Building relationships

Sitel’s Andy Bacon, Tim Manasseh of Convergys and Maximizer Software’s Vivek Thomas tell CXO what Customer Relationship Management can do for the modern enterprise.

CXO. Is it possible to increase retention and grow relationships through customer interaction and customer care? How?
TM. Unfortunately, customer care is one of the most overlooked and unappreciated areas in many businesses. Often, the contact centre is the only point at which customers interface with the organisations they have purchased from. How customers are treated at this point defines their customer experience with that organisation. Smart companies are recognising that, rather than being dismissed at the end of the supply chain – and involved only when there is a problem to be answered - the contact centre, and customer care in general, can be used as a valuable tool to develop and grow customer relationships. As a start point, when most customers phone into a contact centre their primary need is to have their query or problem dealt with quickly and efficiently by a representative who has both the requisite knowledge and authority to resolve the issue in one call. This may sound very obvious, but it is far from guaranteed that this happens across all organisations. Yet this is both the most important driver of customer satisfaction, and also an implicit test of the trust the customer has placed in that organisation. Get this right and trust is built, and from this basis permission is implicitly earned to proceed with more offerings and a potentially deeper relationship. Get it wrong, however, and not only is the customer more likely to churn, he will be deeply indisposed to any further attempts to solicit more business from him. More than anything, the timing and relevancy of up-sell and cross-sell attempts are the two critical factors in their success. Understanding the customer, and applying that understanding to the way in which he wants to be served – both in terms of service channels and additional offers – is a complex set of activities requiring robust process, data and analytic capabilities. But more than anything else, the ability to grow the relationship is based on winning the customer’s trust - by delivering what you promise when he needs it. And that, as a definition, is great operational customer care.

AB. Definitely. Effective ongoing customer interaction is the best method of strengthening relationships with customers. Consumers that have positive experiences when engaging with supplying organisations will be more likely to become loyal and make repeat purchases than those having negative experiences. Customer interaction in itself, therefore, is not enough - it has to be an experience that is fit for purpose, where the supplier proves that the purchaser is important to them and that true customer “care” can take place. In today’s commercial reality, highly advanced product development, demanding consumers and superficial loyalty are common to all players in a given sector, meaning customer service is often the only true differentiator. If service is poor, the consumer will not think twice about finding alternatives.

VT. One of the proven benefits of a successfully implemented CRM solution is the improved relationship with existing and new customers. In today’s fast-paced and commoditised world it is important for the seller to remain cognisant that the buyer, existing or new, is sufficiently knowledgeable of the choices available and requires constant care and attention to remain loyal to a brand.

Increasing customer interaction leads to increased knowledge of a customer’s particular situation as well as existing and potential needs. This knowledge can be turned into a solution that the customer appreciates. Continual application of this process would allow an organisation to prescribe proactive solutions further enhancing the value of the relationship to the customer.

Expansion of this process among all customers allows an organisation to identify patterns and anticipate market trends thereby increasing the value of the organisation to its existing and new customers.

CXO. How important is the ability to leverage customer data to drive value-based product recommendations and cross/upsell offers & enhance customer experience?
TM. It’s very important because the most pressing challenge for most customers these days is the lack of time. Historical customer data is an important indicator of the relevancy of a prospective new offer, but it is by no means the only one. In addition to this input, it’s important to have a view of the customer’s lifetime value, his propensity to respond to proactive sales offerings based on the context of the dialogue with your organisation, and also to be able to see what customers with a similar profile to his have responded to and purchased in a similar fashion. These capabilities are now available, and the application of these variables to produce a relevant and targeted offer, to that particular customer, in real-time, at the point of sales or service, through the customer support agent, is the benchmark standard at which customer experience is judged.

AB. Essential. Poorly placed cross-sell and up-sell opportunities will undoubtedly drive the customer’s experience down. This in turn reduces their satisfaction levels, as it shows a lack of understanding of their needs and diminishes their perceived importance to the supplying organisation. Intelligence-driven up-sell and cross-sell on the other hand can expand the relationship, allowing the supplier to be seen as an advisor and confidant, whilst adding value to the relationship and extended sales to the supplier. This can only be achieved through effective detailed analysis of customer data to build a picture of suitable offers for each consumer.

VT. Ability to leverage customer data is immensely valuable to the product development process as it helps identify macro and micro trends that could help an organisation build a product that continues to anticipate and satisfy its customer’s needs.

Ability to help cross/upsell is another advantage of leveraging customer data aiding increase in an organisations share of a customer’s wallet, while leaving a perceived sense of value with the customer.

CXO. Lots of customers are dissuaded from installing CRM solutions because they think it will be too difficult to maintain. How important is technical support?
TM. It’s something of a cliché these days, but nonetheless still valid, that a true CRM solution is far more than a piece of software. Certainly there is typically a software component to most CRM solutions – and for that a reliable technical support capability is clearly important - but to focus purely on the system is to miss one of the fundamentals of successful CRM. The challenge for most organisations in moving to a CRM environment is the required change of philosophy, which places the customer and their requirements at the centre of the organisation. It can often be helpful to actively discourage the thought that CRM is primarily a systems issue.

