 |
|
|
Home Marketing | A & A Readings Portal | |
| Consumer Behaviour | Marketing | Marketing Management | Marketing Research |
| Home Information Technology |
 |
||
11 Ways to Ensure CRM Success
We asked consultants to list some common CRM
mistakes, and to then advise readers on how to avoid them.
by
Colin Beasty
From CRM Magazine
December 2005
What we found was that no matter the type of company, good CRM practices are often applicable to companies in many industries. One shared tenet, our experts suggest, is customer centricity. "Companies must instill a customer-centric sense throughout the entire organization to find success with a CRM practice," says John Freeland, then global managing partner of Accenture's CRM Services (now president of worldwide operations at Salesforce.com). This means, essentially, that companies must not only focus on cutting costs and improving productivity, they must also enhance experiences across all customer touch points.
One strategy sure to cripple any CRM initiative, experts find, is leading with the technology and not a legitimate business case for implementing a CRM system. To achieve a 360-degree view of customers, CRM project leaders need to gain a 360-degree view of their own business first.
Consider all the stakeholders affected by the system. What do they stand to gain or lose? What business processes need to be rebuilt or simply need a little touch-up and a little paint? The technology is often rock solid; what derails CRM initiatives very often is the lack of focus on people and business processes.
Some of the tips below were also featured in CRM magazine's June 2005 issue in the story titled "100 Proven Ideas--Successful and Disastrous." It, too, offered pointers based on mistakes made over the years. Here, however, the consultants we spoke with maintain that the following tips address common mistakes their clients continue to make, and the consultants' advice has been fleshed out.
1) Get executive buy-in--If management doesn't believe in a new CRM system, why should employees? Support throughout all echelons of upper management affirms the company's commitment to the project, which will motivate all stakeholders below management. Many times the difference between a successful CRM implementation and a waste of money is a manager who realizes the value of the product, understands the problems it's going to solve, and dedicates time and energy to making it happen. "Many will give you lip service," says Izzy Franco, CRM leader for North America at Cap Gemini. "They'll sign the procurement orders, spend the money, and attend the meeting once a month, but that's simply not enough. They need to be hands-on and involved directly. It's incredibly important."
2) Align departmental strategies--Each department, whether it's a call center, marketing team, or sales force, has its own requirements and goals. They are also, however, all part of an entity that should communicate a consistent message and brand experience across all customer touch points. "One of the keys to a successful CRM implementation or strategy is aligning your enterprise and all the customer touch points within that enterprise," Franco says. "If you want to get to the bottom of why many CRM implementations have failed, there was no alignment between the customers and the enterprise."
3) Strategy first, technology second--If executives learned anything from the Y2K tech wreck, it should be that technology is not a good driver of a CRM strategy, but reorganizing business process efficiencies and bolstering revenue are. Find out how your company's customer touch points can maximize those ideas, then give customers applications that work with them.
"The software is only there to enable implementation of a CRM strategy, not the other way around," Franco says, "If you try it vice versa, you're going to find that down the road your implementation is going to be missing some of the key opportunities you could be taking advantage of--or failing entirely." Freeland agrees: "CRM isn't about picking the technology. Technology is a pillar of CRM success, but it's only one pillar. There are other things that are just as important."
4) Minimize financial risks--It's important that executives come to grips with the fact that CRM is not a one-time expense. Long-term services and maintenance fees will outweigh the price of licensed applications by a ratio of nearly 3:1, according to industry analysts. Consider expenses over monthly, quarterly, yearly, and three-year periods. By assessing the risks and understanding the cost of implementation and long-term services along with the financial benefits, organizations may conclude that a hosted delivery model's quick implementation and low start-up costs are an alternative.
"By understanding the financial impact the company gains a better understanding of what sort of an application they need and how big the implementation should be. Many times they realize it becomes silly not to," Freeland says. "Oftentimes, organizations are deterred from CRM because they view it strictly as a cost."
5) Look for quick wins--Many pre-Y2K failures were largely due to companies biting off more than they could chew. The multimillion-dollar implementations of yesterday required a significant investment in people and process changes. Because companies weren't ready for this, CRM applications became expensive shelfware. CRM project leaders learned that smaller, more manageable projects can yield quick wins, more momentum, and higher end-user adoption.
"You're building a holistic approach, but on a step-by-step process," says Martin Schneider, enterprise software analyst at The 451 Group.
6) Consider migration paths--Understand where your company is heading. Maybe you only need a sales reporting tool now, so you buy an SFA solution that's cost effective, but lacks the ability to integrate an e-commerce system, for example. Can the vendor you've selected provide that additional functionality you might need in two or three years? Select a vendor that will enable your products to grow as your company grows. If an organization doesn't plan ahead, time and money can be wasted on additional add-ons and modules that could have been avoided from the beginning.
"How much over the long haul is it going to cost you to buy from another vendor, do an implementation, and then integrate another module?" Schneider asks. "It takes a lot of money to keep buying point products."
