Case Study: Alorica re-invents eMachines’ customer support program

March 2004 -

Three years ago, Irvine, Calif.-based PC vendor eMachines, Inc. was noted for providing quality and affordable products, yet was equally distinguished for its terrible customer service. As a result, product returns were the highest in the industry, and the overall customer dissatisfaction had a detrimental effect on the company’s brand and bottom line.

In March 2001, a new management team, led by former Best Buy executive Wayne Inouye took over, and immediately recognized that in order to position eMachines as a serious player in the PC market and revive its reputation, they needed to address the problem of customer service. Inouye brought on board Mike Zimmerman, a veteran of customer care in the PC arena, as senior vice president of customer care. Zimmerman began discussions with eMachines’ customer relationship management (CRM) services provider Alorica Inc. to help resolve many customer service issues.

The standard for customer service set by the previous eMachines management allowed for customers to receive only fifteen consecutive days of tech support after the first call, with a call center policy of getting the customers off the phone as quickly as possible. Zimmerman determined to change this model and with the help of Chino, Calif.-based Alorica, he was able to completely re-invent eMachines’ customer support program. To aid in this task, eMachines hired Bob Cote to serve as vice president of call center operations.

Upon meeting Alorica, Zimmerman and Cote’s goal was clear: reduce returns and at the same time regain the trust of their customers. “We could have gone looking for another CRM firm, but Alorica was able to adjust to our new management direction and procedures, while offering quicker results than a new service provider could,” said Cote. “Plus, we loved the scalability of their software (HelixTM).”

After the first day on the job at eMachines, Cote was so enamored with the real-time reporting functions of the firm’s Web-based software Helix, that he bragged about its functionality to his former Compaq associates. Thanks to this real-time reporting capability, Cote had his finger on the company’s customer service pulse – day and night – while at the office or on the road.

“In addition to the dynamic benefits Helix offered, Alorica provided the complete call center facilities and staffing to assist us in handling our customer relations,” Cote continued. “Alorica was more than just another vendor for us, they became our partner.”

“The software’s scalability was just as attractive to us, allowing a company to add or subtract any component of the software and tailor it exactly to meet any organization’s specific needs,” Cote said.

In the first six months since the new program began with Alorica, eMachines cut its product returns by fifty percent, adding huge savings to the company’s bottom line. In fact, the company reported its first profitable quarter ever, just three months into the customer care program. Instead of receiving angry letters, eMachines began receiving letters from customers praising its stellar customer service.

eMachines was recognized for outstanding customer service in the December 2003 issue of PC World magazine. In the publication’s annual “Reliability and Service Report Card,” eMachines topped the charts for desktop computers, earning the highest overall marks of any PC Manufacturer in reliability and service measures. This achievement represents a remarkable improvement for eMachines. Just three years ago, the company was rated unacceptable in this identical survey, and appeared doomed to be the next computer manufacturer to go out of business. With the help of Alorica and other initiatives, eMachines’ returns are down from 16% to 6%, saving the company over $25 million per year.

“A major reason that we were able to turn the business around was through Alorica’s efforts,” said Zimmerman. “This is one of the most challenging industries. Achieving success begins with selecting the right partner. We’ve done that with Alorica.”

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