AB. Effective support for any technology-based system is essential to the integrity of the organisation using it and provides a vital foundation for excellence in the face of their customers. Poorly maintained systems will impact the customer experience and are therefore highly undesirable. However, it must be stressed that no matter how good the system, or its support, CRM of any kind will not benefit the organisation if the corporate culture does not back such interaction with clients wholeheartedly. CRM is a term used all too often to only describe the software system, rather than a business mind-set that understands the importance of properly caring for clients. Any organisation can go a long way by simply reversing this term, using common sense to ensure the corporate culture is fully aligned to maximise MRC – Management of the Relationship with the Customer. Only once the organisation adopts this mind-set, should a suitable CRM system be investigated and installed to support the corporate ethos of consumer worth. If a software system is installed in the hope that it will drive a cultural mind-set shift to service excellence, the exercise will fail.

VT. As with any other broad based application, some functionality of CRM solutions has gradually become commoditised resulting in many customers attempting to implement the solution themselves. Consequently they hit technical, process and training challenges and soon get frustrated. If an organisation can understand that implementing CRM requires a combination of vision, process, technology and people and that each of these facets need its equal share of diligence, then implementation, deployment and subsequent maintenance of the technical solution becomes easy.

Using a qualified and experienced (there are not that many really experienced) CRM consultant at the outset is the recommended method of implementation, ensuring that the experience is leveraged across configuration, implementation, training and support of the CRM solution. The same consultant would be able to maintain the system they helped implement with relative ease.

CXO. Is risk management an important aspect of a CRM solution?
TM. Risk management is an important consideration and driver for moving to a CRM solution. When correctly implemented and institutionalised, CRM should provide a window into your customers’ motivations, requirements and interests. Understanding your customers, what makes them loyal, what increases their propensity to be disloyal and ultimately what drives them to churn, is the best way of managing the risk inherent in any customer relationship. For most companies, but particularly those with high client concentration, CRM is a prerequisite to help them mitigate against customer defection and to build further revenue streams on the back of existing customer relationships.

AB. Risk management is an important aspect of any business. Understanding, mitigating and avoiding risks allow the business to operate with reduced exposure to the elements that lie outside of its control. It is not unique to CRM, nor should it be viewed as such.

VT. Risk management is a complex financial valuation that should remain external to any CRM application. The valuation derived from the risk management application may be incorporated within the CRM process as part of an organisations CRM methodology and it could determine a representative’s next action based on the organisations appetite to risk.

CXO. What kind of ROI can customers of CRM solutions expect?
TM. It depends upon the nature of the solution and whether what they have implemented is the necessary philosophical and systemic changes we’ve talked about above, or whether they have just bought and implemented a piece of software. Done properly, CRM can have a full ROI within 12 months – depending on the size of operations and what was in place before. Where CRM really can demonstrate ROI is in making what may previously have been anecdotal and arbitrary into a measurable and manageable format. CRM applies across the customer lifecycle, contributing to the organisation’s knowledge of its customer base and of its own business. Implemented properly, it can literally transform the way an organisation does business, allowing it to maximise and monetise the value of its hard-won client base.

AB. Since this publication purports to discuss “CRM – a philosophy, not just a software package” it is somewhat disappointing that the majority of the roundtable questions are about software solutions. Any organisation wishing to raise the importance of customer relationship management (as a cultural ethos, not just a software package) will certainly achieve a positive return on their investment, as it is always a worthwhile thing to do. Organisations who lead their industry in the area of customer service excellence undoubtedly have dominant market share and position. Service leaders crush their competition through excellent customer service that differentiates them from the competition, creates a relationship with the customer and intensifies feelings of loyalty. A good CRM system will obviously help an organisation achieve this, but you don’t necessarily have to have one in order to achieve this. You only have to look back a few decades to see that service quality and customer relationship management were simply a part of the natural supplier / customer transaction. No software required.

VT. ROI is dependant on an organisation’s goals when beginning the quest for a CRM solution and cannot be generalised. It is typically quantified in terms of revenue, profitability, number of customers, share of wallet, deal size and other metrics on productivity and customer service.

Depending on the goals set by an organisation, its CRM vision, the alignment of the organisation around the implementation of CRM methodologies, measurable metrics etc, an organisation can expect a decent ROI on its investment. We have seen revenue growth of between 25 to 500 percent within a 12 month period after implementing our CRM solution correctly.

Andy Bacon is responsible for Sitel’s marketing throughout Europe, the Middle East and Africa, managing a small specialist team located throughout the region. Andy joined Sitel in early 2006, following a career in Marketing and Business Analysis, mostly within the telecommunications industry. Prior to joining Sitel, Andy was responsible for all international marketing and product development for TalkTalk, running business to consumer direct response campaigns to 250,000,000 households across Europe and managing on-line response mechanisms. Previously he served with Siemens Information and Communication, developing and marketing business to business service product portfolios for corporate and carrier-grade telecommunications equipment across the UK. In addition to extensive experience gained within blue chip organisations Andy had interludes working agency-side, including founding and running a small marketing consultancy called ABC Strategic Marketing. Mr. Bacon earned his MBA at the Henley Management College in 2001 and has also found time to write his first novel.

Vivek Thomas is Managing Director EMEA of Maximixer Software. He oversees all EMEA sales, marketing, distribution strategies and operations for the company, including the its extensive Business Partner network across the region. Thomas joined Maximizer Software in 2002 as Director, Americas Sales and was promoted to Vice President, Americas Sales in 2005. With more than 16 years of senior management experience, Thomas was promoted to his current role in 2006. Prior to Maximizer Software, Thomas held senior sales management positions with Sony Corp. Business Objects and most recently with CRM vendor Front Range Solutions. He holds a Bachelor of Commerce degree.