7) Scrub the data--Behavioral data is the lifeblood of CRM. Make sure your customer data is accurate. Many organizations overspend on technology implementations and bypass this critical first step in gaining an accurate view of the customer. Before implementing a solution, bring the data into a unified database, cleanse it to remove multiple entries for the same customer, ensure that the data is accurately distributed to all customer touch points, and standardize your databases so customer information is presented accurately throughout the entire organization. Vendors like DataFlux, FirstLogic, and Trillium Software all provide data-cleansing software. In addition, a general rule of thumb is companies should balance their server space to maintain 13 months' worth of customer data, and at least three years' worth of contact data information.
"Don't overlook this critical step," Freeland says. "Getting the data right and doing it in a way that isn't some monolithic, data-warehousing exercise is critical. People tend to have too much data so they aggregate it, but when they aggregate data, [they're] losing it somewhere."
8) Plan for disruptions--Companies change. They make acquisitions or they get acquired, sections are sold off or outsourced, and executives get replaced. When making a CRM implementation, these are changes that management must be ready for. A firm can reorganize its sales territories or replace its CRM project leaders, which can have a significant impact on its CRM strategy.
"Many times projects are planned to be completed in 90 days, but all of a sudden it's day 120, because at day 45 there was a shift in the nature of the business," says John Norkus, a principal at Deloitte Consulting. "That's nobody's fault, it's just a part of doing business. It's going to happen, but executives and management in charge of any CRM implementation have to take this into account. They can't plan in a vacuum."
9) Don't leave training till the end--Training is often considered the last component of an implementation. Training receives the least funding and results in end-users receiving a new application at the last minute. Give your end-users as much time as needed with the new solution before going live--it makes the transition that much easier. Training should begin immediately following integrator and software selection. The sooner training begins, the sooner end-users realize they're part of the process and the quicker they realize the benefits of the application. Also, the training curriculum needs to mirror the business processes of each department.
"Training should begin as soon as the vendor is selected," says Suda Harvard, CRM specialist for Global Knowledge. "The more time to train, the better off you are."
10) Choose a champion of change--When making a full-suite implementation, start with a single department and let the dominos fall into place. Choose a department with a manager who's behind the implementation, realizes its benefits, and whose department will also find the most success early on. Nothing jump-starts a CRM implementation more than a manager who always has that can-do attitude. Once other departments begin to see this success, they should follow suit. Just like hitting in baseball, CRM success can be contagious.
"The key to this strategy is choosing a department manager you know can make it happen," Franco says. "Other departments will start to think, 'Hey, that looks pretty good. Why can't we do that?'"
11) Ask the expert--When faced with a problem, whether it's customization, functionality, or deployment strategy, companies often assume a new product needs to be purchased or another module integrated. Instead, look to leverage current applications to gain new functionality or services.
"A lot of times people--because of management changes, IT turnover, and all these real-life things that happen--lose sight of what they have and what they've already purchased," Freeland says. "Many times, there's a lot of functionality and potential with what you already have, and you don't even know it."
Contact Editorial Assistant Colin Beasty at cbeasty@destinationCRM.com
Barriers to CRM Success
Tech obstacles to CRM success can be considerable,
but others include process and people concerns--read here about two companies'
experiences.
Aside from her lack of CRM knowledge, Johnson also faced one of the
oldest barriers to CRM success: no user buy-in. She needed to convince a
team of more than 20 salespeople--a team accustomed to using
spreadsheets, card files, and financial/accounting systems--to switch to
a shared data repository. To make matters worse, the company's power
user and person responsible for training new salespeople asked, "Why are
we changing from something that is working for me?"
Educate Yourself First
The first barrier Johnson had to overcome was her own ignorance
about CRM. She began to learn the merits of CRM systems by
attending an industry conference in the summer of 2004. There,
the limitations of WWW's existing data-gathering methods became
clearer to her: The 70-employee insurance company offers
property, personal, and marine insurance for businesses in and
residents of Florida. The sales team is divided into two groups,
one for business insurance, and the other for residential
insurance. The existing customer-data system of paper,
spreadsheets, and accounting applications was limited in CRM
functionality and lacked the ability to share customer
information. Also, when employees left the company their
customer contact information left with them. When WWW had to
replace a salesperson, the new employee was advised to rummage
through the predecessor's desk to find any "workable leads,"
Johnson says. "The goal with purchasing a CRM system was to
enable salespeople to sort through leads. Also, there were many
cases that involved a member from each sales team. The lack of a
unified customer system inhibited this."
Safety in Numbers
Johnson also quickly identified at the conference another
barrier to CRM success: a financially insecure vendor. With all
the merger-and-acquisition activity in the CRM industry, one of
her biggest concerns was that "while this would work now, the
vendor would eventually fizzle out and there would be no
support, no new updates, nothing. We would be up the river
without a paddle."
What she learned at the conference helped Johnson to overcome two more common barriers to CRM success. One was limiting information resources to only CRM vendors. She needed unbiased opinions on each vendor's products and the vendor's staying power: "I went by [other customers'] comparison list on which vendor was going to be around for a long time and which was well respected." The next barrier was cost--the manageable monthly payments of the on-demand delivery model appealed to her. However, because she was not sure if WWW would eventually bring the CRM system in house, Johnson wanted a product that would give her the option to do either. She selected Sage Software's Sage CRM SalesLogix.
