During the current pandemic, DCL Logistics’ customer Eargo has seen a sizable increase in business, yet they haven’t had to change their shipping or logistics strategies to manage this unexpected order spike. Because of Eargo’s business model, their reputable supply chain partners, and a propensity to always be optimizing toward scalability, the company had the infrastructure already in place to seamlessly manage the current order increase.
Eargo produces technologically advanced, invisible hearing aids—and the company is pioneering remote support for their customers through telecare and digital support assets. We spoke to CEO Christian Gormsen about how DCL has helped Eargo keep their customers happy with best-in-class order fulfillment and shipping during this time. He says, “At the highest level, we’re obsessed with the customer experience that’s why we chose DCL. For us it’s all about quality.”
Seamlessly Manage Order Volume Increases
Eargo had the systems in place, before COVID started, to manage quick growth and scaling. Christian says, “We are currently running record levels of orders and calls of people interested in our products. I’m happy to say that despite this added pressure on the system, we have been able to keep all of our service levels and actually give customers a solution within days of when they order it. So we are doing quite well in the current situation.”
COVID has put the hearing aid industry in an unprecedented situation. Since a large majority of people who need hearing aids get them from physical clinics, the shelter-in-place restrictions have essentially shut down this industry. Because Eargo is largely a direct-to-consumer business, and they don’t sell their products via retailers or clinics, they have had higher volumes and didn’t have to change anything to continue their business during this time.
Christian says, “Luckily for us at Eargo, our whole business model is built around two things: a unique, invisible hearing aid that is a device itself, and a direct relationship with all our customers. We believe that going to clinics is not the ideal solution for everyone. We were already really focused on the way the world is changing so rapidly—we’re doing a lot to support customers through telecare, online and remote care.”
Optimize for Scalability Before it’s Necessary
The partnership between Eargo and DCL has created many opportunities for the company to grow and scale along the way. Around six months ago Eargo transitioned their inventory from DCL’s Fremont facility to the Louisville, Kentucky facility. Christian remembers, “It required pretty tight cooperation between the DCL team and our in-house logistics team. I think it opened up our communication channels. And I think that the whole point about going to Louisville was to anticipate scaling.”
This move also helped Eargo switch a higher proportion of their freight to USPS which lowered their freight costs because of Louisville’s central location. Christian mentions how the move to Louisville, and all that it entailed, was what set Eargo up for such a smooth time operationally during these COVID order spikes.
“We’ve had a great partner in DCL—they constantly adapt. We’ve had a lot of support to really drive our cost per shipments down, which is significant when you are doing big numbers. Their flexibility was what really got us, and the quality of the product that we get from DCL.”
Outsource for the Best Customer Service
Over the years DCL has helped Eargo with an almost 100% direct-to-consumer business model, but it wasn’t always that way. Eargo began with completely in-house manufacturing and supply chain operations.
Originally Eargo did everything in-house, manufacturing and logistics, classic startup style which they found didn’t scale well. Once their product was viable in the market, they decided to find a good logistics partner. Christian says, “After looking around a lot, what we found in DCL was a flexible and agile approach to how to get things done. They could actually deliver at the backend and deal with the kind of product we have. What I liked the most was DCL had a team who appreciated and understood that our small team didn’t have all the answers.”
Now in the current COVID situation, the Eargo team found that because they outsource logistics support they have more availability to directly support their customers. He explains, “What we’ve seen with the higher order volumes is that we’ve been able to optimize how much time we spent on support materials—creating new digital assets that allow our customers to self help themselves—that’s part of our telecare offering. Given that our entire logistical and manufacturing supply chain is outsourced luckily we have partners that have been able to comfortably deal with the volume increase.”
Christian was candid to give his advice for startups making the transition from in-house to outsourcing. He says, paramount to anything else are quality, flexibility, and the relationship, which he quickly found were the core values of DCL. He explains, “I think for me what was key was the quality. We deliver an essential product to people and we wanted a great quality experience—you don’t want to risk something like that. We didn’t want disruptions on delivery times, we wanted a high degree of consistency. And it was important to me that when something goes wrong, because something always goes wrong, I can trust that they will give attention to solving our issues, do the right thing, and there’s a commitment there.”
Throughout COVID there have been many quick changes needed, and attention given to details and operational management. This is exactly the type of situation that Christian knew he could count on his 3PL to deliver. He says, “The DCL team keeps the Eargo team well informed about helpful practices—we’ve been having some challenges currently because we are an essential product, and we’re juggling how to deal with COVID exposure risks. DCL has dealt really well with their staff and contingency plans. Our investors and stakeholders have a very keen interest and understanding in how we are dealing with potential disruptions—and frankly we’ve been able to share with them the contingency plans of DCL, which have been absolutely satisfactory.”
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More About Eargo
Eargo wants to change the way the world thinks about hearing loss by dramatically improving the consumer experience at every step of the hearing care journey. Their hearing loss solution combines sleek proprietary technology, on demand licensed hearing professionals and an advanced personalized App to offer high-quality performance via their virtually invisible hearing aids. We believe everyone should hear life to the fullest.
Right now they are offering anyone in America a free hearing check or remote consultation even if they aren’t a customer.
During this COVID pandemic they are also offering a 20% discount to frontline healthcare workers up to $1 million in value. Christian says, “We’re celebrating health care workers because we do think they’re the ones who need the attention now. Hearing is essential to understand the communication around you, and when people are wearing masks it’s actually a lot harder to understand. A lot of clues are verbal and visual, and it’s a problem that people can’t rely on that right now. If you are a health care worker, we want to make absolutely sure that you can hear everything that’s going on in such a stressful environment.”
Tags: Case study, DTC, Omnichannel Fulfillment
