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NOTES ON ALL CRM TOPICS

NOTES ON ALL CRM TOPICS

Discuss NOTES ON ALL CRM TOPICS within the Final 100 Mark Project forums, part of the Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects category; Definition 1: Customer Relationship Management (CRM) can be widely defined as company activities related to developing and retaining customers. It ...

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NOTES ON ALL CRM TOPICS
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vikas049
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NOTES ON ALL CRM TOPICS - March 13th, 2008

Definition 1:

Customer Relationship Management (CRM) can be widely defined as company activities related to developing and retaining customers. It is a blend of internal business processes: sales, marketing and customer support with technology and data capturing techniques. Customer Relationship Management is all about building long-term business relationships with customers.

D 2:
As the name implies, CRM means Customer Relationship Management. Different organizations define CRM differently. In today’s economy, there is no single undisputed definition of CRM. Here is what we believe CRM is:
CRM is an alignment of strategy, processes and technology to manage customers and all customer-facing departments & partners.
Having defined CRM, here are some generalizations
Any CRM initiative is and has the potential of providing strategic advantages to the organization, if handled right.
Most CRM initiatives begin with a strategic need to manage the process of handling customer related information more effectively. For beginners it could simply mean better lead management capabilities or sales pipeline visibility. However, as organizations mature in their CRM initiatives, they begin to look at CRM as tool to acquire strategic differentiators.
Despite the immense benefits that the CRM solutions can deliver, they are not entirely without their share of problems. Many organizations have burned their fingers trying to implement the technology and manage costs. To successfully undertake CRM initiatives it is essential to
• Clearly define the management objective & strategy
• Evolve the right process around it
• Identify the right software solution for implementation
• Understand the hidden costs and hurdles
• Back it up with good training and support
While selecting the software solution for your implementation, ensure that
• It can manage both your data and process
• It is easy to implement and roll out
• It is simple to use
• You understand the total cost of ownership
• You evaluate the risk exposure




Many companies are turning to customer-relationship management systems to better understand customer wants and needs. Customer Relationship Management applications, used in conjunction with data warehousing, E-commerce applications, and call centres, allow companies to gather and access information about customers' buying histories, preferences, complaints, and other data so they can better anticipate what customers will want and how to best retain them. The adoption of Customer Relationship Management is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organization, providing competitive advantage and improved profitability.
Customer Relationship Management is a strategy, not a specific software or hardware; but it encompasses the technology and strategy needed to completely integrate a business in order to get a holistic view of customers and their relationship to the entire enterprise. The software that links the back office to the front office, the technology needed to make the call centre customer-friendly, and integrating each component seamlessly with the customers' point of contact, web-based or other means, are all part of Customer Relationship Management.

CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.
CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.
1. Advantages Of CRM
Using CRM, a business can:
• Provide better customer service
• Increase customer revenues
• Discover new customers
• Cross sell/Up Sell products more effectively
• Help sales staff close deals faster
• Make call centers more efficient
• Simplify marketing and sales processes

2.
What are the advantages of CRM?
CRM solutions help companies boost their business efficiency, thereby increasing profit and revenue generation capabilities. Let us take a quick look at some of the measurable benefits that your organization can gain by implementing a CRM solution.
• Increase Customer Lifecycle Value
In most businesses, the cost of acquisition of customers is high. To make profits, it is important to keep the customer longer and sell him more products (cross sell, up sell, etc) to him, during his lifecycle. Customer stay, if they are provided with value, quality service and continuity. CRM solutions enable you to do that.
• Execution Control
Once the business strategy is put into motion, the management needs feedback and reports to judge how the business is performing. CRM solutions provide management with control and a scientific way to identify and resolve issues. The benefits include a clearer visibility of the sales pipeline, accurate forecasts and more.
• Customer Lifecycle Management
To keep the customers happy, you need to know them better. At the minimum, you need a centralize customer database, that captures most of the information from your entire customer facing departments and partners. Integrated CRM solutions, like CRMnext enable you to manage customer information, throughout all stages of their life cycle, from contact to contract to customer service.
• Strategic Consistency
Because CRM offers business and technological alignment, it enables companies to achieve strategic company goals more effectively, like enhanced sales realization, higher customer satisfaction, better brand management and more. Additionally, the alignment results in a more consistent customer communication creating a feeling of continuity.
• Business Intelligence
Due to the valuable business insights that CRM provides, it becomes easier to identify the bottlenecks, their causes and the remedial measures that need to be taken. For example, CRMnext provides real-time business focus dashboards with extensive drill down capabilities that provide the decision makers with the depth of information required to identify the causes and spot trends.
Who Needs CRM ?
Putting it simply, CRM is ideally embraced by that organization which besides making and retaining clients also makes serious effort to optimize their revenue potential. This organization is one that aims at organizational growth through sharp focus on customer relationship management, which it achieves through an intelligent tracking system.
In here, the customer relationship executive stays terrifically organized, since he can view his pipeline even while on the move and stay informed of the latest customer status which helps him plan his short time strategy and long time goals. The management, on the other hand doesnt have to rely on the week end/month end/year end etc cumbersome reports (authored/tailored by the designated personnel) to know how the organization is faring. Instead, it is empowered with real time access (anywhere, anytime and totally web based) to the progress, performance and profits of the entire organization ( broken right down to the individual level ) through comprehensive, smart and informative analytics. All this and more at a cost that is affordable, software that is easy to deploy and an adoption time that is unbelievably low!



Can CRM Drive Revenue ?
The important considerations of any organization looking forward to incorporating a CRM are understandably, more business related than technical. Thankfully, all the different objectives that are fulfilled through CRM, by default; revolve around increasing the top line revenue.
CRM is not just a guarantee for quicker growth and bigger revenues but also a means to keep up with competition. Through CRM, you can determine the Customer Lifetime Value or in other words, the present and projected business worth of a customer to your organization. This once known, acts as the basis on which you can formulate marketing strategies targeting customers individually.
Customer intelligence and CRMs predictive analysis capabilities help you generate a highly accurate demand forecast which leads to better and more informed inventory management, thus, curtailing significantly, the internal costs through new and efficient processes. Further, the simplification and streamlining of the sales process, significantly reduces the time spent by sales reps on their paperwork and administrative engagements, and lets them focus on selling instead.
The ROI gained out of implementing a CRM is what makes the experience worthwhile. It is best measured by comparing the past and the present customer acquisitions, enhancements in customer value/worth, long-term customer retention, etc, all of which contribute to the organizations revenues.
Key Challenges in implementing CRM solutions
Companies around the world have leveraged CRM strategies to gain competitive advantage. As more and more companies rush to implement CRM, precautions must be taken to do it right. It is approximated that 50-70% CRM implementations fail, depending on the Industry vertical. Hence, it is essential to identify the key challenges, address risks and build a strategy that can make your CRM successful. CRM is full of talk about strategy, but at the end of the day, someone has to lead the way and implement
Even if operations report that the network is operating perfectly and services are running normally, your customers may not be happy, leading to revenue shortfall and increasing levels of churn. You need to view your network and services from your customers' perspective to gain a true understanding of availability, performance, quality and usage.
That understanding has to be built from an analysis of each individual's experience. Individual users have different handsets, use different services, connect from different locations, and connect over different paths through the network. They each have individual experiences that you cannot interpret by looking at aggregate metrics and reports.
Agilent OSS provides Customer Experience Management, based on the analysis and correlation of individual customer transactions captured by monitoring the signaling traffic buried in your network. Signaling is the central nervous system of your network. It manages every customer activity, from switching on a handset, to downloading ringtones and the most complex inter-operator roaming services. Tapping into this data source gives you the detailed intelligence to optimize your customers' experience of your network and services.
CRM Software
Sales Force Automation
• Contact management
Contact management software stores, tracks and manages contacts, leads of an enterprise.
• Lead management
Enterprise Lead management software enables an organization to manage, track and forecast sales leads. Also helps understand and improve conversion rates.
eCRM or Web based CRM
• Self Service CRM
Self service CRM (eCRM) software Enables web based customer interaction, automation of email, call logs, web site analytics, campaign management.
• Survey Management Software
Survey Software automates an enterprise's Electronic Surveys, Polls, Questionnaires and enables understand customer preferences.
Customer Service
• Call Center Software
• Help Desk Software
Partner Relationship Management
• Contract Management Software
Contract Management Software enables an enterprise to create, track and manage partnerships, contracts, agreements.
Example: Upside Software, Accruent Software, diCarta, I-Many.
• Distribution management Software

CRM-
Fast and consistent will always beat the slow and steady
First find out your core competency and then change your playing field to suit your core competency
Team work and harness each other’s competency
Consistency and changing your strategy
Stop competing against a rival and start competing against a situation
Start competing against a situation
One needs to take care of an internal situation
Compete against a situation and not with your rival
Pooling resources and working as a team will always beat individual performers
Work to your competence
Never give up when faced with failure

Gap model
There is a gap because of which a market goes up or come down. What the company perceives and what the customers perceives is different. It is this gap which identifies a product of the company as product centric. The customer has a different point of view. He may focus on the price.
Gap for the community
 Failure of CRM systems to deliver the promised benefits. For e.g. it is assumed that the food at Taj is good. What is the back up system that you are going to offer a customer is what the customer is more bothered about. To back the entire purchase and to satisfy the customer
 Treating CRM as a tool implementation exercise rather than a strategic effort. You need to know who your customer is.
Gap for the general consumer group
 Customers were asking for methodologies to address these things
 CGI had development methodologies and technical know how We need to target our customer’s specific CRM needs

CRM- it is a long term customer centric business strategy whose goal is to maximize profitability through customer loyalty.
To realize CRM benefits
Foster behavior- for e.g. a guy using a laptop makes him use a USB port. You make a customer move in a different direction
Implement processes- your cost and middlemen
Implement technologies- this is possible only if you have money. You first show an operating profit, and then convince others. Once you make profits you have to write off the costs incurred in the previous stages of implementing technology
Support coordinated interactions through all customer channels

CRM-
Underlying principles
CRM may be understood as looking at the ideas of product and customer centricity
Organization’s tendency to concentrate it’s activities of the product or the customer

Aspects of product or customer centricity
these two are mutually exclusive-
an organization may be somewhere between the two
there are discreet activities between the two- moving from a need, want to a demand
natural evolution- from product to customer centricity Product may be our skills and customer centric may be the result of our skills

Product and customer strategies
Mission- guides an organization.
Organization
Competition- this is a deterrent to an organization
Environment- the sustainability report talks about how much you are contributing to the society. Sustainability costs and revenues should be taken into account

Product extensions are bringing new products into the market
Line extensions are adding new attributes to the product
Cross selling- It is where you sell something in addition to the product. For eg If you are selling a car
you also sell a car loan. It refers to the income that a Business unit gets from another business unit
Up Selling- When you make a customer move on from a product to a line extension. In this case the income comes from the same business unit

Product offering
Reducing cost and cycle time- it also involves reengineering your middle level. Your output depends on how you manage your cycle
Improve quality

Customer centric
You increase your product offering to acquire new customers and we are not only talking about acquiring new customers but also maintaining existing customers
Increase profitability - offering a new product which is volume based and maintaining existing products which is value based
Retention of customers
Customization- The example is designer wear
Differentiation- Gastronomy and Formula strategy
Wow syndrome- when you make a mistake correct it with an extra product offering

The strategies of CRM
Acquiring new customers
Differentiation
Innovation

Retain customers
Listening
Adaptability
New product
Customer service
Loyalty program

Increase customer profitability
Bundling
Cross selling and upwelling
Maximizing high value or low cost customer

Determining CRM maturity levels
Product
Mass market or niche market
Competitive advantage derived from cost, quality and cycle time

Customer
Competitive focus on building
Testing customer relationships
Management of customer knowledge, data mining

Competitive advantage is something that cannot be copied over a period of time and something that has not to be copied over a period of time
CREATING CUSTOMER LOYALTY
Correlation to delivering world class service and reaching beyond customer satisfaction and creating customer loyalty
Various measurement methodologies and rating scales:
In the days of the booming economy IT companies based their success on continuous product innovation
Services were originally body shopping in those days. Body shopping is basically out sourcing that is doing what companies have to do..
During an economic slowdown customers need more than product features to ear loyalty
Research results:
44 percent only plan to business with the current IT sector.
30 percent feel trapped and are unhappy
23 percent are high risk and are unlikely to continue relationship in terms of innovative features
3 percent are vulnerable to competitive product. The speed at which the service is given

Satisfaction is meeting minimum expectation. It is need based approach
Loyalty is exceeding customer expectation and securing future commitment.
Retention is satisfaction plus loyalty

CRM GOALS
Revenue growth model
Existing customers and existing products- retain
Existing customers and new products- cross and up selling
New customer and an existing product- win the new customer

Loyalty factors
Product capability and quality
Customer service and experience
Ease of doing business
Price versus value
Company reputation- Brand

Most service vendors have a survey process to measure customer satisfaction
Periodic surveys
Event/ transactional surveys- one time that is something that has gone wrong and what are the quantifiable damages
Establish required sample size, target response, rates and confidence level
Quantitative results and verbatim feedback gathered
Results are analyzed and communicated

SCP support center practices
Seven point scale

Top box measurement is a term used to describe the 80 percentile of the service scale
Highest rated measurement to better understand customer loyalty and retention

Four point seven point and a ten point rating scale
The blue boxes are the 80 percentile
Companies need to hang on to their customer acquiring new business is difficult and costly
CLM is a method to predict future customer behavior
It is forward thinking
Understand how customers feel about you
It’s strategic and tactical.

Ring questionnaire
H0 Null hypothesis- something that you assume, something that is there
It is raining- H0
When the rain will stop is what is H1
The entire analysis is to find out if H1>H0
Suppose you have 10 questionnaires you will have to base your questionnaire
A link questionnaire is prepared when two factors affect a single factor
A hidden questionnaire is to test the validity of the questionnaire.
For e.g. - Asking if a person’s income is > 100000 to check if what he has given is right
One can also group the questionnaires. You also need to code the questionnaires as in giving codes for
each of the options

Strategic is based on a certain mathematical parameter or a scientific method
Owner’s relationships means the strategic business units
When a customer is more accessible the feedback from the customer is much better. A truly loyal
customer is one whose behavior and attitude is very high.
The attitude is basically when you change to a different product because you want to try something new
and your behavior is that of churn.

Psychographic pattern exercise- You don’t sometimes buy a product because they need it but because of
one’s behavior. Your attitude will determine which brand you buy
At the end of the day every manager looks for business and looks for money.
In the beginning the customer is new and he might not know about the product. But over time a point comes when the customer is fully satisfied and your revenues grow considerably. If you keep your product in the market even further there is saturation and the customer gets bored. Instead of the customer moving to another company’s products you make the customer move to another product of your own company in the form of Brand extensions and line extensions. For e.g. H.P which was introducing soon realized it was stable and it had stable revenues. But there was nothing new for the customers and retaining the customers was very important in terms of staying in the Fortune 500 list.
When you do a loyalty analysis it is not only customers but also about your markets and it varies from industry to industry
LTV is lifetime value.
================================================== =====================

Customer Service Organizations in Dire Need of Management


Company Announces Results of Online Survey Focused on the Ways Organizations Address Customer Service and Leverage Information from Their Customer Interactions


Friday, 06 October 2006

Witness Systems, provider of workforce optimization software and services, announced the results to its online survey in celebration of this year's National Customer Service Week, October 2-6.
It's no surprise that many industry-leading organizations monitor and review customer interactions on a regular basis. However, what happens to the information from there - is it shared across departments, does it change the way service is delivered, or it is used to create revenue generating opportunities?
Top-line results from the company's recent customer service survey revealed the number one challenge facing customer service organizations is first call resolution, which led with a nearly 40 percent response rate. This aligns with the 35 percent that were surprised to hear inconsistencies among their agent responses, along with poor service delivery. In addition, when asked if senior management listens to calls to hear customer feedback first-hand, nearly half of survey respondents said their managers listen occasionally, and more than a quarter dial-in on a regular basis. Further, when asked if their organizations share interactions with other groups outside the call center, respondents said training departments topped the list at 38 percent, followed by sales and marketing at 17 percent.
Following is a full break-down of survey results:
When it comes to improving customer service, what do you feel your number one challenge is?
37% - First call resolution
11% - Root cause analysis
6% - Improving up- and cross-selling rates
9% - Creating effective training initiatives
8% - Agent satisfaction
23% - Customer satisfaction and retention
6% - Other (insufficient staffing, retaining good employees)
Do members of your senior management team listen to/review customer interactions?
28% - Regularly
49% - Occasionally
17% - Do not listen
6% - Don't know
Do you share customer interactions with other departments in your organization? If so, which ones?
17% - Sales and marketing
5% - Engineering and product management 9% - IT 6% - Human resources 38% - Training 9% - Executive 9% - No 7% - Other
After listening to customer interactions, what were you surprised to hear?
35% - Inconsistencies in responses, voice tone, attitudes/poor service from agents
25% - Customers express gratitude for great experience/agents go above and beyond the call of duty
10% - Agents need more training on company products/services and communication skills
2% - Customers not familiar with products they purchased/call in multiple times asking repeat questions
3% - Customers are rude and/or they have unrealistic expectations as to the level of service they should receiv
e 3% - Problems weren't solved the first time and caused the customer to call back multiple times
22% - Other (language conflicts, easier to up sell after problem was solved, better agents are low performers, online initiatives are a challenge for some customers)
In what ways do you recognize your contact center during "National Customer Service Week" - or at other times during the year?
42% - Have a party in the office
24% - Conduct an awards ceremony recognizing high achievers 14% - Provide gift certificates to a select group or all service representatives
6% - Provide special scheduling arrangements for a certain amount of time
14% - Other (provide daily gifts, invite other staff to listen to calls, combination of the above, themed events and activities)








