CRM Customer Relationship Management 2008

Custom
er
Relations
hip
Manage
ment
Other titles in the Briefcase
Books series include:
Communicating Effectively
by Lani Arredondo
Performance Management
by Robert Bacal Recognizing
and Rewarding Employees
by R. Brayton Bowen
Motivating Employees
by Anne Bruce and
James S. Pepitone
Leadership Skills for Managers by
Marlene Caroselli
Effective Coaching by
Marshall J. Cook Confict
Resolution by Daniel Dana
Proect Management by
ary !eerkens Managing
!eams by Lawrence
!olpp "iring #reat People
by "e#in C. "lin#e$%
Matthew S. &'Connell% and
Christopher P. "lin#e$
Empowering Employees by
"enneth L. Murrell and Mimi
Meredith
Presentation Skills for Managers by
Jenni(er Rotondo and
Mike Rotondo
!he Manager$s #uide to %usiness
&riting
by Su)anne D. Sparks
Skills for 'ew Managers by Morey
Stettner
To learn more about titles in the Briefcase
Books series go to
www.brie(casebooks.com
Youll fnd the tables of contents,
donloadable sample chap! ters,
information about the authors,
discussion guides for using these books
in training programs, and more"
Custom
er
Relations
hip
Manage
ment
#ristin $nderson
Carol
#err
Mc%ra!
&ill
'e York Chicago (an )rancisco *isbon
Madrid
Me+ico Cit, Milan 'e -elhi (an .uan
(eoul (ingapore (,dne, Toronto
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A9I0 '0.'0+*F00)'+(,'2-
Conte
nts
Pre(ace #ii
*. Customer Relationship
Mana+ement ,s -ot an &ption *
Customer Relationship Management -efned
/
Technolog, -oes 'ot 01ual (trateg, 2
The 3oer of CRM 4
CRM (uccess )actors 55
CRM 6s &ere to (ta, 57
.. /he Customer Ser#ice0Sales Pro1le
*2
8h, Call 6t the Customer (er9ice:(ales 3rofle;
54
The Three *e9els of (er9ice:(ales /<
The (hape of Your Customer (er9ice:(ales
3rofle /=
3itfalls of the Customer (er9ice:(ales 3rofle />
CRM and Your 3rofle/4
3. Mana+in+ 4our Customer
Ser#ice0Sales Pro1le
35
(on?ia@s Contact Center =<
Maurice@s )ood Brokerage =7
Managing 6nitial or (tand!$lone Transactions=4
Managing for Repeat Business 7<
Managing for Customer $d9ocac, 7/
6. Choosin+ 4our CRM Strate+y
67
CRM (trateg, (tarting 3oints 7>
3icking the 3la,er 74
3reparing for Your )irst Meeting 7A
The CRM (trateg, Creation MeetingBsC D<
6dentif, 3otential (trategies D5
CRM (trateg, (election D=
8. Mana+in+ and Sharin+ Customer
Data
82
Return to Your (trategies D>
-ata 9s" 6nformation DA
Managing Customer 6nformationE-atabases
2/
0thics and *egalities of -ata Fse ><
9
9i Contents
7. /ools (or Capturin+ Customer
,n(ormation
2.
8here to %et the -ata and 6nformation >/
The Computer 6s Your )riend Bbut 'ot
$la,s Your Best )riendC 4<
Belie9e 6t or 'ot 4/
2. Ser#ice9Le#el A+reements
:7
(er9ice!*e9el $greements -efned 42
Three #e,s to 0ffecti9e (*$s 4>
Creating an (*$ A<
Fsing (*$s to (upport 6nternal Customer
Relationships AD
Making (*$s 8ork A>
:. ;9Commerce< Customer
Relationships
on the ,nternet
==
CRM on the 6nternet
5<5
Choosing the Right Gehicle
5<>
Three Rules for (uccess on the Road to 0!
Commerce
5<A
8hat -oes the )uture &old;
55/
=. Mana+in+ Relationships /hrou+h
Con>ict
**8
Managing the Moment of ConHict
55>
IBut J'ice 'e9er Bought Me a CustomerK
5//
Customer Relationship Management 6s an
0arl, 8arning (,stem
5/>
8hat if the Customer 6s the 3roblem;
5=<
*5. ?i+htin+ Complacency< /he @Se#en9
4ear ,tchA
in Customer Relationships
*3.
But The, *o9e MeL
5==
The 6llusion of Complacenc,
5=7
Customer 'eeds Change
5=4
Make 3arting (uch (eet (orro
57<
Rene Your Gos
575
**. Resettin+ 4our CRM Strate+y
*6.
Read,, (et, ResetL
57=
3hase 5" $re You &itting Your Target;
57=
3hase /" -oes Your CRM (trateg, 8ork for Your
3eople;
57D
3hase =" Time for Change
574
Closing 8ords
57A
,nde$
*83
L
3refa
ce
6
n one sense, managing customer
relationships is as old as the hills" #ristin
$ndersons grandfather operated a grain
ele9ator in a small ton in Minnesota" Carl T"
$nderson kne e9er, farmer b, name"
These ere his customers " " " and his
neigh! bors" &e kne the names of their
families, here the, ent to church, and
hether the, or their parents or their
parents par! ents had immigrated from
'ora,, (eden, %erman,, or )inland" &e
kne hich farmers ould produce the
best grain regardless of the eather and
hich farmers here struggling ?ust to
make a go of it" $nd he kne ho
important it as to sta, connected to all of
them"
Carl T" $nderson as a customer
relationship manager, though he ould
ne9er ha9e used that term" )or him, CRM
asnt a s,stem or a technolog," 6t as a
a, of life, a a, of li9ing"
6ts hard to create that le9el of
customer connection toda," Yet, thats
?ust the challenge ,ou face"
8here9er ,ou are in ,our organiMation,
hate9er ,our title, ,our success hinges
on ,our abilit, to be as good at CRM as
Carl T" $nderson as " " " e9en better"
I8ait ?ust a minute,K ,ou ma, protest,
Im, customers are scattered from coast
to coast, continent to continent" 8e do
business o9er the 6nternet, not o9er
coffee"K
Thats e+actl, h, e rote this book"
CRM toda, is about keeping the old!time
spirit of customer connection e9en hen
,ou cant shake e9er, hand" CRM toda, is
about using informa! tion technolog,
s,stems to capture and track ,our
customers needs" $nd CRM toda, is about
integrating that intelligence into all parts of
the organiMation so e9er,one knos as
much about ,our customers as Carl T"
$nderson kne about his"
9ii
L
9ii
i
3reface
Content &ighlights
You can ?ourne, through these pages
co9er to co9er, or ,ou can skip around,
dipping into indi9idual chapters for ansers
to ,our most pressing 1uestions about CRM"
Chapters 5 through = focus on the concept
of CRM" Chapter
5 defnes hat CRM means in toda,s
business en9ironment and h, onl,
organiMations ith clear and effecti9e CRM
strate! gies are destined for long!term
success" Chapter / introduces the
Customer (er9ice:(ales 3rofle model, a
brand ne tool for understanding the
d,namic relationship beteen stand!
alone
ser9ice transactions, repeat customers,
and the creation of on! derful customer
ad9ocates ho lo9e to spread the good
ord about ,ou and ,our products and
ser9ices" 6n Chapter =, ,oull read about
issues dealing ith managing ser9ice
deli9er, and using the Customer
(er9ice:(ales 3rofle model"
The second portion of the book,
chapters 7 through 2, offers practical
ad9ice for choosing and implementing a
CRM strateg, in ,our on organiMation"
Chapter 7 leads ,ou step b, step through
the process of defning an effecti9e CRM
strateg," Chapter D discusses hat
customer intelligence ,ou should gather
and ho ,ou might manage it" Then Chapter
2 looks at ho ,ou can collect that same
CRM data and information"
'e+t, e look at se9eral special CRM
topics" Chapter > addresses ser9ice!le9el
agreements" Chapter 4 translates CRM into
the e!commerce en9ironment" Chapter A
looks at the po! erful potential for CRM
to reduce conHict ith customers and to
help ,ou maintain relationships in those
instances here con! Hict does occur"
The fnal to chapters focus on
sustaining success" 6n Chapter 5<, e sho
,ou ho to use CRM to a9oid the deadl,
trap of complacenc, in ,our customer
relationships" $nd fnall,, in Chapter 55,
,oull learn ho to IresetK ,our CRM strateg,
and the tactics ,ou choose for
implementing it" Committing to this
process ill keep ,our CRM approach
complete and effec! ti9e far into the
future"
3reface i+
8e encourage ,ou to keep a highlighter
hand, to make plent, of margin notes"
6dentif, here ,our e+isting CRM strate! g,
is strong, and here ,ou can make
impro9ements" Capture ideas for building
bu,!in for CRM, and for sharing information
across department lines"
8hether ,ou are a senior e+ecuti9e or a
line manager, ,our understanding of the
concepts of CRM and ,our commitment to
using the tools of CRM make a difference"
(pecial )eatures
The idea behind the books in the Briefcase
(eries is to gi9e ,ou practical information
ritten in a friendl, person!to!person
st,le" The chapters are short, deal ith
tactical issues, and include
lots of e+amples" The, also feature
numerous bo+es designed to gi9e ,ou
different t,pes of specifc information"
&eres a description of the bo+es ,oull
fnd in this book"
These bo+es do ?ust hat the, sa,:
gi9e ,ou tips and tactics for being
smart in the a, in hich to
manage customer relationships in
different situations"
These bo+es pro9ide arnings for
here things could go rong hen
,oure tr,ing to build and sustain
cus! tomer relationships"
&ere ,oull fnd the kind of ho!to
hints the pros use to make CRM
efforts go more smoothl, and
successfull,"
09er, sub?ect, including CRM, has its
special ?argon and terms" These
bo+es pro9ide defnitions of these
con! cepts"
*ooking for case studies of ho to
do things right and hat happens
hen things go rong; *ook for
these bo+es"
+ $cknoledgments
&ere ,oull fnd specifc
procedures and techni1ues ,ou
can use to implement ,our CRM
strateg,"
&o can ,ou make sure ,ou ont
make a mistake hen dealing ith
customers; You cant" But if ,ou see a
bo+ like this, it ill gi9e ,ou practical
ad9ice on ho to minimiMe the
possibilit,"
$cknoledgments
8riting a book is ala,s a collaborati9e
process" 8e ha9e man, people to thank
for their generous support" )irst and
foremost, e e+tend arm appreciation to
.ohn 8oods of C8* 3ublishing 0nterprises, for
his in9aluable guidance, patience, and
belief in this pro?ect and in us" $nd thanks to
Bob Magnan, also ith C8*, hose editing
skills and encouraging ords ere both
greatl, 9alued" (usan -ees as a terrifc
source of creati9e inspiration, ala,s
illing to talk through a ne idea or
concept" Maggie #aeter as there ith
priceless support as our deadline
approached" Carols husband, (te9en,
deser9es special credit
for his unfaltering support demonstrated
in a,s too numerous to mention"
8e offer a special thank ,ou to our
friends at Can,on of the 0agles 'ature 3ark
and *odgeEespeciall, Michael ." (cott, ho
helped us sta, true to our target readers
Eand to the numerous other friends and
famil, members ho told us Ie kno
,ou can do it"K
$bout the $uthors
"ristin Anderson is president of (a, 8hat;
Consulting, a Minneapolis!based frm that
orks ith indi9iduals and organi! Mations
to assess e+isting customer ser9ice and
communication practices, create and
implement change plans, and impro9e
ser9ice and communication
effecti9eness"
$bout the
$uthors
+i &er clients range from Fortune D<<
corporations to small businesses, from
pri9ate sector companies to non!proft
organi! Mations" #ristin has orked
internationall, ith emplo,ees at all le9elsE
from top e+ecuti9es and senior
managers, to front!line
staff and support area emplo,ees"
6n addition to riting Customer
Relationship Management ith Carol #err,
#ristin is author of Great Customer Service
on the Telephone B$M$COMC, and co!
author of four books in the bestselling
I#nock Your (ocks Off (er9iceK
N
series,
including Delivering Knock Your Socks Off
Service"
#ristin is host of the si+!part 9ideo
training series, IOn the 3hone " " " ith
#ristin $nderson,K created ith Mentor
Media of 3asadena, C$, and Ron Oemke of
3erformance Research $ssociates, 6nc" &er
articles and inter9ies ha9e appeared in
numerous publications"
$n acti9e member of the 'ational
(peakers $ssociation, #ristin as honored
b, the '($!Minnesota Chapter in 5AAA as
IMember of the Year"K #ristin is also a member
of (OC$3
B(ociet, for Consumer $ffairs 3rofessionalsC"
8hen not speaking, training, consulting,
or riting, #ristin en?o,s on!the!ater
acti9ities, including racing her MC sailboat
during the summer and pla,ing BroomBall
during the inter" Carol "err has o9er a
decade of consulting e+perience, includ!