The implementation began in November of 2004 and the system was up and running within two months. To begin converting the sales force, she blocked salespeople from using the old financial/accounting system and forced them to run and file activity reports through SalesLogix. If the reports weren't filed through SalesLogix, they were considered not filed. "That pushed everybody to use it," Johnson says. "If there's no driving force behind it, people can ignore the new system for as long as they can."
Johnson then encountered staff resistance to the project. "We
had at least eight or 10 guys [telling] me the sky is falling,"
she says. "They had complete doubt about whether the software
would handle all the information, if information would be lost,
or if the whole thing was just going to blow up.
Everybody wanted to do things their way. They were looking for
SalesLogix to fail." To make matters worse, the company's
biggest power user wasn't adapting the new system. He's one of
the company's most successful salespeople, and was also
responsible for training new recruits. He continued to use the
legacy financial/accounting system, content on placing customer
notes into the old system, printing out summary reports, and
then having another employee shuffle through the reports so that
each set of notes was in the proper sales zone for the
corresponding customer. "He told me, 'You can have all the new
guys change, but I'm not [going to],'" Johnson says. "That only
added fuel to the fire. Other salespeople in the office started
asking, 'Why do I have to use SalesLogix?'"
Johnson realized she might have a mutiny on her hands. Most
sales, marketing, and customer service departments don't
appreciate receiving instructions from the IT department.
Johnson sidestepped this barrier by letting the sales manager
address the matter. "He went into [the power user's] office and
laid down the law," she says. "The power user had to buy into
SalesLogix or face some potentially serious consequences." The
power user began using SalesLogix, and finally saw its benefits.
"It had a wonderful effect on the entire implementation,"
Johnson says. "He has become a champion of change. It was really
important as both a power user and as a motivator/mentor to the
rest of the sales team."
WWW has seen dramatic improvements thanks to Johnson's
persistence. Besides streamlining its sales department, the
company has created a new marketing department. "SalesLogix has
consolidated business operations across the board. The staff has
come around. They accept that this is an improvement over the
way things were previously done."
A Final Hurdle
Johnson overcame one last barrier by realizing early on that CRM
training is a continuing process. She continues to educate the
sales force by distributing daily emails to the staff with
updates about additional functionality. "We keep an eye on the
staff to see how advanced they are on the system and send
corresponding updates each week to show them how to accomplish
something new. It keeps them happy," Johnson says. "In
hindsight, this initiative came down to
communication--communicating and working with people."
Contact Editorial Assistant Colin Beasty at cbeasty@destinationCRM.com
Common CRM Success Barriers
Understanding Partnership Perils
Vendors often partner to fill in functionality gaps, such as
adding wireless capabilities to CRM applications. Occasionally,
however, a vendor partnership will fall through, a failure that
can create another barrier to CRM success. "Customers need to
understand the fallout a failed partnership might have on their
system," says Jonathan Copulsky, a principal at Deloitte
Consulting's strategy and operations practice. "If they're not
in the position to support that technology on their own, they
might need to retool."
A case in point is Briggs Corp., supplier of professional documentation systems, training materials, and medical supplies to the healthcare industry. Briggs implemented a CRM system for the same reason most companies do--centralizing and sharing customer information. The company has more than 60,000 customers and 12,000 healthcare products on offer, and operates within several markets. "We're very much an inbound, outbound, telesales service company. We really needed a CRM system that would provide us with a complete view of the customer across sales, marketing, and service," says Doug Dostal, vice president of IT and eProducts at Briggs.
Before Dostal joined Briggs the company had implemented the J.D. Edwards One World product line to streamline and automate accounting, distribution, and manufacturing. J.D. Edwards had a partnership with Siebel Systems at the time, and it made sense to implement Siebel's CRM product line to integrate the two. The implementation of Siebel started in the fall of 2000, about the time Dostal joined the company. Briggs's sales force went live in April of 2001 on Siebel's Enterprise Edition 6.1.
Dostal could see storm clouds on the horizon shortly after the initiative's launch. J.D. Edwards was promising a new software package at the time of implementation to integrate with Siebel. That's when the two software vendors began to part ways. "We realized we weren't going to get a solid integration product out of J.D. Edwards," Dostal says. "That was the first sign that the long-term picture might be clouded using Siebel."
Despite the setback, Briggs pressed on with integrating One World and Siebel CRM, and continued making roll outs to its sales force over the next six months. As those roll outs continued, so did the price of operating and maintaining the system. At this point Dostal ran into a primary barrier to CRM success--cost. Briggs was not aware that the cost of implementing and maintaining a CRM system could be two to three times the price of the software.
Briggs ran into two other potential barriers: time and location. "We thought it would take 15 to 30 days to roll out a functionality improvement. Instead, it was taking us 30 to 60 days just to make even the most basic of changes. Plus, we're based in the middle of Iowa so Siebel design people and consultants don't exactly grow on trees out here."
By the end of 2002 Dostal was under the gun and facing executive pressure. "Both the sales committee and executives said, 'Either make Siebel work or get something else that will,'" he says. "Siebel had cost a lot of money up to that point." By the middle of 2003, the decision had been made to look for alternative solutions. Briggs would stick it out with Siebel Enterprise Edition 6.1 into 2004 while the company shopped, but by the end of 2004 a new solution would be required. "When we launched the project to reestablish our new CRM strategy, everything was on the table," Dostal says. Despite the problems encountered with Siebel, he says, "Siebel was a good product. We just didn't have the hard ROI to show for it."