Customer Experience Management:
The Value of "Moments of Truth"
Part 1 of 2


By Bob Thompson
CEO, CustomerThink Corporation
Founder, CRMGuru.com
• Executive Summary
• What Is Customer Experience Management?
• How Important Are Experiences to Your Customer?
• Emotions Make Experiences Memorable
• Getting It Right at "Moments of Truth"
• Living Your Brand
• About the Author
• About the Sponsor
Executive Summary
Nearly 25 years ago, Jan Carlzon engineered a turnaround at Scandinavian Airlines by improving "moments of truth" in passenger interactions with the airline. Since then, relationship marketing and Customer Relationship Management (CRM) have been mostly concerned with how to market to customers and get value from them, often with IT-based strategies. But largely forgotten was the insight that Carlzon understood intuitively: Customers perceive value based on the experiences they receive.
These days, it seems the phrase "customer experience" is on the lips of every marketer and business consultant. And really, it's not a moment too soon. All too often, we've seen executives pay lip service to the customer while gearing their business to short-term payoffs. But in this age of customers empowered with global shopping carts, that won't cut it. Colin Shaw, founding partner of Beyond Philosophy, and John Ivens argue that customer experiences are critically important. "We are witnessing the first ripples of a fast approaching new wave of change, breaking upon the shore of a new business differentiator," they write in their 2002 book Building Great Customer Experiences (Palgrave MacMillan).
Think about your own behavior. While using Starbucks as your remote office, you sip on a tall latte and catch up on email. When you travel, you rent your car from Enterprise Rent-A-Car and stay at Marriott hotels—brands that fulfill their promise to you. When you get a free weekend, you head for the open road on your Harley. You listen to music on your iPod. You buy DVDs, kids' toys, clothes, electronics and, oh yes, books at Amazon.com.
These firms know the secret to building loyalty and growing your business. Why? Because they make a connection with customers that transcends the basic functional value they offer. Unfortunately, such stellar experiences are not the norm. In CRMGuru's survey, only 22 percent of customers agreed that companies "currently provide an excellent customer experience" in major industries like banking, air travel and electronics. The silver lining, though, is that companies that excel can build a more sustainable competitive edge based on an emotional bond.
But what is the "customer experience" and how can you tap into it? What is Customer Experience Management and how does it relate to Customer Relationship Management? And why are so few businesses focusing on the customer experience, let alone managing it well?
In this paper, we'll discuss the customer experience from the point of view of the customer, based on CRMGuru research conducted in April 2006. In a second paper, we'll analyze CEM from the enterprise perspective, and highlight performance gaps and methodologies to improve customer experiences while driving loyal and profitable relationships.
Consider what customers had to say in our recent survey. Some key findings include the following:
• In earning their loyalty, customers rate their quality of interactions with an organization as equally important to the quality of the goods or services purchased.
• Off-shoring and IVR initiatives, popular methods to cut the cost of customer interactions, have not improved customer experiences for more than 90 percent of survey respondents.
• In contrast, investing in employee training and Internet-based sales and support has generally had a more positive effect, improving customer experiences more than a third of the time.
• Post-sales service/support activities are the most likely to generate a "memorable" experience, either positive or negative, because of the strong emotions that often result in problem situations.
• Memorable experiences build loyalty—31 percent of customers in the survey recommended the company to a friend or colleague, and 19 percent increased their purchases.
• "Well-trained and helpful employees" is the top attribute of companies that provide "consistently excellent" customer experiences.
What Is Customer Experience Management?
To manage customer experiences, you must first understand what "customer experience" means. It's almost as difficult to pin down as "customer relationship."
"Customer Experience" and "Management" Defined
Experts interviewed for this paper offered many different definitions, but virtually all agreed that customer experiences included interactions with an organization's people, processes or systems. Some said experiences also included interactions with a product. And others said that experiences included the feelings or emotional responses generated by the interactions.
Customer perception seems at the heart of what a customer experience is about, so we asked CRMGuru survey respondents for their perspective. When asked to pick from a list of expert definitions, nearly 50 percent chose: "The sum of all my interactions with a brand's products, services and people." But one respondent highlighted the importance of human perception in this write-in definition of customer experience: "The feelings and thoughts resulting from all impressions, tangible and intangible, from anyone or anything representing, directly or indirectly, an organization, brand or product." Well said.
Customer experiences include every point in which the customer interacts with your business, product or service. For the Starbucks customer, for example, it includes the anticipation of going to Starbucks, walking up to a shop, opening the door, ordering and paying for the coffee, getting the coffee, sitting down in the atmosphere of the shop to enjoy the coffee. Each interaction point is what SAS' Carlzon would call a "moment of truth." That's the point at which your customer is engaging with your brand and at which you can make or break the relationship.
(Note: This paper was written with the help of a few venti lattes and apple fritters served up at the local Starbucks!)
For the purposes of this white paper, our definition of customer experience is:
The customer's perception of interactions with a brand
Let's break that down to understand it more clearly:
• "Perception" is critical, because unless the customer thinks or feels that something happened, it hasn't. And perception can include the emotional aspect of the interaction.
• An "interaction" could mean literally anything from viewing a marketing message to the actual use of a product or service to a post-purchase service/support activity to solve a problem.
• Finally, "brand" means far more than a logo or marketing communication. In the customer's mind, the brand is a symbol for the organization and a promise to be fulfilled.
Customer Experience Management, therefore, is simply managing customer experiences. That was easy! But this begs the question: To accomplish what? A more useful definition of CEM is:
Managing customer interactions to build brand equity and improve long-term profitability
"Managing" anything requires measurement, but it's tricky to quantify how customers perceive and value experiences. "It is important to note that customers intuitively judge the experiences they receive. That is, they often are not able to consciously point out why an experience resonates with them, but they know when it works or, conversely, when it doesn't," says Qaalfa Dibeehi, director of thought leadership and vice president for Beyond Philosophy, the London-based customer experience advisory and consulting firm.
Those "soft" responses are what set Customer Experience Management (CEM) apart from most other business strategies. They can't easily be quantified by numbers and technology. It's also what some would say differentiates CEM from CRM, Customer Relationship Management. When it comes to defining CEM, you can view it as an extension of CRM as a strategy, paying particular attention to the customer's emotion and considering the product itself as an experience.
How CEM Relates to CRM
Customer Relationship Management (CRM) is a business strategy to acquire, grow and retain profitable customer relationships. In previous research on CRMGuru.com, we found that more than 80 percent of business managers seem to understand that CRM is a customer-centric way of doing business, not just technology to automate front-office processes.
Managing customer experiences is an integral part of what CRM should be-a win-win value exchange between a company and its customers. Loyal customer relationships are built on what the customer perceives and feels about the product/service purchased and interactions with the organization. At a fair price, of course. Says CRM industry veteran and CSO Insights' partner Barry Trailer, "CRM and CEM are really synonymous, if you look at CRM as a business strategy, rather than just technology."
Yet, the reality is that some people do equate CRM with technology used for tactical automation projects, and many of those consider it technology that hasn't always made a business successful. (CRMGuru's research has found that about two-thirds of IT-focused CRM projects are successful.) So in some minds, the term Customer Relationship Management has become tainted and must be avoided, while Customer Experience Management is another name for a customer-centric strategy without any stigma attached.
Others see Customer Experience Management as an extension of CRM to provide a true customer focus.
"At its highest level, CRM defines what the company wants from the customer relationship and gathers the information and insight that is analyzed against products and service to find optimum opportunities to sell," according to David Rance, managing director of Round (U.K.) Limited. "CEM is the mechanism by which the customer is engaged to optimize the potential customer loyalty and long-term value that is defined by CRM. The customer experience is the emotional part of any transaction."
Lior Arussy, customer strategy expert and president of Strativity Group and author of Passionate & Profitable (Wiley, 2005), agrees that CEM is about "managing the value proposition as the customer perceives it," while CRM is concerned with "maximizing the revenue and value to the company."
Of course, loyalty research tells us that there is a linkage between the customer's perceived value and loyalty and the company's revenue and profits. But in practice, too many companies focus more attention on the ends (revenue and profit) and ignore the means (the customer's value proposition). "Organizations think CRM will create the customer experience for them, but it's just a tool," author Shaun Smith, director of the London-based shaunsmith+co, told us.
Customer Process Improvement
Many find CEM to be an organizational strategy for managing customer interactions. HP, for instance has placed customer experience high on its organizational chart, with a department dedicated to Total Customer Experience. Its research director, Katherine Armstrong, calls CEM a "designed and structured approach to planning and managing the customer experience end to end."
In such cases, the business takes an active role in managing customer interactions, including setting expectations to protect the brand value.
If you define CRM, at least in part, as a method of customer process improvement (technology-based or otherwise), then you'll see plenty of overlap between CRM and CEM in our recent survey.
The quality of the actual product or service being purchased is still critical, to be sure. However, as you can see in the following chart, the quality of sales, purchasing and service/support activities received a significant percentage (ranging from 58 percent to 66 percent) of high importance ratings. Marketing communications were not rated highly, but keep in mind that marketing messages are one way in which companies make promises that they have to keep.

Emotions and Experiential Products
Is there any real difference between CRM and CEM? Yes, in two areas. CRM is usually more clearly focused on customers' value to the enterprise. There's nothing wrong with that-businesses exist to make money, and customers are valuable assets that require varying levels of attention and investment. But CEM brings in the new dimensions of customer emotions and "experiential" products (a type of product innovation), both of which are value that customers receive from the enterprise. Classic CRM projects rarely consider such things.
"At a broad level, [CRM and CEM] are similar," said Bernd H. Schmitt, professor of international business at Columbia University and author of five books, including Experiential Marketing (Free Press, 1999) and Customer Experience Management (Wiley, 2003). To Schmitt, CRM is supposed to focus on customer loyalty and making sure customers are treated well. To that end, businesses can turn to their CRM systems to find out whether the contact center treated customers well, contacted them when they wanted to be contacted and fixed a problem.
But, Bernd says, CRM falls short of the emotional connection that is at the heart of Customer Experience Management. "I would say CEM is a bit broader. I don't think people will talk about the aesthetic aspects of the product or design [when talking about CRM], but that's part of the experience."
Beyond Philosophy's Dibeehi agrees. "Where CRM had to be in large part inside-out in perspective (i.e., viewing the company from the inside) to begin to set a foundation for customer-centric action within the business, CEM is outside-in (i.e., viewing the company from the point of view of the customer) to make certain that the actions of the business resonates with customers in a positive way."
Step Back and Stop Managing
Some people are so emphatic about the importance of looking at the business from the customer's point of view that they cringe at the reference to "management." Paul Greenberg, author of CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, (3rd Edition McGraw-Hill, 2004), and a big proponent of focusing on the customer experience, warns against approaching that experience as something you can "manage." "What the customer needs is to manage their own experience; they don't need to have it managed for them," he says. Instead, you must examine the customer and his or her experience with your business carefully, mapping out every point at which the customer touches your organization and then tailor your business to accommodate what you've found out.
As Rance of customer-experience specialist Round says, "Customer Experience Management attempts to define how all the customer management capabilities within an organization, such as the brand, marketing, business rules, processes, decision-making authority, training, employee engagement customer data and metrics, etc. combine to influence the customer experience."
Yin and Yang
Previous CRMGuru-sponsored studies have found that customer-centric planning—taking an outside-in approach—is the No. 1 driver of CRM success. The emergence of CEM brings new focus to the oft-neglected task of examining the customer value proposition.
Customer strategy expert Jim Barnes believes that you shouldn't neglect some basic principles of CRM when you turn to Customer Experience Management. "Maybe we should approach CEM, as we should CRM, from the customer's viewpoint. What will customers consider a genuine positive experience? I believe it will have to appear genuine, not staged or synthetic."
Put it all together, and it seems the CEM and CRM have more in common than differences. After all, relationships are developed through a series of experiences over time.
Perhaps we can sum up by saying that CEM and CRM are the Yin and Yang of customer-to-business relationships. The Yin-Yang concept originates in ancient Chinese philosophy and describes two primal opposing, but complementary, forces found in all things in the universe. There's no record about whether the Chinese found it necessary to turn every concept into a Three Letter Acronym (TLA).
Whether you're a fan of the latest TLA or not, what you should take away from CEM is the imperative to find out how experiences drive the customer to—or, heaven forbid, from—your business, service or product. Then use that knowledge to build an emotional attachment between the customer and your brand. A relationship, even.
How Important Are Experiences to Your Customer?
Customer Experience Management is a method of increasing customer loyalty, a daunting task as more products and services become commodities in today's global economy. Loyalty can increase your bottom line, because loyal customers buy more, stick around longer and refer others.
Not surprisingly, CEM proponents claim it will help turn customers into "raving fans" or advocates. Like members of the Harley-Davidson Owners Group (who call themselves, appropriately, HOGs), people who are so passionate about your product or service that they get tattooed with your logos.
In CRMGuru's April 2006 online survey, more than 600 respondents gave 2,000 industry ratings based on their own experiences. We asked respondents to rate the importance of three factors in earning their loyalty, using a seven-point scale. Across 12 industries, nearly 80 percent of respondents give "high-quality interactions" and "superior product or service" high importance ratings (Top 2 Box). "Lowest price or cost of ownership" received only 31 percent of high importance ratings.

As you might expect, there were differences between industries.
Banking and fixed-line telecom customers rated interactions higher than product or price. In banking, of course, the main product is money—the perfect commodity. As many telephone customers are locked into service and pricing, company interactions rise in importance. It's not clear how one can be truly "loyal" to a monopoly, however.
Not surprisingly, customers of full-service restaurants rated both the product (food) and interactions highly, and price was tied for the lowest importance. Automobile customers provided quite similar ratings. Wireless customers rated price the most important of all industries, but product/service and interactions were also average or higher.
One surprise: electronics. All three dimensions were scored lower than average. Possibly, this simply means that it's harder to earn gizmo shoppers' loyalty, no matter what the manufacturer does. Barnes says that, since the customers' principal contact is with the product, they are "most likely to define experiences as involving some form of contact with people."
High-Quality Interactions Drive Loyalty
These findings suggest that companies should not lose focus on providing competitive products or services. But winning the hearts and wallets of customers requires equal attention to the quality of interactions between a company and its customers.
This may be obvious in service-intensive industries like airlines or financial services, but as noted earlier, even customers of product-focused industries like electronics place significant value on interactions.
Customer Experience Industry Trends
Globalization and the Internet have created an abundance of goods and services, and it has become increasingly difficult to differentiate based on the core offering (functional capabilities) or price. An IBM study in 2005 revealed that, "to create a new and lasting source of competitive advantage, businesses must manage the customer experience."
Customer Experience Management is valuable in any industry-and in both business-to-business and business-to-consumer relationships. Shaw and Ivens of Beyond Philosophy cite their own research, which found that "85 percent of senior business leaders agree that differentiating solely on the traditional physical elements such as price, delivery and lead times is no longer a sustainable business strategy."
That's why tuning in to the customer experience is so important. Unhappy customers can bolt to a competitor—or simply stop using a service. All it takes is a computer browser set to any of the complaints sites on the World Wide Web to see the true story of how easy it is to irritate and lose a customer.
"Because of one rude person you have put in charge, you no longer get that weekly cut out of my check, but you also have lost a very loyal customer who did ALL of their shopping, fueling and video rentals" complained one person on Complaints.com - Consumers in Control about a grocery store she used to patronize. Now angry, she was willing to pay more money to pump gas from the more expensive station across the street and travel farther from home for her groceries and videos.
How are companies doing today? In CRMGuru's survey, only 22 percent of respondents agreed that companies "currently provide an excellent customer experience." As you can see, more than half of respondents had no strong opinion one way or the other, and 18 percent had a negative response.
Full-service restaurants got the highest positive ratings and one of the lowest negative ratings. At the other end of the spectrum, fixed-line telephone companies earned the highest negative rating at 32 percent, perhaps an indication of the lack of competition in this industry.
Electronics companies had the lowest positive rating, and the long-suffering airline industry fared only slightly better.

Experience and Cost Conundrum
Over the past decade, business executives have been cutting costs with automation, off-shoring and, of course, the Internet. In recent years, as the economy has improved, attention has turned back to revenue growth and building loyalty—hence, the current interest in customer experiences.
The problem is that some of these strategies may be in conflict—at least, in terms of how they are executed and perceived by customers. We asked CRMGuru survey respondents to rate their agreement on whether, based on their own personal experiences, they believed that employee training, Internet sales/support, off-shoring and Interactive Voice Response (IVR) had improved customer experiences.
Their reactions were dramatically different. As you can see in the chart below, customers believe that "well-trained people" and "Internet sales/support" have had a positive impact a bit more than one-third of the time. Only 15 percent had a negative outlook.

However, a significant number of respondents said off-shore call centers (38 percent) and IVR (35 percent) had adversely affected their experiences. Although some companies attempt to spin these initiatives as attempts "to serve you better," it's clear that most customers don't see it that way.
A backlash against "IVR hell" led to the launch of GetHuman.com, where consumers rate service quality, record their hold times and can find the shortcuts to bypass the phone menu and get directly to a human being at many of the top American companies. One major bank in the United States is running humorous TV ads touting its ability to enable customers to actually talk to a real person. Imagine that!
The off-shoring issue is more complex. To be fair, it's not clear whether customers would be willing to pay more for experiences that did not include an off-shore call center. In this respect, it's "damned if you do and damned if you don't" for companies that attempt to cut costs but can't do so without some change in quality of service, even if the "quality" is a perception based on a different accent. Customers want lower-cost goods and services, hence the rise in Wal-Mart and other discounters, but don't always like the trade-off when it affects local jobs or service quality.
Some companies are taking a more cautious approach to off-shoring, worried that cost savings may be offset by customer experience deterioration. Dell, for example, decided in 2004 to bring back to the United States some of its call-center operations, after concerns surfaced about service quality.
Emotions Make Experiences Memorable
Some experts say that CEM is all about creating an exemplary experience, what many call "customer delight" or a "wow" experience.
Carlzon, the former Scandinavian Airlines CEO, in an Inside Scoop interview for CRMGuru tells the story of the tour operating company in which he began his career. The company liked to surprise customers by putting baskets of fruit or a bottle of wine and a hand-written card in guests' rooms at their travel destinations. "Everybody got extremely happy, because nobody expected it and they all thought it was a kind of individual service to them," Carlzon said.
The value of booking for the tour company increased because of the guests' perception that they were getting something special. Unfortunately, an enterprising advertising manager burst the balloon by amending the company's brochures to tell people they would be getting a "surprise" of a bottle of wine in the room. Setting this expectation eliminated the surprise and, worse, turned the positive experience into a negative one when the gift was forgotten.
Emotional Glue
Without emotion, we wouldn't remember much of anything. Think about your strongest memories. They probably include either very pleasant or awful experiences. The same goes with customer experiences.
In CRMGuru's online survey, we asked respondent for input on a recent "memorable" experience. It might be surprising to learn that it doesn't take a lot to please or annoy customers. Sure, when your people go the extra mile for customers, they're very impressed. But often, customers just want to get what they ordered and to be treated decently. Amazon.com's most popular link is "Where's My Stuff?" One happy online shopper put it this way: "Amazon is easy. A child could use it. Online ordering is practically two clicks."
Earlier, we stated that the "quality of service/support processes" was ranked fourth out of five activities in earning a customer's loyalty. Yet, when we asked respondents for input on a recent "memorable" experience, 35 percent of the responses included service and support activities. Sales activities (15 percent), purchasing process (19 percent) and use of product/service (20 percent) ranked lower. Clearly, how a problem is resolved creates a strong emotion and lasting impression.
For highly loyal customers ("promoters"), approximately 80 percent to 90 percent of respondents said a memorable experience left them feeling positive emotions like "pleased," "comfortable" and "appreciated. Customers with little loyalty ("detractors") felt "frustrated," "let down" and "angry."

Little Things Matter
Exceeding expectations may not be the right goal for companies that don't get the basics right. In some cases, the customer experience can improve, not because of a pleasant surprise but for the lack of negative one. Naras Eechambadi, CEO of marketing performance management company Quaero, says that paying attention to the experience the customer has with your firm is "not about customer delight all the time." It's about making promises and sticking to it: "There is a place for wow. But consistency is more important," he said.
One survey respondent raved that Commerce Bank had a toll-free phone contact that was "nearly instantaneous"; it was answered on the "FIRST ring by a real, live, knowledgeable human being." And the question was answered in less than two minutes. Not exactly a "wow" experience, you might say, but the fact that the business handled it well nearly floored this customer.
And that's not all. People who experienced trouble with a product or service were also thrilled by a business handling the problem well. For example, a grocery shopper discovered that a can of chili peppers was less than half full. "I returned it to the market, where they immediately replaced it, and when I left, an employee was shaking cans to see if they were less than full so that others would not have my problem." You would think the customer would be upset about getting a partial can of chilis. Instead, the market impressed the customer in how its employee was thinking of other people.
Of course, they're also pleased when businesses exceed their expectations. One person wrote in about Alaska Airlines, which gave every passenger a $50 coupon to "a very nice restaurant in my local area." The customer was pleased not only by the coupon but also by the fact that there were no restrictions or early expiration. "To my delight, they were good for one year, and there were no catches!"
Another person was surprised to be met at the door by Hilton Hotel employees in Fort Wayne, Indiana, and then escorted to a get-acquainted reception at the restaurant, along with dinner on the house that night and breakfast on the house in the morning. It was Hilton's way of "just doing a little customer appreciation for my frequent stays." Ebay.com noticed a mistake in an order and notified the customer. "They were right. They sent me a very polite email asking if I meant to order two," reported the happy person, who had wanted only one item.
Lack of Common Courtesy
Alternatively, judging from the complaints people registered in the survey, all it takes to earn a customer's disapproval is a lack of common courtesy or inattention to details you might expect businesses to take for granted. Some fast-food restaurants, for instance, were dinged for poor quality food and dirty seating areas. When the HBO signal went out the night of the season premiere for the TV series The Sopranos, a cable company operator wouldn't offer a credit. "The person just didn't care," the survey-taker wrote.
And customers know lip service when they experience it. One person wrote about a transaction that went terribly wrong at an investment firm. The people were friendly, but the customer wound up on the phone for an hour, transferred four times and put off for more than a month without resolution. "They think that pleasant service people that ask if there's anything else they can do to help you—even though they usually can't answer your question or solve your problem—means they have good service."
Promoters and Detractors
After a customer has a memorable interaction, what happens next?
As you can see from the chart below, loyal customers ("promoters") said they recommended the business to a friend or colleague nearly one-third of the time. That's powerful evidence that the likelihood to recommend ("promoters" give loyalty scores of 9 or 10 on a scale of 0 to 10) does lead to actual recommendations. Other customer activities that increase customer value to the company include purchasing more products and services and continuing the relationship.
Conversely, "detractors" (0 to 6 on the 10-point scale) complained to a friend or colleague 25 percent of the time, complained to the company nearly as often and switched suppliers 20 percent of the time. After one experience! Imagine how customers might defect or complain to others if a company has a pattern of bad experiences.
Note that the company gets direct customer feedback only 22 percent of the time after a positive experience and 24 percent of the time after a negative one. Given the severe repercussions of a bad experience, companies need other proactive ways to identify the 76 percent who may complain to others or reduce their business without any warning.