ing ork as an OrganiMation 0ffecti9eness
Consultant for Motorola" (he is currentl,
president of VisionResearch, an
organiMation effecti9eness consulting
group orking ith high! tech, hospitalit,,
and public sector organiMations"
VisionResearch take a s,stemic, hole
organiMation 9ie to assessing o9erall
effecti9eness, and then orks ith our
clients to close performance gaps"
$s a fre1uent guest lecturer for the
&uman Resources -e9elopment graduate
program at the Fni9ersit, of Te+as at
$ustin, Carol addresses topics that range
from the basics of de9eloping a
corporate learning program, to
establishing a common understanding of
corporate strateg, and goals in a
+ii $bout the $uthors
global market place, to de9eloping and
implementing corporate strategies"
Carols e+pertise in ho organiMations
function has alloed her to ork ith a
9ariet, of different t,pes of groups
including marketing and sales, product
design, manufacturing, facilities, guest
ser9ices, and e9en other consulting
groups" (he regularl, fnds herself orking
ith clients on strateg, de9elopment, goal
setting, customer ser9ice, team
building, process impro9ement, and
1ualit, s,stem de9elopment"
8hen not orking Carol en?o,s
camping, cooking, seing, and auto racing"
(he is an a9id '$(C$R 8inston Cup fan and
regularl, attends races at tracks across
the countr,"
Carol has a bachelors degree in speech
communication from 'orth -akota (tate
Fni9ersit," Carol and #ristin originall, met
hile competing on their respecti9e
schools speech teams" (he also holds a
masters degree in organiMational
communica! tion from (outhest Te+as
(tate Fni9ersit," Carol currentl, makes her
home in $ustin, Te+as ith her husband,
(te9en and their three cats, Bab,, )risk,,
and Tigger"
8ed appreciate hearing about ,our
customer relationship management
efforts" 8e can be reached at #ristinP
#ristin$nderson"com and
C#0RRPaustin"rr"com"
Customer
Relationship
Management
6s 'ot an
Option
3
eter -rucker said, IThe purpose of a
business is to create customers"K
6mplied in his ords and his ork is the
impor!
tance of keeping those same customers
and of groing the depth of their
relationship ith ,ou" $fter all, as research
b, )rederick Reichhold and 0arl (asser of the
&ar9ard Business (chool shos, most
customers are onl, proftable in the
second ,ear that the, do business ith
,ou" Thats right" 6nitiall,, ne customers
cost ,ou mone,Emone, spent on
ad9ertising and marketing and mone,
spent learning hat the, ant and teach!
ing them ho best to do business ith
,ou"
Customer relationship management
BCRMC can be the single strongest eapon
,ou ha9e as a manager to ensure that
cus! tomers become and remain lo,al"
Thats rightL CRM is the single strongest
eapon ,ou ha9e, e9en before ,our
people" (ound
like heres,; *et us e+plain hat e mean"
%reat emplo,ees are, and ala,s ill be,
the backbone of an, business" But
emplo,ee performance can be enhanced
or hampered b, the strateg, ,ou set and
b, the tools that ,ou gi9e
5
L
/ Customer Relationship Management
emplo,ees to get the ?ob done" -one right,
CRM is both a strat! eg, and a tool, a
eapon, if ,ou ill" 6n ,our hands, and in the
hands of ,our emplo,ees, CRM comes to
life, keeping ,ou and ,our team on course
and able to anticipate the changing land!
scape of the marketplace" 8ith CRM, lo,al
customers arent a happ, accident created
hen an e+ceptional customer ser9ice
representati9e, salesperson or product
de9eloper intuits and responds to a
customer need" 6nstead, ,ou ha9e at ,our
fnger! tips the ultimate ad9antageE
customer intelligence: data turned into
information and information turned into
acustomer!satisf,! ing action"
6mplementing CRM is a nonnegotiable in
toda,s business en9ironment" 8hether
,our customers are internal or e+ternal,
consumers or businesses, hether the,
connect ith ,ou elec! tronicall, or face
to face, from across the globe or across
ton, CRM is ,our ticket to success"
Customer Relationship
Management -efned Customer
Relationship Management is a
comprehensi9e approach for creating,
maintaining and e+panding customer
relationships" *ets take a closer look at
hat this defnition implies"
)irst, consider the ord Icomprehensi9e"K
CRM does not belong ?ust to sales and
marketing" 6t is not the sole responsibili!
t, of the
customer ser9ice
CRM $
comprehensi9e
approach for
creating,
maintaining
and
e+panding
customer
relationships"
group" 'or is it
the brain! child of
the information
technolog, team"
8hile an, one of
these areas ma,
be the internal
cham!
pion for CRM in ,our organiMation, in point of
fact, CRM must be a a, of doing business
that touches all areas" 8hen CRM is
delegated to one area of an organiMation,
such as 6T, customer relationships ill
suffer" *ikeise, hen an area is left out of
CRM planning, the organiMation puts at risk
the 9er, customer relationships it seeks to
maintain"
Customer Relationship Management 6s 'ot
an Option =
3atients $re Customers, Too
6n the earl, 5AA<s Midest Communit,
&ospital Bnot its real nameC recogniMed
that managed care plans dictated
here patients ent for their frst
hospitaliMation" &oe9er, it as the 1ualit, of
caring during their patient e+perience that
determined hether or not indi9iduals and
families ould choose MC& for their ne+t
healthcare need or mo9e hea9en and earth to
ha9e their man! aged care plan send them
somehere else" (o, a I%uest RelationsK program
as launched to increase patient satisfaction
and lo,alt," 6t in9ol9ed all patient contact areas,
from the securit, personnel ho patrolled the
parking ramp, to the nurses and aides, to the
facilities management team, to the kitchen and
cafeteria staQ" 6t forgot fnance" $ccounting staQ,
accustomed to dealing ith impersonal policies
and go9ernment!regulated -R% Bdiagnostic
related groupsC pa,ment guidelines, took a
clinical and impersonal approach to billing and
col! lections" MC& found that all the good ill
created during the patient sta, could be, and
often as, undone hen a patient or famil,
member had an encounter ith the fnance
group" MC& learned the hard a, that managing
the customer relationships e+tends be,ond
traditional caregi9ers, and that to ork CRM must
in9ol9e all areas"
The second ke, ord in our defnition is
Iapproach"K $n approach, according to
8ebster, is Ia a, of treating or dealing
ith something"K CRM is a a, of thinking
about and dealing ith customer
relationships" 8e might also use the ord
strateg! here because, done ell, CRM
in9ol9es a clear plan" 6n fact, e belie9e that
,our CRM strateg, can actuall, ser9e as a
bench!
mark for e9er, other strateg, in ,our
organiMation" $n, organiMa! tional strateg,
that doesnt ser9e to create, maintain, or
e+pand relationships ith ,our target
customers doesnt ser9e the organ!
iMation"
(trateg, sets the direction for ,our
organiMation" $nd an, strateg, that gets in
the a, of customer relationships is
going to send the organiMation in a rong
direction"
You can also consider this from a
department or area le9el" .ust as the
larger organiMation has strategiesEplans
Efor share! holder management, logistics,
marketing, and the like, ,our department
or area has its on set of strategies for
emplo,ee
7 Customer Relationship Management
retention, producti9it,, scheduling, and the
like" 0ach of these strategies must
support managing customer relationships"
(ounds too logical to need to be
mentioned" Yet it is all too eas, to forget"
)or e+ample, in times of e+tremel, lo
unemplo,!
ment, ho
tempting is it to
CRM 6s
(trategic
Make a list of the
ke, strate! gies that
dri9e ,our area of
responsi! bilit," 8hat
approach or plan deter!
mines ,our:
R (taSng le9els;
R 3roducti9it, targets;
R 3rocesses and
procedures;
R Reporting;
'o, rite don ,our
organiMa! tions, or ,our
personal, approach to
managing customer
relationships" Compare the
CRM strateg, ith the
other ke, strategies" -o
the, support the manner in
hich ,ou ant to inter!
act ith customers; 8h,
or h, not;
keep a less than
ideal emplo,ee
?ust to ha9e a
more
comfortable
head! count; Or,
consider the
situation all too
familiar to call
center
en9ironments,
here pressure
to keep calls
short goes head
to head ith
taking the time
necessar, to
create a pos!
iti9e customer
e+perience"
'o, lets look
at the ords,
Icreating, main!
taining and
e+panding"K CRM
is about the
entire customer
c,cle" This is
hat ell discuss in Chapter / as the
Customer (er9ice: (ales 3rofle" 8hen ,ou
implement ,our CRM strateg,, ,ou ill cap!
ture and anal,Me data about ,our targeted
customers and their targeted bu,ing
habits" )rom this ealth of information, ,ou
can understand and predict customer
beha9ior" Marketing efforts, armed ith
this customer intelligence, are more
successful at both fnding brand ne
customers and culti9ating a deeper
share of allet from current customers"
Customer contacts, informed b, detailed
information about customer
preferences, are more satisf,ing"
$re ,ou a manager hose area doesnt
deal ith e+ternal customers; This part of
the defnition still applies" )irst, ,ou and ,our
team support and add 9alue to the
indi9iduals in ,our organ! iMation ho do
come into direct contact ith customers"
$gain and again, the research has pro9en
that e+ternal customer satis!
an Option D
faction is directl,
propor! tional to
emplo,ee
satisfac! tion"
That means that
the 1ualit, of
support gi9en to
internal
customers
predicts the
1ualit, of support
that
is gi9en to
e+ternal cus!
tomers" (econd,
consider ,our
internal
customers as
ad9ocates for
,our depart!
ment or area" )or
,ou and
;$ternal
customers
Those outside the
organiMa! tion ho
bu, the goods and
ser9ices the
organiMation sells"
,nternal customers
$ a, of defning another
group inside the
organiMation hose ork
depends on the ork of
,our group"Therefore,
the, are ,our
Icustomers"K 6ts ,our
responsibilit, to deli9er
hat the, need so the,
can do their ?obs properl,"
,our team, CRM is about groing
ad9ocates and fnding ne a,s to add
9alue"
)inall,, hat do e mean b, Icustomer
relationshipsK in toda,s econom,, here
e do business ith indi9iduals and
organiMations hom e ma, ne9er meet,
ma, ne9er ant to meet, much less kno
in a person!to!person sense; CRM is about
creat! ing the feel of high touch in a high
tech en9ironment" Consider the success of
$maMon"com" Both of us are fre1uent
customers and neither of us has e9er
spoken to a human being during one of our
ser9ice interactions" Yet, e each ha9e a
sense of relationship ith $maMon" 8h,;
Because the CRM tools that support $maMons
customer relationship strateg, allo
$maMon to:
R $dd 9alue to customer transactions
b, identif,ing relat! ed items ith
their Icustomers ho bought this
book also boughtK feature, in much
the same a, that a retail clerk might
suggest related items to complete a
sale"
R Reinforce a sense of relationship b,
recogniMing repeat shoppers and
targeting them ith thank ,ous
ranging from thermal coffee cups to
one!cent stamps to ease the
transition to ne postal rates"
6n short, customers ant to do business
ith organiMations that understand hat
the, ant and need" 8here9er ,ou are in
,our organiMation, CRM is about managing
relationships more effecti9el, so ,ou can
dri9e don costs hile at the same time
increasing the 9iabilit, of ,our product
and ser9ice offerings"
Technolog, -oes 'ot 01ual (trateg,
The past se9eral ,ears ha9e itnessed an
e+plosion in CRM tools, especiall, softare
applications" $ccording to a recent report
from )orrester Research BMarch /<<5C, 7DT
of frms are considering or piloting CRM
pro?ects hile another =>T ha9e
installations under a, or completed"
These frms ill spend tens of millions on
CRM applications, often orking ith ten or
more separate 9endors"
Yet, the 1ualit, of customer ser9ice
continues to decline" The $merican
Customer (atisfaction 6nde+, compiled b,
the Fni9ersit, of Michigans Business (chool,
declined an a9erage of >"AT beteen 5AA7
and /<<<" $t the same time the number of
on!line sites here consumers can post
their customer ser9! ice complaints for
the entire orld to see has risen
dramaticall,"
8hats going on here; 6f CRM is the
poerful eapon e sa, it is, then h,
isnt ser9ice impro9ing;
8e belie9e the problem stems from
confusing technolog! ith strateg!" 6n
both large and small!scale efforts, its not
uncommon to see the term CRM used as
shorthand for the technolog, that supports
the strateg, implementation" $s ,ou can
see in )igure 5!5, ,our CRM strateg, should
dri9e ,our organiMational structure, hich
should in turn dri9e choices around
technolog, implementation" Yet,
indi9iduals and organi! Mations become
enamored of the technolog, applications
and forget that that the, must start ith a
CRM strateg,"
The language confusion doesnt help"
Countless articles and re9ies of CRM tools
and technologies ne9er mention strateg,"
The, impl,, or e9en come right out and
sa,, that the onl, thing ,ou need to do to
ha9e effecti9e CRM is bu, the right applica!