Due to the expense of owning a CRM solution, Briggs wanted an on-demand system. After he looked at multiple on-demand vendors, including NetSuite, Salesforce.com, and Siebel On-Demand, Briggs chose RightNow Technologies, at the end of 2004. The implementation and roll out lasted from February to April 2005, with sales and customer service going first, followed by marketing.
Since February 2005 Briggs's IT department has continued to make small improvements to RightNow, rolling out new functionality each month. The service department has found the most success. "They love it. They've had no issues since day one," Dostal says. A big payoff for Briggs is that the cost of operating RightNow is one-fourth what it was to operate Siebel. And thanks to the service contract, Dostal has a predetermined exit strategy in three years in the event things with RightNow don't work out. "Thanks to the cost cuts, I know at least a few executives who are happy with the RightNow implementation," he says. "The other nice thing about RightNow is I can stand up in front of sales, marketing, and customer service and say we're only committed for three years. That's brought goodwill and trust amongst everybody." --C.B.
100 Proven CRM Ideas, Part 1
...successful and disastrous: 90 bright ideas for
your CRM strategy and 10 dim ones to avoid. Edited by David Myron
Don't believe us? The proof is in the process. When CRM works, C-level execs make smarter decisions because they have a 360-degree view of corporate performance; salespeople increase their proficiency and close more deals; marketers create more targeted campaigns with better insight into their effectiveness; and employees--especially CSRs--become more productive and efficient.
Consider the 100 ideas list here a guide to proven strategies for starting or resuscitating your CRM efforts. The sales, marketing, customer service, and company-wide ideas are color coded to show where they best fit in the organization. We believe companies following these strategies are the ones truly committed to long-term CRM success. If we're wrong, you can give us 100 lashes with a wet metric.8| Experience counts. "I can't emphasize enough the value of an expert consulting organization that understands our business [and] a vendor that has a track record," says Jean Marc Pigeon, president of Inortech. To that end, ask the consultant and vendor for customer references.
9| Take the Goldilocks approach. Some CRM tools are too big; others are too small. Find what's just right for your business. Just because other companies like yours use one approach doesn't mean you have to do the same thing.
10| Benefits come in many flavors. Cost justifications are critical, but look deep enough to see the indirect effect of changes to your CRM policy. Look past the dollar signs of implementation and consider things like employee efficiency, productivity, and customer satisfaction.
11| Calculate short- and long-term costs over time. CRM is not a one-time expense. Total cost of ownership (TCO) and return on investment (ROI) need to be used together when evaluating a CRM project. Expectations should be managed over time. Consider costs over monthly, quarterly, yearly, and three-year periods. Costs don't end with technology, so consider services as well, which can easily cost twice as much as the technology.
12| Emulate best practices. Nothing turns employees off like being forced to do their jobs differently for no obvious reason. Study your top sales and service people, then design or invest in technology that enables your firm's best practices--their best practices--to be emulated company-wide.
13| Get support from the top brass. If management doesn't believe in the new system, why should the employees? Many times the difference between a successful CRM strategy and a huge waste of money is a leader who motivates the rest. Once they're hot on the idea, you need to keep them committed, so communicate with them regularly.
14| Go with a CCO. Yes, another acronym to add to your mile-long scroll of industry terms, but this one's got potential, we promise. If you're lacking accountability across all departments, the chief customer officer is the person to bring it to your organization. Still not sure what a CCO really does? It's her job to keep an eye on everything we put on this list.
15| Get a champion of change. Don't have a CCO handy? Choose a manager who's behind the implementation, understands the problems, realizes the benefits, and understands the importance of the implementation from the company's side, says Lorie Goudie, director of customer support for Tarantella. After all, there's nothing more motivating than somebody who always has that can-do attitude. Want proof? Just watch a Richard Simmons video.
16| Deputize wisely. A strong second-in-command, the person "who makes all your glossy words actually happen," is critical, says Sadie Baron, marketing project manager at Eversheds.
17| Set goals. Setting predefined and mutually agreed upon goals with your CRM team prior to selecting the CRM vendor will give an organization an idea of how well the CRM solution performs once it is installed. How can a company succeed if success cannot be measured?
18| Set attainable goals. Simply because one salesperson has an 80 percent close rate does not mean all salespeople can come anywhere near that. "Not all customers write business cases. Not all business cases have metrics. Not all metrics are reasonable," says Barton Goldenberg, president of ISM. Determine a department's average performance levels and aim for 5 percent to 10 percent increases in areas like sales, customer retention, or lead generation.
19| Cleanse preemptively. Identify your key client data set before you flip the switch and make sure it's accurate and up-to-date. Do the data audit from day one.
20| Keep it simple. Don't buy what you don't need. The fewer bells and whistles, the less time and money you'll need to devote to training. People don't like change as it is; keeping things simple only makes the switchover that much easier.
21| Success can be contagious. In baseball they say that hitting can be contagious. Implementing CRM is no different. With a full-suite product in particular, starting an implementation with a department you know will find success can make other departments start asking, "Hey, why can't we do that?" If one department finds success with CRM, others will want to as well.
