April 2007 - Support System

Finding fulfillment services doesn’t have to be difficult. It just requires sound research, solid referrals- and asking a lot of questions.

By David Lustig

There are many important steps to successfully marketing a product. So many, in fact, that when you look back at the entire process, its creation can sometimes seem to have been the least of your problems.

One of the most critical areas is the successful marriage of your idea to the appropriate fulfillment company that will act as the middleman between creation and revenue. Finding the right match, understanding the process and working together as a team, however, become a combination of research, referrals and asking the right questions. Like everything else in business-not to mention life-you need to find a good fit.

“There are numerous partners that marketers work with when managing a direct response campaign,” explains Kris Johnson, director of sales for Accretive Commerce in Los Angeles.

“We find that many of our clients are referred to us from these partners, including production companies, media buyers, telemarketing companies, payment processing specialists and consultants. New clients are also acquired through regular sales prospecting and via direct communication with established marketers.”

Joel Crannell, vice president of sales of Moulton Logistics Management in Van Nuys, Calif., says referrals from within the industry are very common and range across the board from production companies, media buyers, telemarketing and payment processors.

“Networking among them all is very helpful,” he continues. “Trade shows, industry-related trade magazine advertising and just old fashion cold calling also work.”

Those words, “right fit,” mean more than just everyone getting along. Finding the right fit may also mean that you have sufficient volume for a particular fulfillment company to work with you.

“This is really a case-by-case situation,” continues Crannell. “We all love to have the high-volume accounts, but in this business we realize that this is not always the case. Working with “seasoned’ marketers that have had their successes in the past is generally a preferred type of account.”

Andy Arvidson, owner of Imagine Fulfillment Services in Torrance, Calif., contends that no client is too small or too large to make a good fit.

“It is very important to determine what types of business the order fulfillment company specializes in,” he explains, citing kit assembly, packaging, daily continuity processing, real-time inventory and financial reporting, lot tracking, clean room fulfillment for health and beauty products, database management, fan club fulfillment, and retail store distribution as examples.

“Look for a fulfillment center with a long history of experience with the warehousing, fulfillment and distribution of the client’s specific items,” Arvidson suggests. “Closely examine the fulfillment house’s real-time system for handling post sales transactions, possible backorders and partial shipments in an efficient manner.”

Thus, a fulfillment company should be just thrilled to take you on, right? Maybe not. While, naturally, you will be looking closely at the prospective fulfillment company, a good fulfillment company will want to take a good look at you, too.

“The type of products many fulfillment companies agree to take on is a function of internal capabilities,” states Doug Engebrethson, vice president of sales of Protocol Marketing based in Doylestown, Pa.

“Perishable foods, for instance, is a special situation both for storage and shipment,” he says. “Climate control also allows for vitamins and supplements to be stored under proper conditions.

“The size of the warehouse or the number of pallet spaces determines whether large and bulky items can be stored economically. The ability to find and retrieve product and to conduct audits also determines which types of products are shipped. The type of inventory system also might be a contributing factor in having a large number of SKUs in stock, where lot control or dating might be needed for inventory control or storage.

“The ability to manufacture optical media and packaging on-site-such as intellectual products-and then ship to the end customer without moving that product to another location is a win-win for both the marketer and the fulfillment company.”

Once you’ve passed these potential hurdles, and you and the fulfillment company have come to terms, what next?

“We have developed a checklist that covers the basics that every direct marketer must be prepared for before launch,” says Sheldon Stoller, vice president of Integrated Messaging Inc. of Winnipeg, Canada. “This includes obtaining samples of the product, promotional literature, a copy of the commercial and the answers to a myriad of questions, including: how much will the product sell for, how much is shipping and handling, are there any state taxes?” Stoller adds that it’s also important to determine if there is an upsell, a continuity program or a third-party upsell.

“Where will a mail order or check be sent? Is the credit card banking set up?” he asks. “In addition, who is the card processor? Do we need to communicate with them and authorize the transaction? Will we keep track of inventory so that we do not oversell or charge for a product sale when there is no inventory available? How long for delivery? Where do returns get sent? What is the guarantee? The return policy? When do we authorize the shipment of a replacement product if it is lost?” The list, he explains, can seem endless.

Finally, he says, the best insurance is to place a test call, send a mail order, process each and fulfill the orders to show how long it takes to deliver.

Every detail, it seems, must be worked out, including discussing the various telephony opportunities that are available.

“Smart marketers can take any kind of negative feedback and turn it into an opportunity,” notes Arvidson. “If someone is complaining about a product, the live customer service representatives should do everything possible to make them a happy, repeat customer. Satisfied customers will buy from clients for a long time. Customer service representatives should take a consultative approach with a dissatisfied customer and work to understand their requirements and needs, putting the right solution in front of them.”

Many fulfillment centers have an interactive voice response (IVR) component to them. You know, that recorded voice that says, “Welcome to so-and-so. Please listen to the following menu….”

“IVR is very useful when product is not available or backordered,” says George C. Fanolis, vice president of business development for Fosdick Fulfillment Corp. in Wallingford, Conn.

“The majority of the calls, in this situation, are to check the status of orders. IVR allows us to answer the customer’s question without utilizing a live agent,” he continues. “The drawback with IVR is it is more difficult to save the sale or upsell. In a customer service environment, you need the personal touch to successfully save a sale or upsell. It is also our experience that elderly people do not enjoy the IVR experience and prefer to speak to live agents.”