tion" Yes, the right application is critical" But it
is ,our CRM strateg, that informs hich
application ill be right for ,ou"
$ recent con9ersation ith a ne client
9i9idl, illustrated this point to us" (te9e is
the general manager for a ne resort
locat! ed in a remote setting" I8hats ,our
approach for customer rela! tionship
management;K e asked" I8ell, e ould
like to bu, a database management
s,stem,K he said, naming a particular
an Option >
)inanc
e
%rot
h
*ogistics
Customer
Relationship
Mana+ement
Strate+y
(hareholder
Management
Marketing
-ri9
es
3olicies (ilo or Matri+
&r+ani)a
tional
Struc
ture
Reporting
Measures
Controls
-ri9
es
/echn
olo+y
,mplemen
tation
)igure 5!5" CRM strateg, dri9es structure and
technolog,
application, Ibut right no our re9enues
?ust ont support the in9estment"K
8e tried again, I8hats ,our strateg, for
making sure that guests ho come to sta,
one time ill ant to come back; &o do
,ou ensure that e9er, staff member orks
to create a bond ith each guest;K I8ell,K
he began, looking intent, I09er,one ?ust
does their best to be friendl, and to make
the guest feel elcome" 8ell do more
hen e get
the database in place"K (te9e had
fallen into the
ICRM is
technolog,K
confusion" 6ts eas,
to doE and
dangerous" 8ithout
a strateg, to
create, main! tain,
and e+pand guest
relationships,
(te9es
resort ma, ne9er
ha9e the
(trateg, 6snt
Technolog,
*isten to the a, the term
CRM is used in ,our
organiMation" -o people
confuse strateg, and
technol! og,; 6f so, ,ou can
be a 9oice for clar! it,"
6nsist that CRM applications
and technologies be
referred to as CRM tools"
$sk ho each tool
supports ,our CRM
strateg,"
re9enue to in9est in CRM toolsEor e9en
to sta, in business" &otels, at least
the good ones, ha9e been managing
guest relationships since long before
the CRM tools e kno toda,
e9er e+isted" (o, fortunatel, for (te9e, the
seeds of a good CRM strateg, ere alread,
in place" )ront desk emplo,ees often
asked guests if the, ere 9isiting for a
special occasion" 6nformation about
anni9ersaries and birthda,s as passed
on to the restaurant, here
complementar, champagne or a special
cake as pro9ided" (ometimes,
housekeeping took part and
added special
room deco!
#no Your
3urpose
-ont get enamored of
the tools of CRM before
becoming clear about
,our purpose and hat
,our approach to creating,
maintaining, and e+panding
customer relationships
looks like"
&a9ing a customer
database is not the same
thing as ha9ing a CRM strat!
eg," $s a friend of ours is
fond of sa,! ing, I$
dictionar, is onderful
data! base of ords, but a
dictionar, cant rite a
letter for ,ou"K
The 3oer of CRM
rations" &oe9er,
because (te9e
as so focused
on the high!tech
solution he
couldnt bu,, he
asnt le9eraging
his hotel staffs
natural approach
to creat! ing,
maintaining and
e+panding guest
relation! ships"
There ere a lot
of
Ihapp,
accidentsK that
resulted in
happ, guests"
But there ere
e9en more
missed
opportunities"
The poer of CRM comes from the clarit, of
,our approach" Think for a moment about
,our personal planner and organiMer" 6n a
sense, it is ,our personal CRM tool" 8hat do
,ou use; $ calendar ith scribbled names,
addresses, and a lot of 3ost!itU notes; Or
are ,ou more organiMed, using a
)ranklinCo9e,U or -a,Timer
N
binder;
3erhaps ,ou are the high tech t,pe, using
the latest handheld personal digital assistant
B3-$C to keep track of e9er,thing"
&o ell does ,our personal organiMing
s,stem ork for ,ou; 8ed like to suggest
that ,ou can be as poerful ith 3ost!itU
notes as ith a 3alm
N
, pro9ided that ,ou are
clear about ,our inten!
an Option A
tion and that ,ou9e chosen the right tool
for ,ou" 8e ould guess, hoe9er, that a
fair number of ,ou are using Bor at least
carr,ing aroundC the organiMer that
someone else thought ,ou should ha9e"
Ma,be its e9en the organiMer that !ou
thought ,ou should ha9e"
Thats hat happened to a good friend of
ours" I6 got a VD<<
3-$ that 69e ne9er used, e9en after the frst
eek of torturousl, loading in m, loose
data" 6 bought it because e9er,bod, else
had one" The, looked so organiMed and,
ell, kind of cool beaming things back and
forth" 6 thought, if 6 get one then 6d look
organiMed too" 6m still car!
r,ing it aroundW
along ith a
calendar and a lot
of
3ost!itU notes"K
Yet, another
friend sears b,
her 3-$, con!
scientiousl,
entering e9er,
ne name and
phone
#no Your
6ntention The
more clarit, ,ou
ha9e about ,our
CRM intention,
the greater the
likelihood that ,ou ill
choose the appropriate
tools to support it an"
that ,ou ill follo
through on using them"
number, religiousl, consulting its calendar
before committing to meetings or
pro?ects, e9en using the portable
ke,board to rite reports and enter
fnancial data"
$ VD<< 3-$ is a bargain if ,ou use it, and
an e+pensi9e to, if ,ou dont" $nd the same
is true of a VD<<,<<< CRM tool"
To gain clarit, about ,our CRM intention,
think for a moment about ,our on
customers, be the, internal or e+ternal,
consumers or business!to!business"
R 8hat dri9es them to do business ith
,ou;
R 6f ,ou manage an
internal
support area,
ask ,ourself,
gi9en a
realistic
choice,
ould ,our
cus! tomers
choose to do
business ith
,ou;
R 6n hat a,s
do ,ou need to
enfold ,our
customers in
,our
business, so
that
(hare Your
(trateg, Make
sure ,our team
mem! bers kno
hat ,our CRM
strateg, is and ho the
tools ,ou9e chosen
support that strateg,"
One a, is to in9ite a
representati9e from
another area of the
organiMation to a staQ
meeting to e+plain ho
his or her area uses the
customer data that ,our
team members collect"
5< Customer Relationship Management
,ou can better understand hat the,
ant and needE
and more effecti9el, pro9ide it;
R 8hat do ,our customers need and
ant to ha9e happen during their
encounters ith ,ou;
R 8hat ill dri9e ,our customers to
continue to do busi! ness ith ,ou;
R 8hat information about ,our
customers ill help ,ou identif, a,s
,ou can gro the amount of mone,
the, spend ith ,ou;
The ansers to these 1uestions ill begin
to clarif, ,our
CRM strateg,"
To e+amples from our consulting
e+perience ma, help as ,ou think about
,our on customers"
Consumer Product Contact Center.
(on?ia manages a con! sumer product call
center for a food manufacturing compan,"
&er group responds to the 4<<X calls and
e!mail re1uests offered b, product users"
(on?ia knos that her customers often
choose these products because these
are the brands their moth! ers and
grandmothers used" (he also knos that
most of them dont e9en think about her or
her group " " " until the, ha9e a product
1uestion or concern" 6n the e9ent there is
a problem
ith a cake mi+, cereal, or other product,
the members of (on?ias team need to
obtain product codes from the
customer" Be,ond resol9ing problems and
ansering 1uestions, the 4<<X call or e!
mail contact is a great opportunit, to
reinforce cus! tomer lo,alt, and gather
more information about this ne gen!
eration of users" Therefore, (on?ia is clear
that for her team CRM has to:
R Create a sense of relationship and
reinforce brand lo,alt, ith customers
ho seldom contact the compan,
directl,"
R Yuickl, and effecti9el, turn around a
product problem or concern"
R %ather product code information so
that the potential impact of problems
and concerns on other customersE
those ho dont make direct contact
Ecan be assessed and corrections
and impro9ements can be made"
an Option
55
R $llo customer contact
representati9es to demonstrate
familiarit, ith an increasingl, ide
9ariet, of products and packaging
options"
?ood Brokera+e. Maurice ons and
operates a food brokerage business,
suppl,ing fresh fruits and 9egetables to
area restau! rants" &e ser9es independent
restaurants" The chef or souschef places
bieekl,, and e9en dail,, orders" Chefs b,
nature arent hesitant to tell deli9er, dri9ers
hen product 1ualit, is lacking" $nd if the,
are disappointed, the, ma, ell go to
another suppli! er to get the items the,
ant" -isappoint them too man, times, and
the, ma, make a permanent supplier
sitch" Therefore, Maurice is clear that to
add 9alue CRM has to:
R 3rofle each restaurant and chef, so
that both the brokers ho place the
bulk food orders and the dri9ers ho
make the deli9eries kno hat
fruits and 9egetables each is likel,
to order in each season of the
,ear"
R Track satisfaction ith deli9ered
merchandise, including refused
shipments and those that ere
grudgingl, accepted"
R $nticipate on!the!spot increases in
orders, so that dri9! ers can be
prepared ith e+tra asparagus, for
e+ample, hen it looks particularl,
fresh and appetiMing"
R Capture information about upcoming
restaurant promo! tions and special
e9ents, in order to predict and
accom! modate changes"
6n Chapter 7, ell spend more time
shoing ,ou ho to choose the specifc
CRM strateg, that is best for ,our needs"
)or no, the point to take aa, is that the
poer of CRM lies in
the clarit, of ,our purpose" (on?ia and
Maurice ha9e clear inten! tions" &o
about ,ou;
CRM (uccess )actors
8hile clear intention fuels the poer of
CRM, there are se9eral other success
factors to consider" 8e ill focus on f9e
of the most important here" OrganiMations
that implement CRM ith a strong return on
in9estment share these characteristics"
5/ Customer Relationship Management
5" Stron+ internal partnerships around
the CRM strate+y. 8e said earlier that CRM
is a a, of doing business that touches all
areas of ,our organiMation" This means that
,ou and ,our man! agement peers need
to form strong internal partnerships
around CRM" 6f ,ou and ,our organiMation are
earl, on the road to CRM implementation,
no is the time to bring ,our CRM needs to
the table, and to be open to listening to the
CRM needs of other areas" You ma, fnd that
,ou ha9e re1uirements that are, at least
potentiall,, in conHict" Resist the temptation
to go to ar for hat ,ou need"
6f ,our organiMation has gone off the
partnership road ith CRM, then no is
the time to come back together and
rebuild partnership ith the area that is
currentl, championing CRM" *et them kno
that ,ou appreciate hat the, ha9e done"
*et them kno hat data ,ou ha9e to
offer and help them under! stand ho
,ou plan to use the data ,ou re1uest
from them"
/" ;mployees at all le#els and all areas
accurately collect in(or9 mation (or
the CRM system. 0mplo,ees are most
likel, to com! pl, appropriatel, ith ,our
CRM s,stem hen the, understand hat
information is to be captured and h, it is
important" The, are also more likel, to trust
and use CRM data hen the, kno
ho and h, it as collected"
8orking Together for CRM
$t the Consumer 3roduct Call Center, the
market research group anted to add
a short customer sur9e, to
the end of each customer call" (on?ia orried
that both customers and staQ ould resent
spending additional timeEcustomers
because it asnt the purpose of their call and
staQ because of the pressures to handle a
particular number of calls each shift" 0ngaging in
dialogue ith her marketing peer about their
needs and her concerns helped the CRM team
to come up ith a orkable strateg," Fsing the
poer and He+ibilit, of the e+isting softare
applications, callers are randoml, selected to
participate in sur9e,s" Customers are asked if
the, ould be illing to spend an additional fe
minutes ansering three 1ues! tions in return
for a thank!,ou coupon" Customers ho agree
are transferred to an automated sur9e,
s,stem, hile ser9ice representa! ti9es are
freed to respond to the ne+t call"
an Option
5=
%etting 09er,one on the
(ame 3age Maurice realiMed that his
sales reps had de facto control of CRM
and often felt like the, had personal
onership of each
customer relationship" 6n making CRM more
comprehensi9e than a sales tool, Maurice began
b, thanking his sales team for building strong
customer bonds" &e shared se9eral stories
that illustrated ho helpful it as to the sales
team hen dri9ers ga9e them a heads!up
about problems or additional customer needs"
I8ouldnt it be great to get that kind of
information e9er,da,;K he asked, Iand not ?ust
hen ,ou and the deli9er, dri9er happen to
cross paths;LK The sales team agreed"
=" CRM tools are customer9 and
employee9(riendly. CRM tools should be
integrated into ,our s,stems as
seamlessl, as possi! ble, making them a
natural part of the customer ser9ice
interac! tion" $ ma?or manufacturer of
specialt, pet foods redesigned
the pop!up screens for its toll!free
consumer phone line" 6n the original
design, the fnal pop!up screen prompted
the represen! tati9e to ask the callers
name and address" Yet, representati9es
had found that it as easier and felt more
natural to ask,
I8hats ,our name;K and I8here are ,ou
calling from;K and
I8hats ,our pets name;K at the start of the
call"
7" Report out only the data you use%
and use the data you report. .ust
because ,our CRM tool can run a report
doesnt mean it should" Refer back to ,our
CRM strateg,, and then run the data ,ou ill
actuall, use" $nd share that data ith ,our
team"
#eeping %uests &app,
#ristin $nderson recalls an o9ernight at
the -uluth, M', (uper 4 Motel" *ocated
near the ship loading and arehous!