Getting It Right at "Moments of Truth"
Part of the value in your specific product or service comes in the experience you create. Coffee is coffee is coffee, except when it's Starbucks coffee. "Whether it was a planned or sort of a random discovery early on in their experience as a business, they figured out that it's really not about selling coffee to customers," said HP's Armstrong. "Starbucks is selling more than beverages; it's the total experience at a Starbucks outlet: buying, drinking, getting online, etc."
People who participated in CRMGuru's survey on customer experience were passionate about companies that served them well or poorly. We received more than 1,400 write-in responses about specific companies that provided "consistently excellent" or "consistently poor" customer experiences.
In this section, we'll discuss the Big Five attributes that set apart the top performing companies. Attributes were determined by analyzing frequently-mentioned terms and their synonyms and grouping them into meaningful phrases.
1. Well-trained and Helpful Employees
If you're interested in delivering an excellent customer experience, start by ensuring your employees are well-trained and genuinely helpful. Training gives the means, but being helpful is in large part an attitude—as we learned from our survey-takers.
For example, a Best Buy (electronics retailer) customer said, "When we go in, someone is always there to greet us and direct us to the correct area. Their salespersons seem to be well trained in their particular field. We have had nothing but good experiences with them."
Marriott received several positive comments from travelers who noted the hotel chain's "pleasant and helpful staff," "selection, training and management of employees" and "friendly and well-trained staff ready and willing to support travelers (whether for business or for leisure)."
One car shopper was impressed that "Saturn employees are well-trained on the various models and are willing to talk with me at length about which model best fits my needs. They are willing to show me aspects of a particular sales model even when they know I am not currently looking for a new car."
2. Excellent Customer Service
A significant number of responses simply said that customer service was "excellent," or words to that effect, making it the No. 2 attribute of the top companies. A passenger of a U.S. regional airline Midwest Express illustrated how service can offset a "product" limitation: "They offer limited flights, but the service on them is always excellent. They go above the norm by giving out freshly baked cookies!" American Airlines, although "not always perfect" according to one 20-year frequent flyer, "consistently focuses on the core things necessary to provide an excellent service."
In financial services, you can feel the value of good communications when you note that ING Direct was praised for "great customer service by phone (don't feel you're sent offshore), excellent communications—keeps it simple, easy to understand." In restaurants, however, service is hard to separate from the quality of food, as this comment about Bonefish Grill illustrates: "Personable, attentive people (interact with their customers on a more personal level); consistently excellent product with seasonal variations."
3. High-Quality Goods and Services
Smiling and helpful employees will take you only so far. You'd better be able to deliver the goods
or, as the case may be, services, that customers want. And don't think you'll be able to sacrifice quality for price, because the leading companies don't.
The meaning of "high-quality" varies by industry. As you might expect, the quality of food was a key factor in grocery supermarkets and restaurants. In the United States, specialty grocery retailer Trader Joe's earned kudos from one shopper for "high-quality products at low prices" and from another for "reliable quality produce and nice selection of products." One Subway (sandwich specialty restaurant) patron liked the "quality and range of products."
Car drivers have a different view of quality, naturally. Toyota received comments regarding its "great quality products and associated warranties" and because it "delivers on its promise of quality product and service." Another survey-taker said that Acura offered "superior quality product out of the gate."
4. Friendly and Caring Employees
It pays to be nice! "Friendly" was one of the most commonly mentioned words in survey responses. Customers liked pleasant interactions with employees who genuinely cared about doing their job well.
In our survey, no other company was rated friendlier than Southwest, a popular low-cost airline in the U.S. "They match expectations with reality-their people are friendlier," gushed one happy passenger. Another lauded "friendly, personable employees who take time to connect with passengers," and another observed that the airline "hires friendly and helpful people."
Starbucks, the company that redefined coffee from a product to a service, was recognized for "friendly and helpful service" by employees that "go out of their way to serve." A customer of Enterprise Rent-A-Car, another service-obsessed company, appreciated "very friendly, accommodating staff."
5. Personal Attention, Reward for Loyalty
Our final "Big Five" attribute is about recognizing top customers personally. A First Citizens Bank customer said, for example, "This bank treats me with respect, as an individual. They got to know me personally as soon as I opened the accounts and are always pleasant and helpful when I transact business with them. I can pick up the phone and call the person who opened my accounts any time."
Marriott was praised by several customers who noted the company's "personal touch." One said, "I am a person to this hotel chain. On repeat visits, I am recognized and treated personally." Others noted that they appreciated Marriott's rewards program, which recognized their loyalty in a tangible way.
Living Your Brand
Imagine if your company were the Starbucks in its field, with all your customers devoted advocates, recommending your business to others. It's not so far-fetched. The steps to managing the customer experience are at every business's disposal.
But before you start the CEM journey, take note of the findings of the CRMGuru study. Start by truly understanding how customers perceive the value your brand provides and what will earn their loyalty. That's why this paper was devoted to the customer's perspective.
Walk a mile in the shoes of your customers, along every step of their interactions with your organization, products and services. How do customers first hear about your company? How do they respond emotionally to sales and service interactions? Are you offering the right touch-points and methods of interactions or forcing customers to the lowest cost?
Keep in mind that problems are opportunities to build relationships and true loyalty. Are your employees perceived to be "well trained and helpful," like those of customer experience industry leaders? Can they provide the human touch when it's needed? Are they empowered to take action immediately? Technology can be part of the answer, but you can't rely on systems to make the human connection.
In an upcoming paper, we'll discuss Customer Experience Management from the enterprise point of view. We'll look at methods for identifying the customer's current experience, setting goals for the ideal experience and getting from here to there. We'll look at how you can tailor that experience to your business—and your customers—in a way that will help you stand out in a global market and reap the rewards of customer loyalty.
Until then, take the CEM litmus test: Would you like your current customer experiences turned into a tagline and plastered all over your firm's marketing material? It's happening already in your customer's mind. Experiences increasingly define what your brand really is, not what you tell your customers it is through marketing or sales communications.
Above all, let great experiences bring your brand to life in the hearts, not just the minds, of your customers. That human and emotional customer connection is a key part of the journey toward truly loyal relationships. Enjoy the trip!
About the Research and Author
Acknowledgments
We are indebted to many people who gave generously of their time to make this paper possible. First of all, our sincere thanks to members of the CRMGuru community who collectively spent more than 200 hours completing an online survey. Also, the research design and survey process was improved tremendously with input from industry experts on the CRMGuru Panel (www.crmguru.com/gurus), several of whom were also interviewed and quoted in this paper.
Authors of leading CEM books were also gracious with their time and input, including Jan Carlzon (author of Moments of Truth), Bernd Schmitt (author of Customer Experience Management and Experiential Marketing) and Shaun Smith (co-author of Managing the Customer Experience). The "memorable experience" section was facilitated with Jim Barnes' list of 10 common customer emotions and Fred Reichheld's loyalty scale for "promoters" and "detractors."
Methodology
The statistical information in this paper was collected via a CRMGuru online survey in April 2006. More than 600 respondents gave 2,000 ratings on companies in 12 industries. "Memorable experience" input on specific companies was collected from 440 individuals.
The CRMGuru community is diverse, with approximately 75 percent in customer-oriented jobs in marketing, sales or customer service functions. Respondents were generally well-educated and ranged from 20 to 60 years old, slightly skewed toward male (55 percent), with about half from the United States and Canada, 30 percent from EMEA and the balance from Asia Pacific countries.
From prior experience, we know this audience has a bias toward customer-centric thinking and high quality. Therefore, we have found that customer input is by and large more critical than the general population. Conclusions may not be valid outside the 12 industries analyzed or in developing markets.
About the Author
Bob Thompson is CEO of CustomerThink Corp., an independent Customer Management research and publishing firm. He is also founder of CRMGuru.com, the world's largest industry portal dedicated to helping business leaders improve customer management success.
Since 1998, Thompson has researched the leading industry trends, including partner relationship management, customer value networks and customer experience management. In January 2000, he launched CRMGuru.com, which now serves 300,000 business leaders monthly through its web site and email newsletters. Thompson is co-author of Blueprint to CRM Success, has written numerous articles for leading business and IT publications and is a popular keynote speaker at conferences worldwide.
Throughout his career, Thompson has advised companies on the strategic use of information technology to solve business problems and to gain a competitive advantage. Before starting his firm, Thompson had 15 years of experience in the IT industry, including positions as business unit executive and IT strategy consultant at IBM. For more information, please visit http://wwww.crmguru.com/ or contact Thompson at [email address].
About the Sponsor
RightNow (RNOW) is leading the industry beyond CRM to high-impact Customer Experience Management solutions. More than 1,500 companies around the world turn to RightNow to drive a superior customer experience across the frontlines of their business. As a win-on-service strategy becomes a business imperative, Customer Experience Management solutions have become essential for business success. Founded in 1997, RightNow is headquartered in Bozeman, Montana, with additional offices in North America, Europe and Asia. For more information, visit On Demand CRM Software and Solutions by RightNow Technologies | RightNow Technologies.






Unlocking The Value of Your Customer Satisfaction Surveys

In today's business environment companies cannot afford to lose a single profitable customer. By effectively leveraging results from a customer satisfaction survey an organization can respond to their customer's needs in ways that increase revenue as well as improve customer and employee, satisfaction and loyalty.

Many companies perform customer satisfaction surveys, but don't receive full value from their investments to administer the program. Too often survey results are used simply for monthly reporting on "how we did last month".

A few years ago, I had the pleasure of being placed in charge of a fast-paced and dynamic customer care organization. After several weeks in my new role, I was in my office enjoying the challenges of my new position when one of my team-members dropped off a stack of "thank you" letters for me to sign.

These letters would be sent to customers that had taken our most recent survey. The letters stressed to the customer how much we appreciated the time they invested in taking the survey, and our commitment to using the information to improve the service we deliver to them.

We had been doing monthly reviews of the survey data, but something was missing. The reality was that the organization was investing resources in a process to perform customer satisfaction surveys and not getting the maximum value possible. And, worse, we were wasting our customers' time.

At a juncture like this, you have 2 choices: stop the survey process (save your money and your customer's time) and throw the thank you letters in the trash, or leverage the customer satisfaction survey results as a catalyst for continuous improvement. We selected option 2. Reaping the full benefits of our survey program didn't happen overnight. We ultimately implemented a very effective program that truly leveraged our customer satisfaction survey information. I could again feel comfortable with our investment in the program, and in the fact that we were no longer wasting the time of our customers. Most important of all was the fact that our overall customer satisfaction ratings consistently improved.

In my experience the key elements to unlocking the value of customer satisfaction surveys, include:

- Adherence to measurement principles
- Responding to immediate customer needs identified during the survey process
- Implementing customer-focused changes
- Implementing account strategies
- Management review and assessment

Adherence to Measurement Principles

Your adherence to the following principles, within your customer satisfaction survey program, will place you where you want to be in the eyes of your customer.

1. You can't manage what you don't measure. Performing a customer satisfaction survey program is step 1. If you are not presently performing customer satisfaction surveys, there are many reputable firms that can help you with this. Assuming that you are measuring customer satisfaction, we will now discuss the remaining principles for managing to this critical metric.

2. Any measurement that does not hold an individual responsible is not an effective metric. While many companies adhere to one element of the first measurement principle (that of "measuring" customer satisfaction), managing to it requires that an individual be held responsible for the customer satisfaction metrics. For example; a customer satisfaction survey program may be designed to produce feedback on customer service, account management, billing, provisioning, etc. At the end of the day, the managers of these organizations are responsible for the customer satisfaction levels of their respective areas. As such, they should be fully engaged in your customer satisfaction survey program.

3. No one should ever be held responsible for a measurement that they cannot influence. Too often, customer-facing personnel know that their firm is performing customer satisfaction surveys, but they don't know what the customers are saying in the survey results. This causes tremendous frustration for the front-line personnel, because they want to know what they can do to improve customer satisfaction. Your program should be designed to include communications to your customer-facing personnel so they know what they can do to improve customer satisfaction.

4. The importance of a measurement is determined by how high in an organization it is consistently reviewed. Make no mistake, business is about numbers. In my opinion, there are 2 sets of numbers that every company would do well to track and manage to: 1) the financials, 2) customer satisfaction levels. If executives of a corporation only care about the financial indicators, that company has lost sight of their source of revenue; the customer. To be truly successful companies must include customer satisfaction results on their list of key performance indicators that are reviewed by executive leadership on a monthly basis.

5. Every measurement must have clear unambiguous and rational goals. After establishing a baseline, for its customer satisfaction levels, a company must set measurable and achievable goals in terms of where it wants to be. Firms initially find that customers are totally satisfied in some areas of performance, while not satisfied in others. Companies typically focus their efforts only on areas of dissatisfaction, which is an appropriate step upon initially establishing a baseline. However, the customer satisfaction survey program needs to pay attention to all areas. That is, customer expectations are continuously changing. As such, areas in which customers are satisfied today may turn into areas of dissatisfaction, if a company doesn't remain progressive.

6. If a carrot and stick is not clear, for a measurement, it will fall into disuse. Building upon each of the above principles, it is not good enough to simply measure, manage to, influence, promote visibility and set goals for customer satisfaction results. Those personnel that can influence customer satisfaction, directly or indirectly, must benefit from reaching, and be impacted by missing, customer satisfaction goals. To accomplish this management must ensure their organization's compensation model is tied to customer satisfaction levels. This could be in the form of annual performance reviews in which merit increases would reflect achievement of goals, or lack thereof. Alternatively, this could occur through a bonus program that is administered on a monthly, quarterly or annual basis.

Responding To Immediate Customer Needs Identified During The Survey Process

All too frequently, companies only use customer satisfaction survey results as a report of "how we did last month". Truly proactive, customer-focused organizations respond to customer survey information to increase revenue and improve customer and employee satisfaction and loyalty.

During the process of administering a customer satisfaction survey program your customer will often express items requiring immediate attention. We will refer to these occurrences as a "HOTLINE". A HOTLINE could include leads for new business, up-sell and cross-sell opportunities, or areas of significant dissatisfaction from an irate customer. This is the moment of truth in the eyes of your customer.

If you respond to these items promptly, you demonstrate to the customer how much you care about their business. If you don't, the customer will perceive that your firm is wasting their time in asking them to participate in the survey. That is, you aren't taking the time to respond to their feedback. A customer that has a need for additional services will now have time to shop your competitor. And, a customer that is dissatisfied with the product or service will only be further convinced of the lack of performance of your organization. The goal is to take this opportunity to show the customer how much you truly care about their needs.

There are 4 steps we will discuss in setting up a process to effectively respond to your customer's needs:

- Becoming "connected at the hip" with your survey partner
- Establishing your HOTLINE criteria
- Implementing a HOTLINE team
- Management Reporting

1. Becoming "connected at the hip" with your survey partner: To ensure objectivity in their customer satisfaction survey process, many companies engage a third party survey firm. If this is your approach to performing surveys, then the first step to setting up a HOTLINE process is ensuring you are "connected at the hip" with your survey partner.

2. Establishing your HOTLINE criteria: The next step to setting up a HOTLINE process is establishing specific criteria for which a real-time response is warranted. This could include: identifying keywords that a customer may use when responding to the survey, or indicating that a customer providing at least one response of "totally dissatisfied" to any survey question is a qualified HOTLINE.

Additionally, the survey partner must be prepared to capture the complete context of the customer's comment. There is nothing worse for a dissatisfied customer than to go through a dissertation during the survey, on their areas of concern, only to have you call them and ask "so, why are you dissatisfied with our service?".

3. Implementing a HOTLINE team: You now need to define, within your organization, a team of people empowered to effectively respond to your customer HOTLINES. This includes ensuring the team has the ability to immediately [if necessary] engage support personnel to resolve the customer's service issues. The HOTLINE team must also be prepared to initiate the process to fulfill a customer's requirement for new/additional services.

A customer's dissatisfaction is in direct proportion to the gap between what they "believe" they were to receive and what they "perceive" they are receiving. This can be a contractual gap or it could be based on a misunderstanding of what they acquired. The HOTLINE team may need to explain that a particular item or service was not included in their purchase or lease.

They should also be prepared to discuss how they may be able to obtain this added level of service, if it is an available option and they so desire it. This team, therefore, must be very knowledgeable about your products and services as the appropriate response may simply be to reset the customer's expectations.

For many companies it makes sense to establish the HOTLINE process such that service issues go to the Customer Care department, and up-sell and cross-sell opportunities go to Sales.

4. Management Reporting: The final step of the HOTLINE process is to produce management reporting on a frequent basis; this insures that appropriate attention is paid to your HOTLINES. Reporting should occur on at least a monthly basis. Information on the HOTLINE report should include the customer's company name, contact name, brief description of the HOTLINE, when it was detected, when it was initially acted upon by your HOTLINE team, when it was closed-out and what the final resolution was.

Now you are ready to administer the customer satisfaction survey. And, upon your survey partner sensing that a customer's situation warrants immediate response they can initiate the HOTLINE process. They will know what criteria initiates this process, what information they should capture and how to engage the appropriate personnel in your organization to follow-up with the customer.

Effectively responding to HOTLINES uncovered in the survey process simply requires a closed-loop process between your survey partner and your firm. By so doing you have taken the necessary steps to fulfill a customer's unmet needs and respond to their concerns that may have been previously unknown to your firm. In all cases this is a win-win situation. Your customer's level of satisfaction will increase and you will have increased the measure of loyalty they have with your firm.

The benefits of implementing and following a process such as this include:

- Turning customer problems into new business opportunities
- Demonstrating to the customer that you truly care about their experience and are committed to taking immediate action to respond
- Increasing customer satisfaction
- Increasing revenue

Implementing Customer-Focused Changes - A Customer Survey Remediation Program

This step in the process of unlocking the value of your customer satisfaction surveys is where the rubber truly meets the road. You are now measuring customer satisfaction, adhering to measurement principles and responding to the immediate needs of your customer uncovered in the process of executing your survey. There are 4 steps that we will review to implement customer focused changes through a Customer Survey Remediation program.

1. Management attention and commitment - Management (Director and VP-level) of each customer-facing organization must be engaged and participate in the program. This includes, at a minimum, the areas of sales, marketing and service/operations. This commitment requires their personal review of customer satisfaction survey results as well as ensuring their area is fully represented in all elements of the Customer Survey Remediation program.

2. Cross-functional review - Each customer-facing organization needs to receive the monthly customer satisfaction survey results report and perform a detailed review. The goal is to identify trends that are impacting customer satisfaction. Additionally, proactive actions must be identified to improve customer satisfaction levels. You may need to follow-up with the customer to apologize for the lack of performance by your firm, reset expectations or obtain additional details regarding their comment. For chronic trends that are impacting many customers you will want to define initiatives to improve the level of performance being experienced by your customers.

