Lines of Fire

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From the beginning, Patient Infosystems made a substantial investment in technology--slightly over $1 million in hardware and software in the call center alone--and it has yet to turn a profit. Revenues for its first complete year of business, 1996, were $845,000; they rose to just over $2 million in 1997, and analysts project that the publicly traded company will hit sales of $8 million this year. Director of marketing Richard Holowka also anticipates that Patient Infosystems will "turn the corner" and make a profit in 1998. To judge by its call-center expansion plans--the company is building a second room to handle an increase in its number of reps, to 34 by this month--a substantial portion of any profit will be plowed back into the call center. But that's all right with Holowka, for without its call center, Patient Infosystems wouldn't be in business. "We owe our existence to the technological cresting of a variety of applications--not the least of which are strides being made in call-center technology," he says.

The 59-year-old Famous Smoke Shop doesn't owe its existence to its call center, but it could be argued that owner Zaretsky owes his to it. Prior to the installation of Famous's ACD, Zaretsky, who has a four-cigar-a-day habit, would typically spend seven or eight hours answering the phones during the business day and then, at 6 p.m., begin his job of trying to run and manage the company. He knew it wasn't a healthy existence, despite his claims that he doesn't "so much smoke as chew the cigars."

Today the Bronx native still has the deep throaty voice of a smoker, but it contrasts noticeably with his slim, fit, 50-year-old physique. The juxtaposition is hard to miss, particularly because of the CEO's uncharacteristic choice of business attire: spandex tights and fanny pack. A vegetarian, Zaretsky routinely makes the 80-block round-trip to his office in the Garment District on Rollerblades and does five or six loops of Central Park three or four times a week. Factor in a couple of midday trips to the gym each week, and the Superman getup begins to make sense.

Famous's ACD is what makes those athletic jaunts possible. Zaretsky can justify time away from the office, because, whether he's there or not, his phone system tracks everything he needs to know: how many calls are coming in (typically 600 to 1,300 a day); exactly how many of them translate into sales (typically 40% to 60%, a rate captured by using the ACD in combination with the MailBasics mail-order software); the average time a customer is on hold (the goal is no more than 15 seconds); and even when the peak calling times are (usually between 11 a.m. and 2 p.m.).

Of course, Famous Smoke Shop didn't install a call center to turn its CEO into a jock--it did it to improve its customer service. Had the Short Story-smoking Cara Biden called Famous two years ago, she might never have called back. Since Famous didn't have any kind of sophisticated phone system to handle its 32 incoming lines, Biden's calls would have been answered in who-knows-how-many rings by an undoubtedly harried and not very cigar-smart person. "Phones would ring on everybody's desk, calls were constantly lost, and employees were ready to attack one another," recalls Zaretsky. "I don't know how we survived. It was abominable customer service."

The fact that the cigar industry began turning red-hot in 1993 (consumption has increased 68% since then, according to the U.S. Agriculture Department) magnified the severity of Famous's customer-service problems. So in early 1996, after a particularly stressful Christmas season, Zaretsky desperately started reading every telecommunications journal he could get his hands on. He still remembers the name of the author whose article in Operations and Fulfillment magazine hit him like an epiphany. "Curtis Barry. And he said, 'If you have this problem and that problem, then what you need is an ACD,' " recalls Zaretsky. "I didn't know what an ACD was; I just knew that I needed one."

The ACD he chose after nearly a year of research was Distributed Call Center (from Teloquent Communications, 800-468-6434, $1,750 per agent) because, he says, its applications were the most "open, expandable, and flexible" within his price range. "This is not a product in a box but a software system that can be modified," he says of his Teloquent system, which is Unix-based and resides on a Compaq Prolinea 575. Once the ACD was installed, "all of a sudden new possibilities began to emerge," Zaretsky recalls. For example, originally the system offered a customer three choices in its voice-driven menu--catalog requests, order placement, or returns--but after a while it became apparent that the company needed a fourth option, for callers interested in cigar resale. "Storekeepers are interested not in consuming the product but in how much profit they can make on it," explains Zaretsky.

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