22| Train early, train often. Give your employees as much time as possible to learn the new application. They don't like change any more than other people do, but the sooner you begin, the sooner they realize they're a part of the process and the quicker they will realize the benefits. Repeat and augment training as necessary to keep those skills fresh.
23| Identify quick wins. Tackle the smallest, easiest task straight away and save the hard stuff for later. Success early on gets the ball rolling and motivates employees.
24| Take baby steps. Sales teams, like cats, can be
finicky. When automating the sales force, roll out the CRM
system in small steps. With many sales teams, the number one
concern is, What's in it for me? Dump or force
a strategy on them and they'll get cranky.
25| Focus on ROI. "CRM should provide salespeople with better pipeline reporting, rather than only make it easier to sell more. The latest CRM solutions are forcing salespeople to enter more administrative numbers than before. As a result, firms find they spend millions in sales automation only to learn that sales reps are still using ACT!," says Scott Nelson, Gartner vice president and distinguished analyst.
26| Slow down, Speedy. Don't get too far ahead of your customers in introducing CRM technologies--changing human behavior is tough, and takes time. Recognize that customers and employees may be struggling to keep up with the pace of technological change. New applications are best served up in small, measured doses, says Jim Johnson, director of information services at Master Lock Company.
27| Find superusers. Why fight uphill all the time? Get the most enthusiastic people to use the system first.
28| Keep your eye on the prize. Measure the results and soothe the inevitable hiccups by showing people the benefits of the new CRM system, says Stephanie Ledoux, assistant vice president of customer and provider service at Blue Cross Blue Shield--Rhode Island.
29| Test the waters. Make sure your email and other communications are actually being delivered to the right people at the right time. Troubleshoot with test customers before making your services generally available.
30| See your customer through the same glasses. Various departments in your organization may see your customer as diversely as they would walking past a fun house mirror--attractive and valuable from one angle, unappealing from another. Using one integrated set of analytical data throughout the company can help executives to make key decisions about how much to invest in a particular customer.
31| Keep things uniform. Unify your message across all communication channels, including television, radio, newspaper, email, regular mail, Web site, and the telephone. Try to have the same look and feel throughout the company. Don't send mixed or conflicting messages--you will confuse the customer.
32| Walk a mile in your customers' shoes. Getting complaints from customers about how horrific it is to do business with you? Put yourself in their shoes by role-playing the typical customer experience. Once you suffer through what you dish out, you'll be shocked into a more customer-centric mindset. Guaranteed.
33| Keep your promises. Just like relationships with your friends and loved ones, relationships with your customers should be based on trust. Reminding customers of promises kept--and taking responsibility for promises unfulfilled--simply requires openness.
34| Clean your data regularly. Your CRM system is only as good as your data, so keep it clean and avoid duplication. "According to the U.S. Census, about one in seven people change addresses within a year," says Denis Pombriant, managing principal of Beagle Research Group. That's why, he adds, "having old data is like having no data."
35| Big names don't mean big money. While big clients may look impressive on a customer list, they may be costing your organization more money than they bring in. These clients may have special needs, such as customized packaging, special distribution needs, more hand-holding, which take extra time and expenses. Look at overall customer profitability, not just sales, and send unprofitable clients to the competition.
36| Consider life stages. According to the U.S. Census Bureau, there are roughly 75 million baby boomers (born between 1946 and 1964), more than 49 million gen Xers (born between 1965 and 1976), more than 72 million gen Yers (born between 1977 and 1994), and 40 million millennials (born between 1995 and now).
37| Know thy customer. Don't assume that an ethnic cohort comprises one monolithic group of consumers. Some consumers are more tied to their culture than others. Within each culture exists subcultures that include a wide range of people who are fully assimilated to those who don't speak English. What's more, country of origin may also play a significant role in buying behavior.
38| Mass marketing or one-to-one? Actually, it should be a mix that mostly meets somewhere in the middle. Your most valuable customers require one-to-one communication. Just below this requires a one-to-some model, in which your marketing messages are somewhat customized and sent to the bulk of your customer base. The bottom level is your lowest 10 percent, which requires little customization.
39| Experiment with marketing. Marketing is just as much of an art as it is a science. Recent technological developments are enabling marketers to challenge their segmented marketing campaigns with just a few keystrokes. Consider different data sets like attitudinal, demographic, and behavioral data when reevaluating your marketing campaigns.
40| Sell what's priceless. The affluent are no longer as interested in material things as they were leading up to the Internet boom. Instead, they'd rather purchase products and service that enhance their experiences. Take heed from Citibank's "Live Richly" and Mastercard's "Priceless" campaigns.
41| Choose your customers. Find some commonality among your best customers in your database and cross reference that with prospects from external databases to pick the most profitable customers.
42| "Don't reinvent your relationships," says Joshua Yuster, CEO of BranchIT Corp. Relationship management software from companies like BranchIT, Spoke Software, and Leverage Software can search digital records of customers and potential customers who have preexisting relationships with other members of your team.
43| Reward team players. In the big picture a happy customer is more important than one salesperson's commission. Provide bonuses or team player rewards for referring customers to the right internal sales agent or business partner who's closer to the customer and can add more value.
44| Think, partners = customers. "Treat [partners]
like they're customers," says Catherine Smith, COO of ING U.S.
