Planet watch: SunExpress gives customers direct access to 3,000 products Sun's telemarketing arm fulfills purchasing requirements while walking tightrope between direct sales and VARs. By Cate T. Corcoran

December  1996

To paraphrase that popular folk ballad by Arlo Guthrie, you can get (almost) anything you want at SunExpress. While just about anything Sun makes is available through SunExpress, you won't get the kind of customized support and service provided by VARs. What you get is direct access to Sun, and some 90 percent of all Sun users are, or have been, SunExpress customers. (1,500 words)

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SunExpress is the little-known tightrope-walker division of Sun Microsystems. Actually, the company sells aftermarket products over the phone, which means you can buy just about any Sun product except an actual workstation from it. The big guns reserve those for their own commissions, but someone has to take care of the little stuff, and that's where SunExpress comes in. It'll sell you upgrades, X terminals, networking products, and extra copies of software -- just about anything you might need after a big purchase.

But SunExpress' role is a lot like that of a tightrope walker, even though it's using telephone wire and has its feet planted firmly on the ground. The company has to tread a narrow path between many conflicting interests. SunExpress must be competitive, but not so competitive that Sun's dealers feel threatened. It must educate the customer because open systems and networks are making installations more complex, yet SunExpress can't become a consultant or a VAR.

And, of course, the company must make money, but it also has to offer good customer service, which can be expensive. SunExpress appears to be doing well on all accounts, according to analysts, customers, and competitors. Discounters, VARs, and consultants have their own niches, and SunExpress has been very careful not to compete with the channel, says Dorothy Rosenthal, an analyst with IDC.

Under the direction of President Dorothy Terrell, SunExpress reaches 90 percent of Sun's customers and gets high scores on customer satisfaction, according to SunExpress's own surveys. Like the rest of Sun, the company is small and scrappy, pulling in revenues of roughly $250 million a year with only 265 employees. (The company does not reveal exact revenues or profits, although it has its own profit and loss responsibility separate from the rest of Sun.)

"We don't have a ton of money or people," says Terrell, who has also run factories for Digital Equipment Corp. and has been a social worker. "Miracle after miracle happens in SunExpress."

Taking a team approach
SunExpress has a different operating model than other arms of Sun, spending less per transaction, says Terrell. But the company has done well, perhaps because of its special management style and clever computer systems, which enable its small staff to field questions on hundreds of products with relatively little training.

Japanese sales, for example, are handled by 35 representatives in Tokyo, and all of Europe is managed by 55 multi-lingual agents in the Netherlands. One hundred and seventy-five people work at SunExpress headquarters, located in Chelmsford, MA, a suburb of Boston dotted with patches of woods and low-storied buildings. The company outsources warehousing and shipping to a midwestern company, which runs the warehouse in Indiana, as well as one in Europe and another in Japan. Altogether, SunExpress shipped some 110,000 orders this fiscal year and made two million customer contacts -- which works out to more than 30 contacts a day per person.

SunExpress has an unusual organizational structure that has improved productivity. Four years ago, the company started rewarding performance on the basis of group, not individual, results.

"It was a radical idea," says Art Carty, SunExpress vice president and general manager, North America. SunExpress put it into place for the good of the customer, he says. Under the old system, "if I'm not there when you call back, somebody else gets the credit [for a sale]," Carty explains. "So I get into a weird number. I say I'll call you, or call me on my personal line, which starts to cost the customer money."

The teams, which range from five to 11 agents, became self-policing, he notes. It quickly became clear if one person wasn't pulling their weight, and employees now help each other learn about the product lines, whereas under the old system, they had no incentive to do that.

Of course, the team approach had the potential to be a disaster, but SunExpress sends its sales staff to "team school" first. The turnover rate is low, less than five percent, says Carty. Sales people are experienced and make high salaries, close to what Sun's direct salespeople receive. In the past three years, revenue per person has gone up by a factor of three, which Carty attributes partly to the evolving skills of SunExpress employees and partly to their new computer systems.

Knowing the customers
SunExpress' customer and product databases help its sales people keep up on more than 3,000 products, all of which change every six to twelve months. Like other telesales organizations that sell complex products, the company had to develop computer systems that would cut down on employee training.

When a call comes in, it is routed by caller ID and zip code to the appropriate team. Each customer always talks to the same two or three salespeople. In fact, some customers and salespeople have gotten to know each other so well, they've exchanged pictures, Terrell says.

A customer file pops onto the screen automatically and shows the customer's recent sales history. As the customer starts talking about a particular product, the salesperson instantly can bring up all the data on the product, including extensive support material, such as white papers. In fact -- and this is still unusual in telesales -- the sales person can fax or e-mail that same information to the customer while they are still on the phone, so the customer can refer to it during the call.

The salesperson also can tell the caller whether an item is in stock, calculate sales tax, give the customer a confirmation number, and with a mouse click, instantly send the order to the warehouse and take the item out of inventory. The company has put a lot of emphasis on educating the customer about how products work, particularly in networked environments. Customers say they are impressed by the company's knowledge.

"When I call and ask them for information, they're very good about responding to that with e-mails or faxes, and they do follow-ups several days later to make sure I received what I was expecting," says a Sun developer who asked not to be quoted by name.

Kudos and recognition
Analysts also praised the company's approach. "It goes past a pure catalog and into a help-desk situation," says James Greene, an analyst with Summit Strategies of Boston. "They don't just mail out a million catalogs and hope something comes back. They're very relationship oriented for a telesales organization."

SunExpress is also one of the few companies in the world selling its entire product line on the Internet. The same white papers and product data available to the salesperson is up on the SunPlaza site, so the site serves both as an information center and another way to order. (Customers in U.S. and Europe can order products online now, and Japan is slated to follow soon.) Printed catalogs quickly become out of date, but customers can browse the latest product information online, even if they don't want to buy over the Internet, Terrell adds.

SunExpress designed the site to accommodate the special purchasing procedures of corporate customers. A customer who doesn't have authorization to buy can browse the site and send a list of recommended products to a colleague in the purchasing department.

At the moment, sales on SunPlaza are a very small percentage of SunExpress' business, in the single digits, Terrell says. SunExpress believes the site eventually will be used to make simple purchases, to download software, and as an educational tool. Eventually, that could mean a sales person will spend less time going over basic information with the customer and can spend more time on more complex questions.

"We're hoping the customer will use the Internet for a lot of information, so we can upscale the sales conversation," says Terrell, who was quick to say SunExpress will not cut its sales force or its paper catalog. In the future, the company plans to expand its geographical reach to include the 10 percent of Sun customers who don't buy from SunExpress, most of them in parts of Asia other than Japan. The company also intends to improve its relations with customers by offering them more information about products, particularly networked products, and new services.

One new service the company is considering includes EDI (electronic delivery interchange), a standard purchasing system that many suppliers and buyers use, notes Tom Mackowski, SunExpress worldwide group marketing manager. Other possibilities might include custom packaging to fit the routing procedures of particular customers and a purchasing application written in Java that customers could use to order items.

The goal, Terrell says, is to grow revenue while keeping buyers happy. It's a tough task, because the market is necessarily limited and margins are low, Greene adds, but the company already is performing an excellent balancing act.

Resources

• SunExpress
  http://sunexpress.usec.sun.com/
• Other Sun planet profiles
  /sunworldonline/common/swol-siteindex.html#planets

About the author
Cate T. Corcoran is a free-lance writer who grew up in Palo Alto. At the age of 11, she helped test Xerox PARC's mouse. Reach Cate at cate.corcoran@sunworld.com.

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