Operations Benchmarks & Best Practices

Barry: The Internet is radically changing these benchmarks, so that has to be taken into consideration here, too. Say you have two companies with AOV of $100 and two-line orders, for a $100 million a year business. But one company gets 10 percent of orders via the Net, and the other gets 50 percent via the Net. Most of the ratios will be radically different, including cost per order, cost per contact, call-to-order ratio, etc.

Kislik: That's true. You have to consider your customer population. If you have a lot of older customers, they may be more prone to use the phone than the Net.

CS: Please name some common external benchmarks you see catalogers using.

Barry: We track all kinds of data, including call abandoment rates, percentage of calls answered in 20 seconds or less, e-mail turnaround time, calls answered per hour, how many e-mails handled per hour, average call time, call-to-order ratio, calls answered per square foot of the contact center, costs per order, cost of credit, cost per contact, cost per call, percent to net sales for major expenses such as indirect and direct labor, benefits, training, recruiting, telecom, occupancy, and much more.

We try to see how those vary among companies within our ShareGroups. But it's tough, because the AOV among those share group companies can be a wide range, from say, $45 to $400.

Kislik: Curt's array of costs to measure is impressive. Companies not participating in this kind of rigorous, ongoing study ... well, some companies just can't get near that level of data to pursue; they just can't handle it.

Barry: Companies find real value in capturing and collecting the benchmark data. They often learn many things they didn't know about their operations, which leads to positive changes in process.