Finally, each team must come prepared to a cross-functional review meeting, to discuss the survey results reflective of their area and comment on actions that have been, or will be, taken. The cross-functional review meeting should happen 7-10 days after the customer satisfaction results have been compiled by or provided to your firm, from your survey partner. This meeting should be facilitated by a member of your firm that is not part of a customer-facing organization.

This role could be referenced as the the customer survey coordinator. The customer survey coordinator should be assertive, diplomatic and empowered to "ask the tough questions". Because this person has no vested interest in the customer-facing organizational camps, they can tease-out key areas that need to be addressed to get at the root of issues causing customer dissatisfaction.

3. Survey remediation tracking and reporting - During the cross-functional reviews that take place, trends will be observed and continuous improvement programs will be defined. The result of this exercise will be a customer satisfaction dashboard that includes high-level reporting on the customer satisfaction trends by month, and a list of initiatives that have been defined to respond to these trends. This reporting is produced by the customer survey coordinator, and distributed to senior management and all levels of management of the customer-facing organizations.

Establishing satisfaction goals and tracking performance against these goals - Here there are 3 things to focus on. First, each area of your customer satisfaction survey should have an established goal that is owned by the functional area whose performance is being measured. Also, each program that is defined to improve customer satisfaction needs to have a quantifiable impact established that can be tracked on a timeline. For example, let's assume that the Customer Care organization will be performing a customer service skills training program in the month of October.

It is expected that this will have a measurable impact on customer satisfaction. The first step is to determine when the impact of this training will initially be felt by the customer. Let's assume that the impact of this training will begin to be felt by the customer in November. The second focus is determining when this impact will be observed in the customer satisfaction survey results. In this case, if the training will begin to provide positive impact in November, the full impact on the survey results may not show up until the December surveys are administered.

Therefore, it will not be until the January timeframe, when you review your December survey results, that your organization will be able to see the full impact of this training. The final focus is establishing customer satisfaction goals to identify the level of impact. For example, let's say that customers are 78% totally satisfied with Customer Care, at the present time. The question to ask is "how many percentage points will our customer satisfaction ratings increase as a result of providing skills training to the Customer Care organization? How much improvement should we experience in November, and how much in December?"

You may decide that the customer satisfaction rating will improve by 2% in the November survey, and an additional 6% in December. This exercise is repeated for each functional area as they identify the impact that their customer-focused initiatives will have on the satisfaction results for which they are responsible.

4. Communication to the organization, and the customer - Now that you are performing all of the above elements of the Customer Survey Remediation program, you have the opportunity to share the positive results with your entire organization and more importantly the customer. This can be in the form of all-hands meetings and internal newsletters for your employees. For customers, this can be in the form of monthly reporting to your highest priority accounts and newsletters sent to all customers. By taking this final step you will increase employee morale and ensure that your organization is focused on your single source of revenue: the customer.

Additionally, you will demonstrate to the customer that you truly value their feedback by responding in ways to improve the experience they have with your firm.

There is no silver-bullet in the quest to increase customer satisfaction. As such, your team should try various programs designed to improve customer satisfaction, check against survey results and adjust the program(s) based on customer feedback. By aligning your customer-facing teams towards a common goal and promoting awareness through-out your organization you will find that you are well on your way to continuously increasing customer satisfaction levels.

Implementing Account Strategies

A few years ago, I had the pleasure of working with a very skilled account management team, based in New York City. We visited a particular customer to respond to a source of their dissatisfaction with our firm. I will never forget the comment made by the Sales Engineer as we left the customer's facility, at the end of the meeting. He said: "I love it when my customers complain, because I always end-up selling them more stuff". Make no mistake, this gentleman was not happy that the customer was dissatisfied with our firm. However, he saw the silver lining.

There was a gap between the customer's expectations regarding what they thought they would be receiving for service and their perception of what was being delivered. By identifying the cause of dissatisfaction and resetting the customer's expectations this Sales Engineer was able to close the gap by recommending that the customer purchase additional services. We walked away with a new sales order from what "was" a highly dissatisfied customer! The result was that the customer's satisfaction increased, and so did the revenue that our firm received from this customer.

There are 6 steps you can take to Implement Account Strategies, driven by customer satisfaction survey results. Implementing account strategies is something that can be done, to a greater or lesser degree, for all of your customers. However, what will be reviewed here is a program that is most appropriate for your highest-profile accounts.

- Compile account-specific survey results
- Engage senior management in the customer's experience
- Prepare for the customer review meeting
- Meet with the customer
- Educate your organization and engage resources to respond
- Continue the process

1. Compile account-specific survey results. Once your firm has implemented the prerequisite steps, previously covered in the series "Unlocking the Value of Your Customer Satisfaction Surveys", you are now ready to compile an account-specific report. This entails creating a report of the specific customer's feedback resulting from your surveying their firm.

The report will outline: who was surveyed (names and titles), the levels of satisfaction and dissatisfaction by person, and any comments they shared during the survey. What you may find is that the individual users are totally-satisfied with your service, while management within the customer's organization is not. This may result from the fact that the manager, responsible for financing the purchase of your services, doesn't see the return-on-investment, while the end-users within the customer's organization find the service mission-critical in the performance of their job.

You need to take this opportunity to proactively manage the customer's perception of your firm. The remaining steps outline how you can do this, by leveraging your customer's survey results.

2. Engage senior management in your customer's experience. While it is not expected that each of your customers have a relationship with an executive from your company, it is highly beneficial to have your senior executives (VP and above) develop relationships with 2-3 of your firm's highest priority accounts. Highest priority accounts can be defined as those that generate the most revenue, have strategic name recognition or are an important partner in the industry within which you operate.

Having your executives develop relationships with your highest priority accounts forms the basis for a very effective and long-term partnership between your firms. A specific step that your executives can perform is that of an interactive review of survey results, with the customer's Account Manager and the customer. This provides opportunities for your executives to hear "unfiltered" feedback from your customer-base.

Additionally, it is an excellent opportunity to turn problem situations into new business opportunities. Executives typically don't get bogged down in the details. Instead, they generally strive to form strategic relationships built upon mutual respect. Finally, with your executives this close to the customer you demonstrate to all your constituencies the commitment your organization has to the customer.

3. Prepare for the customer review meeting. The major activity in this step is holding a rehearsal, or dry-run, of the customer meeting between the Account Manager and the senior manager assigned to the account. The goal is to determine the appropriate strategy for the meeting and what messages need to be delivered to the customer. You may want to assign the discussion points so that the senior executive covers an overview of the corporation, future plans and reasons for conducting the survey. The Account Manager then discusses the customer's survey results and asks three key questions: 1) What can I, the Account Manager, do to improve Customer Satisfaction? 2) What can the Company do to improve? 3) What is everything necessary for you to become Totally Satisfied?

Performing a dry-run is crucial, as you will typically identify a number of issues that require several hours, or days, to address to ensure a positive outcome with the customer.
The final step is scheduling appointments to meet with key contacts at the account. The Account Manager will want to schedule a meeting, or meetings, to ensure that you have an opportunity to provide a review of survey results and future plans with: end-users, decision-makers and key influencers.

When scheduling face-time with the customer, use this opportunity to indicate that you will be bringing a senior manager from your firm, and would like to have senior managers present from the customer's firm as well. By your taking the posture of presenting analysis material, that will benefit the account, instead of selling, the Account Manager can enter offices that may have previously been closed. The Account Manager now has an excuse to move horizontally and vertically within the account's organization in order to present the results and extend their sphere of influence.

4. Meet with the customer. You are now ready to meet with your account to review the report specifically designed for them. You will share what your company has observed as broad trends across your customer-base and what is being done to respond globally. Then you will discuss the customer's specific concerns and finally your response, which may not have been covered in the broad programs previously reviewed.

The main goals of this meeting include:

- Clarify account issues
- Identify additional business opportunities
- Understand how the account evaluates your products or services
- Demonstrate to the customer that you are taking their input seriously and are responding to meet their needs

5. Educate your organization and engage resources to respond. You will now want to educate others in your firm and engage the appropriate resources to respond to your account's feedback. You will have information that needs to be shared with other organizations such as Marketing and Product Management that may lead to future enhancements to your products or services.

And, you will likely need to pull together your extended account team to respond to the customer's specific feedback. Too often customer satisfaction is left on the shoulders of account management and/or the customer contact center. While these are key functions impacting the customer's overall satisfaction with your firm, many other personnel touch the customer (technical support, billing, credit, collections, etc.).

As such, you will need to bring together members of the extended account-team to ensure that each organization understands the areas of satisfaction and dissatisfaction of the particular account and knows what they can do to positively influence this customer's perception of your firm.

6. Continue the process. By now you will have realized many benefits of implementing account strategies and want to continuously loop through the process on a monthly or quarterly basis with each account that you include in the program. During each subsequent meeting you'll want to start off by providing an update on what you've done, the programs you've put in place, or steps you've taken to respond to previously identified areas of dissatisfaction. You will find that each pass at this process builds upon an increasing relationship of trust, respect and mutual profitability.

Remember, implementing account strategies is not something that you will necessarily do for all of your customers. This is a program that you would perform, in its entirety, for only your highest-profile accounts. With that said, however, it is highly recommended that your Account Managers leverage survey results to hold similar discussions with their lower-profile accounts. While senior management from your firm may not be engaged the Account Managers and the customer will realize positive results here as well.

Implementing account strategies based on customer satisfaction survey results, will benefit your firm by:

- Identifying additional revenue opportunities in existing accounts
- Expanding the level and breadth of contacts that account managers have in their accounts
- Clearly identifying account issues (gaps that can be closed)
- Aligning the corporation's resources to resolve account issues
- Enhancing the relationship between account managers and their customers
- Bottom-line: Increases account revenue

Management Review and Assessment

In today's business environment you don't want to miss ANY opportunities to "meet your numbers." Based on an in-depth study, it has been determined that an increase in customer satisfaction leads to an increase in revenue. This is a double-win: increasing customer satisfaction ensures that you hang on to your customers, and it helps you to meet your revenue goals! To reap the full benefits of your customer satisfaction survey program, you need to include management review and assessment.

The management review and assessment step in the process is all about the reality that if management isn't engaged to review and assess the results of your customer satisfaction survey program, you will receive diminishing returns over time. Personnel will lose focus on the program as their attention is diverted to other challenges prevalent in today's business environment. And, you will be at risk of losing focus on your single source of revenue: the customer. To avoid this unfortunate outcome, you need to institutionalize ongoing management review and continual assessment.

There are 3 areas we will explore for management involvement that puts the "icing on the cake", on your customer satisfaction survey program.

- Customer Satisfaction: A Key Performance Indicator
- Ensure customer-focused change programs are in line with strategy
- Customer Feedback: Critical Input to business Decisions

1. Customer Satisfaction: A Key Performance Indicator. To effectively manage their business, executives track key performance indicators (KPIs) in the areas of financial performance, sales results, product/service delivery intervals, quality, customer and employee retention, etc. To complete this picture, you need to bring executive attention to your company's customer satisfaction levels.

If these are not on the list of metrics, that your senior management team monitors, you are encouraged to increase awareness of the benefits of doing so. If you require more information, regarding the relationship between increasing customer satisfaction and increases in revenue, to "promote the cause", give us a call. We would be happy to share additional information on this topic.

2. Ensure customer-focused change programs are in line with strategy. Your business, like most, is changing every day. This requires senior management to continuously evaluate where and how resources are invested. The customer survey remediation program (described in a previous article) will generate many ideas for initiatives to improve customer satisfaction levels.

Management must be aware of, and at some level "approve", these programs to ensure that they are in line with corporate direction. In an environment of stretched resources, as is especially the case today, when you make a decision to say "yes" to a new initiative, you are required to make a decision of "no", to what you will no longer focus on. Make no mistake, this decision WILL occur: either consciously or unconsciously. These decisions are much better made on a conscious level based on the priorities you have set for your organization.

3. Customer Feedback: Critical Input to Business Decisions. Often companies review market trends to look for opportunities to augment their product and service offerings with the hope of capturing "new revenue" from "new customers". And, they do this without an understanding of what they could achieve for "new revenue" from their existing customer-base.

By investing in new initiatives that don't address the pressing needs of your existing customers you may inadvertently alienate these customers. The result: customer defection. As such, take the time to evaluate the trends in your customer satisfaction levels to obtain invaluable customer input to drive your business decisions. You can do this at the macro-level (overall satisfaction), but you will obtain significantly more input by performing a detailed review of specific customer feedback on particular aspects of your product and service offerings. By leveraging your customer's input in making critical business decisions you will be taking yet another step to mitigate risk and ensure that the decision you make is a good one.

By having senior management "this involved" in your customer satisfaction survey program you ensure that the voice of the customer reaches executive management "unfiltered". Without this level of involvement, rest assured that customer information will get a "spin" as it rises through management, prior to reaching the executives. This prevents upper management from having a true sense of how the customers are feeling about your company's products, services and overall performance at meeting their needs. And, policy makers are shielded from accurate customer opinions, resulting in erroneous decisions.

In Summary

Let's review the final steps in the process of leveraging your customer satisfaction survey program to improve customer satisfaction and loyalty, and increasing revenue. We have discussed the following areas for management involvement in the program (a senior manager's checklist):

- Perform reviews of survey results and trends
- Ensure my organization is fully engaged in the program, and is taking action to respond to satisfaction trends
- Tie my organization's compensation model to the achievement of customer satisfaction goals
- Be personally involved in the process of implementing account strategies
- Ensure that you have ongoing management engagement in the review and assessment of the survey process.
- Consistently following the approaches we have outlined, ensures that your organization remains focused on its single source of revenue: the customer. By effectively leveraging the results of your customer satisfaction survey program, you are taking advantage of another opportunity to "make your numbers."

Craig Bailey, President & Founder
Customer Centricity (Customer Centricity Home Page) is a business consulting firm that drives programs to improve customer satisfaction and retention, and operational efficiencies. You can reach Craig at [email address] or at 603/491-7948. Craig offers an initial (no-cost) brainstorming and strategy session to review challenges and opportunities that your firm is facing, and shares pragmatic approaches for you to consider in addressing your most pressing business needs.






Customer Managed Relationships:

Introduction to CMR

CMR – what’s that?
Who invented the term "Customer Relationship Management" or "CRM"? Who cares I hear you mutter in response. Well for those of you who think you invented the term it probably matters. For those of you trying to make CRM work you might like to get hold of and strangle them!!

The term "CMR" – or "customer managed relationships" started to be spoken about 2 years ago but still gets little airplay. “Self service” is a term that is more broadly used but misses the power of what customers want. It looks at the saving from a company’s point of view, not the empowerment from customer’s perspective.

CMR is three things:
1. An ability to rethink, to reshape your organisation and its knowledge so that it is at the disposal of your customers
2. Internet enabled management tools which customers use to get what they want
3. An ability to react to the information being generated and used by customers in order to increase profitability

If executed well CMR generates three major benefits over CRM:
1. It is easier to implement because the customer is doing the complex stuff
2. It creates lock in since customers having invested their data with you will not move easily
3. It allows you to move faster than your competitor since you are in a trusted relationship with your customer

Companies need to understand CMR and then change accordingly. To paraphrase the strategy guru Hamel – you need a well developed view of the future, whether or not it is true. You have to invest in the competencies to make that future come true. You need to experiment and learn to see which parts of your view are developing.


CMR or CRM – what’s the impact?

This article looks at one potential future. Just imagine if all the marketing spend that went into getting CRM onto the board’s agenda had gone into CMR instead. For those of you who believe in neurolinguistics (i.e. something along the lines of “the words you use show what you are thinking”) using the term CMR would mean that the board actually thought the customer was in control, that the customer managed the relationship.

A simple thought but a major impact.

Think about it. Customer managed. They do it to you. You do not do anything to control them. You have to start thinking and behaving differently.

It used to be hard to envisage but with internet enabled platforms it is perfectly feasible to imagine how whole industry processes can be reconstructed putting the customer in charge of their own needs by giving them the internet based management tools and data they require. This is what a customer managed relationship is about.


The industry is not designed to give customers what they want

I don’t want a relationship with you

How many customers actually care about a relationship with their financial services providers? To someone in a company with a mindset that says “we have a relationship with the customer” it implies good relationships result in profit. To a customer who wants an overdraft it implies a simple yes over the phone will do!

At conferences over the past 5 years, I’ve always asked, “Who here wants a relationship with their bank?” Very few do. Unless you want something from them of course. You decide when a relationship is useful.

In some cases it is even worse. People do not trust financial institutions to act in their best interests. There is no basis for relationship. Misselling and monopolistic behaviours mean that trust in financial services has to be carefully defined. Many brands generate trust but that just means “BigCo looks after itself so well by charging the customer and is so well protected by regulation that it cannot go out of business taking my money with it”.

Ask a simple question

I also used to ask audiences which financial institution had the capability to answer the following question: “How much money have I got and what shall I do with it”.

One or two small wealth banks might come close to answering that question. But surely that question is one we, as customers, have to answer all the time. It’s too dynamic and complex a problem for most organisations to handle. Putting in a CRM system does not solve that problem.

The solution cannot come from current thinking so how could we imagine a different future using the concepts of CMR?

Thinking only in the here and now

Within your financial institution, everything you build is based on profitability and or growth. Getting bigger, making more money, keeping the shareholders happy and pushing the share price ever upwards. Customers are essential, you may even be excellent at servicing them but they are not in control.

So imagine your customer wants to manage the relationship (CMR) – I mean along comes this upstart customer who actually believes that they control what goes on in their finances. What would the financial services industry look like if they were in charge?


Let’s imagine for one moment….

Let’s imagine Mr & Mrs Customer are very prejudiced. They live in this parallel universe we just described where they do not trust you and get little benefit from a relationship with the bank. Sure, they get mailers and offers, spending statements that mean little and annual statutory statements that look like mailshots from the outside and tell you nothing on the inside.

They believe that they have to take responsibility for their own finances. They have to in fact since they have financial products such as insurance, pensions and savings with so many companies. Many of their “financial products” are kids, cars, job prospects, and leisure pursuits. They vary from day to day in value. One day the job is brilliant and never going to change. Next day he changes his boss. One day the kids will never go to private school, the next day they are put with the wrong teacher.

He still wants to know how much money he’s got and what he might do with it. He looks at the Sunday papers and sees league tables of the best credit cards, investments and cheque accounts. He occasionally hits a good web site, more often he hears about them down the pub. He doesn’t do anything though. It’s just too damn complicated to bother.


I’d move but I can’t be bothered….

But then he hears about this web site that does it all for you. It’s been designed by some ex games software guys. There’s no help but you get your own Lara Croft to run round and show you what to do. The killer is that it automatically calculates tax returns taking live feeds from all the BigCo banks and institutions. Some wit in a government e-think tank saw to that by persuading the banks they could keep their clearing system monopoly if they did.

Ok worth a try. Crikey all that data needed to get started! That’s worse than the tax return. Ah but once done…I’m never doing it again.


Play as you learn

So, you play a little with the games simulator showing you what you can do. You play with some dummy data about yourself. You hit all the league tables for different products. You play in the various personal scenarios, finding you needn’t enter the data since Lara cheated and showed you Mr Well-above-average’s profile which has been remarkably similar to your own in the past. The forecast results are interesting. Betting on the housing market vs. interest rates and all that.

After playing several times you get the hang of the dynamics of the model and get pretty good at beating Lara at it – not bad since Lara was trained by someone on the Bank of England’s monetary committee in reality and its their model you are playing with. Even the data is up to date and from that same source. In fact all the economic data is government or better, branded news sources or better. And of course there’s online help from real people if you want.


Killer app?

All great fun for five minutes. Sounds good at dinner parties. Then along comes next year’s tax return. All that scratching around for bits of paper, ringing round for interest statements, daft questions from accountants. But Lara’s email says she can do it all for you.

Of course she’ll need your permission. And then she will get all the data on you from the various institutions. In practice she’s already got it. The Government says they have to give it her live and online. Even your employer has been obliged to provide live access on expenses and pay, pensions, NI etc.