ing area, this particular motel lacks an, sort of
9ie"Yet, it is regularl, booked ith guests ho
are happ, to be there" That e9ening, #ristin
obser9ed the front desk clerk poring o9er a
large Rolode+
N
" #ristin must ha9e looked curious,
because the clerk looked up, smiled, and
e+plained, IThese are our G63 customers, the
salesmenEell, the,re mostl, menEho
come here regularl," 6m ?ust getting familiar ith
them so 6ll recogniMe them and kno their
preferences hen the, check in"K This
e+plained the recliner in #ristins guestroom"
I8h,, ,es" 8e asked our G63s hat the, missed
from home hen the, are on the road" Their
recliner as the number!one anser"K
$9oiding Customer 6re
$sk ,our staQ if there are an, CRM
1uestions that cause customer ire" )or
e+ample, e9e stood behind more than
one
retail customer ho balked at gi9ing the cashier
her O63 code before ha9ing her merchandise
rung up" 6n the orst cases, the cashier had no
clue h, this information as re1uested, but
refused to make the sale ithout it" 6n the best
cases, the cashier cheerfull, and easil, e+plained
that this information as used to ensure that
stores ere con9enientl, located near core
groups of customers, and that she ould be
happ, to ring up the customers purchases
ithout gathering that information"
D" Don't +o hi+h9tech when low9tech
will do. $t &arle,! -a9idson outside of
Milaukee, 86, during the summer the,
often lea9e open the big metal doors to
the manufacturing facili! t, to let in an,
breeMe and the cooler e9ening air"
Fnfortunatel,, open doors occasionall, let in
other things, including skunks" $ team met
to consider the problem and possible
solutions" $fter discussing the pros and
cons of screens, half!doors, or keeping
the doors shut, the, came upon the ideal
solution" 8hen a skunk anders in, ?ust
lea9e it alone and ait till it anders
back out" (kunks ma, be &arle, fans, but
the, ne9er sta, long" OrganiMations that
successfull, implement CRM look for the
simplest solution hen implementing their
CRM strateg,"
$ lo!tech solution that orks for the
people ho
actuall, use it is
more effecti9e
than a
The Report Ma9en Make
one member of
,our team the
report ma9en" This
indi9idual should learn
ho to 1uer, ,our CRM
database for an ad hoc
report to see if ,ou can
spot a trend or deepen
,our understanding of
hat ,our customers
ant or need"
high tech
solution that is
cumbersome,
costl, and apt
to be discarded
or inconsistentl,
implement! ed"
CRM 6s &ere to
(ta,
*ee 6acocca said,
IThe
biggest problem facing $merican business
toda, is that most managers ha9e too
much information" 6t daMMles them, and the,
dont kno hat to do ith it all"K
an Option
5D
#eep 6t (imple
8hile the hotel chains corporate oSce
struggled to fnd a cost!effecti9e a,
to identif, and Hag repeat guests b,
prop!
ert,, one location had alread, fgured it out"
8hen guests ere picked up at the airport or
greeted b, the doorman, a seemingl, casual
con! 9ersation actuall, probed to see if the
guest had sta,ed at the propert, before" Then,
as the dri9er, doorman or bellhop passed the
customer to the front desk ith a IThis is Ms"
Customer,K a gesture that indicated frst timer
or return guest" 6magine the surprise at the
home oSce hen the, learned that, for free, the
front desk staQ as greeting guests ith a
I8ere so happ, to ha9e ,ou ith us again, Ms"
Customer"K
6snt CRM ?ust another management fad
that adds to that problem; 'o" -one right,
done ell, ,our CRM strateg, sets the
agenda for hat data ,ou ill collect, ho
that data ill be translated into information,
customer intelligence, and ho that
information ill be shared across the
organiMation"
8e belie9e that the biggest problem
facing business toda, is that most
managers ha9e too much data, and far too
little rele9ant information"
8hen
aggregate cus!
tomer information
is strategicall,
collected and
segmented, ,ou
can target ne
customer
prospects" 8hen
customer preference
information is easil,
Data (impl,
the facts"
The fact
that ,ou
ser9ed
7< customers is data"
,n(ormation -ata
for hich mean! ing has
been interpreted"
#noing that 7<
customers is an a9erage
num! ber to ser9e is
information"
accessible, ,ou can craft superior
ser9ice e+periencesEbe the, face!to!
face, 9ia telephone, or o9er the 6nternet"
$nd hen information about changing or
additional customer needs is captured,
,ou can e+pand the depth of the
customer relation! ship"
CRM is the strongest eapon ,ou ha9e
to create, maintain, and e+pand customer
relationships and its here to sta,"
Managers Checklist for Chapter 5
CRM is about managing relationships
more effecti9el, so ,ou can dri9e
don costs hile at the same time
increas! ing the 9iabilit, of ,our
product and ser9ice offerings"
The strength of CRM lies in the clarit,
of ,our approach and purpose" Before
taking a single step forard, be
absolutel, clear about hat ,ou ant
to accomplish"
Remember, customers ant to do
business ith organiMa! tions that kno
them, that understand hat the, ant
and need, and that continue to fll those
ants and needs" CRM is about making
sure ,ou ha9e the information ,ou
need
to do ?ust that"
Tools enable customer relationship
management" Tools dont ha9e to be
high!tech" The best tools are the
ones that allo ,ou to gather the
information ,ou need in the easiest
a, for both ,ou and ,our customer"
The
Customer
(er9ice:(a
les 3rofle
'
o ,ou understand that the poer of
CRM lies in its abilit, to help ,ou create,
maintain, and e+pand customer rela!
tionships" Youre e+cited and read, to
begin del9ing into the process of creating
,our on CRM strateg,, hether at the
organiMation le9el or as it applies to ,our
specifc area or department" Before ,ou
do that, ed like ,ou to take a more
in!depth look at ho ,our current
customers are and hat their relationships
ith ,ou look like" Our model, the
Customer (er9ice:(ales 3rofle, ill help ,ou
to do three things"
)irst, it ill sho ,ou hat kind of
customer relationships ,oure tr,ing to
create" 6s ,our success based in initial,
stand! alone transactions; Or does the
nature of ,our product or ser9! ice put
customers in partnership ith ,ou o9er
longer periods of time; &o important is it
for ,ou to ha9e satisfed customers acting
as ord!of!mouth ad9ocates for ,ou in
the marketplace;
(econd, the Customer (er9ice:(ales
3rofle ill help ,ou identif, strengths in
,our current CRM practices" 09en in cases
here theres no formal CRM strateg,, if
,oure still in business,
5
>
L
,ou must be doing something right,
ma,be se9eral or man, things" #noing
hat right practices ha9e e9ol9ed naturall,
ill help ,ou create the greatest possible
impro9ement ith the least amount of
e+pense"
Third, because this process creates a
9isual image of ,our customer
relationships, ,ou ill fnd it helpful in
communicating to others throughout the
organiMation" #noing ,our current profle
and the desired profle ill naturall, help
,ou focus ,our energ, and attention"
8h, Call 6t the Customer (er9ice:(ales
3rofle;
8e call our model the Customer
(er9ice:(ales 3rofle because e9er,
business acti9it, is ultimatel, ?ustifed b,
ho it ser9es the customer" 09en if ,ou
and ,our team ne9er see a cash!pa,ing
e+ternal customer, the contribution ,ou
make must ha9e some
positi9e impact
on those e+ternal
customer
relation!
-ont *et
the
*anguage (top
You
-o ,ou ork in the
public sector or for a
non!proft organiMa! tion;
You ma, ant to
substitute the ord
ImemberK or IcitiMenK for
the ord Icustomer"K
$nd if ,ou rel, on ta+
re9enue, donations, or
grants for ,our operating
capital, ,ou ma, ant to
use ords like I
patronageK or
IsupportK instead
of Isales"K The point
is still the same:
,ou must add 9alue
to the indi9iduals
and organiMa! tions
that use ,our
ser9ices, bu, ,our
products, support
,ou fnanciall,"
ships or else ,ou
should strongl,
1uestion its 9alue and
purpose" 8e use the
phrase I(er9ice:(alesK
to remind us of three
impor! tant truths"
/ruth B*< Sales do
not eCual
relationships. 8a,
back in 5A4=,
Theodore *e9itt
rote an article
for the #arvar"
$usiness Revie
titled I$fter the
(ale 6s O9er"K 6n it
he e+plained that
the sale is
?ust the beginning of the relationship
ith ,our customerEa relationship
more akin to a marriage than to a one!
night
stand" $nd consultants, practitioners,
researchers, and authors ha9e been
building on this theme e9er since"
The Customer (er9ice:(ales
3rofle
5A
Yes, the sale is a
9er, important
point in customer
relationships"
&oe9er, it is
bracketed b, the
1ualit, of ser9ice
,ou are illing to
offer, able to
deli9er, and
credited ith
pro9iding to ,our
customers"
/ruth B.< Ser#ice
e$tends
(er9ice That
(ticks $uthor
and consultant
Ron Oemke is fond
of sa,!
ing, I3rice is a magnet that
dras cus! tomers in,
but ser9ice is the
Gelcro
TM
that keeps them
lo,al"K $re ,ou
IGelcroingK ,our
customers to ,ou b,
promising, pro9iding, and
taking credit for high!
1ualit, ser9ice;
beyond the buyer. 8hether ,oure
selling in!home plumbing repair or
pacemakers or e!business solutions,
creating a cus! tomer relationship,
maintaining that customer relationship,
and e+tending the opportunities ,ou
ha9e to do business together mean more
than ooing the indi9idual ho rites the
check or signs the contract" You need to
consider all the people ho touch or ho
are touched b, ,our product or ser9ice"
/ruth B3< Ser#ice and sales are on
the same team. $ll too often, e are
called into sales organiMations or customer
ser9ice departments that claim that
e9er,thing ould be better if Ithose other
peopleK in ser9ice or sales Iould ?ust
straighten up and get their act together"K
The sales people lament that the
customer ser9ice people ?ust complain,
complain, and complain about pesk, details
like a fe
Culti9ate the 0+perience
The 8ild Rumpus Bookstore in Minneapolis,
Minnesota, is often listed among the top
5< independent bookstores in the
Fnited (tates" (toreoners kno that parents
control hat their ,oung children read, ho
much mone, the, can spend on books, and
e9en hether or not the, 9isit 8ild Rumpus"
3arents are the bu,ers, ,et the e+perience 8ild
Rumpus creates for children is the dri9ing force
behind its success" 09er,thing about the store
Ethe fsh tank behind the bathroom mirrorZ
the hamsters that li9e belo the 3le+iglas
N
Hoor!
boardsZ the li9e chickens, cats, and reptilesZ
comfortable chairs for read! ingEis designed
to engage %oth children and their parents"
/< Customer Relationship Management
o9er!promises or a couple of tight
deli9er, deadlines" I-ont the, kno that
e9e got to promise those things to get
the sale;K
The customer ser9ice people roll their
e,es at 9isions of golf club!singing sales
t,pes teeing off ith unrealistic promises
and assurances that Ithe customer
ser9ice team ill be happ, to mo9e
mountains for ,ou"K I-ont the, kno e
ha9e policies; 6f e did that for this
customer, ed ha9e to make the same
e+ception for e9er, customer"K
The truth is that to in the game of
business, sales and ser9! ice ha9e to be
pla,ing on the same team" The phrase
(er9ice:(ales can ser9e as a reminder for
both groups that ,ou in onl, hen ,ou
ork together"
The Three *e9els of (er9ice:(ales
There are three ser9ice:sales le9els to
the Customer (er9ice: (ales 3rofle model
B)igure /!5C"
Le#el 3<
Customer
Ad#ocates
Le#el .<
Repeat
Customers
Le#el *<
,nitial
/ransactio
ns
)igure /!5" The three ser9ice:sales le9els
*e9el 5 is initial transactions" $t this le9el
,ou are focused on discrete, initial
interactions or stand!alone sales" This is
the foundation for e9er, business or
organiMation" Yet, e kno that the more
mone,, time, and energ, ,ou must in9est
in getting customers to come to ,ou in
the frst place, the harder it is to
be proftable ?ust orking at this le9el" $s e
noted in Chapter
5, its not unusual for customers to
actuall, cost ,ou mone, the frst time
the, do business ith ,ou" .ust consider
the ac1uisi! tion costs for ,our
customers B)igure /!/C"
3rofle
/5
/raditional Cost o( AcCuisition
Cost of
Campaign
Cost of $c1uisition [
'umber of Customers %ained
)or e+ample, a 'ature Reser9e Center might calculate its CO$ as:
3rint $d9ertising \ Radio
$d9ertising \ 8eb (ite
'umber of frst!time 9isitors
during campaign
[ V=< cost per ne
customer
Actual Cost o( AcCuisition
Cost of Campaign \ Cost of (taQ Time \ Cost of (er9ice
Breakdon
'umber of Customers %ained ! 'umber of Customers I*ostK
-uring This Time
3rint $d9ertising \ Radio $d9ertising \
8eb (ite \ (taQ time to gi9e
tours:e+planations:anser 1uestions
\ Cost to correct ser9ice problems
and misunderstandings
'umber of frst!time 9isitors !
