Strengthening your capability further

Increasing customer loyalty requires excellent planning and a healthy exchange of ideas to ensure the right behaviours and knowledge are applied and used. To do this requires building your capabilities to ensure you make it easier for people to be your customers. First, be able to avoid confusion and frustration; second, ask probing questions and, finally, build a flexible customer relationship management system. Let us now explore these three areas.

Avoid confusion and frustration

• Keep your messages crystal clear, simple and user friendly. Build on the strengths of the past as well as making tangible promises for the future. Be ready to provide adequate training, back-up technological support and staffing to help the cause.

• Do not overload your customers with a confusing array of rewards and incentives. Learn why new labels and brands sway your customers to or away from the product/service. Position your service narrowly rather than trying to offer everything to everybody.

• When people ask for help make it easy for them. Give people clear choices. A little common respect can help enormously. If they are kept waiting, let them know how long they can expect to be waiting. Give them the option of speaking to a human being as soon as possible or guide them to a well-kept and updated Internet site. Consider purchasing PBX or web-based capabilities that enable customer details to pop up when they ring in.

• Deliver the promise on time, on budget and within the specifications outlined, while being open to supplying a few extra positives along the way. Offer creative solutions to help their understanding of products and services. At SAP they provide opportunities for customers to join a number of business communities at their web site. Amazon has a skilful tracking system to constantly assist buying decisions, track progress distribution and repersonalize what the user sees, based on past usage. Dell Computers on their web site provides customer assistance on how to manage computer configurations.

Asking probing questions

If you wish to increase customer loyalty, you need to critically review existing relationships and find better ways of creating value. Here are a number of important questions you may wish to explore:

• Who are your top customer groups or clients ?

• What is the strength of the existing relationship and what can be done to improve it?

• How can you use existing products and services differently?

• What knowledge about your customers are you retaining and not using?

Through asking these questions you can get a deeper understanding of the idiosyncrasies and needs of your customers. In particular you are able to mine out important issues relating to the quality and personality of sales transactions or after-sales customer service. At the most basic level, each business must scan and know its marketplace . From there you can begin to vary your products and services, and build new relationships for the future, ultimately leading to a partnership where both the business and the customer can get help and assistance before it is too late.

As an example look at these three business cases where thinking a little differently helped customer value, service and loyalty:

• Chase improved the quality of customer service by drawing on the experience of their relationship managers. When the bank undertook their rollout of one of their new services, they increased calls on customers and product sales by more than 25 per cent, leading to an improvement of 15 per cent of the bank s incremental revenues and 40 per cent of its incremental cost reductions.

• Lend Lease Corporation , after better understanding their customer relationships, shifted their core business from building contracting to one involving funds and project management, giving higher profitability and a different service to the customer.

• P & O , whose core business was cruise liners, are now a market leader in contract cleaning and catering. In this case, a little lateral thinking about their knowledge and capability worked wonders for expanding business potential to a new customer base.

Establishing a customer relationship management system

One of the hottest technological growth areas in increasing customer loyalty is the creation of digital customer relationship management (CRM) systems. Customer relationship management is a knowledge creation system where you have instant and highly personalized information about key customers, while also having a picture of current business performance.

Historically, CRM systems have typically been for larger businesses but now they are increasingly used in smaller operations as costs fall and leasing options improve. In the profit-generated business, CRM is interested in improving customer yield and customer share, and not the mass cloning of products and services. In not-for-profit businesses the benefits could be about improving the quality of the experience, better hospital care, better advice or better home support for the elderly.

Customer relationship management systems can include a range of features, including pre-campaign analysis, marketing to target groups of customers and personalized campaigns , call centre management and education, sales force automation, product and service configuration, pricing and after-sales support. In addition, a CRM system can assist higher standards of data mining, customer learning and collaboration, as well as on-line courses and education.

These features can also be broadened to assist suppliers and other people in the web value chain. For example, CSICO like many other businesses give data on a real-time basis to its business partners every day.

As you would expect there are lots of solutions out there! Customer relationship management solutions are provided by a number of vendors , including Siebel, Goldmine, OnyX, Oracle, PeopleSoft, Pivotal, SalesLogix and SAP.

So what does a digital CRM system deliver? In its simplicity a good CRM treats all customers with individual care and attention, recording their likes and dislikes, and helping them with better service, including resolving issues, managing sales, transactions and offering better aftersales support. Customer relationship management systems are customer centric. The best CRM systems are not those with the latest killer application or software but those that maintain a positive connection with the customer, while making employees feel important.

To reap the benefit of CRM systems there are many lessons to be learnt, one being that the initiative can easily fail if the basics are not right. A study by the Meta Group found that between 55 per cent and 75 per cent of CRM systems failed because they were too ambitious and lacked focus and back-up training. They also found that CRM systems were often poorly organized and managed, and unable to provide mission-critical knowledge on trends and behaviours on a daily basis.

As Martyn Riddle from FrontRange Solutions rightly says, if an organization has bad business practices to start with, the introduction of CRM technology without reviewing a business plan can actually speed up the problem.

As you would expect, the best CRM systems have a very close partnership between all elements of the business, providing an excellent linkage and flow of knowledge between goals, operational constraints, distribution, marketing and performance. The result is stronger product and service deployment, customer feedback, work flow and support.

For further terms in relation to customer support and digital technology see Table 12.2.

Bot A software robot which creates an impression that you are dealing with a human being when a customer contacts a business by e-mail or via the web.

Cookies A technology that customizes a version of a web page based on a customer s past interfaces with the site, for example how people navigate, what they buy and what they are asking. This helps customize their interface the next time they visit.

Data mining A process that examines behaviour, attitudes and transactional data to identify trends, patterns and relationships that can assist customer service and loyalty. For example, data mining on records of charge cards or smart card transactions can discover the relationship between age, sex and the purchase of a product or service.

Data warehouse A central database that provides authorized users with access to all of its customer information. This database consolidates information from a combination of internal and external sources, and acts as a clearinghouse for such capabilities as data mining, forecast marketing and competitive intelligence. This helps to build a more accurate view of customers and their relationship with the business. Current vendors include Oracle and Sybase.

Intelligent agent Programs that perform tasks such as retrieving and delivering information and automating repetitive tasks , like answering routine customer enquires.

Web conversion rate A measure of the number of visitors who initiate a transaction on a web site within a particular period of time relative to the total number of visitors who visit the web site.