Another situation that has to be thought out in advance is what happens if a product is recalled?

“Most fulfillment companies keep complete records on shipments with lot numbers for recall purposes,” says Hal Altman, president of Motivational Fulfillment & Logistics Services in Chino, Calif.

“The customer service department should be able to send out postal cards or e-mails informing the customer of the recall,” he says. “It is the responsibility of the manufacturer to replace the parts, even though some try to avoid that responsibility.”

Moulton Logistics’ Crannell believes that this process is best analyzed on a case-by-case basis.

“The responsibility would be that of the marketer,” he explains. “One consideration would be if it was a voluntary recall or mandated by a governmental department. The FTC has rules and regulations that must be met in regards to contacting consumers. The fulfillment house generally is the instrument in the actual process, with the direction coming from the marketer.” The fulfillment house, he adds, also maintains all the data from when notices are sent, and has the ability to track responses, returns and re-shipments.

Protocol Marketing’s Engebrethson says the process is client driven.

“We can advise the client based on the particular situation in light of our experience, but the ultimate liability and responsibility resides with them,” he notes. “Next steps are a function of the client’s decisions.

“We can extract a list of customers who are affected and then with the direction of the client, determine what to do next. We can outbound that list, send a letter or a postcard or just provide that list to the client.

“The decision to repair, replace or send out additional parts would be based on many factors, including safety, usability, government oversight and the goodwill that the marketer may want to generate. One key facet of any good fulfillment operation is to detail in the SOW (statement of work) what the recall or replacement procedure might entail before the need to act arises. This is necessary as expectations for this operation could have far-reaching financial ramifications.”

Returns are another area that must be carefully thought out beforehand.

Integrated Messaging’s Stoller believes that returned products generally should be evaluated when received and classified as either resellable as is (still in the original packaging unopened) or in need of refurbishing.

“This may be as simple as adding in a new set of instructions or repackaging into a new box or container with all of the parts and pieces required,” he states. “It must be determined if everything is still in perfect, unused working condition and able to be reshipped as new.

“Otherwise, if there are any signs of use or wear, it will likely be scrapped for parts. Many items cannot be reshipped for sanitary reasons and are destroyed once received, accounted for and refunds issued.”

“Over the past several years, most successful DRTV clients have also branched into the retail environment, as well,” says Crannell. “Retailers want to carry the successful, “As Seen on TV’ products, so really, they are one and the same.”

Stoller believes that DRTV customers are single-time purchasers and will create their impression of the company they are dealing with upon first contact with the call center.

“The call center only has one chance and a short timeframe to build a trusting relationship with the caller, having only a limited amount of time to take care of them. The customer group is not generally repeat purchasers unless there is a continuity program associated with the offer or a requirement to order more supplies for the product they purchased.

“In a retail situation, the client may build a relationship with the sales clerk, see them face to face and interact with them for more than a two- to three-minute conversation. The potential exists for repeat business more so in a retail environment, where a relationship is built with the customer.”

So then, what do the experts believe is the most important advice they can give marketers trying to select a fulfillment company?

According to Accretive’s Johnson, “The marketer should perform extensive due diligence to verify that their fulfillment partner has the experience, people, technology, facilities, capacity, scalability and unique direct response expertise to help ensure the success of their program.”

Fosdick’s Fanolis suggests, “Conduct site visits to make sure you see the facilities you’re considering. Such a visit will prove valuable in assessing a fulfillment company. It is also advisable to meet with the key players to get a feel of their knowledge and how “client friendly’ their attitude is.”

“Find a fulfillment company that actually does what they promise during your initial tour of their facilities,” advises Motivational Fulfillment & Logistics Services’ Altman. “Make sure they are flexible to grow with you in both DR, and if and when you decide to go retail. Select a company that tries to save you money both in shipping and materials, and one that will listen but also not be afraid to speak up if they think it will benefit the program or improve upon it.”

Moulton Logistics’ Crannell says, “Do your homework and ask questions. Review reporting and customer service departments, as well as meet the team who will be working with you day to day. Get referrals from others-current and past clients-and definitely do a site visit.”

Protocol Marketing’s Engebrethson stresses, “In no order of importance, you might want to find out how long they have been in business. What are their core strengths? How strong and integrated are their systems? How flexible are they from a cultural perspective and an IT perspective? Can they be a partner? Do they ask the right questions, make recommendations, consider how to make your campaign or program an economic success? Will they furnish references? Is their location close to your manufacturer’s plant?”

“Consider this seriously. You are putting your trust in a company that you may never have heard of previously. You may never have met the person you are discussing your project with. You are allowing them to communicate with your prospects and customers and build a relationship with them on your behalf,” warns Integrated Messaging’s Stoller. “You are effectively having your business run by a company thousands of miles from where you may be located. You have made a significant effort to source the best product you can, produce the best possible commercial, purchase the most appropriate and affordable media and have expended time, effort and resources to put it all together-and you’ll be relying on a call center to carry out your plans to sell as much as you can.”

Imagine Fulfillment Services’ Arvidson, suggests, “Tight communication is the key to any successful relationship. Time and technology do not change that. It is important to create a team of people around each client’s business. Always be proactive and put yourself in the client’s shoes. Fulfillment houses need to put closure on all questions or issues with a high sense of urgency so the client can focus on growing their business.”

David Lustig is a contributing writer to Electronic Retailer. We would appreciate your feedback. To submit comments, please e-mail the magazine at [email protected].


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