number of customers IlostK
[ V//< cost per ne
customer
)igure /!/" Traditional 9ersus actual cost of
customer ac1uisition
$s ,ou can see, in order for our 'ature
Retreat Center to be proftable at *e9el 5,
the, need to:
R 6dentif, customers at risk of lea9ing,
ne9er to return, and fnd out ho the,
can oo them back"
R *ook for a,s to teach ne customers
more about hat the 'ature Retreat
Center offers and ho it orks so that
there are feer a9oidable ser9ice
issues"
R %i9e staff tools and training on a,s to
turn their interac! tions into re9enue!
generating opportunities hile at the
same time making guests feel ell
ser9ed"
6t ill be important for the 'ature Retreat
Center to focus on these impro9ements"
8hen initial transactions run smoothl,,
ith a minimum of fuss or error, it
pro9ides a strong foundation for future
business"
*e9el / represents repeat customers" $t
this le9el ,oure focused on getting
customers to return for a second, third, or
fourth time" Customers ma, come back
for the same purchaseE like the lo,al
Caribou Coffee customer, cordiall, knon
b, the staff as the Ie+tra large, skim latte
ith Caribou cookie"K Or the
// Customer Relationship Management
The -oor (ings Both 8a,s
-ont focus on attracting customers
and then neglect hat it takes to
keep them"
$ good friend ent to a local print shop for
her business cards" The oners ere acti9e in
the neighborhood association, ad9ertised in
the local eekl, nespaper, and offered lots of
deals for I sa9ings on ,our ne+t purchase"
I8hen she got her frst set of cards, she
disco9ered a misprintEone that asnt in the
proof" The, apologiMed and rushed to reprint her
cards" $gain, there as an error" I$fter the third
time, 6 ondered if the #e,stone #ops ere
running the presses,K she e+plained" IThe, so
anted me to come back there for m,
letterhead and other printing needs, but reall,LK
8e suspect that if the,d put the effort
into getting transactions right that the,d put
into making neighborhood relationships, the,
ould still ha9e our friends business"
customer ma, turn to ,ou for a 9ariet, of
products and ser9ic! esElike a car
insurance customer ho comes back to
her agent for homeoners, disabilit,, and
life insurance"
Repeat customers de9elop greater
economic and emotional ties ith ,ou"
$nd the, bring ith them an e+pectation
that ,ou ill 9alue those ties" )or e+ample,
the Caribou Coffee customer ma, e+pect
,ou to sa9e the last Caribou cookie for
him" $nd the insurance customer ill look
for a discount for ha9ing car, home, and
life insurance ith the same pro9ider"
Your CRM strateg, ill tell ,our team ho
much importance to place on repeat
customers" CRM tools ill help ,our team
identif, these
precious
members of
,our cus!
Reard
Repeats
)re1uent bu,er
programs are a
great a, to offer
e+tra 9alue to repeat
customers" The best
e+amples of these make
the process eas, for
both customer and
emplo,ee"
tomer mi+ and
prompt team
members to
notice and
9alue their
e+tended
relationship ith
,ou"
The top le9el
of the model is
customer ad9o!
cates" *e9el =
represents
those customers ho are not ?ust
satisfed and illing to do business ith
,ou again" These customers acti9el, tell
others
3rofle
/=
about their
positi9e e+peri!
ence" The, spread
the
good ord" You
might e9en
consider them to
be acti9e
participants on
,our mar! keting
team"
$s ,ou can see,
each le9el builds
upon the le9el
before" 8ithout
1ualit, ini! tial
transactions,
customers ont
ant to do
business ith ,ou
again" $nd its the
customer ho
sees himself
8hos Read, to
$d9ocate;
Customer satisfaction
sur9e,s often group
responses, reporting
back that
IA<T of our customers
are satisfed or 9er,
satisfed"K Both satisfie"
and ver! satisfie"
customers are likel, to
do repeat business
ith ,ouEbut onl,
the ver! satisfie" are
ripe to be customer
ad9ocates"
Make sure ,our
customer satisfac! tion
sur9e, reports help ,ou
to see the difference"
or herself in a positi9e relationship ith
,ou ho can pro9ide the strongest
ad9ocac, for ,ou and ,our products and
ser9ices" The (hape of Your Custom
(er9ice:(ales 3rofle
The shape of ,our Customer (er9ice:(ales
3rofle reHects the relationship among
these three le9els" 6t is dri9en b, the
nature of the product or ser9ice ,ou
offer, the e+pectations of ,our customer
base, and the forces of market
competition"
There are three basic Customer
(er9ice:(ales 3rofles: the
3,ramid, the &ourglass, and the &e+agon"
The 3,ramid 3rofle
The 3,ramid B)igure /!=C is the
con9entional a, to see the relationship
among the three le9els" 6t applies to the
ma?orit, of businesses" Consider a retail
department store, such as Minneapolis!
based Target (tores" 0ach da, hundreds of
cus! tomers alk through the doors of an,
one Target location" (till more customers
shop online at Target"com" Those
customers represent the base le9el of
initial transactions" The percentage of
those customers ho are lo,al to Target,
ho regularl, seek Target in preference to
its competitors, make up le9el /" $t the
top are those customers ho acti9el,
send their friends, famil, members, and
e9en business associates to Target" The,
tell positi9e stories about staff and
ser9ice"
/7 Customer Relationship Management
Le#e
l 3
Custo
mer
Ad#oc
ates
Le#e
l .
Rep
eat
Custo
mers
Le#e
l *
,niti
al
/ransac
tions
)igure /!=" This 3,ramid is the most traditional
profle
$s ,ou might imagine, not e9er,
p,ramid looks like a per! fect isosceles
triangle" )or e+ample, in some business
models, theres a 9er, strong emphasis
on repeat customers but less on
customer ad9ocates" $s one salesperson
for a large!scale com! puter application
told us, IYes, 6 think m, customers are
happ, enough to keep doing business ith
me" $nd 6m orking 9er, hard to keep
them happ," But, no, 6 ouldnt ant to put
m, e+isting customers in a room ith m,
prospects"K
6f ,ou dont trust ,our repeat customers
to help ,ou IsellK a prospect, then ,ou
ha9e p,ramid ith a broad middle and a
small top" 6t might be tempting to tell this
sales professional to go out and create
more ad9ocates" $nd that ould be a
danger! ous shift if it meant losing focus
on the repeat customer group" 6n a
3,ramid 3rofle, customer ad9ocates gro
directl, out of e+ceptionall, ell!satisfed
repeat customers"
The &ourglass 3rofle
The &ourglass 3rofle B)igure /!7C is less
common" 6n the &ourglass, ,ou ha9e a
broad base of initial transactions, onl, a
fe of hich become repeat customers"
&oe9er, ,ou seek to
3rofle
/D
Le#e
l 3
Custo
mer
Ad#oc
ates
Le#el .
Repeat
Customers
Le#e
l *
,niti
al
/ransac
tions
)igure /!7" The &ourglass 3rofle is appropriate
hen the bu,ing c,cle is long or hen ,our
product or ser9ice is a one!time purchase
create customer ad9ocates from as man,
of those initial trans! actions as
possible"
Consider the relationships beteen a
real!estate agent and her customers"
-iane, an agent in the business for o9er
5D ,ears, e+plains that she sometimes
gets a second sale, but rarel, a third
from most of her customers" I6 get a
second sale hen the initial house is their
Jstarter home" $fter to or f9e ,ears,
the, are read, to mo9e up" Man, of m,
clients are sell! ing because the, are
mo9ing out of the area" 6 dont get a sec!
ond chance ith them"K
Yet -ianes business is booming" &er
compan, has recog! niMed her as a top
performer for se9eral ,ears in a ro" I6
think m, secret is reall, no secret" M,
clients are m, biggest sales force" The,
are constantl, recommending me to
people the, kno ho are bu,ing or
selling a home"K
$n &ourglass is most stable hen it has
a strong base of ini! tial transactions and
those transactions are handled in such a
superior a, that customers are eager to
tell others about their e+perience" 8hen
this happens, the 3rofle creates its on
self!
#no 8hat
(uits
Your (hape
6f ,ou ha9e a
3,ramid 3rofle,
communication ith
e+isting customers ill
focus on repeat %usi&
ness, making the ne+t
sale"
6f ,ou ha9e an &ourglass
3rofle, communication
ith e+isting cus! tomers
ill focus on
recommen"ations, getting
referred for the ne+t sale"
Both are important, but
hich is most important
to ,our successE
repeats or
recommendations;
reneing energ,"
-iane,
for e+ample,
does put con!
siderable time
and effort into
maintaining
contact ith past
clients, sending
them calendars
and other
reminders, and
keeping
her name and
phone num! ber
easil, accessible
so clients ho
ha9e an incli!
nation to
recommend her
ill fnd it eas, to
do so" But -iane is
the frst to
admit that this process orks ith more
ease and Ho than in the earl, ,ears of
her business, hen she as less sure of
herself and less sure about satisf,ing her
clients"
The &e+agon 3rofle
6n the &e+agon 3rofle B)igure /!DC describes
a business that is 9er, stable" 6t has all the
repeat business it can handle or ants, so it
feels little moti9ation to acti9el, seek for
*e9el =, customer ad9ocates" 6t also feels
no strong moti9ation to focus on initial
transactions, since there are alread,
plent, of repeat customers
Le#e
l 3
Custo
mer
Ad#oc
ates
Le#e
l .
Rep
eat
Custo
mers
Le#e
l *
,niti
al
/ransac
tions
)igure /!D" (eemingl, stable, the &e+agon 3rofle
is actuall, 9er, 9ul! nerable, lacking a strong
base of initial transactions
3rofle
/>
W for the moment" This is a 9ulnerable
profle" (hould an,thing disrupt the core of
repeat customers, the business ill be
hard! pressed to replace them"
The &e+agon 3rofle can self!destruct
hen suppl, and demand are no longer in
balance and no longer orking in ,our
fa9or" 8e atched a small ad9ertising
agenc, go under because it as operating
under this profle" (ecure ith its three
ma?or clients and a stead, mi+ of small
IfllerK ?obs, the team focused on doing the
ork" The, paid little attention to groing
their
IfllerK ?obs into something more, or to
getting their name out to encourage ne
clients, or e9en to in9iting their current
clients to recommend them" 8hen frst
one and then to of the core clients
mo9ed their business, the team couldnt
replace them 1uickl, enough to sta, 9iable"
I6 ha9ent done marketing in so long, 6
dont kno here to begin,K one oner
sighed" &o much easier it ould ha9e
been if the,d asked for letters of rec!
ommendation and referrals months
before, hen their core cus! tomers ere
acti9e and satisfed"
3itfalls of the Customer (er9ice:(ales
3rofle
There are to common pitfalls that
cause indi9iduals and departments to
become misaligned around their
Customer (er9ice:(ales 3rofle"
*. ?ocusin+ on the top. 6ts personall,
and professionall, sat! isf,ing to ha9e
customer ad9ocates" &uman nature
6f Youre Out of (teak, (ell the (iMMle
The natural profle for &arle,!-a9idson
Motorc,cles is the
&ourglass" 3urchasers of the priMed bikes 1uickl,
become
ad9ocates" 6n fact, the, are often so an+ious to
be part of the &arle,! -a9idson famil, that the,
are ad9ocates e9en before taking title to
their ne machine"
8hen demand for these classic 9ehicles
e+ceeded suppl,, the com! pan, a9oided
mo9ing into a complacent &e+agon 3rofle b,
creating a special communit, for bikers!to!be"
This in9ol9ed purchasers in the ini! tial
transactionEe9en though it could take up to
to ,ears to recei9e their product"
.ust $skL
Fse customer
satisfaction sur9e,s
and focus groups to
fnd out both hat
satisfes and hat
disappoints ,our
customers" 6f ,ou arent
getting an, complaints,
,ou arent asking the
right 1uestions or the
right people"
,earns for that
positi9e
affrmation"
Beare of tak! ing
their praise so
much to heart
that ,ou begin to
think that an,one
ho
isnt an
ad9ocate is ?ust
too pick, and
hard to please"
.. ?ocusin+ on the (ront door. 6nitial
transactions are critical, but the,re onl,
one step in the customer relationship"
8hen a rush of acti9it, comes """ and
especiall, hen it sta,s """ its eas, to
get caught up in processing customers
through faster and fasterEI-ont orr, if
its not perfect, someone else is
aiting to be ser9edLK Yet, hen the
rush is o9er and ,oure aiting in 9ain
for the ne+t ne customer, all those
initial transactions ill be looking for
someone else, some! one more
ser9ice!oriented, for their ne+t
transaction"
CRM and Your
3rofle
-ont Treat $ll
Customers the
(ame $ tra9el
agenc, oner e
kno shared a hard lesson
he learned during one of
the airline fare ars"
ICustomers ere calling
night and da,, on hold for
=<, 7< minutes or
more aiting to talk
to an agent" $nd m,
agents ere
doggedl, orking to
get to e9er,one"
Most of them ere
people hod ne9er
called us before
and probabl, ont
call us again" $nd hile e
ere tied up ith them,
lots of our regular
customers got frustrat!
