summation by Doyle is very understated, as Logitech has seen enviable growth, from $471 million in fiscal year 1999 to an estimated $960 million for the 2002 fiscal year.
Doyle further adds, "We have reduced expenses by two thirds versus revenue in the last three years, and consumer satisfaction has gone up. It's less measured in dollars than in customer satisfaction. I could not have done this in-house given the way we operate. There is no way I could have maintained the service level doing this in-house."
Bruce McCracken is a business writer with specialization in outsourcing. His coverage areas are primarily in IT, eCommerce, CRM, HR, and supply chain/distribution with focus on small to mid-sized companies. He may be emailed at email@example.com.