Financial Services. Partners, like customers, want what they
want when and how they want it. So just like you do with
customers, identify your partners' needs and wants, and
implement processes
that keep them smiling.
45| Bundle up. To really reward those loyal customers who turn to you for multiple products and services, cut them some slack with a discounted pricing plan to show your appreciation. You may not pull in as much in the short term, but you'll score lifelong customers--and long-term profits.
46| They're not lost, just misplaced. Almost every business goes through rough periods, either individually or when the economy sags, and so lose customers as a result. When business picks up again, be sure to attempt to restart your relationships with lapsed customers--they're easier to sell to than brand-new ones.
47| Automate contract renewals. When focusing on customer acquisition efforts, don't let existing customers slip away. Look to contract renewal applications that will remind sales professionals when clients' contracts are nearing expiration and can also automate contract renewal efforts with customers.
48| Streamline your checkout process. You wouldn't give your family (except maybe your in-laws) a roundabout route to get to your home if there was an easier set of directions. The same idea applies to your online checkout process. Make it less of a maze and more of an express lane. For example, Overstock.com condensed its checkout procedure from seven pages to three, and retooled its product pages to make it easier to complete the checkout process, bolstering conversion rates and reducing online-checkout customer calls.
49| Get personal. Customers hate to feel like the sales agent is reading to them from a script. Learn your customers' personal needs and profiles and target your service to each individual. It will make them feel important and that you value the relationship.
50| Get cozy. When people come to your retail store,
financial institution, or garage, make them feel comfortable.
Many kinds of companies provide coffee and cake in the mornings
for customers who must come in before work. Others provide free
Internet access to people while they wait. Retail stores
increasingly are adding in-store cafes to keep hungry shoppers
around longer.
This telling exchange between caller and company—part of Citibank's "Simplicity" card ad campaign—isn't just a clever send-up of a common customer service problem. It also reflects growing frustration with automated self-service applications that don't work. Citibank's response is the "dial 0" campaign, which stresses that it's easy to call its 800 number and find a real human being. But while Citibank proclaims it will no longer trap callers in an automated loop, most companies are still struggling to improve clunky call center technology that can make it hard to get quick and efficient service.
Organizations that are listening to customer frustration are responding in several key ways: by updating call center technology, by making it easier to reach a human agent if necessary and—in some cases—by moving from far-flung call center agents to at-home customer service representatives. This strategic about-face marks the emergence of a new breed of call center—one that employs technology to connect with its customers, not put them on hold. It also represents a pull back from a trend that started five years ago, when industry leaders such as Dell and General Electric sent their call centers offshore and automated as many calls as possible to cut costs. Companies achieved substantial savings with these tactics, but first-generation touch-tone systems were cumbersome for customers to use and offshore agents were sometimes hard for callers to understand. The result? Customer backlash.
Recent surveys show Americans are vastly dissatisfied with the service they get when they call their bank or computer help desk. Now, forward-thinking companies are realizing that, while they still want to save money, they need to focus more on satisfying customers or risk losing them in droves. To improve communication while reducing cost, they are integrating the existing call center model with newer technologies. These range from voice over IP (VoIP), which makes it easier to oversee a remote workforce but poses some technical challenges for early adopters, to software that sends easy-to-answer calls to an interactive voice response (IVR) system while connecting the most valued customers with complex requests to highly trained agents.
Customers are a company's most vital asset. For that reason, CIOs need to know about technology that can help their companies improve customer applications and satisfaction. While contact centers are often managed by operations staff, CIOs generally maintain the networks and the systems that run them. They can also be in charge of purchasing and implementing new technologies such as voice recognition, work management systems that track agent schedules, and CRM applications that provide easy access to customer information. Clearly, the CIO can play a key role in fine-tuning call center service.
"All the technologies we need for the next generation of call centers are with us today," says Steve Boyer, CIO of call center outsourcer StarTek. "It's a matter of figuring out how to integrate them, adapt them and use them to attract and keep customers."
Shortly after Alexander Graham Bell invented the telephone in 1876, he offered to sell his device to telegraph giant Western Union. Western Union declined and wrote in an internal memo that, "This telephone has too many shortcomings to be seriously considered as a means of communication."
-Use voice recognition, but do it right. Let callers reach an agent if they want to with easy prompts or through voice analysis software that can detect a caller's frustration.
-Consider "home-shoring," the practice of employing customer service representatives working from their homes in North America.
-Investigate VoIP. Early adopters say that despite concerns over security and voice quality, the technology has improved to the point where it can help route calls more quickly and efficiently. Say goodbye to "hold."
Western Union was wrong, of course, and companies soon saw the new contraption as an excellent way to communicate with customers. As early as the 1920s, phones started appearing on the desks of those whose primary duty was to deal with customers, setting the stage for the advertising cliché, "Our operators are standing by." Phone agents didn't really take off, however, until 1967, when AT&T developed the toll-free 800 service that reversed charges from customers to the companies they were calling. Soon after, the Federal Communications Commission ruled that equipment made by businesses other than the Bell System could be connected to the public telephone system. The decision opened the door for competing companies to develop technologies such as the modern PBX, IVR systems and automatic call distribution systems, which made it easier for businesses to handle large call volumes at a more reasonable cost.
