vicki powers
freelance writer

Philosophy Supports Growth with Technology

Philosophy uses technology to streamline operations, handle Website traffic

iQ Magazine , First Quarter 2006

by Vicki Powers

Philosophy passed an extreme technology test when its skin care products were featured on Oprah's 2005 "Favorite Things" list in November 2005.

With new technology implemented just four months before, Philosophy's networking and voice over IP (VoIP) system allowed it to handle more calls more effectively. Philosophy staff handled 634 phone orders ($60,000 in sales) in the first 30 minutes after the Oprah show aired nationally, with average hold times of only 11 seconds. The Website secured 300 to 400 orders per hour.
"There is absolutely no way we could have handled this with our other system," says Jay Nystrom, IT manager at the Arizona-based Philosophy.

Philosophy's success in the last five years so strenuously tested the limits of its previous phone system that it couldn't even accommodate more employees to keep up with the growth or improve distribution channels and customer service. The company's move to a new building provided the perfect backdrop for the transition to a new networking and VoIP system in July 2005.
"We were forced to make a decision about our phone system because of the office move, which allowed us to step back and analyze our needs and plans for the future," says Mark Harshbarger, chief financial and chief operating officer at Philosophy. "VoIP was clearly a strategic decision to allow us to be prepared for the future, whatever that may be. The result is we are better prepared from a technology and communications standpoint."

A Customer-Relationship Tool

Using sophisticated VoIP technology in its customer-service area has brought Philosophy's customer communications to a much more advanced level, especially in terms of managing intelligence. Previously the company's small call center was losing and irritating customers as well as suffering backlogs in calls. The center didn't have a management system that could register or monitor its backlog, let alone manage or redirect it. With the old system, staff couldn't put callers on hold, use caller ID, or transfer calls.
Philosophy might still be dialing through a traditional PBX phone system if Sentinel Technologies, a Cisco Gold Certified partner, hadn't convinced it otherwise. Moving to the new phone system required explaining the power of IP Communications, call recording, and unified messaging, according to Kevin Koski, senior sales supervisor at Sentinel. "We helped Philosophy's top management to view the phone system as a businesswide communications tool," Koski says. "We explained the different mind-set and viewpoint, which helped create this solution."

The solution includes a converged network with VoIP, call center, wireless networking, and other enhancements.

Today, Philosophy is significantly better armed to ensure customer satisfaction. Customer-service staff can now see how many calls are in queue, trace calls, record calls, and even add new queues. Staff can respond to calls more quickly because everything operates in real time. Nystrom says the technology is allowing Philosophy to use its phone system and network as a customer-relationship tool.

"We really like having the ability to see from which queue the call is coming because it gives us time to pull up the appropriate screen to prepare," says Kelly Bischoff, customer-care specialist. Although most sales are done through retailers such as QVC and Nordstrom, call volume on the new phone system will increase as Philosophy carries out plans to move into television infomercial marketing, which will increase direct sales by phone.

Field sales representatives in remote locations also are benefiting greatly from the new network. They can access Philosophy's systems from almost anywhere, which has improved their efficiency.

Philosophy moved from a 55,000-square-foot building to one more than three times that size. Yet Nystrom says communication is 100% improved for every department, including shipping, receiving, and production. Customers can access the company's Website and securely look up orders and order status. The warehouse uses a wireless network for its phones, its receiving functions, and management of inventory with 40 radio-frequency identification (RFID) readers.

The ease and flexibility of adding staff provides a huge productivity benefit as well. Adding phone lines used to be a major issue, Harshbarger says. Now, if Philosophy needs to add capacity to the current system, the IT team simply adds another switch, which will be protected, secure, and reliable.

Another feature Philosophy lacked in the past, Nystrom says, was the ability to capture customer data in a system. Today, with new technology, Philosophy can do that. "One of my responsibilities is trying to keep us ahead of the game regarding technology," he says. "It's good to show we're trying to stay ahead of the curve."

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