ed and mad, and some
ha9e left" The, felt e
oed it to them to ser9e
them frst" $nd, ,ou kno, 6
think the,re right"K
(o, hats ,our
Customer
(er9ice:(ales
3rofle; $re ,ou
operating as a
3,ramid; $s an
&ourglass; Or as a
&e+agon; 6ts
important to
kno hat kind
of cus! tomer
relationships
,ou9e been
creating so that
,ou can be
thoughtful and
strategic in
choosing hat
kind of customer
relation! ships
,ou ant to
create from this
point forard"
8hat orks
about ,our current
profle; $nd hat
3rofle
/A
ould ,ou like to change; The ansers to
these 1uestions ill help to shape ,our CRM
strateg," You ill fnd that its easier to align
,our teamEand ,our organiMationE
around a clear and consistent CRM
strateg, if ,ou all share a common 9ision
of ,our Customer (er9ice:(ales 3rofle"
Managers Checklist for Chapter /
8here is ,our customer relationship
emphasis; 6s it on creating initial or
stand!alone transactions B*e9el 5C; 6s it
repeat customers B*e9el /C; Or do
customer ad9ocates
B*e9el =C dri9e ,our success;
You cant ha9e a customer relationship
ithout ser9ice and sales orking
together, creating positi9e
e+periences for the customers ho
gi9e ,ou the mone, and for e9er,one
else at the customer site ho touches
or is touched b, ,our product"
The 3,ramid 3rofle is the most common"
6nitial transac! tions lead naturall, to
repeat business and a percentage of
those repeat customers mo9e into
ad9ocac,"
The &ourglass 3rofle describes
relationships ith cus! tomers here
the bu,ing c,cle is long" The focus
is on turning customers into
ad9ocates based on their initial
e+perience ith ,ou"
The &e+agon 3rofle represents an
organiMation at risk" 6t ma, seem stable,
but it lacks a strong base of initial
trans! actions and has fe customer
ad9ocates to help dri9e ne marketing
efforts"
Managing
Your
Customer
(er9ice:
(ales 3rofle
8
hats ,our Customer (er9ice:(ales
3rofle; To determine ,our profle, look
at each of the three le9els" 8hat
percent!
age of ,our customer transactions are
initial or stand!alone trans! actions and
hat percentage of customer transactions
represent repeat business relationships;
'e+t, of ,our total customer base, hat
percentage do ,ou consider to be real
ad9ocates;
*ets follo our e+amples from Chapter
5Ethe consumer product contact center
and the food brokerageEto see ho the
process of managing to ,our Customer
(er9ice:(ales 3rofle unfolds"
(on?ias Contact Center
(on?ia is creating a profle for her
consumer product contact center Bsee
Chapter 5C" 8hen she looks at the
customer traffc, she knos that most of
contacts are frst!time:one!time" $ con!
sumer has a product 1uestion or
concern, recei9es an anser, and then
ma, not e9er ha9e a need to contact the
center again" (he puts these contacts in
*e9el 5, e9en though the indi9idual
consumers ho call or e!mail ma, be
lo,al repeat users of the
=<
L
Managing Your Customer(er9ice:(ales
3rofle
=5
Le#e
l 3
Custo
mer
Ad#oc
ates
7
D
Le#e
l .
Rep
eat
Custo
mers
Le#e
l *
?irst9
/ime0&ne9
/ime
/ransac
tions
)igure =!5" (on?ias consumer product contact
centerE3,ramid
3rofle
product" Theres a segment of consumers
ho contact the center repeatedl," (on?ia
puts this group in *e9el /" )inall,, she learned
in a recent Customer (atisfaction (ur9e,
that about 2T of those ho contact the
center ha9e positi9el, recommended the
center to other customers" (on?ia puts that
percentage in *e9el ="
$s ,ou can see in )igure =!5, the
consumer product contact center has a
3,ramid 3rofle" Fsing this 9isual image,
(on?ia can begin to la, the groundork for
her CRM strateg," B8ell get into crafting a
strateg, in Chapter 7"C
)irst, (on?ia ill ant to compare this
profle ith her desired profle"
)or e+ample, research suggests that if a
consumer com! plaint or concern is
handled 1uickl, and easil, in the frst con!
tact, there can be an opportunit, for an
add!on sale" To take full ad9antage of this,
(on?ia might look for a,s her CRM strateg,
could encourage more repeat customers
and thus more sales opportunities" This
ould change the proportions in her ideal
3,ramid 3rofle, reHecting a greater
emphasis on repeat cus! tomers B)igure =!
/C" The percentages for *e9els 5 and /
should e1ual 5<<T" These le9els represent
customer transactions ith
=/ Customer Relationship Management
Le#e
l 3
Custo
mer
Ad#oc
ates
*5
D
Le#e
l .
Rep
eat
Custo
mers
65
D
Le#e
l *
?irst9
/ime0&ne9
/ime
/ransac
tions
75
D
)igure =!/" (on?ia keeps the 3,ramid 3rofle
but increases the emphasis on Repeat
Customers, *e9el /
,ou" *e9el = is the percentage of ,our
total customer base ho feel so positi9e
about their e+perience that the, acti9el,
ant to, and do, tell others"
(on?ia ma, determine instead that
repeated contacts mean that a
customers concern or complaint as not
handled in the initial contact" 6n this case,
she ma, be satisfed ith her e+ist! ing
profle"
Or, (on?ia ma, belie9e that a more ideal
profle ould be some form of the
&ourglass B)igure =!=C, here initial
transac! tions are handled so ell that
customers dont feel the need to call
again, but the, speak positi9el, about
their e+perience to
others" (o, her CRM strateg, then ould
focus on support!
ing her team in
resol9ing
(tud, Your
(hape 8hat is
the shape of ,our
Customer
(er9ice:(ales
3rofle; 6s this profle
orking ell for ,ou and
,our team; Or might ,ou
be better ser9ed b,
seeking a different profle;
customer
contacts right
the frst time an"
encouraging
those customers
to share their
positi9e
e+periences ith
others"
'e+t, keeping
in mind the
profle she ants
to
3rofle
==
Le#e
l 3
Custo
mer
Ad#oc
ates
35
D
Le#el .
Repeat
Customers
*:
D
Le#e
l *
?irst9
/ime0
&ne9
/ime
:.
D
)igure =!=" $n &ourglass 3rofle reHects greater
emphasis on
Customer $d9ocates, *e9el =
create, (on?ia can consider ho ell she
and her team currentl, manage
transactions at each le9el" 8hat are the
best practices that allo customer contact
representati9es to resol9e problems
during the initial transaction; $re there
information technolog, s,stems and
supports, such as a customer!facing 8eb
page ith easil, accessible ansers to the
most fre1uentl, asked 1ues! tions,
ansers that ork ell to satisf,
customers; 8hat is it that causes 2T of
customers to mo9e into the le9el of
ad9ocac,; These are right practices that
(on?ia ill ant to reinforce ith her CRM
strateg,"
-ont $ssume $ll Repeat
Customers $re %ood
$n important issue for a ser9ice group like the
consumer
product contact center is to kno if repeated
contacts are good or bad" $ repeat customer
ma, be someone hos disco9ered e+tra 9alue
b, contacting ,ouEor someone ith
complaints" 6ts meaningful to segment ,our
repeat customers" &o man, contact ,ou ith
a ser9ice problem; &o man, contact ,ou
because the, recei9e 9alue from the contact;
This ill help ,ou determine hether or not, and
ho, ,ou ant to
gro at this le9elEke, information for ,our CRM
strateg,"
=7 Customer Relationship Management
)inall,, (on?ia can look for a,s to
impro9e the customer e+perience b,
asking these 1uestions:
R 8hat isnt happening that should be
happening;
R 8hat is happening that shouldnt be
happening;
R 8hat is happening that could happen
better;
-ont ?ust look
at face!
*o9e 6t
*ose 6t
6mpro9e
6t
09aluating
Best
3ractices
to!face and
phone!to!
phone
interactions"
Consider, too,
ho cus! tomers
e+perience an,
self!ser9ice
features, such
(peaker, trainer, and
consultant Robin %etman of
Minneapolis!based 6nter$CT
%roup uses these
categories hen she
e9aluates best practices"
IYou can use these
categories hen ,ou ask
customers for feedback
or hen ,ou are orking
ith ,our on team to
impro9e ser9ice and
product 1ualit,,K e+plains
Robin" 8hat do ,ou need to
lose; 8hat should ,ou
impro9e; $nd hat do ,our
customers and ,our team
members ?ust lo9e;
as an interacti9e
8eb site, and at
ho the
processes,
policies, and
procedures
affect the
customers per!
ception of
ser9ice and
9alue"
Maurices )ood
Brokerage
*ooking at the
three le9els of
customer
interaction
re9eals something 9er, important to
Maurice" &is current Customer (er9ice:(ales
3rofle is a &e+agon B)igure =!7C" The bulk of
his business is in *e9el /, repeat business"
These are his
Istead, customers"K
$lthough hes on the lookout for ne
clients, there are a limited number of
restaurants in his communit," $nd, to be
frank, man, ne restaurants ?ust dont
make it" (o, Maurice is understandabl,
reluctant to e+tend credit or make
deli9eries to a ne 9enture that is likel, to
pa, late W or not at all"
Restaurant oners, and chefs in
particular, are an opinionat! ed group, not
sh, at all about gi9ing Iconstructi9eK
feedback on product 1ualit,, price, and
ser9ice deli9er," Maurice under! stands,
IMargins are 9er,, 9er, tight and its their
reputation on
3rofle
=D
Le#e
l 3
Custo
mer
Ad#oc
ates
Le#e
l .
Rep
eat
Custo
mers
Le#e
l *
?irst9
/ime0
&ne9
/ime
/ransac
tions
)igure =!7" Maurices emphasis is on *e9el /,
Repeat Customers
the line"K $lthough hes proud of the name
hes earned in this marketplace, Maurice
hesitates to put man, customers in *e9el
=, ad9ocac,"
8e kno that the &e+agon 3rofle can be
risk, if an,thing happens to disrupt the
Istead, customersK at *e9el /" &oe9er,
gi9en the nature of this marketplace and
Maurices ,ears of e+perience in the
business, he belie9es the &e+agon is the
right profle for him" The &ourglass ould
be an ob9ious mismatch because it de!
emphasiMes repeat business, Maurices
bread and butter" $nd, the 3,ramid
doesnt ork either because, as Maurice
might sa,, I6f 6d anted that man, stand!
alone trans! actions, 6d go into in the
grocer, store business"K
To keep his profle stable, Maurice ill
need a CRM strateg, that balances
emphasis on repeat customers ith
appropriate attention on initial transactions
and nurturing customer ad9ocates"
'o, like (on?ia, Maurice can look at
ho he and his team manage transactions
at each le9el, looking frst at right prac!
tices and then at the gaps" &ere are
e+amples of hat Maurice is likel, to see"
(teps Toard (tabilit,
Tightl, niched industries and
marketplaces here there are a 9er,
limited number of potential customers
or ?ust a fe
ma?or pla,ers often create &e+agon 3rofle
conditions" There are to creati9e a,s to
mo9e to reduce 9ulnerablit,"
-i9ersif, ,our product and ser9ice offerings"
&o could ,ou cre! ati9el, appl, hat ,ou
kno and hat ,ou offer to other markets;
Create scalable orkforce solutions" )or
e+ample, ,ou ma, ant to use more contract
or outsource emplo,ees so that hen ,our
*e9el / business shrinks, ,ou can ad?ust pa,roll
accordingl,"
Right 3ractices for Repeat Customers
Maurice and his team regularl, offer special
deals or make spe! cial arrangements to
assist long!term, high!9olume customers"
6ts something his customers e+pectEand
its a smart business decision" This is a
right practice" Maurices CRM strateg, should
reHect the fact that some customers are
economicall, more important and orth
more concessions and accommodations"
-ri9ers create personal relationships ith
the kitchen staff members ho take charge
of the deli9ered goods" $lthough
these indi9iduals often dont place the
orders or ha9e the fnal sa, on hats
acceptable or not acceptable, the, can be
a po! erful internal force, rela,ing
information about product a9ailabil! it, and
upcoming specials to the chef or
restaurant oner" Maurices CRM strateg,
and the tools he chooses to support it
should support Truth X/, ser9ice e+tends
be,ond the bu,er" Opportunities to
6mpro9e 6nitial Transactions
$ll this IspecialK treatment for *e9el /
business could make a
0+cellent 0+planations
(ome people are great ith ords and
kno ho to sa, ?ust the right thing in ?ust
the right a," Fse their skill and e+pertise to
create model Ie+cellent e+planationsK to share
ith other emplo,ees" #ristin $nderson and Ron
Oemke pro9ide man, e+amples and models for
this in their book, Knock Your Socks O' (nsers)
Solving Customer *ightmares an" Soothing
*ightmare Customers B$M$COM BooksC"
3rofle
=>
$9oid Making $n, Customers
)eel *ess 6mportant
(,stems can also contribute to that Isecond!