As telecommunications technologies advanced, U.S. call centers boomed. Datamonitor estimated that in 1998 there were 69,500 call centers nationwide. By the late 1990s, however, major corporations sought to cut customer service costs and began to investigate how to save money by moving call centers offshore.
In one of the earliest high-profile announcements, Dell said in July 2000 that it would open a call center in Bangalore, India, and signed on with outsourcer Tata Infotech. Other companies in the United States and abroad followed suit, and the Indian call center industry took off, followed by similar developments in the Philippines, Latin America and beyond.
Customers have been less enthusiastic about offshoring. Many complained that it was hard to communicate with foreign operators due to their accents, and that scripted answers left them frustrated.
A political backlash against offshoring ensued, one reason Dell announced in 2003 that it would bring technical support calls for business customers back to the United States. Dell did follow through on the move. But in March it announced plans to double its Indian workforce to 20,000 over the next three years, a figure that likely includes some call center workers.
Technology hasn't been a cure-all for customer satisfaction, either. The widespread use of technologies such as voice recognition software and IVRs also left some callers alienated and unhappy. A 2005 study by Opinion Research found just 35 percent of those surveyed said call centers fully met their expectations.
Forrester's report also notes that replacing traditional touch-tone IVRs with some speech recognition technologies provides greater flexibility for companies trying to encourage customer self-service. To avoid caller frustration, however, companies must also make human help available as needed. And despite complaints, the automated agent, or IVR, is catching on as callers get acclimated to such services, analysts say. In fact, according to McKinsey, more than 60 percent of customers favor an automated option for simple interactions.
To ensure good customer service, however, companies must focus not just on how fast the call is answered, but on what happens after it is answered. "If you're outsourcing and putting in new technologies just to lower costs, you can run into problems," says Elizabeth Herrell, VP in the telecom and networks research group at Forrester. "It's not the automation or the outsourcing that's the problem—it's the lack of time spent on the details."
She stresses there is no one-size-fits-all solution to meeting customer demands while saving money in call center operations. The call center of the future, she notes, won't follow a uniform model—some agents will answer calls in large contact facilities, while at-home agents will be hired as needed during busy periods to provide flexibility. Companies need to try different technologies and tactics while improving agent and supervisor training and tracking customer satisfaction with real-time surveys. "Customers will be unhappy when they can't get information or when a system doesn't understand them," Herrell says.
There's no denying that automating some calls can save a lot of money for a company and enhance service by helping callers get information such as flight times quickly. However, the investment in newer technologies such as speech recognition solutions can range from a few hundred thousand dollars to more than a million dollars, Herrell notes. The ROI from such investments can come quickly if businesses can answer more calls and avoid putting callers on long hold loops. That's why companies such as Red Lion Hotels and Countrywide Financial are investing in voice recognition software and other tools that can automate some of their calls.
Red Lion, with annual revenue of $165 million in 2005, is installing such software as a way to save money and provide some self-service for customers seeking simple information like a reservation confirmation. It also hopes to handle unexpected surges in call volumes with automation.
The hospitality and leisure chain doesn't outsource its contact centers. It employs its own agents at a primary call center for hotels in Spokane, Wash., and it has two others for its ticketing operations. But call volumes can be unpredictable, says David Barbieri, Red Lion's CIO. During peak times, customers looking to make a hotel reservation or to buy tickets through the concert and event service would sometimes go into an "on hold" loop if an agent wasn't available. Red Lion was concerned that customers left on hold were likely to hang up and try a competitor.
With Voxify's voice recognition software, Barbieri expects to handle sudden volume peaks without losing calls. "It's important the technology works and works quickly so that customers can have a stress-free interaction," he says.
Experts agree that voice recognition has advanced to the point where it can be an important part of the call center. "But the key is not to penalize the caller when they want to talk to a human," says David Brandon, senior technical call center consultant for Forsythe Solutions Group.
Two years ago voice recognition software replaced touch-tone IVR applications that frustrated callers at Countrywide Financial, a $15.7 billion specialist in home loans and diversified financial services. The result, says Lior Ofir, Countrywide's first vice president for emerging technology, is improved performance with more customers completing transactions. The software from Nuance has helped the company achieve a return of more than 300 percent on its $4.5 million investment over the past two years, says Ofir. Still, Ofir knows it's important to give customers the option of speaking with a live person, especially if they're doing a complex transaction.
"We don't believe in hiding the agents," says Ofir, whose group implements new technologies for the company's U.S. call centers. "The goal is to give our customers a clear choice." The new system, he says, recognizes about 300 variations of a request to speak with an agent, ranging from "I want to speak to a human" to "agent." Callers can also press "0" to connect to a customer service representative or the operator. In addition, Ofir says, the system uses voice analysis to detect when callers are having trouble and will then automatically switch them to an agent.
While U.S. companies such as Red Lion and Countrywide seek to boost service and cut costs through careful use of automation, others are banking on the human touch. In addition to newer technologies, they are experimenting with the ultimate virtual call center—agents working from their homes in North America.