Pay as you earn

In fact you don’t need to declare anything since some whizz has written a software programme that sits in the ether somewhere and is constantly looking at all this data and checking your tax payments are up to date. Next year they are proposing to abandon tax returns altogether. You won’t need to declare tax it will have been recalculated online all the time and deducted there and then.


What’s in it for me?

You don’t have to of course, but if you do you get 1% discount and an equivalent of interest on early payment. And you get free online access to all your own data, ready installed in Lara’s programme so you can play scenarios and make choices.

You get free use of the expenses submission tool, which is obligatory at your firm anyway so they can keep P11D expense submissions live. You get free alerts on pension triggers you asked for, whether because your account suggests it or legislation allows it. You can look at any of your statements anytime you want and talk to the online ombudsman if a company you deal with isn’t responding in plain English or at all.

If you are self employed then all your tax, NI, billing, VAT is done for you. A huge overhead taken away.

In fact it is very little different to being employed since time data is required to ensure employment legislation is being met. All sounds like a bit of an overhead but once you start playing with the management information tools its worth it. Self analysis, coaching on line, skills profiling and so on are all there too should you want to go further having looked at how you spend your time. Now if only you get the car to implement the mileage data directly and coordinate it with the diary.

In fact it is much simpler to keep all financial data up to date online this way, 5 minutes here and there. Using either proprietary software to enter data or the tools that come with the site.

I’m now living in a CMR world. I have tools with which to manage the big picture of my finances. I get best offers all the time. If service levels are not good I get to know before I buy by asking other customers of the companies concerned. These financial services companies are now wholesalers or manufacturers or advisors. The whole clearing system is a subset of this system. Banks do not do that anymore. Of course I need some cash sometimes but that’s getting rarer because my PFA (personal financial assistant - Laura) can’t track it for me, so I have to enter stuff manually. That will never die out though since lots of people still want anonymity for many things. Financial service always was an oxymoron!


What’s in it for Government?

The system networks all the relevant knowledge, process and contact I need. It is regulated and government backed. For the moment government owned. They’ve made more money out of online tax collection and the equity value they have in “than the national lottery and the G3 licenses put together.

The hardest part they had to play was to persuade all the vested interests to set up the new system and to select smart, sharp operators who could build and operate such a scaled up system in the new technologies. Of course the fact they only paid on % of turnover and had forced liability for errors onto the supplier consortia made a big difference. The prototype took 3 months – a student project to cut out the wisdom that would prevent progress. But the full system took 3 years of absolute stamina. That’s what Mr Blair must have been talking about by e-enabled Government. Whatever happened to him? On the board of “MyMoneyandWhattodowithit” last I heard.


What’s in it for BigCo?

Of course the real winners were the BigCo.s who got their heads round the idea of CMR very early and started changing their organisation to meet the knowledge based economy. They studied the stakeholder pension model but not really got the point about how much they should be allowed to take out of people’s pockets. The ones that focused on innovating product design based on the new data they had about customers did well. Those that withdrew to large scale fund management did well. Those that built and now run large scale internet based solutions to support many channels be they IFAs or BigCo brands have done well. Yesterday’s financial services companies were very good at all sorts of things which are sustainable today when customers expect to be able to manage their relationships effectively and in their best interests.


I don’t believe it…

If you are sitting comfortably, perhaps even complacently, then remember the parable of the dangerous student. They are out there working on this solution for a new financial system now. You just don’t know where.

Last time I told that parable was about the guys who invented CD sales on line. They did quite well if I remember in reshaping sales models. I was telling it to an audience of retail property people 5 years ago who believed in a forecast by the reputable industry advisors that said 0.01% of sales would be online by 2005. It was the given system at the time.


And finally a challenge

Anyone in government reading this? Please tell me what you are doing about it if anything? Someone out there is working on this solution…

Anyone in financial services agree or disagree? – email me on [email address]. Let’s get a debate going.

Look out for further articles from Peter in the near future.

Peter Massey
Peter Massey is an entrepreneur who has grown and/or funded several businesses in the CRM market. He can be contacted on 07802 793515 or at [email address].






Customer relationship management
Customer relationship management (CRM) encompasses the capabilities, methodologies, and technologies that support an enterprise in managing customer relationships. The general purpose of CRM is to enable organizations to better manage their customers through the introduction of reliable systems, processes and procedures.
Contents
[hide]
• 1 Implementing CRM
• 2 Architecture of CRM
o 2.1 Operational CRM
o 2.2 Analytical CRM
o 2.3 Collaborative CRM
• 3 Purposes of CRM
• 4 Improving customer relationships
• 5 Technical functionality
• 6 Privacy and ethical concerns
• 7 CRM in Business
• 8 CRM for nonprofit organizations
• 9 See also
• 10 External links

Implementing CRM
Customer relationship management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers. Although there are several commercial CRM software packages on the market which support CRM strategy, it is not a technology itself. Rather, a holistic change in an organisation's philosophy which places emphasis on the customer.
A successful CRM strategy cannot be implemented by simply installing and integrating a software package and will not happen over night. Changes must occur at all levels including policies and processes, front of house customer service, employee training, marketing, systems and information management; all aspects of the business must be reshaped to be customer driven.
To be effective, the CRM process needs to be integrated end-to-end across marketing, sales, and customer service. A good CRM program needs to:
• Identify customer success factors
• Create a customer-based culture
• Adopt customer-based measures
• Develop an end-to-end process to serve customers
• Recommend what questions to ask to help a customer solve a problem
• Recommend what to tell a customer with a complaint about a purchase
• Track all aspects of selling to customers and prospects as well as customer support.
When setting up a CRM segment for a company it might first want to identify what profile aspects it feels are relevant to its business, such as what information it needs to serve its customers, the customer's past financial history, the effects of the CRM segment and what information is not useful. Being able to eliminate unwanted information can be a large aspect of implementing CRM systems.
When designing a CRM's structure, a company may want to consider keeping more extensive information on their primary customers and keeping less extensive details on the low-margin clients
Architecture of CRM
There are three parts of application architecture of CRM:
• Operational - automation to the basic business processes (marketing, sales, service)
• Analytical - support to analyze customer behavior, implements business intelligence alike technology
• Collaborative - ensures the contact with customers (phone, email, fax, web, sms, post, in person)
Operational CRM
Operational CRM means supporting the "front office" business processes, which include customer contact (sales, marketing and service). Tasks resulting from these processes are forwarded to resources responsible for them, as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference.
Operational CRM provides the following benefits:
• Delivers personalized and efficient marketing, sales, and service through multi-channel collaboration
• Enables a 360-degree view of your customer while you are interacting with them
• Sales people and service engineers can access complete history of all customer interaction with your company, regardless of the touch point
According to Gartner Group, the operational part of CRM typically involves three general areas of business:
Sales force automation (SFA)
SFA automates some of the company's critical sales and sales force management functions, for example, lead/account management, contact management, quote management, forecasting, sales administration, keeping track of customer preferences, buying habits, and demographics, as well as performance management. SFA tools are designed to improve field sales productivity. Key infrastructure requirements of SFA are mobile synchronization and integrated product configuration.
Customer service and support (CSS)
CSS automates some service requests, complaints, product returns, and information requests. Traditional internal help desk and traditional inbound call-center support for customer inquiries are now evolved into the "customer interaction center" (CIC), using multiple channels (Web, phone/fax, face-to-face, kiosk, etc). Key infrastructure requirements of CSS include computer telephony integration (CTI) which provides high volume processing capability, and reliability.
Enterprise marketing automation (EMA)
EMA provides information about the business environment, including competitors, industry trends, and macroenvironmental variables. It is the execution side of campaign and lead management. The intent of EMA applications is to improve marketing campaign efficiencies. Functions include demographic analysis, variable segmentation, and predictive modeling occur on the analytical (Business Intelligence) side.
Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer.
Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information of a customer in one place, a company aims to make cost savings, and also encourage new customers.
CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving your time.
Analytical CRM
In analytical CRM, data gathered within operational CRM and/or other sources are analyzed to segment customers or to identify potential to enhance client relationship. Customer analysis typically can lead to targeted campaigns to increase share of customer's wallet. Examples of Campaigns directed towards customers are:
• Acquisition: Cross-sell, up-sell
• Retention: Retaining customers who leave due to maturity or attrition.
• Information: Providing timely and regular information to customers.
• Modification: Altering details of the transactional nature of the customers' relationship.
Analysis typically covers but is not limited to:
• Decision support: Dashboards, reporting, metrics, performance etc.
• Predictive modeling of customer attributes
• Strategy and research.
Analysis of Customer data may relate to one or more of the following analyses:
• Campaign management and analysis
• Contact channel optimization
• Contact Optimization
• Customer Acquisition / Reactivation / Retention
• Customer Segmentation
• Customer Satisfaction Measurement / Increase
• Sales Coverage Optimization
• Fraud Detection and analysis
• Financial Forecasts
• Pricing Optimization
• Product Development
• Program Evaluation
• Risk Assessment and Management
Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Therefore, most successful analytical CRM projects take advantage of a data warehouse to provide suitable data.
Business Intelligence is a related discipline offering some more functionality as separate application software.
Collaborative CRM
Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured,conversational, and/or transactional in nature.
Collaborative CRM provides the following benefits:
• Enables efficient productive customer interactions across all communications channels
• Enables web collaboration to reduce customer service costs
• Integrates call centers enabling multi-channel personal customer interaction
• Integrates view of the customer while interaction at the transaction level
Driven by authors from the Harvard Business School (Kracklauer/Mills/Seifert), Collaborative CRM seems to be the new paradigma to succeed the leading Efficient Consumer Response concept in the industry/trade relationship. Many organizations are searching for new ways to achieve and retain a competitive advantage via customer intimacy and CRM. In this context, new strategic frameworks and cooperation with everybody along the whole value chain are needed to allow managers to deal with the changes in shopping patterns of consumers. New management concepts such as Collaborative Forecasting and Replenishment, CRM, Category Management, and Mass Customization are integrated into one holistic approach with a view to jointly develop customer bonding and loyalty.
Purposes of CRM
CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, improving customer service. A good CRM program will allow a business to acquire customers, service the customer, increase the value of the customer to the company, retain good customers, and determine which customers can be retained or given a higher level of service. A good CRM program can improve customer service by facilitating communication in several ways :
• Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week.
• Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.
• Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.
• Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).
• Help to identify potential problems quickly, before they occur.
• Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction).
• Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction).
• Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).
• Use internet cookies to track customer interests and personalize product offerings accordingly.
• Use the Internet to engage in collaborative customization or real-time customization.
• Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness).
• The CRM program can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it.
Improving customer relationships
CRM programs also are able to improve customer relationships. Proponents say this is so because:
• CRM technology can track customer interests, needs, and buying habits as they progress through their life cycles, and tailor the marketing effort accordingly. This way customers get exactly what they want as they change.
• The technology can track customer product use as the product progresses through its life cycle, and tailor the service strategy accordingly. This way customers get what they need as the product ages.
• In industrial markets, the technology can be used to micro-segment the buying centre and help coordinate the conflicting and changing purchase criteria of its members.
• When any of the technology-driven improvements in customer service (mentioned above) contribute to long-term customer satisfaction, they can ensure repeat purchases, improve customer relationships, increase customer loyalty, decrease customer turnover, decrease marketing costs (associated with customer acquisition and customer “training”), increase sales revenue, and thereby increase profit margins.
• Repeat purchase, however, comes from customer satisfaction - which in turn comes from a deeper understanding of each customer, their individual business challenges and proposing solutions for those challenges rather than a "one size fits all" approach.
• CRM software enables sales people to achieve this one on one approach to selling and can automate some elements of it via tailorable marketing communications. However, all of these elements are facilitated by or for humans to achieve - CRM is therefore a company-wide attitude as much as a software solution.
Technical functionality
A CRM solution is characterised by the following functionality:
• scalability - the ability to be used on a large scale, and to be reliably expanded to whatever scale is necessary.
• multiple communication channels - the ability to interface with users via many different devices (phone, WAP, internet, etc)
• workflow - the ability to trigger a process in the backoffice system, e. g. Email Response, etc.
• assignment - the ability to assign requests (Service Requests, Sales Opportunities) to a person or group.
• database - the centralised storage (in a data warehouse) of all information relevant to customer interaction
• customer privacy considerations, e.g. data encryption and the destruction of records to ensure that they are not stolen or abused.
Privacy and ethical concerns
CRM programs are not however considered universally good - some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on customers - see persuasion technology. However, CRM does not necessarily imply gathering new data, it can be used merely to make "better use" of data the corporation already has. But in most cases they are used to collect new data.
Some argue that the most basic privacy concern is the centralised database itself, and that CRMs built this way are inherently privacy-invasive. See the commercial version of the debate over the carceral state, e.g. Total Information Awareness program of the United States federal government.
CRM in Business
The use of internet sites and specifically e-mail, in particular, are often touted as less expensive communication methods in comparison to traditional ones such as telephone calls. These types of technologies service can be very helpful, but it is completely useless to a business that cannot reach its customers. Some major companies believe that the majority of their clients trust other means of communication, like telephone, more than they trust e-mail. Clients, however, are usually not the ones to blame because it is often the manner of connecting with consumers on a personal level making them feel as though they are cherished as customers. It is up to companies to focus on reaching every customer and developing a relationship.
It is possible for CRM software to run an entire business. From prospect and client contact tools to billing history and bulk email management. The CRM system allows a business to maintain all customer records in one centralized location that is accessible to an entire organization through password administration. Front office systems are set up to collect data from the customers for processing into the data warehouse. The data warehouse is a back office system used to fulfill and support customer orders. All customer information is stored in the data warehouse. Back office CRM makes it possible for a company to follow sales, orders, and cancellations. Special regressions of this data can be very beneficial for the marketing division of a firm/company.
CRM for nonprofit organizations
CRM is also important to non-profit organizations, which sometimes use the terms "constituent relationship management," "contact relationship management" or "community relationship management" to describe their information systems for managing donors, volunteers and other supporters












An Analytical Approach to Workforce Management


E X E C U T I V E S U M M A RY

Traditional reports are at best clumsy mechanisms for improving contact center performance. They flood contact center staff with unsorted detail, much of which has little relevance to effective operations, and supervisors and managers spend far too much time using spreadsheets and other ad hoc tools to turn data into actionable information—information that usually arrives too late to be useful.

The solution lies in analytical applications that automatically deliver specific types of information—selected for their relevance to business goals and job functions—to staff throughout the contact center in easily understood formats that allow users to view the information from different perspectives and drill down into the granular details.

These applications not only save time and money by freeing staff from the task of sorting and arranging statistics, but also enable everyone from agents to managers to understand the root causes of contact center performance and to take swift corrective action when performance is substandard.

This white paper describes the principles of analytical applications and demonstrates how Aspect has applied them to a specific application for optimizing the performance of the contact center workforce. Workforce management is a critical factor in cost-effective operations and in maintaining high service levels, and Aspect has chosen this function for the first analytical application in what will eventually be a family of analytical solutions that cover every facet of contact center operations.

Analytics vs. reporting: what’s the difference?

Traditional call center reporting is based on the ability of automatic call distribution (ACD) systems to generate statistics. ACDs are very good at counting things like the number of calls handled, the amount of time that callers waited before their calls were answered, how long customers and agents remain on the line, and how many calls were routed to particular agents, agent groups, or call center sites.

The old wayroduction reports

It has been standard practice in most call centers for many years to bundle these kinds of statistics into production reports that regenerate regularly for distribution to supervisors and managers. Production reports are simple, one-dimensional tools, and their widespread use is mostly a result of the fact that until very recently, they’ve been the only game in town.

Production reports do have their uses, of course. They’re excellent for analyzing long-term trends, and they are a good source of detailed statistics for any call center that has to provide reports to government agencies that mandate service levels. But as a tool for managing the contact center workforce and for optimizing day-to-day operations, they have serious shortcomings.

One disadvantage is that production reports are static. Snapshots of call center activity at a particular point in time, they are out of date as soon as they are generated. Another, more serious problem is that production reports give a very broad and general view. They are, after all, unsorted collections of information, much of which has little or no relevance to effective operations.

It is the need to sort and organize statistics that makes production reports a clumsy and inefficient way to seek actionable information. It involves knowing which statistics are relevant, extracting them from the clutter, analyzing what you’ve extracted, and doing something about what you learn from it.

And all of that means that using traditional reports to try to manage your contact center better ranges from woefully ineffective to counterproductive. Your managers spend a lot of time using spreadsheets to crunch the raw numbers and try to draw conclusions, time that could be spent on other critical tasks such as coaching and supervising agents.

The results of their efforts usually don’t get done in time to be useful, since the production reports themselves are out of date as soon as they are generated—and even more out of date by the time your analysts have massaged the data. It is not uncommon, for instance, for agents to receive their performance results for a particular quarter after the quarter has ended—far too late for them to use the information to improve their performance and earn quarterly bonuses.

The effective way: analytical applications

Analytics is something new and altogether different. An analytical application is a focused management tool that:

• Selects information based on predefined application logic tailored to specific activities and business drivers
• Offers different views for different users, based on their job requirements
• Provides an easy-to-use interface that lets users navigate through the information, looking at it from different perspectives and drilling down to the most granular level of detail in order to identify root causes and truly understand what is going on in the contact center
• Includes tools for communicating with contact center staff and taking quick corrective action when performance falls short of business goals

All this makes analytical applications much more desirable, both from the standpoint of cost and the standpoint of effectiveness, than traditional production reports.

Because analytical applications are tools designed to accomplish a specific purpose rather than collections of raw data, the time-consuming work of sorting the data to find what is relevant to operational and business requirements has already been done. Analytical applications don’t just dump statistics on manager desktops; they deliver selected information that applies directly to the pressing concerns of running the contact center efficiently and of supporting business goals.

An equally important advantage is the structured presentation of the information. A good analytical application automatically presents the right information to the right people in a timely manner and in a format that is easy to comprehend. Add to this the ability to move through the information at will and the ability to communicate corrective actions, and you have what managers have needed all along—an effective tool for meeting business goals.
Analytics as a general principle applies to any contact center data and all contact center reporting. But it is most effective if it is applied to specific contact center functions.

Workforce management is an obvious place to start. For one thing, there’s plenty of data to work with. Workforce management applications are a source of detailed data about forecasts, schedules, and schedule compliance. Managing the workforce effectively is one of the most important contact center functions, both from the standpoint of containing costs by preventing overstaffing and maintaining service levels by avoiding understaffing. And all of the advantages that analytics offer—quick access to relevant information, job-specific displays, and tools to communicate and take corrective action—are directly applicable to the processes of managing and motivating the contact center workforce for maximum efficiency.

How the application works

Applying analytics to workforce management is fairly simple in concept. The application draws its information from the workforce management software. The information is selected and presented in the form of key performance indicators (KPIs) based on domain expertise from specialists in contact center best practices. These KPIs focus on the measurements that really affect contact center efficiency and effectiveness and that prevent users from being swamped by a deluge of irrelevant detail.

The KPIs are displayed on dashboards tailored to the specific job requirements of different groups, such as agents, supervisors, managers, and control desk staff. Each dashboard displays only the KPIs relevant to the task of the person using it, and each offers the right degree of control for its user group.

Two important characteristics of these dashboards are clear, easily comprehended displays of information and flexible, intuitive navigation based on the real requirements of the user. Color-coded displays, for instance, tell users at a glance whether performance is above, at, or below target levels. Users can also choose between numeric and graphic displays, and easily accessible menus allow them to change views, drill down, and quickly pinpoint root causes.

Once users have determined what is going on in the contact center and why, a good analytical application also gives them tools to take prompt action that improves performance. Managers, supervisors, and control desk staff can change target levels and performance objectives for agents, groups, or the entire enterprise.

Moving from supervision and management to leadership and teamwork

What makes this kind of application such a revolutionary advance over traditional reporting techniques is its effect on contact center efficiency and productivity. By automatically distributing KPIs to the entire contact center staff, workforce management analytical applications enable them not just to know what is going on in the contact center, but also to understand it.

