Dow Chemical is gaining solid returns from its customer service solutions group through a unique outsourcing partnership with Electronic Data Systems.
Dow, Midland, MI, originally contracted with EDS, the computer services giant based in Plano, TX, in 1989 to build a database to support its customer information center. The database worked so well that when Dow wanted to enhance it four years later, EDS proposed to take over all operations of the customer information center, an inbound call center that served as a clearinghouse for information and contact point to disseminate further information to industrial manufacturers that use Dow products.
“EDS proposed to run the call center and it appeared they would be much better doing so,'' said Dan Showalter, who handles marketing and sales for Dow. The companies signed a 10-year agreement for North America in 1993 that has been a win-win situation for both.
“We certainly look to try to get into more of a partnership with our clients,'' said Steve Koons, business relations manager for Customer Information Group, the EDS division within Dow. “Long term agreements are very critical in terms of developing a relationship. [The Dow agreement] is a little longer than normal.''
By outsourcing its teleservices functions, Dow gained a partner with the expertise to provide flexibility and the latest capability at a fixed price. EDS provides enterprise customer management solutions, teleservices, database marketing, fulfillment and distribution to 266 clients, including General Motors and Toshiba, at 70 calling sites in 19 countries. Forty of these sites, including the Dow center, are dedicated to a specific client.
The partnership arrangement allows for better communication between Dow and EDS than a simple outsourcing relationship. Dow articulates specific business goals and which products and customers levels it wishes to target. In turn, EDS uses it technology and experience to analyze customers and influence future buying decisions.
Managing 2,000-3,000 inbound contacts per month and responding to those contacts was the original mission for the Customer Solutions Group. That role can be upgraded seamlessly to include all inbound contacts including management of a Website and outbound telemarketing and market research. Dow customers receive calls to keep them updated on regulatory compliance issues and to gain feedback on their buying decisions. For example, through database analysis, EDS can predict the buying cycle for a specific product and reach the customer with an outbound call when it's time to buy again.
Dow can concentrate on its primary mission as a chemicals company and be assured that customers are provided with better service at lower costs than it would take to establish the infrastructure itself.
“They are not experts at the phone, computer and people issues related to service,” said Customer Solutions Group account manager Dan Gilbert. “Since we specialize in that execution, we can do it very efficiently. In most cases, we can do it more cost effectively than they could ever do it alone.''
EDS trains customer service representatives to insure that they are well versed on technical and chemical issues. Dow customers perceive that they are getting better service, which has led to high rates of retention and loyalty and also has attracted new business.
“Because of our approach, we get a broader view of the customer (than Dow would),” Gilbert said. “Your customer is telling us they are purchasing this amount of a product. When you effectively deliver what your customers need, you increase sales and loyalty to the point where cost is irrelevant. In all cases, we've found that the value delivered is greater than the entire cost of the center for a full year.''
EDS also provides technology upgrades throughout the life of the contract, something most companies “do grudgingly'' according to Showalter. EDS has already installed a new phone system and improved Dow's database and data capture capabilities.
“The costs don't increase; that gives us a lot of value as the contract goes along,'' Showalter said.
Since Dow's costs are fixed, EDS must examine ways to bring down its own structural costs to maintain and improve its services. These examinations allow EDS to look at other areas within Dow and see what values they can provide outside the scope of the agreement.
“EDS has a great relationship with our businesses,” Showalter said. “Dow has13 divisions and EDS is constantly in contact with all of them.”