classK feeling"
$ hospital e kno offers cafeteria food at a
loer cost to emplo,ees and ph,sicians" The,
consider this special accommodation to these
inter! nal customers a good business decision,
and ere inclined to agree" The problem; To
s,stems"
The frst is the price signage in the cafeteria
area" 6t lists the dis! counted price frst and the
IregularK patient:famil, member:guest price
second, so it seems that e+ternal customers
are suffering a sur! charge at the hospital
cafeteria" $ simple change in the order of the
prices ill impro9e e+ternal customer
satisfaction"
The second s,stem is the manner for
determining the emplo,ee dis! count, fgured
item b, item" 6f the cafeteria ere to sitch to
a percent! age discount, then separate pricing
ouldnt be necessar, and the spe! cial
accommodation ould no longer be ob9ious to
e+ternal customers"
-o ,ou ha9e s,stems that make some
customers feel less important;
frst!time customer feel like a second!
class citiMen" Maurice and his team could
lessen this negati9e feelingEand thereb,
create a better *e9el 5 e+perienceEb,
changing the tone of their com!
munication during initial or stand!alone
transactions" This is largel, a soft skills
issue" Team members at all le9els need to
kno hen and ho to e+plain the tiered
ser9ice le9els" Otherise, in the absence
of aareness and training, *e9el 5
customers could hear, I8e dont ha9e an,
of the good aspara! gus for ,ou because it
all ent to the important customers"K
'urturing Customer $d9ocates
Maurice has ne9er formall, asked a
customer for a recommen! dation or
e9en for a response on a customer
satisfaction sur9e," 6ts time to test his
belief that customers in this business
seldom, if e9er, mo9e to *e9el =,
ad9ocac," 8hats more likel, to be true is
that ad9ocac, for this customer group ill
look different than in other industries"
$lthough chefs are unlikel, to phone each
other and ra9e, IOh, ,ou ha9e to tr, M)Bs
asparagus,K ord gets around about hich
suppliers are best" (omeone is talking" $nd
that implies that theres a a, to disco9er
hos talking,
8ork $gainst
the
'umbers
Fnhapp, customers
ma, tell eight, 5D, /<, or
e9en more people about
their e+perience"
Ger, satisfed
customers ma, talk to
f9e people"
The numbers ork
against ,ou, gi9en that e
tend to share bad nes
and tell stories about the
poor ser9! ice e9e
suffered, rather than to
pass on a good ord"
Make sure ,ou treat ,our
ad9ocatesEthese
positi9e ser9! ice
partnersElike gold" Thats
e+actl, hat the, can
bring ,our a,L
about hom,
hen, and
here" )inding
out is the frst
step toard
nurturing
customer
ad9ocates"
$s these
e+amples sho,
e+amining ,our
pro! fle pro9ides
,ou ith
important
information" )or
the remainder of
this chapter, ell
share some
additional tips for
manag! ing all
three le9els of
cus! tomer
interaction,
hate9! er ,our
Customer
(er9ice:(ales
3rofle"
Managing 6nitial or (tand!$lone
Transactions
*e9el 5 is here customer relationships
are born" Think of these transactions as
auditions" Customers use this contact to
form impressions, to make e9aluations,
and to decide hether or not to do
business ith ,ou again or speak ell of
,ou to others"
There are three ke,s to managing
initial or stand!alone transactions for
success"
&o (mall 6s a (mall;
8e9e noticed a trend at mo9ie
theater concession stands and fast food
restaurants" The old siMes orked fne
for usE
Ksmall, medium, and large"K But e arent ala,s
sure hat to make of choices like Ichild, small,
large, and e+tra 9alue"K 8hate9er happened to
medium or regular!siMe drinks; Carol asked
recentl, at her local theater"
IOh, thats large,K the counter ser9er replied
holding up a large cup"
IRegular is small no, but if ,ou ?ust sa, regular,
6d gi9e ,ou the large"K &uh; IFnless ,ou reall,
ant a small, hich is the child siMe"K
-o ,our customers e9er feel caught in an
$bbot and Costello rou! tine because ,ou9e
created a uni1ue 9ocabular, to describe ,our
product offerings; #eep it simple"
3rofle
=A
"ey B*< Make Systems Simple. The
more ob9ious and intu! iti9e ,our
processes and procedures are for both
customers and emplo,ees, the easier it
ill be to create a superior ser9! ice
e+perience" This is as true for traditional
bricks!and!mortar retail stores as it is for
inno9ati9e 6nternet applications"
"ey B.< ?en+ Shui the
;$perience. The
transac! tion
should progress in
a a, that feels
natural for both
customers and
emplo,ees" 0ach
step should Ho
easil, from the
step before"
$nsering these
three 1uestions is
a good a, to
start:
#o can !ou
make it eas&
?en+ Shui Translated as
Ithe a, of ind and ater,K
the ancient Chinese
practice
of anal,Ming the building,
en9ironment, people,
and time in order to
create ma+imum
harmon,, health,
prosperit,, and beaut,"
)eng (hui the customer
e+perience b, looking at
a,s to increase ease of
access, Ho of process,
and the aes! thetics of
the setting"
ier for customers to get to !ou+ Think
about here customers might search for
,ou, such as through online or printed
direc! tories, ,our location, the signage
that tells them the,9e arri9ed at ,our
location, and the ph,sical process of
entering"
)or e+ample, a slo!loading 8eb site and a
hea9, door atop a long Hight of stairs
could discourage customers from
pursuing initial transactions"
#o can !ou streamline the process of
"oing %usiness+ 8e noted ith interest the
recent recommendation that Mc-onalds
offer feer menu choices" The fast!food
giant as a pioneer ith combo meals
that made customer ordering easier"
Fnfortunatel,, that e9ol9ed into confusion as
Mc-onalds sought to offer more and
more possibilities"
#o can !ou make the service
environment frien"lier an" more inviting+
*ook ith fresh e,es at ,our ser9ice
en9iron! ment" 6t could be the retail sales
Hoor, ,our online support site, or the a,
the ser9ice representati9e looks and
acts hen on! site ith a client" Consider
use of space, color, and light" (it in
3oinsettias in March;
8hen ,oure in an en9ironment e9er,
da,, its eas, to lose aareness"You no
longer notice itEuntil someone or
some!
thing brings it to ,our attention"
#ristin recalls making this point at a hospital in
the Midest" (he as interrupted hen a oman
near the back of the room let out a loud
IOh, m, goshK and started laughing" I6 ?ust got it,K
she e+plained" IThis morning 6 came here through
the front door, not the emplo,ee door,
because 6 anted to see m, mom ho ?ust had
surger," 6ts March and there are to dead
poinsettias in the entr,a,, left o9er from the
holi! da,s" 6 didnt realiMe until ?ust noEe ask
patients to trust us ith their li9es hen e
cant e9en notice hen a plant is dead"K
*ook around ,our ser9ice en9ironment ith
the e,es of a customer and ,ou too ma, be
amaMed at hat ,ou see"
the furniture" (tand in line" *og on"
0+perience it the a, ,our customers do"
"ey B3< Capture the &pportunity. 09er,
*e9el 5 transaction is a customer ho ma,
mo9e to *e9el / or =" You need to cap!
ture information that ill allo ,ou to
in9ite this customer
back for another 9isit" 8ithout a focus on
capturing the oppor! tunit,, emplo,ees
ma, begin to see customers as
replaceable: hen one goes aa,,
another comes to fll the space" 6ts ala,s
dangerous to take customers for granted"
Managing for Repeat Business
*e9el / of the profle represents repeat
business" This is here most organiMations
make their greatest proft" 6f ,ou manage an
internal ser9ice group or a non!proft
organiMation, this is here ,ou ill,
traditionall,, pro9e the most 9alue to ,our
stakeholders" 6ts helpful to look at
managing repeat business from to
perspecti9es" The frst is indi9idual
customers ho make multi! ple
purchases ith ,ou o9er time" This could
describe a fnan! cial ser9ices client
purchasing stocks, bonds, and other
in9est! ment 9ehicles" Or a lo,al retail
customer" Or e9en an emplo,ee
ho turns to technical support for training,
problem sol9ing, and ne e1uipment
installation"
3rofle
75
"ey B*< /rack the Relationship. 6deall,,
,our CRM database tool should allo ,ou to
capture the histor, of each customer so
that ,ou can e9aluate and predict
purchase and use pat! terns" 8here thats
not possible or a9ailable, ,ou can still
cre! ate t,pical customer use profles
based on customer t,pe and segment"
"ey B.< Allow (or Eariation. Customers
ant to be catered to" The, seldom belie9e
that one siMe fts all" (o create a,s for
customers to ha9e the e+perience of
customiMing" $l9in TofHer rote about
"emassi,cation as the shift aa, from the
Ione siMe fts allK attitude epitomiMed in the
comment b, &enr, )ord, IThe consumer can
ha9e an, color he ants, so long as its
black"K You can create controlled
demassifcation for ,our customers"
Toda,s car bu,ers can ha9e an, color the,
ant W from the palette of colors offered"
8here can ,ou gi9e ,our customers scope
to shape their on ser9ice e+perience;
"ey B3< Look (or &pportunities to
;$pand the Relationship. $maMon no
sells ?ust about e9er,thing, including, of
course, books" Our fa9orite Minneapolis
restaurant, Te?as, offers its sig! nature
salsa b, the ?ar" $t Can,on of the 0agles
'ature 3ark and *odge, the,ll recom!
mend a hiking
trail and pack ,ou
a lunch" 8hat
else might ,our
repeat
customers ant
or need; Could it
make sense for ,ou
to pro9ide it;
The second
perspecti9e for looking
at repeat busi! ness is
that of indi9iduals
and organiMations
ith mul!
'ot .ust
3roducts, but
(er9ices
(taples"com is
more than
?ust oSce supplies"
Customers 9isiting the site
ill fnd that I%reat
ser9ice e9er, da, in
e9er, a,LK also means
business ser9ices,
including an I$sk the
0+pertsK site" 6ts a great
a, for (taples to keep
customers coming
back to its site and into its
stores"
tiple bu,ing relationships" )or e+ample, a
bank customer ma, ha9e checking,
sa9ings, and in9estment accounts as ell
as a line of credit" Or se9eral or man,
departments in a corporation ma, ha9e
bu,ing relationships ith the same offce
suppl, store"
"ey B*< Connect the Relationships. $
customer ith multiple relationships not
onl, represents a greater economic
9alue to ,ou, but also brings additional
e+pectations and assumptions" 8hen ,our
CRM tools capture and connect the
relationships, ,ou help ,our ser9ice
pro9iders meet the customers needs
and e+pectations" )or e+ample, a
corporation ma, e+pect and negotiate a
9olume discount on oSce supplies based
on total purchases across departments,
e9en though some indi9idual
departments bu, onl, a fe items"
"ey B.< Don't !old &ne Relationship
!osta+e to Another. This is often an
accounts pa,able:credit issue" 8hat
passed for CRM in not too distant da,s as
often a re9ised 9ersion of the accounting
database, since this as often the largest
and most accurate source of customer
information" &oe9er, it as designed to
collect mone, or assess the risk of not
collecting mone," $nd it as 9er,
conser9ati9e in its assessments" 8e9e
heard more than one horror stor, here
an o9erdue bill for
some small amount from one small
department caused the s,s! tem to
change all deli9eries to CO-Eor orse,
putting the
entire customer relationship at risk"
"ey B3< Calculate the /otal Ealue o( the
Customer. 6ts helpful for emplo,ees to
kno the economic 9alue of customers
ith multiple relationships" You can use
real numbers from real cus! tomers or
,ou can create 9alue models for t,pical
customers ithin a segment"
Managing for Customer $d9ocac,
*e9el = customer transactions are the
most elusi9e" Yes, ,ou can identif,
customers ho are illing to
recommend ,ou or ho ha9e done so"
But ,ou cant make customers
ad9ocate on ,our behalf " " " or can ,ou;
'o, ,ou cant make them do it" &oe9er,
,ou can nurture
and encourage themEith poerful
results"
"ey B*< "now Fhat's Forth /alkin+
About. Customer ad9o! cates belie9e
,our ser9ices and products are orth
talking
3rofle
7=
You Cant Bu, Marketing *ike This
(aturn recogniMed the poer of
customer ad9ocates earl, on" The ne
(aturn approach to the car!bu,ing
process, and the
1ualit, of the car itself, as orth talking about"
$nd customers didL (aturn put some of those
same customers in Ireal peopleK ads and in9it!
ed others to rite in ith their stories"
Customers actuall, competed ith each other
for a chance to help sell (aturns"
about" (o, ,ou need to listen to them to
fnd out hat the,re sa,ing" -isco9er
hat features, hat benefts, hat
aspects of the e+perience the,
recount hen
the, recom!
mend ,ou" The,
ma, not be the
same things ,ou
thought most
important or most
impressi9e"
"ey B.< Chan+es
Forth
/alkin+ About.