Agents who are falling short of their goals can adjust their performance or communicate with supervisors about identified causes. Supervisors can coach agents, set group and individual goals, and motivate workers. And managers can manage effectively on an enterprise level rather than getting bogged down in detail. In short, analytical applications allow the contact center staff to go beyond supervision and management to teamwork and leadership.

Aspect’s approach to the concept of analytics

Aspect is in the process of applying its domain expertise as a pure-play contact center vendor with nearly two decades of experience to analytical applications for the contact center. Our first offering is Aspect® Performance Optimization for eWorkforce Management.

It delivers all the features and benefits described above, is easily installable, and requires no customization. It includes 100 standard KPIs selected for their relevance to contact center efficiency and receives data from the Aspect eWorkforce Management software. (We reasoned that most businesses will need the same KPIs, and that to start with, quick implementation and low cost will be important factors.) An Aspect PowerStart installation service is available, and for an additional fee, up to two more data sources can be added.

Workforce management analytics is just the starting point for Aspect’s product development. The principles that make Aspect Performance Optimization for eWorkforce Management such a valuable application apply equally to all the data sources in the information-rich contact center. So we’re developing more applications to bring the advantages of analytics to ACD, IVR, and multichannel contact statistics.

EMPOWERING THE ENTIRE CONTACT CENTER STAFF

Aspect Performance Optimization for eWorkforce Management delivers actionable information via four job-specific dashboards. The following scenarios demonstrate the effects of each on contact center efficiency.

Agent

Knowing that his quarterly bonus is based on meeting schedule compliance targets, a call center agent uses the Performance Optimization agent dashboard to check his performance.

The easy-to-read color-coded display tells him that he is below target. He knows that he’s getting to work on time and that he hasn’t been leaving early, and he knows that while he’s on shift, he’s productive. So he needs to find out what is preventing him from earning his bonus.

His first question is whether his schedule compliance had bee below par only recently or over a longer period of time. By changing the time period to a longer increment, he confirms that his compliance has been consistently low for the last month

Further analysis indicates that the problem occurs at the same time each day—just after lunch.This reveals the root cause of the problem.The agent’s afternoon shift is scheduled to start at exactly the time his lunch break ends. He’s getting back from lunch four or five minutes after his scheduled start each day, and it’s making a big difference in his schedule compliance. So using Aspect eSchedule Planner, he requests a minor schedule change that gives him five more minutes to get from the cafeteria to his workstation.

Supervisor

A team leader uses Performance Optimization to monitor the number of calls her team is handling. Her dashboard indicates that the team is seven percent below the target level. Before she takes action, she needs to know whether the whole team is falling behind or just one or two agents are holding the team average down.

By drilling down to individual agent performance, she finds that most of her team members are actually handling more calls than they’re expected to, but two agents, both recent hires, lag well behind the group. From that point, it is a simple matter of watching them handle a few calls and asking them how the work is going.

The team leader sees that both agents are slow with after-call wrap-up work, and that’s what causes them to answer fewer calls. An experienced agent herself, she gives them some tips on handling the wrap-up work efficiently, and their call-handling average goes up.The team begins to reach and ultimately exceed its goal.

Manager

A call center manager is using Performance Optimization to monitor the entire center. Average handle time is in the red. By drilling down, she is able to determine that one particular type of call—purchase requests in response to a television sales campaign—is the cause.

She contacts the supervisor of the group handling the campaign and discovers that many of the agents assigned have little experience in processing this kind of special offer. She knows that the center has handled this kind of campaign before and that more experienced agents are on shift, so she instructs supervisors to alter some assignments to put the more

Handle times drop, and as a result, the number of calls handled rises.

Control desk

A control desk manager is monitoring multiple sites, comparing forecast call volumes, schedules, and actual traffic and staffing. He sees that actual staffing is lower than scheduled staffing. He does a time analysis by period of day and then drills down to each site, locating the cause of the deviation at a single site.The forecast for the site indicated that 100 agents would be needed. 105 were scheduled. But only 95 are on hand.

The control desk alerts the site of the shrinkage, and the site finds the cause. Mandatory scheduled training is making agents unavailable for shifts. Knowing the cause, the site can adjust schedules to eliminate the shrinkage, and the control desk can use other KPIs to assess the effectiveness of the training and determine whether it is valuable enough to justify. Empowering the entire contact center staff.













Understanding customers, maximising your profits
© 1999 Michael W. Solomon & Roccade Finance

Financial service institutions, especially banks, have
never been in a more sweeping era of change. Judging
from all the deals being done of late, the banking
industry is headed toward a massive consolidation into a
handful of global mega-players offering every possible
financial product and dominating the world of finance.
But while being big matters more than ever in the
banking business, there is plenty of reason to question
the one-size-fits-all model being promoted in many
financial quarters.

Of course, there are advantages to being big. More than
ever, a big bank has to be global and has to be able to
offer its customer just about every service under the
sun. A huge capital base, among other things, makes it
easier to stand behind ‘mega-financing’ transactions.
But being big doesn’t guarantee success, and the bigger
these banks get, the more room they leave for nimble
niche players to outflank them. Increasingly, financial
institutions and the offerings they provide need to be
relevant to customers and their lifestyles. This does not
necessarily mean being overly sophisticated.

The traditional lending of money is much less important
than it was 10 or 20 years ago. Banks have now been
forced to go where the real money is: specialized
services, stock underwriting and sophisticated
transactions. Customers, who may have opted for faceto-
face banking services in the past, generally no longer
have time to stand in queues for transactions. They want
more time to bank, when and where it is convenient.
Technology, has also brought with it fast-moving
customers who want instant gratification. Many financial
services products tend to have to flow through a lot of
red tape before customers receive what they want.
Some customers, for example, no longer want check or
savings accounts; instead they want all their banking
needs built around their credit cards. Consequently,
financial institutions have to re-examine what the
customer wants.

This is starting to throw the entire traditional banking
product and service range into question. Financial
services appear to be moving towards differentiated
pricing, where customers are charged for the facilities
and services they use. In future, fees are likely to be
unbundled and customers who use electronic check
books, for example, will tend to be charged less than
those still using paper-based checks.

Customers, clearly, do not want to pay for products and
services that they do not want to use. When they are
prepared to pay, they want the choice of being able to
use a full range of value-added products and services.
Also significant, customers are constantly on the move
and they want their banking to move with them so that
they can access banking products and services
remotely, with a full understanding of what they’re
doing. The same applies to almost every area of investment.

People furthermore will look increasingly to having all
financial services under one roof, but equally an
enormous amount of unbundling is likely to take place.
For example, the multi-manager approach sees
services being outsourced, often to rival institutions.
The new battleground

Retail bank structures, meanwhile, are taking on their
own new look. There is already a strong movement
away from flagship branches towards transaction
processing centres. Today, customers may not see or
hear from their bank directly, as they prefer to interact
electronically. All they want is fast 24-hour service. In
the UK earlier this year, Barclays Bank closed 171 of
its branches in a single day, a tenth of its national
network. Disgruntled customers delivered wreaths to a
number of branches, and demonstrators gathered
outside others, bearing placards reading ‘Save our
Bank’.

The new economy has become an important
battleground for market share. The use of more
customer-centric technologies will confer competitive
advantage on those who deploy them wisely, and will
leave the laggards further and further behind.
It won’t be long, for instance, before customers
phoning their bank’s call-centre find themselves
speaking not to a live agent, but to a machine which
can offer verbal responses to their queries and
requests.

International research has shown ready acceptance of
speech recognition software around the world among
users of all ages, including those who have to push
buttons in a conventional interactive voice response
interaction.

Indeed, a benchmark survey conducted by Nuance
found that three-quarters of users found speech
applications as good as or better than their previous
method of accomplishing the same tasks, such as
banking, airline reservation, product ordering,
brokerage, voice dialing, directory assistance, and
using voice-enabled Internet content.

Speech recognition gives users the freedom to use the
system whenever they want – the call centre never
Understanding customers, maximising your profits.

They can use the speech recognition system the
way they want, interrupting commands or instructions,
and skipping through menu levels, which is not possible
with a push-button interactive voice response system.
Banking by cell phone is also on its way into the market.
Banks find it extremely expensive to maintain a maze of
branches, yet customers need reasonable access. The
answer naturally lies with cell phones, where, firstly, the
market is exploding, and, where, secondly, all that is
needed is a permanent connection where transactions
can be done with the touch of a button.

Customer relationship management

Although useful, these technologies will be no more than
battlefield gimmicks unless the customer is king and his
or her needs are paramount. For example, when people
look for a housing loan, the most competitive interest
rates will be important. But also meaningful will be a
friendly relationship, the fastest transaction turnaround
time; flexibility built into the arrangement (such as home
equity finance); having the transfer fees built into the
loan; and having the same buyer-seller attorney so that
they only have to go to one place to sign documents
Ultimately, customers want to be seen by their financial
institutions as individuals rather than simply one of a crowd.
And here’s the crux: to achieve the customer-centric
approach that today’s customers demand, organisations
need to excel, among other things, at empathy. They
need to develop a pervasive ability to see things from
the viewpoint of the customer.

This may sound fairly simple. However, the capacity to
put oneself in the shoes of someone else is a difficult
skill to master, and not surprisingly will prove to be a key
issue in customer relationship management (CRM).
Interest in CRM has arisen from the realization that it is
easier and cheaper to sell to existing customers than it
is to acquire new ones. As such, successful
management of relationships with existing customers is
imperative. Obtaining a new customer in the financial
services industry today is on average 10 times more
costly than keeping an existing one. CRM is becoming
so important, that global expenditure is expected to
touch USD 12.1 billion by 2004.

However, there is little consensus on the definition of
CRM, let alone the approach. For example, according to
a recent Meta Group survey, at least 22% of
respondents viewed CRM as no more set of tools and
technologies. In spite of this confusion, existing
definitions of CRM tend to view it as the process of
acquiring, developing and retaining customers in a
profitable way. Typically, this would involve providing
offerings, promoting them, winning the customer, and
then retaining him. Once he is in the net, he inevitably
becomes a lot more profitable to your organisation than
in the beginning. You can cross-sell to him, up-sell to
him, and in the end handsomely reward your
shareholders. However, to design satisfying offerings
and to serve customers as they want to be served,
organisations have to undertake the difficult task of
adopting a customer-centric approach.

Customer situations can be viewed from three
perspectives: a) the point of view of the company, b)
the point of view of the individual serving the customer,
and c) the point of view of the customer.

Empathy explained

Products and services are often designed or delivered
from the frame of reference of the organisation or the
staff member. The customer might then find himself
thinking, ‘Hey, I wish they could relate to my frame of
reference, and see things the way I do”. In our
research into organisational empathy we came across
a good illustration of this point. A focus group member
explained how on returning his rental car to the
outdoor, airport drop-off point in the pouring rain,
running late for his flight, and struggling to get his
luggage out of the vehicle, he was approached by a car
rental staff member, who’s first concern was to secure
the vehicle’s keys and take the odometer reading. If the
staff member had taken the customer’ predicament or
state of mind into account, he may have first offered to
get a luggage cart and an umbrella. However, it is likely
that the staff member had been trained to manage the
customer from the organisation’s point of view. From
this narrow view, the only thing that mattered in this
situation was to look after the interests of the car rental
company. Apparently, the customer was merely there
as a by-product of a transaction.


Clearly then, not only do you need to empathize with
the customer, but you need to respond appropriately to
his needs. This involves putting yourself in his shoes
and seeing the world as he sees it. Once that is
apparent to you, you need to respond by providing
what is necessary on time and at the expected cost.
Of course, this can be much more difficult than meets
the eye. Customers do not always have a clear idea of
what they want, and sometimes require the vendor or
service provider to stimulate their imaginations.
Organisations are generally better at responding than
they are at taking the customer’s point of view. It is
much easier to make assumptions about what
customers want and need than it is to continuously test
one’s understanding of one’s customers. But what is
empathy? Empathy is the ability to enter into and
understand the world of another person and
communicate this understanding to him or her.

Empathy consists of two key abilities: Being able to take
someone else's perspective, and accurately sensing
their emotions.

Empathy is an important social skill that significantly
affects the quality of one's relationships with others. It
helps to establish rapport; and means listening carefully,
clarifying one’s understanding, and showing in words or
action that one understands the other person’s world; It
generally requires emotional maturity on the part of the
user. It also involves considerable self-awareness – you
need to know a lot about yourself to understand others,
and indeed should you master that, there are several
advantages. A person with high degrees of empathy is
usually well adjusted, reasonably outgoing, fairly
sensitive, and tends to get on well with the opposite sex.
People tend to display empathy at one of three levels. At
the most superficial level it is a communication skill that
can be learned and applied. At the deepest level it is a
way of being that was famously displayed by the likes of
Mahatma Gandhi, Mother Theresa, Princess Diana, and
Nelson Mandela. In between these two extremes it is
used - often by people in the helping professions like
teaching and counselling - as a mode of interacting with
others that can be switched on and off. Unfortunately,
using it as a tool will be experienced as hollow unless it
is an expression of the user's way of being.

Organisational empathy defined
Organisational empathy, as we have already suggested,
is the ability of an organisation to use the customer’s
viewpoint to design offerings and experiences that will
exceed his or her expectations. Virgin Atlantic and
McDonalds are prime examples of organisations that
have invested heavily in organisational empathy. Let’s
take the case of McDonalds, in which there are various
dimensions of empathy, and in which you can see them
continuously evolving in response to their customers. It
has spent an enormous amount of time putting itself into
your shoes.

The first feature is its endeavour to satisfy the kids, by
providing a ‘happy meal’ and the ‘Playplace'. The
second is operational empathy, the ‘drive-thru’. The third
is a service promise of quality, cleanliness and value.
And the fourth is cultural empathy, in which the
operation is customized to local conditions and local
circumstance.

Virgin Atlantic, at a very different level, offers ‘Upper
Class’ passengers a limo service, hassle-free check-in,
the ‘Clubhouse experience’ with its cool extras such as
a haircut and massage and in-flight entertainment for
all. Richard Branson will always adopt this approach,
no matter what business he gets into. Other
businessmen will never be a success from a customer
point of view, no matter what business they get into. It’s
an attitude that is often very difficult to acquire.
There is a paradoxical side to empathy, however. The
more you understand the customer walking through the
door, the more you realize that she or he probably
wants to be left alone. There can be nothing more
irritating than five or 10 shop assistants, asking, “Can I
help you?” Clearly, it requires an element of tuition.

Two phases in organisational empathy
Organisational empathy differs from empathy as
practiced by individuals although the latter is a vital
competence for customer-facing personnel.
Organisational empathy involves perspective taking but
not necessarily emotion-sensing. It generally occurs in
the absence of the customer and can be built into the
organisation using processes combined with the
empathic insights of individual members of the
organisation.

Individual empathy, on the other hand, involves both
perspective taking and emotion sensing. It is clearly a
person-to-person phenomenon, which happens mostly
in the "here-and-now" and obviously requires the
customer's presence. It relies heavily on the character
of the user and as such is difficult to orchestrate like a
process.
Organisational empathy is different but nevertheless
related to a variety of other concepts that in the CRM
vocabulary. It differs from customer-centricity, which is a
state that can be achieved using organisational empathy
as an approach. It is unlike customer relationship
management, which is an approach to marketing that
could easily drive the organisation deeper into its own
point of view. Customer intelligence differs from
organisational empathy in that it is concerned with
gathering and analyzing data to help make decisions
about how to deal with customers. The data and the
decisions that emerge from analysis can be either
organisation-centric or customer-centric. It is perhaps
most closely related to one-to-one marketing that sees
all customers as individuals that should receive
personalized offerings and experiences. However, unlike
one-to-one marketing organisational empathy is focused
on both marketing and customer service. When using
organisational empathy to exceed customer
expectations, two important phases are needed: first
taking the customer’s viewpoint, and second designing
offerings and experiences. In this paper we will only
consider the first phase.

Existing methods for taking the customer’s
Perspective

Several tools already exist that can help one take the
customer's view. They originate in the disciplines of
marketing, consumer behaviour, new consumer thinking
and user-centred design. Marketing as a discipline
considers cultural, social, personal and psychological
factors when analyzing consumer markets. Marketing
also helps take the customer's view using market
segments that group customers by geography,
demographic characteristics - like age, life-cycle stage,
gender, income, generation, and social class,
psychographic characteristics (such as lifestyle,
personality & values) and behavioural patterns like -
occasions, product usage rate, and loyalty amongst
others.

Consumer behaviour is an obviously important
component of the overall subject, typically emphasizing
the purchasing activity within a combined process and
influence model. It generally covers the consumer
buying process and attempts to understand how it is
influenced by the consumer’s personal, psychological
and social factors.

Indeed, any individual is considerably influenced in his
attitudes by three important factors: personal,
psychological and social. On the personal side, much
will depend on his age and sex, his immediate state of
mind, and activities that he may be involved in.
Likewise, on the psychological side, his attitudes will
depend largely on experience, the way he sees things,
motives that he may have, his ability and knowledge,
and his personality. Social influences, of course, will
include his status and role within his family, peer and/or
professional pressure, social class, culture and
perhaps even religion or political thinking. These
factors, in turn, will have an enormous impact
collectively and individually on his choice of products.
Experience, for example, will be important in identifying
problems; his ability and knowledge will be crucial in
understanding the product, evaluating it and
considering the alternatives; whether he ultimately
buys it or not may be an issue of social preference or
prejudice; and whether he appreciates it or not once
purchased, will have much to do with his personality.
New consumer models include the thinking of Lewis &
Bridges and Pine & Gilmore. These authors maintain
that new consumers, unlike old consumers, are
individualistic, involved, independent and informed.
They actively pursue personal authenticity in their
consumer roles and need help to overcome
deficiencies in time, attention and trust. In their book
The Experience Economy, Pine and Gilmore contend
that these new consumers want personal
transformations – rather than mere products and
services – to help them achieve such authenticity.
Some promising tools for taking the customer
perspective have arisen in the field of user-centred
design (UCD). UCD takes the user’s perspective in the
design and development of software and other
information technologies. Several methods have
emerged. Cooperative design involves users of the
potential technology in the design of a new system.
Soft-systems methodology includes the widest variety
of parties involved in the total' human system' that will
need to use the new technology. The ‘multiview’,
approach on the other hand, is a structured
methodology for developing information systems that
takes users, wider human systems and technical
considerations into account, starting with an analysis of
the human activities involved.

Limitations of existing methods
These tools have an important role to play but they
also have gaps and limitations. Marketing tends to
entrench the organisation’s perspective by relating the
customer to the organisation rather than vice versa. It
relies, in places, on the outdated notion that human
behaviour is strongly driven by internal forces like
personality. Consumer behaviour is purchase-oriented,
abstract and generic, and oftentimes removed from the
everyday activities of customer lives. New consumer
thinking offers valuable insights into customer lifestyle
deficiencies, but while authenticity is a useful concept it
does not explain all customer behaviour. User-centred
design, although in its germinal phases, offers the
opportunity to understand practical human activities
and the broader systems in which these occur.

Using customer process analysis to build
organisational empathy
In an effort to build on to, and fill the gaps left by these
perspective-taking tools we have developed a technique
called customer process analysis that helps to structure
efforts at taking the customer’s view. It focuses attention
on the observable behaviours that constitute much of
the customer’s experience of his ‘consumer world’. It
views this behaviour as a type of work made up of many
learned, goal-directed processes.

Customer process analysis is underpinned by several
principles:

• Start with the customer’s goals and work
backwards, but remember that the customer is
both rational and irrational;
• Focus primarily on objective and readily
observable behaviour that is not influenced by
the many perceptual filters that people use
when they report on the workings of their minds
and their own behaviour;
• Thereafter, analyze the customer’s subjective
experience of their own processes and the
products, services and offerings that
organisations sell them to help support their
processes;
• Also look beyond the immediate moment of
truth in which the customer interfaces with the
organisation, to consumer situations in which
there is no interface with your organisation;
• Develop hypotheses about the customer’s
world and confirm these with the customer;
• Create a balance between highly personalized
and generic models of customer processes;
and,
• Borrow from existing models where appropriate
and build on them.