Companies including Office Depot, Vermont Teddy Bear and JetBlue already use hundreds of home-based customer service agents across the United States and Canada. Home agents don't always replace offshore call centers at these companies. Instead—as in the case of Vermont Teddy Bear—they serve as extra manpower that swoops in during holidays or seasonal business peaks. They give a company flexibility to handle unusually busy days or even hours. In fact, the number of home-based agents is expected to triple to 300,000 by 2010, says Stephen Loynd, a senior analyst at IDC.
Loynd says one reason the trend—which he has dubbed "home-shoring"—is taking off is because it's cheaper than outsourcing to a domestic call center. Newer technologies also mean the call center is becoming increasingly virtual. IDC estimates that it costs $31 per employee per hour (including overhead and training) to operate a traditional call center in the United States, but only $21 per hour for a home-based agent. That's still higher than rates for offshore agents, which start at $10 per hour in the developing countries of Southeast Asia and Eastern Europe, according to Forrester Research.
On the plus side, at-home agents are generally older and better educated, Loynd says. "If you have enthusiastic, hardworking agents with a flexible work schedule, they'll be better on the phone," he says. They're also more likely to stick around. While some traditional call centers report attrition rates of 80 percent to 100 percent annually, outsourcer Willow CSN (which uses only home-based agents) claims an annual attrition rate of just 15 percent.
Vermont Teddy Bear agrees that home-based agents can boost customer satisfaction, although it won't divulge actual figures. The company, which reported annual revenue of $66 million in 2005, doesn't automate its calls or use offshore agents. Instead, it operates a small call center in Shelburne, Vt. In addition, it has used home agents from outsourcer Alpine Access since 2000. Most of the time, says contact center manager Chris Powell, the center's 170 seats are not filled. But the maker of handcrafted bears experiences major peaks in business during holidays such as Valentine's Day and Mother's Day and can go from 50 agents to 700 on its busiest days. At these times, home agents help the company respond to orders and shorten customer waits.
To make sure customers can get 24/7 service, companies rely on agents worldwide. But routing calls and managing a global workforce presents it own set of challenges including making sure that round-the-clock scheduling runs smoothly.
One way to manage agents and route calls from a central location is to use VoIP technology to replace traditional phone systems. VoIP was originally touted for its ability to help companies cut long-distance costs. Now, for call center operators, it promises a greater ability to oversee a disparate workforce.
VoIP works by converting a voice signal from the telephone into a digital signal that travels over the Internet. Companies save money with reduced long-distance charges and elimination of individual phone lines since all voice and data travels over the Internet. The technology, however, is in its early stages of adoption and users have to overcome security vulnerabilities and quality of service hurdles. For example, calls that travel over data lines can be subject to Internet worms and viruses.
Still, outsourcers such as ClientLogic, Mphasis, TeleTech Holdings and others are installing IP phone lines in their contact centers. They say the advantages of being able to administer the system centrally outweigh the challenges. "With an IP phone, agents can be anywhere—at home or at a physical site—and we can route calls to them from a central location," says David Eckert, CIO at ClientLogic.
"If you're doing it just for the cost, you're fooling yourself," says Mojgan Lefebvre, international CIO at TeleTech. "The driving force should be to have 24-hour support service, multimedia contact centers with Web, e-mail or voice. That's easier with VoIP."
Analysts also point out that VoIP eliminates the need for call center managers to integrate voice and data networks, as they do in traditional call centers. Companies don't have to run separate infrastructures for automatic call distribution and IVR applications. VoIP also supports agents regardless of location because it's not necessary to have the traditional telecommunications equipment at each call center.
For Roto-Rooter, VoIP helped create a system in which there are few service interruptions or delays in answering calls, says CIO Steve Poppe. In the past, the emergency plumbing company had "mini call centers" in each metro area it served, which meant agents could get backed up and callers might stay on hold. Now, three call centers in Baltimore, Chicago and Fort Lauderdale, Fla., take a million calls a year.
With VoIP, the regional centers are better equipped to handle peaks in call traffic. If there is a problem in one center, for example, the system automatically routes callers to the next available agent, wherever that agent may be.
Since installing voice over IP at the centralized call centers about two years ago, Poppe says fewer calls are dropped. "We're doing a better job of capturing every call," he says.
Poppe foresees a time when the highly trained Roto-Rooter agents will work from home as well as the company's call centers. "The location of the agent is not important," he says. "What's crucial is taking care of the customer. If you don't, they'll just move to the next company in the phone book."
Computer telephony integration: CTI integrates disparate call center systems and provides to agents' desktops useful customer information. A typical desktop CTI application may recognize a customer's phone number when the call comes into the PBX or IP line, access the customer's purchasing history from the host computer and display the information to the agent.
Interactive voice response: IVR systems allow touch-tone phones to interact with a database.
Speech recognition: Software that allows companies to automate calls that don't require a human agent. Early speech recognition applications didn't always work well, but newer versions are proving more accurate.
Voice over IP: VoIP sends voice signals over data lines instead of phone lines. Call centers and outsourcers are adopting the technology to better handle routing and call volume; it can send calls to an agent anywhere in the world. VoIP does pose some security risks and quality of service concerns.
Workforce management: Also known as job scheduling, workforce management software uses projected call levels to forecast the number of on-duty agents needed at a given time.
Copyright © 1997-2006 [A & A Trading Enterprises]. All rights reserved.