Customer process analysis requires five steps in helping
an organisation take the view of the customer.

These are:
• Define what is meant by the customer;
• Determine what the customer’s pertinent
goals are;
• Identify the activities that customers use to
pursue these goals;
• Identify inputs or resources that customers
use – or wish they had – to perform the
activities; and,
• Develop marketing hypotheses for the design
process.
The first four steps help to identify opportunities for
innovation and improvement. These, however, are not
absolute and should be adapted where necessary. In
identifying the organisation’s customers, it’s clearly
necessary to focus on the customer’s view. However,
there is nothing obvious about it, even though it may
seem quite simple.

Identifying the customer

Of all the marketing texts we reviewed, we could find
no definitive description of what the term actually
means. Ironically, the cynic’s definition may be the
most realistic, if not the most accurate, namely, “the
customer is a person identified as such by having his
or her name listed in an organisation’s customer
database”.

Earlier we pointed to the importance of social factors
that influence attitude, and it’s here that organisations
can gain a better sense of who the ‘customer’ is, by
analyzing the customer’s social network. You can do
this on the basis of applying primary and secondary
circles. The primary circle, for example, would include
the identified customer, parents, siblings, household
staff and other individuals heavily engaged in the
household’s affairs. The secondary circle covers less
salient relationships including those with acquaintances,
vendors, institutions and the like.

Each of these groups can play different roles in
influencing the identified customer’s behaviour. These
could include, say, influencer, proxy salesperson,
consumer activist, buyer, decision-maker, authorizer,
recipient, payer, messenger and even “The Jones’s”.

Exploring customer goals

Having identified the customer one can then explore his
goals. Once these goals have been identified, you need
to establish whether they are explicit and whether, in
fact, the customer is conscious of them. And if he is
aware of them, does he stick to them? Other important
questions to establish are whether the goals are static or
changing, and whether they are necessarily logical and
rational. You have to be clear here that you’re dealing
with the customer’s goals and not the goals your
organisation wants him to have. You also need to rate
them from most to least important and from most to least
urgent. This will then allow you to segment your
customers according to the type and nature of financial
goals that they are pursuing. Certainly, in the context of
financial services, customer ambitions may range from
the ostentatious to the modest. At the one end of the
scale you’ll find those people who want to be the richest
in the world, or be obscenely rich, or have a net worth of
at least $10 million. At the other end, you’ll get those
who merely wish to put bread on the table, or have a
good time, or put money away for a rainy day. Between
the two, you’ll have those who wish to preserve wealth,
those who wish to be a millionaire before they’re 45,
those who wish to be financially independent and retire
at 30, those who wish to be financially secure and live in
comfort, and those who simply wish to make provision
for retirement.





Clarifying customer activities

These are the kinds of questions that need to be asked
in clarifying the activities customers use to pursue those
goals:
• Which activities do you plan and which do you
execute?
• How do you feel about these activities?
• Do you have any latent wishes about these
activities?
• Have you considered ways to make them more
convenient, less time-consuming, less expensive
and less complicated?
• How much time do these activities consume, can
they be completed in a single sitting, or do they
stretch out over long periods of time?
• Which people or organisations currently help you
with these activities?
• How competent are you at these activities and
how much effort did it take to acquire this
proficiency?
• Which member(s) of the customer network
typically perform these activities, or are they
shared?
• How regularly must these activities be performed?
• How do these activities intersect with the
processes of one’s organisation?

Understanding the inputs needed

Once the customer’s activities have been understood,
it is worth looking at the resources customers generally
need to perform these activities to their satisfaction and
that of the vendor organisation. For instance,
customers using Internet banking may wish to access
their account data in a specific personal effectiveness
application like Intuit’s Quicken product. First National
Bank in South Africa clearly used organisational
empathy when they chose to provide a “save-as” data
export facility enabling their online clients to save their
account statements in several formats including ASCII
text. These inputs or resources could include
knowledge, information, data, money, time, skills and
tools.

Generating hypotheses

Once all this information has been collated, hypotheses
can be generated which can be used in either a focus
group with real customers, or, alternatively, used to
perform an expeditionary marketing exercise. Of
course, a hypothesis is merely a tentative statement of
fact, and can be proved or disproved according to
whether the facts support them. A good example of a
hypothesis that emanated out of a recent study on
short term insurance in South Africa suggested that
people first buy insurance at the behest of their
parents. In our focus group, this was confirmed by 90%
of our participants. This in turn presented an
opportunity for innovation, that parents might be
attracted to a risk management package for their
teenagers if it were to include advanced driving
education, vehicle purchase assistance, and advance
household content cover. Simple data analysis could,
of course, identify existing clients who are parents of
teenagers.


Customer process analysis as input into customer
intelligence

Customer process analysis does not necessarily create
a comprehensive and integrated view of an
organisation’s customers. It provides input from the
customer perspective into the organisation’s overall
customer intelligence picture as opposed to the
customer intelligence generated from an organisational
or external point of view (mainly by analysts and
analytical tools).

In essence customer intelligence refers to an ongoing
process of collecting, evaluating and interpreting
customer information in order to provide actionable
intelligence to decision makers in support of the
customer management strategy of the company. Having
said that, it is evident why organisations struggle to
understand their customers – their intelligence picture is
incomplete because it is focused on the integration of
internal organisational intelligence and market
intelligence.

Thus the real value of customer process analysis can
be exploited once the data and information gathered is
used as input to a customer intelligence process where
organisational and external information is collated and
interpreted.

Whatever growth and change occurs in a company or
the industry, one thing must always remain constant:
the customer and his interests must always be put at
the head of the list. And the closer an organisation is
able to get to the customer, the better it will be able to
design its products and retain the loyalty of that
customer.
About the authors
Michael W. Solomon

Michael holds an MA in Clinical Psychology from the Rand
Afrikaans University, Johannesburg South Africa. He started his
career teaching Psychology at the Rand Afrikaans University
and later lectured in Organisational Behaviour at Vista
University, Soweto. Thereafter he joined the London-based
management consulting firm, Proudfoot Plc as a manager where
he specialized in Total Quality Management (TQM), Business
Process Reengineering (BPR) and performance improvement.
In 1996, he joined the IBM Consulting Group, a division of the
IBM Corporation, as a business transformation and strategy
consultant. Here he headed up the Change Management,
Balanced Scorecard and Knowledge Management
competencies and specialized in e-business and general
strategy consulting. He joined Roccade Finance, a Dutch-based
IT services firm in 2000, as a strategy consultant. In 2001 he
relocated to Washington DC, where he assumed the role of
Strategy Executive for the IBM Corporation's worldwide
Business Intelligence Solution organization. Three years later he
established managementworks, an international services firm
that builds management capacity in the public and private
sectors through consulting and education. Michael has
consulted in Southern Africa, the United States, Europe and
Asia. He was trained by the Executive Consulting Institute, New
York in Business Transformation and Change Management.




Leon Kock

Leon matriculated from Pretoria Boys' High and received his
tertiary education at the University of the Witwatersrand,
Johannesburg. After several years on the former South African
Financial Gazette, Rhodesian Financial Gazette and The
Citizen, he was appointed editor of the Namibian daily
newspaper, The Windhoek Advertiser. He was fired in 1982
following a controversial meeting in London and a subsequent
report on the former Soviet Union. The following year Leon was
appointed senior news commentator of the South West African
Broadcasting Corporation, and in 1985 returned to South Africa
as programmes and corporate director of the South African
Institute of International Affairs. In 1989 he moved to the
Prescon Group as managing editor and at various stages edited
Money Magazine and Money Newsletter. He also had a spell in
Sydney, Australia, as head of Prescon's Australian operation.
He has been an independent writer for the past two years,
writing primarily for London-based Fleet Street Publications,
Baltimore-based Agora Publishing, and Johannesburg-based
Finance Week. Leon is author and co-author of several major
works such as The New SA -- The Next 20 years and Retiring
Abroad. He has also travelled extensively in Latin America and
Eastern and Central Europe during the past decade and has
written prolifically on these subjects.












WHITE PAPER | 2006
Turning Customer Experiences
Into Competitive Edge:
Nikon’s Journey to Leadership

“You must design the customer experience, or the customer
will design it for you.”
– Tom Peters, business management guru

Executive Overview
The customer experience is now the battleground for competitive advantage. In a
global and information-rich economy,many of the familiar avenues to gaining and keeping a competitive edge, such as product innovation or speed-to-market, are not as effective as they once were. Faced with a market rife with product commoditization and marketing blitz—where customers are in control—a company’s competitive advantage depends on delivering
a consistent, satisfying customer experience.

This fact has been on the executive radar for some time. But when it comes to managing the customer experience, research shows that there is a sizeable gap between planning and doing. In 2005, for example, the global research firm Strativity Group reported that 76% of senior executives taking part in a worldwide survey placed customer strategies higher on the corporate agenda than they did three years ago. Yet only 31% said they had the tools and authority to
serve customers. Even more alarming, 59% claimed they do not deserve their customers’ loyalty.i How are the leaders getting it done? Just ask Nikon corporation, the global provider of imaging technology, from digital cameras to
film scanners. With a focus on the customer, Nikon is driving incremental improvements across technology, people and processes to provide a best-in-class customer experience.



Using service as its cornerstone, Nikon is delivering a customer experience that meets the information needs of its customers, cuts costs, boosts revenue and keeps rivals at bay.
Drawing from the real-world savvy of Nikon, the thought leadership of Peppers & Rogers Group and the technology expertise of RightNow Technologies, this white paper is a guide for improving the customer experience. It discusses why managing the customer experience remains the best path to differentiation and maintaining a competitive edge.

Following a deep look at Nikon’s journey, the paper wraps up with five best practices for improving the customer experience.

Turning Customer Experiences into Competitive Edge:
Nikon’s Journey to Leadership
CONTENTS
It’s All about the Customer
Experience ..............................................3
Nikon’s Journey to Leadership ........4
Five Best Practices to Managing
Customer Experiences ........................6
Conclusion: From Advantage to
Necessity .................................................. 8
©2006 Carlson Marketing.Peppers & Rogers Group is a division of Carlson Marketing. All rights protected and reserved.

IN BRIEF
Designed to help companies make the jump from planning to doing when it comes to improving the customer experience, this white paper:
_ Affirms why managing the customer experience is the best path to differentiation
and maintaining competitive edge _ Establishes service as the ideal starting
point for improving customer experiences
_ Explores how Nikon is using customer service to deliver a superior experience
that differentiates its brand and gives the company a competitive edge
_ Details five best practices for improving the customer experience
©2006 Carlson Marketing.Peppers & Rogers Group is a division of Carlson Marketing. All rights protected and reserved.
Turning Customer Experiences into Competitive Edge: Nikon’s Journey to Leadership
WHITE PAPER
According to Peppers & Rogers Group, Customer Experience Management is the totality of an individual customer’s interactions with a company and its brand over time. It essentially ensures that each department and touchpoint—from sales to billing to returns—act collectively in the customer’s best interests to generate long-term loyalty. It requires starting from the customer’s view first (not the company’s), then aligning people, processes and technology to ensure that interactions are valuable from the customer’s vantage point.

The economics of customer experiences

Delivering poor customer experiences puts customer relationships and revenue at risk. It also leads to the destruction of enterprise value.“Suppose a customer calls to complain to your firm, and his complaint doesn’t get resolved. He may not actually defect to a competitor for some time, but the likelihood of his defecting has suddenly increased, and the probability of his buying more things from you has just as suddenly declined,” state Don Peppers and Martha Rogers, Ph.D. in their book Return on Customer.
“When this customer hangs up the phone...your company loses value
at that very moment.” Ii
Economic impacts aside, managing customer experiences to deepen engagement with customers and drive revenue is fast surpassing other, more traditional avenues to competitive advantage. Competitors now occupy every corner of the
globe, from Bangkok to Boston. They’re swamping customers with offers, allowing customers to choose from a slew of knockoffs that are on par with what used to be considered best-in-class. “Competing on product innovation or price is too hard these days,” says Greg Gianforte, Founder and CEO of RightNow Technologies. “Even if one of these gives you a short-term boost, it does not translate into longterm advantage anymore.”

Planning vs. doing

Yet, no matter how intuitive this sounds, companies are slow to take action.According to the Strativity Group survey cited earlier, only 44% of senior executives surveyed agreed that their company is truly committed to the customer (down from 58% from the previous year). After conducting more than 300 reviews of Web sites, phone self service, kiosks, e-mail and cross-channel transitions, Forrester reported that most experiences failed to pass even 80% of the firm’s criteria for a satisfying customer experience.iii

The takeaway: When it comes to providing a superior customer experience,many
companies still haven’t bridged the gap between planning and doing.
What explains this gap? “A lot of executives are concerned that if they invest the
money in strengthening customer experiences they’ll hurt margins in the short
term,”says Gianforte. Leading companies, however, are thinking and acting differently. They’re striking a balance between efficiency (cost-control) and effectiveness (revenue gains) when designing and delivering premium customer experiences. A balanced, incremental approach leads to smaller costs up front and a shorter time horizon to benefits.Revenue gains justify the initial investment and can
be put toward new initiatives.“Best of all, both the customer and the company win because the customer experience is improved,” says Gianforte.

It’s All about the Customer Experience “Suppose a customer calls to
complain to your firm, and his complaint doesn’t get resolved. When this customer
hangs up the phone... your company loses value at that very moment.”
— Don Peppers and Martha Rogers, Ph.D. ©2006 Carlson Marketing.Peppers & Rogers Group is a division of Carlson Marketing. All rights protected and reserved.
Turning Customer Experiences into Competitive Edge: Nikon’s Journey to Leadership
WHITE PAPER
Nikon’s implementation of its customer experience management strategy demonstrates the power of knowing who your customers are, what they need and what motivates a company to continue doing business with you. With revenues over
$5.9 billion, the Nikon brand is respected globally by consumers for its innovations in cameras, lenses, and other consumer optical products. Despite Nikon’s years of success, however, changing consumer demands and marketplace volatility prompted the company to seek a different business strategy three years ago.


Spotting challenges early
“Traditionally,we had been selling high-end photo equipment through specialized dealers,” explains David Dentry, general manager of Nikon’s technical support group. “As a result, we didn’t know who our customers were. As Nikon moved into the digital camera market, we realized customers demanded
and expected things faster, so we needed a better handle on directly identifying our
customers and their specific needs.” Nikon also recognized the decreasing
amount of brand loyalty in the industry. “With compact cameras everywhere, customers would jump back and forth to lower price points,” says Dentry. “In the Internet age, consumers make quick decisions and want their questions answered at the moment they want to purchase, which could be as they are sitting at their desk.”
To meet shifting consumer needs and mitigate marketplace instability, Nikon began piecing together products and solutions, but it wasn’t enough. Dentry notes, “We sat down as a team and realized that Nikon’s market challenges were not going to get any better,particularly as more of our industry and business became digital. We needed a change.” Dentry claims that Customer Experience Management was a
natural strategic choice for Nikon. “We recognized that it was increasingly important to know who our customers are and where they are at in the lifecycle so we could better recognize and meet their needs,” he says. “Customer Experience
Management means having an ongoing conversation with them to keep them satisfied and loyal for the long term. We needed to know data that would help inform those conversations, such as how we learned about them, how they learned
about us, our mutual interaction history and the kinds of products they are looking for.”

First stop: Customer service

Customer service was identified as the cornerstone of Nikon’s Customer Experience Management strategy. Part of the reason was just sheer numbers. “Service is the touchpoint where most of our customer interactions take place, so it jumped out right away,” says Dentry. As the central hub of the customer experience, customer service was also Nikon’s greatest pain point. Nikon decided to focus its strategy on the consistency of response as well as the speed of response, in particular for inbound inquiries. Starting with these goals, the strategy then rippled out to include the people and processes needed to enable it.


Technology represented the last mile. Dentry analyzed the various technological
options to put the company’s strategy into action. Decision criteria ranged from
features and functionalities to how well an individual solution synched up with existing operations.Just as it did with its strategy,Nikon wanted to move in manageable steps.“We looked at some of the larger players, but we weren’t looking to do a huge implementation,” says Dentry.“We looked at RightNow Technologies and knew that all of the things we needed—for now and in the future as we grew
our plan—were there.”

Plan the work,work the plan, and reap the benefits

With RightNow in place, Nikon revamped a number of processes, most notably the automatic routing of customer inquiries. “It used to be that customers would come to our Nikon’s Journey to Leadership “Our average e-mail response
time used to be 80 hours. Within 30 days of implementing
the RightNow solution, it was 20 hours...and now it’s a 5-hour turnaround.”
— David Dentry,General Manager,
Technical Support Group, Nikon
©2006 Carlson Marketing.Peppers & Rogers Group is a division of Carlson Marketing. All rights protected and reserved.
Turning Customer Experiences into Competitive Edge: Nikon’s Journey to Leadership
WHITE PAPER
Web site, enter a question and we’d manually route it within the company. This created too long of a time lag to respond to customers,” says Dentry. “These were prospective and existing customers, so at times, we were both pushing away leads and not delivering superior customer service.” Nikon created automated routing systems based on a customer’s particular question, which has proven to be easier,
faster and more effective. Dentry highlights,“Our average e-mail response time used to be 80 hours.Within 30 days of implementing the RightNow solution, it was 20 hours. This past year, we have focused on decreasing that even further by placing dedicated people in particular customer question areas and now it’s a 5-hour turnaround.”


Even with just this one initiative, the results speak for themselves. “Every day we get three to four e-mails from customers that can’t believe how quickly we have responded to customer service e-mails,” says Dentry. “They get a good, positive
experience and walk away with a positive view of the brand and company.” Nikon’s business results also have been stable over the past three years, with sales volumes increasing and support volumes maintaining a steady pace. “These indicate that our products are easier to use and that our support has done a good job in getting our customers the help they need, whether through self-service or through less expensive channels such as e-mail,” says Dentry. “And all of the improvements have come about by focusing on the customer experience first.”

Staying on top

The service initiative represents the first step in Nikon’s customer experience journey. Going forward, the company plans to improve the customer experience across all of its customer-facing touchpoints. A central data repository that consolidates customer information (including data from rebates and tradeshows) also is in the works. With key customer information centralized and accessible, employees will be able to tap into the repository to meet customers’ needs on the fly. Nikon is already a recognized leader in the imaging technology industry. By maintaining its focus on delivering a best-in-class customer experience, Nikon will
keep that leadership position for a long time to come. A company’s brand is a critical pillar of the enterprise’s long-term ability to generate profitable results and build competitive advantage. True cultivation of customer relationships—that results in sustained competitive advantage and customer loyalty—requires delivering on the brand promise at key moments of truth. Oftentimes, customers’ experiences during these critical interactions directly impact their perception of the company and potentially influence a purchase or repurchase decision. Since the customer experience is the totality of a customer’s interactions with a brand over time, brand image is directly impacted by the experiences customers have with a company.





An organization cannot design effective customer experiences that reinforce the brand without a process-based infrastructure that enables the delivery platforms to execute the strategy. Product, people and process must be built around the value and needs of the customer base in order to ensure that the customer experience is measurable and trackable for the company, while relevant and consistent for the customer. At the same time, these are the means from which the brand reaches the end-customer, ensuring that both the externally facing customer interactions—as well as the internal processes that enable the experiences—are designed from the customer’s perspective. Nikon is an example of a company at the forefront of understanding the impact of consistency on brand.

To effectively and efficiently answer questions on products and services, Nikon ensured that its central repository of information delivers relevant, consistent answers at every opportunity.

TIED AT THE HIP:

Customer Experiences and Your Brand
Turning Customer Experiences into Competitive Edge: Nikon’s Journey to Leadership
WHITE PAPER
2006
©2006 Carlson Marketing.Peppers & Rogers Group is a division of Carlson Marketing. All rights protected and reserved.

Even companies with the best of intentions have struggled with transitioning from the strategy to execution stage of customer experience management. From creating efficient and effective processes to delivering a consistent customer experience, organizations must identify the value levers that render success for both the company and customer. Below are five Customer Experience Management best practices designed to help a company bridge the gap between “planning” and “doing.”




1 Five Best Practices to Managing Customer Experiences

The customer experience is the battleground for competitive advantage.To bridge the gap between planning and doing,however, companies must also bridge the gap from managing data to managing customer experiences based on knowledge and insight.

Walk a Mile in the Customer’s Shoes

How many companies can confidently answer the question: What’s it like to be one of our customers? “Most companies continue to view their customers through functional silos and disparate data stores, which creates disconnected processes and a fragmented customer experience,” explains Becky Carroll, Senior Consultant, Peppers & Rogers Group. “But these breakdowns only jump out when companies take the time to undergo the customer experience first hand and
document what they find.” With visibility into the customer experience across business units, channels and product lines, companies can make the transition from managing disconnected data to managing more profitable customer experiences.

“There are ‘moments of truth’ along the customer lifecycle that make or break a customer relationship,” says Carroll. “The goal is to have the right information ready at the right time and channel for that customer. This requires a cross-functional approach that gives the personnel on the front line the knowledge they need, when they need it.”

Recognize Customer Differences
From the company’s perspective, individual customers differ in two important ways: their value to the enterprise and their needs. “Value and needs insight is matched up with single customer views to deliver targeted treatment strategies for
different customers,” says Carroll. For instance, if a high-growth B2B customer with an express need for insight into innovative products inquires about a new offering during a service call, she may receive a follow-up visit from field sales for a personal demonstration.




However, a low-value customer with a history of making returns may receive e-mail marketing offers only and be guided to self-service over the Web or an Interactive Voice Response (IVR) system. Experiences based on value and needs
insight provide value to both parties. Customers are satisfied because experiences are tailored to their needs.At the same time, the company is focusing its resources on those customers that provide maximum value.

Mobilize the Enterprise

“With treatment strategies in place, the final phase is to mobilize the enterprise to present seamless, individualized experiences across touchpoints,” explains Carroll. Technology requirements are drawn up to match systems to new roles. Important stakeholders are enrolled to develop and implement cross-functional processes. Training, incentives and performance measurements are rolled out to bring customer-facing staff on board. “Each step aligns the organization further to
provide consistent, relevant experiences that drive customer advocacy and profitability,” says Carroll.

Use Self-Service as Part of a Multi-Channel Strategy

Before the Internet, the bulk of customer-initiated interactions happened only in person or over the phone. But the game has changed, and it’s now mandatory for companies to invest in Web self-service to cost efficiently field and satisfy inbound customer inquiries. Web self-service not only reduces the cost to serve customer (efficiency), it also strengthens the customer experience (effectiveness).“Self service enables customers to find their answers fast without waiting for a person to get back to them,” notes Carroll. “This brings operational efficiencies that attract
businesses, but the key is to balance the speed that self-service enables without sacrificing relevancy at each interaction.” Web self-service works best when it’s part of a larger multichannel strategy that integrates with e-mail response, chat,
phone-based service and voice-based service. Different customers have different needs and different value to the enterprise.




If companies only focus on pushing as many interactions as possible to Web-based self-service, any gains in cost efficiencies may be offset by disgruntled customers forced to interact only on the company’s terms. An integrated service model allows for a more flexible approach that enables the efficiency gains companies seek without alienating customers. By incorporating Web self-service into its customer experience initiative, for example, Nikon enhanced its overall service quality
without taking on high operational costs and hurting margins.

Remember that CEM is not a One Time Event

How can CEM be sustained? Taking the customer’s point of view—consistently and regularly—is a prerequisite for motivating customers to change their behavior. With that foundation in place, the organization can design interactions that are not only profitable to the company but also engender customer trust. To deliver successful customer experiences across all touch points—from sales to marketing to customer service—an enterprise must first understand who its customers are and how they differ based on their value to and needs from the company. Most companies aim to retain customers for a lifetime. It’s not too much to ask, provided companies are managing customer experiences over the course of time, not just as a one-time event.

“Strategically, it requires the foresight to understand who your valuable customers are, what they need now and will need in the future,” says Carroll. “Tactically, it mandates enabling systems that learn from customer experiences, and get smarter over time.” For example, Nikon’s self-service tool tweaks answers in real time
based on the information customers enter—allowing Nikon to keep its responses relevant and re-rank the inquiries appropriately. Such a knowledge base is self-learning and adaptive, giving the company constant insight into how to improve in order to be in tune with customer needs over the long term.




WHITE PAPER
2006
Conclusion: From Advantage to Necessity
“Whether you sell IRAs or iPods, the only way to differentiate your company and win in the long term is through the quality of service around those products, which comes down to delivering a great customer experience,” says Gianforte.

Most companies have yet to bridge the gap between planning and doing when it comes to the customer experience. This leaves the window of opportunity open to escape the product commoditization trap and grab a competitive edge by managing customer experiences, just as Nikon did. In 2003,Gartner Group predicted that through 2006,enterprises that fail to establish strong relationships with their customers will erode their competitive position by 15% to 20% per year.iv The deadline is approaching fast. To better gauge your organization’s readiness, consider the following questions:

Do you have a unified customer view across product lines and across business units?

Do you have a current map of all customer interactions across touch points?

Do your employees have access to the knowledge they need to deliver positive customer experiences?

As you tackle these all-important issues, you will put your organization on the
path from the best of intentions to a real competitive advantage
with proven results.
_
Peppers & Rogers Group
Peppers & Rogers Group is a management consulting firm, recognized as the world’s leading authority on customer- based business strategy. Founded in 1993 by Don Peppers and Martha Rogers Ph.D., the firm is dedicated to helping companies maximize the value of their business by maximizing the value of their customer base. Our work is focused on driving bottom-line results from the delivery
and implementation of customer initiatives.



The goal: develop and execute customer strategies that create immediate return on investment and long-term customer value. In this way, we help clients optimize their most valuable asset: their customer base.

Led by 1to1 Magazine, Peppers & Rogers Group maintains a significant voice in the marketplace through its 1to1 Media properties. These print, electronic and
custom publications explore the best practices, trends and developments in customer strategy, demonstrating how customer-based initiatives are driving bottomline impact.
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Re: NOTES ON ALL CRM TOPICS - March 26th, 2008

Thanks a lot Vikas049 its very useful for my project which i will bee doing I mean starting in a weeks time.
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Re: NOTES ON ALL CRM TOPICS - March 26th, 2008

Planning Your CRM Program

Gauging the Factors of CRM Success.

Factor Ideal Desirable Undesirable
Initial trigger An executive or board member reads about CRM and understands how its benefits can result in competitive advantage. A customer support exec returns from an industry conference where a case study depicted uplift in existing sales via CRM. A product manager sees a vendor demo and returns to the office touting functions and features.
Sponsorship A cross-functional executive team agrees that CRM is a competitive necessity. A business visionary sees quantifiable benefits for her organization in the short term and for the company at-large soon after. The IT organization decides to implement CRM because an existing vendor has just substantially discounted its CRM software.
Objective definition Increased customer loyalty, better customer service, additional sales revenues, and an overall enhancement of external perception. To provide an organization with a greater degree of customer knowledge and improved customer interactions. To automate existing processes – especially if they aren’t costly to begin with. Or to add CRM technology to the IT portfolio.
Solution selection Allowing corporate strategy and business drivers to dictate CRM functionality and letting required functionality dictate tool selection Tool delivers process efficiencies (e.g., marketing list creation) while applying additional customer intelligence via integrated data. Selection of CRM market leader or existing software vendor with minimal research.
Operating environment Integration of CRM product into existing IT infrastructure, including ERP and data warehouse systems. Introduction of dedicated CRM environment linked to corporate network and key data sources. Standalone CRM system.
User community Employees across the corporation at all levels, using CRM for different purposes but basing their decisions on the same customer information. Business people from one or two departments leveraging operational and analytical CRM. Operational CRM available to a select group of users who disperse findings from time to time to selected executives – on paper.
Efficiencies Process efficiencies and integrated data combine to deliver strategic decisions, in turn leading to higher customer profitability, sales uplift, and customer satisfaction. Automation leads to process efficiencies and new information that advance departmental goals and result in improved customer satisfaction. Automation leads to process efficiencies resulting in time savings but failing to cover CRM program expenses.
Measurement Clear sales uplift or decreased complaints and measurable improvement in customer response rates across touch points. Improved perception among existing customer base and suspected improvements in marketing campaigns, closed sales, product quality, and so on. IT has successfully linked the CRM system to operational systems and has deployed CRM to 100 desktops.

From Operational to Enterprise: An Implementation Scenario

The call center adopts CRM

Marketing adopts CRM

Sales adopts CRM


Enterprise CRM

Determining CRM Complexity




















Above figure illustrates a CRM initiative’s complexity relies on two main metrics:

1. Quantity of functions. If your CRM objective is simply to deliver customer profiling, you probably have a single function. If it’s to automate your campaign management, you’ll likely have at least a handful of functions to implement.

2. Range of usage. How many departments are slated to use the CRM system after it’s up and running? Implementing CRM for a single relatively small department is much less complex than deploying it to the entire enterprise.

The contrast among the four quadrants in the figure is stark and has significant impact on the development process, as illustrated here:

• A single-function CRM project to one department is nothing more than a customer-focused application. It is most likely driven by a handful of business people and managers, not corporate executives, and will be used by a single organization. You’ll probably be able to leverage a series of in-house development processes and existing staff to deliver single-function CRM to the department that needs it.

• A multifunction CRM project to a single department is another story. Instituting a customer-focused contact center dictates a range of new customer-oriented business processes, not to mention new policies and end-user training. Defining and documenting business processes, will give you a good idea of the CRM system’s true complexity and the development resources it requires.

• Conversely, a single CRM function to be deployed across the company represents a newly institutionalized business function. If the call center, marketing, risk management, and sales organizations have each requested customer lifetime value information, a simple function takes on additional complexity because it involves multiple departments, and thus varied business requirements. This additional complexity will likely require additional development resources and longer up-front planning.

• The most complex type of CRM is multifunctional and multidepartmental or enterprise-wide. This means deploying a range of new business functions across the company to a variety of business people for a variety of purposes. Requirements will be complex, as will the technology to enable CRM. The complexity suggests a variety of development resources and a range of CRM technologies, from CRM product suites to Internet access to data warehousing.

Preparing the CRM Business Plan

The business plan should generally be made as per the company’s governance process for fund allocation. These can consist of several components to explain the value proposition and the tactical implementation plan.

The business plan may also include the following:
• The requirement of new technologies
• The impact on existing technologies
• Ongoing support and maintenance requirements
• CRM alternatives




Typical CRM Approval Factors

Evaluation Factor Explanation Examples
The Program’s
long-term value Why the proposed CRM initiative will have long-term, sustainable value to the company Marketing’s CRM initiative is estimated to increase target marketing response rates by 50 percent (resulting in a 6 percent average campaign response rate), delivering annual net revenue gains of approximately $14 million.
Its adherence to company objectives How CRM pertains to the company’s stated goals or overarching strategies An enterprise CRM program will allow us to achieve out objective of exceeding 40 percent market share through decreased attrition levels and more successful marketing campaigns.
Its ability to deliver key business objectives How specific business goals will be met with CRM CRM will allow the company to adopt true one-to-one relationships with our customers by delivering both personalization on our Web site and real time customer profiling capabilities for our call center staff.
Its cost An estimate of the cost breakdown During the next fiscal year, the proposed CRM program is estimated to need $1.5 million in technology funding (hardware, software, networking), an additional $1 million for permanent head count, $1.5 million for consulting services, and a half million for external data acquisition.
Its boundaries An explanation of the initial CRM project’s resulting deliverable The initial release of the eCRM program will include deployment of IVR self-service, Web enabled provisioning, and Web FAQ services to alleviate demands on the contact center.
Staffing requirements A list of necessary staff for requirements gathering, technology acquisition, development, and rollout of the CRM solution In addition to the current CRM SWAT team, we estimate the need for
• A CRM development manager (FT)
• Two CRM product specialists (FT)
• A CRM architect (consultant)
• An additional database administrator (FT)
Risk assessment A description of the potential risks involved in launching a CRM program at this time We foresee the e-business organization’s historical reluctance to share its data as a likely impediment to sales-department access to existing customers’ Web purchase and self-service history, rendering customer history profiles incomplete and the resulting decisions potentially faulty.



Cost-Justifying CRM

When launching a visible and wide-ranging program such as CRM, it’s only a matter of time before a high-ranking executive inquiries, “so how much money have we spent on this CRM thing, and what have we gotten in return?” The degree to which your CRM program has been deliberately planned and executed is the degree to which you’ll have a slam-dunk answer to this question.

Any CRM program has three possible financial outcomes:

1. Increased profits
2. Break-even
3. Lost revenue

For some companies, simply knowing that, after deploying CRM, their sales figures exceeded the industry average is enough. For others, the inevitable executive questions loom large – large enough to mandate tangible benefits.

From a hard ROI perspective, CRM can result in revenue or cost savings via the following quantifiable metrics:

1. More efficient customer-focused business processes
2. Decreased customer attrition
3. Increased sales

In fact, every business objective you define as part of your long-term CRM planning should inherently target one of the three metrics.

The following opportunity costs of delaying CRM can also be highlighted –
• The cost of lost marketing opportunities, including
• Cost of lost customers due to competitive marketing events
• Reduced effectiveness of new products due to lack of market understanding
• Continued increase of marketing costs due to poorly focused campaigns and/or oversized target audiences.
• Cost of continuing the support of stovepipe database systems
• Loss of staff skills and experience due to staff redeployment
• Lost IT resource and subject-matter expertise due to normal staff attrition rates
• Reduced customer loyalty and perception due to inability to enhance the customer’s relationship experience.








Following form as a way of measuring company’s CRM opportunity:

The Call Center

Problem Statement: Our call center staff productivity has decreased dramatically as the problems become more complex. We need a means of increasing CSR productivity to improve the cost structure of the call center.
Sample problem quantification: Everyone knows the number of trouble tickets exceeds the existing staff’s ability to process them. We’ve recently determined that the average CSR can handle 10 tickets a day. The average amount of time spent in data-gathering (which includes accessing data from five different systems) is 25 minutes per ticket.
Improvement quote: “A single CSR tool and screen should be able to reduce data-gathering time and allow our CSRs to address more trouble tickets in a given day.” (Vice President of Customer Support).
Operational premise: Number of CSRs = 60
Average time to gather customer information =
25 minutes

Number of tickets generated for each CSR per day = 30-45
Fiscal premise: Average yearly burdened cost of CSR = $60,000
Average tickets per CSR per day = 10
Cost per ticket = $25
CRM improvement assumptions: A CRM system that includes dynamic customer-profile “screen pops” can reduce data-gathering time and present pertinent customer information at the point of interaction.

Reducing data-gathering time will impact the overall ticketing process. (Every 15 minutes saved means a 31% improvement.)

Productivity gains will reduce backlog.
Related applications/systems: Customer profiling
Quantified # of CSRs Staff cost per year Tickets Time gain $ impact
10 100 $600,000 31% $186,000
30 300 $1,800,000 31% $558,000
60 600 $3,600,000 31% $1,116,000
Soft Benefits: Reduced trouble-ticket response times
Improved customer-satisfaction levels
Improved employee-satisfaction levels

The Marketing Department

Problem Statement: The company’s marketing process is too darn long.
Sample problem quantification: It takes up to 6 weeks to identify a campaign target audience – using experienced data analysts. We’d like this to take days, or even hours, using marketing staff with minimal assistance from IT.
Improvement quote: “By reducing the time needed to identify a campaign’s target audience, we could double or even triple the number of campaigns we deploy, while further delimiting our target segments.” (Director of Segment Marketing)
Operational premise: Right now, for every three marketing campaign managers, we need one data analyst and one IT query support staff member to run queries.
Fiscal premise: Each campaign manager requires two support staff members:
Average yearly cost of 1 data analyst = $130,000
Average yearly cost of 1 IT resource = $130,000
Number of campaign managers in marketing = 30
CRM improvement assumptions: • Campaign managers will migrate to using desktop CRM analysis and will need to be educated on its use
• Campaign managers will evolve from project managers to ‘knowledge workers’
• The projected cost savings will occur via the reduction of data analysis and IT support staff
• Productivity gains will increase the number and effectiveness of campaigns by a minimum of 20 percent.
Quantified impact: # of campaign managers # of support staff Projected staff savings (n*$150K)
10 6 $900,000
25 16 $2,400,000
40 26 $3,900,000
Soft Benefits: Through the increased productivity, the company can increase the number of campaigns and thus the effectiveness of each individual campaign, in turn increasing revenues. Alternatively, the company can simply decrease the number of campaign managers but deploy the same number of campaigns.














Understanding Business Processes

Every successful CRM program involves a process improvement of some kind.

1. CRM was initially designed to help solve tactical, customer-facing business problems. (Only after the resulting data promised new strategic improvements did analytical CRM become the darling of analysts and futurists.

2. The common denominator of CRM-related business processes is that they should be designed around the customer’s perspective with the ultimate goal of improving the customer’s experience.

3. Days of business process reengineering (BPR), when companies redesigned their core processes to drive new levels of efficiency, are back with CRM.

4. Improved customer-focused processes that can in turn be automated with technology.

5. The term “workflow” is used in CRM to refer to automated business processes. Many CRM products feature “workflow management” components automating processes such as campaign management or customer troubleshooting.

Analyzing your Business Processes

• More often than not, existing business processes need fine-tuning before they’re implemented as part of a CRM program, putting a new spin on BPR.

• Ask the questions for each customer facing business activity involved in each CRM requirement:

o Is the tangible result of the process (e.g., a purchase order or return authorization number) seen or experienced by the customer?
o Is there an opportunity to gather more customer data at discrete touch-points in the process?
o Does each interaction demonstrate value to the customer?
o Does any interaction waste the customer’s time?
o Does this process improve our ability to see this customer as an individual?
o Is there an opportunity to impress the customer or personalize the interaction at discrete customer touch points?
o Can we include exception-handling to ensure accurate service and personalize interactions?
o Can this process be improved or even eliminated for high value customers? What about for the mid-value tier?

If you don’t know the answer to two or more of these questions, you would do well to take the time to map out the new or existing processes and identify areas that can deliver an improved customer experience and tighter time frames.

In addition, try looking at your business processes from an organizational perspective. Most process planning activities neglect this step, but answers to questions like those in the following list can result in even more highly refined processes and can pinpoint opportunities to improve your overall infrastructure:

• For a given customer-facing business process, how many departments are involved?
• How many actual staff members touch in each process?
• What data is transferred between organizations, and how much?
• Does the information being shared change as it goes through the process? How often?
• Do the organizations involved in each business process agree on business rules and common terminology?
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Re: NOTES ON ALL CRM TOPICS - March 26th, 2008

Thank u Vikas...ur CRM notes were of great help to me..
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Re: NOTES ON ALL CRM TOPICS - March 27th, 2008

thnks rear ur report was of gr8 help 2 me
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Re: NOTES ON ALL CRM TOPICS - April 9th, 2008

damn goods notes there pretty good.......do you have notes for ssm.marketing
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Re: NOTES ON ALL CRM TOPICS - August 5th, 2008

good ones can send me the project on crm in banks
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Re: NOTES ON ALL CRM TOPICS - August 23rd, 2008

these r really gud notes. serves the purpose of CRM very well.
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Re: NOTES ON ALL CRM TOPICS - September 6th, 2008

friend,,,,,
i need notes on CRM Framework... pls help me
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Re: NOTES ON ALL CRM TOPICS - September 7th, 2008

Quote:
Originally Posted by ashariss View Post
friend,,,,,
i need notes on CRM Framework... pls help me
CRM Framework

http://www.infosys.com/industries/ut...-framework.asp

http://www.oneocean.org/download/20020529/chapter5.pdf

very good explanation abt CRM Framework...>>>


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