You dont
8hat Can You
*earn from
Customers;
$9ons (kin!(o!(oft
is more
than great lotion"
Customers sore b, it
for ,ears as a bug
repellant" Onl, more
recentl, has $9on shared
that claim in its
ad9ertising"
keep customer ad9ocates b, doing the
same old thing" 8hat as impressi9e
,esterda,
is ho!hum toda,"
Carol still recalls
the frst time she
9isited her
healthcare clinic
and "i"n-t need to
present her
insurance cardEit as
all in the computer,
printed out and aiting
for her" 'o she ?ust
e+pects that"
#eep Making
Memories
The customers
personal e+peri!
encesEonce so
fondl,
rememberedE
ma, fade" To keep
those 9er, satisfed
customers as ad9ocates,
its helpful to update them
on changes and
impro9e! ments" #eep
impressing those cus!
tomers so the, keep
promoting ,ou"
"ey B3< Prompt Ad#ocates to Share
/heir Recommendations. Man,
ad9ocates are illing to recommend ,ou
but dont fnd themsel9es in con9ersation
ith the right people" You can get
poerful results ?ust b, asking for their
recommendations" &ere are a fe ideas:
(sk satis,e" customers for referrals. 8e
kno, e kno: ,ou co9ered this in ,our
(ales 5<5 class" (o, do ,ou make a practice
Take M, 8ords
for 6t
Customers ma, be
reluctant to rite a
testimonial simpl,
because the, dont
belie9e the,re cle9er
ith ords" Others are
?ustE like man, of usE
intimidated b, the blank
page" 6f ,ou sense this is
the case hen customers
hesitate to pro9ide
testimonials, ask if it ould
be helpful if ,ou got them
started" Then, using real
customer language, rite
the testimo! nial ,oud
lo9e to recei9e"Your cus!
tomer ill make changes """
and ,oull ha9e a
testimonial"
of doing it; 6t
remains an
e+cellent a, to
build ,our client
base"
Collect an"
"istri%ute cus&
tomer
testimonials. 6n
,our literature, on
,our 8eb site,
posted on ,our
allsEhere9er
others ma, see
it"
%i9e
customers an,!
thingEfrom
matches to
coffee cups to
cr,stal 9asesE
ith ,our name
and contact
information"
This a, ,our name is easil, ithin reach
hen the opportunit, arises for a
customer to recommend ,ou"
RecogniMe customers ho recommend
,ou" $t The (leep 'umber (tore, sales
associates ask customers if the, kno
an,one ho ons a (elect Comfort bed"
The associate takes don the name" 6f the
customer bu,s a bed, the associate
searches for the friend in the database
and has a thank!,ou sent out" I6 got a check
for VD<,K a friend told us" IYou bet 6m going
to recommend them again" $nd 6 lo9e m,
bed" &a9e ,ou tried (elect Comfort; You
reall, should W"K
Managers Checklist for Chapter =
Create a 9isual image of ,our
Customer (er9ice:(ales 3rofle b,
gi9ing a percentage to each of the
three le9els: *e9el 5Einitial
transactions, *e9el /Erepeat
customers, and *e9el =Ecustomer
ad9ocates"
6s ,our profle a 3,ramid, an &ourglass, or
a &e+agon; Compare the profle ,ou
ha9e ith the profle that ,ou see as
ideal for ,our customers in this
market"
6dentif, current right practices and
opportunities for impro9ement" $sk
these three 1uestions: 8hat isnt hap!
3rofle
7D
pening that should be happening; 8hat
is happening that that shouldnt be
happening; 8hat is happening that
could happen better;
Fse the three ke,s to manage *e9el 5
initial or stand!alone transactions" #e,
X5: Make s,stems simple" #e, X/: )eng
(hui the e+perience so its eas,,
friendl,, and in9iting" #e,
X=: Capture the opportunit, to in9ite
this customer back for another 9isit"
Manage *e9el /, repeat business ith
customers ho make multiple
purchases" #e, X5: Track the
relationship" #e, X/: $llo for 9ariation"
#e, X=: *ook for opportunities to e+pand
the relationship"
Manage *e9el /, repeat business ith
multiple bu,ing rela! tionships" #e, X5:
Connect the relationships" #e, X/:
-ont hold one relationship hostage to
another" #e, X=: Calculate the total
9alue of the customer"
Manage *e9el =, customer ad9ocates"
#e, X5: #no hats orth talking
about" #e, X/: 8hats orth talking
about changes" #e, X=: 3rompt
ad9ocates to share their
recommendations"
Choosing Your
CRM (trateg,
M
ission statements, 9isions,
strategies " " " all ha9e gotten their
share of bad press" -o the, reall, do
an,thing to help
in the da,!to!da, business battle; )ull of
buMMords and o9erl, general, man, are not
actuall, orth the paper on hich the,re
printed" $nd its a shame" 6ts not because
riting them, dissemi! nating them, and
rall,ing around them at compan, meetings
takes time that could be more producti9el,
spent elsehere" 6ts a shame because, to
succeed, organiMations actuall, nee" to
ha9e
a clear mission or 9ision of here the,
ant to be and a ell! defned strateg,
statement to pro9ide a map for getting
there" $s ,ou read Chapter 5, ,ou
thought about the approach
that ,our organiMation and ,our area take
in dealing ith cus! tomers" You considered
,our place in ,our market and hat dri9es
customers to do business ith ,ou" 6n
Chapter /, ,ou put that information into
,our Customer (er9ice:(ales 3rofle and
considered hether the profle ,ou ha9e is
the profle ,ou ant"
'o, ,ou can build on that and use this
chapter to create ,our on CRM strateg,
roadmap" 8ell take ,ou through the
process in detail, so hether ,oure
creating a CRM strateg, for
72
L
Choosing Your CRM (trateg,
7>
)un ith Catbert
%o ahead and let ,ourself ha9e some
fun before ,ou get don to the
serious business of riting ,our CRM
strateg,
statement"Gisit (cott $dams 8eb site and tr, the
Mission (tatement %enerator at
"unitedmedia"com:comics:dilbert:career:ind
e+"html" 6f ,our on CRM strateg, sounds at all like
something that might appear in a -ilbert
cartoon, go back to the draing board" To sta,
out of the comic pages:
R Fse e9er,da, language" $9oid buMMords and
?argon"
R Make the end goal measurable" B, humans"
8ithout spending a 1uarter of a million dollars"
R &a9e a orkable plan" (trateg, is ho ,ou get to
here ,ou ant to be" .ust as I8in a million
dollarsK is a nice thought, but not a orkable
strateg, for personal ealth, ICapture all useful
information about e9er, customer ho does
business ith usK ma, not be a orkable
strateg, for CRM success"
,our entire organiMation or ?ust for ,our
corner of its orld, ,oull feel confdent
leading the a," $nd ,our resulting CRM
strateg, ill help put ,ou and ,our team
ahead of ,our competition" CRM (trateg,
(tarting 3oints
6n the ideal orld, e9er, organiMation ould
ha9e a clearl, defned CRM strateg," $fter all,
effecti9el, satisf,ing customers is the
foundation of an, organiMations success" 6f
,ou manage in an organiMation thats
fortunate enough to ha9e such a CRM
strateg,, take a moment to realiMe ho
luck, ,ou are" B6ts so eas, to focus on
hat organiMations fail to pro9ide that its
especiall, important to gi9e credit and
take pride in hat the, do ell"C
6f ,oure not sure hat ,our organiMations
CRM strateg, is, no is the time to fnd out"
(ometimes the issue isnt that the
organiMation lacks a CRM strateg,, but that
the strateg, hasnt been communicated"
)ind out hich area in ,our compan, takes
onership for the ma?or CRM tools currentl,
in use" Often, this is the 6T or information
technolog, group" Other times its
marketing or sales" Talk ith them about
the strateg, that directed them to use
these tools"
(tart ith (trateg,
Be aare that the CRM strateg, ma, be
rolled into a larger strateg,Esuch as a
customer ser9ice strateg, or e9en the
o9erall business strateg,"Youre looking for
clear direction on ho ,our organiMation plans
to create, maintain, and e+pand customer
relation! ships" 6f thats clear, hat its called is
less important than the fact that it e+ists and
that its orking"
$ 9ision thats supposed to dri9e strateg, and
states that ,our com! pan, ill succeed b,
Ibeing orld!classK is too 9ague to guide CRM
efforts" &oe9er, if the 9ision goes on to detail
hat Iorld!classK looks like, feels like, and
means to ,our current and target customers,
then ,ou ma, ha9e hat ,ou need to build a
inning strateg,"
$nd if no CRM strateg, e+ists; You ha9e
to choices" One, ,ou can be the pioneer
for creating a CRM strateg, for ,our o9erall
organiMation" This is a big ?ob, but highl,
orthhile and rearding" To, ,ou can
focus on creating a CRM strateg, thats
specifc to ,our area or department" 6f ,ou
choose to create a department!specifc
CRM strateg, in the absence of a
compan,! ide one, ,ou need to take
e+tra care to ensure that ,our strate! g,
supports broad business goals and the
efforts of other depart!
ments and
functions to
Strate+y $ large!
scale plan for
achie9ing a goal" The
term Istrateg,K has
its ori!
gins in large!scale militar,
combat plan! ning" 6n
business, think of ,our CRM
strateg, as ,our
large!scale plan for
achie9ing the goal of
creating, maintain!
ing, and e+panding
mutuall, benefcial
customer
relationships"
/actics (pecifc
procedures and tools ,ou
use to implement ,our
strateg," )or CRM the, ma,
include ,our cus! tomer
database, e!commerce
customer interaction
tools, ,our procedures for
handling unhapp,
customers, and cus!
tomer satisfaction
sur9e,s"
oo and keep
customers" $s
e take ,ou
through the CRM
strateg,
de9elopment
process, ell
assume that ,our
organiMation has
an o9erall CRM
strateg, and that
,our goal is to
create an
appropriate and
meaning! ful sub!
strateg, for ,our
area or
department"
3icking the
3la,ers Fnless
,oure a sole pro!
prietor or a 9er,
small
Choosing Your CRM
(trateg,
7A businessEand sometimes not e9en
thenE,ou ont create ,our CRM strateg,
all b, ,ourself" (o, the ne+t part of the
process is to choose ,our strateg,
de9elopment team"
Youre looking for indi9iduals ho:
R Represent front!line customer
contact, back!of!the! house
support, and management" This can
include rep! resentati9es from all the
functional areas that ill use
the CRM strateg," )or a compan,!ide
effort, this might include sales,
accounting, and the arehouse,
hereas for an internal department,
such as an internal help desk, those
groups ma, be e+traneous"
R Fnderstand customers and hats
important to them"
R Fnderstand the larger business goals
and 9isions or are illing to learn
about them"
R $re able to commit time and
energ, to this process" -o team
members
ha9e to understand
CRM tools; 'o"
Remember that the
strateg, informs
the tools that ,ou
choose" You dont
need to kno ho
to repair an
automobile, or
e9en ho to
dri9e, to cre! ate a
game plan for
bu,ing a car" 6n
fact, in our e+peri!
ence, ha9ing too
man,
ImechanicsK on the
team can cause ,ou
to focus on the rong
things"
)ocus on
3articipation
3articipants ho arent
there arent
participating" 6ts
almost ala,s the
case that e9er,one
,ou in9ol9e in the
CRM strateg,
de9elop! ment
process alread, has
a full!time ?ob" Be sure that
,ou obtain commit!
ment before ,ou begin"
$s the manag! er, ,ou can
look for a,s to ease
their ?ob duties in other
areas to compen! sate
for the time the,re
spending on this pro?ect"
3reparing for Your )irst Meeting
Before ,our initial meeting, it can be helpful
to distribute a sum! mar, of all the
information, strateg, statements, and
business ob?ecti9es that ,ou9e pulled
together in preparation for this effort" $ lot
of organiMations are using a 9ersion of the
Balanced
D< Customer Relationship Management
Balanced
Scorecard $n
e9aluation tool
that goes be,ond
fnancial measures
that organiMations can use
to assess customer
satisfaction, process
eScien! c, and
effecti9eness, learning,
and groth" 6t as
de9eloped b, Robert #aplan
and -a9id 'orton of the
&ar9ard Business (chool"
(corecard to
capture and
summariMe this
informa! tion
along ith ke,
suc! cess
metrics"
6f formal data
and information
about hat ,our
customers ant
and ho the,
e+perience ,ou
is scarce, ,ou
ma, ant to
conduct one or
to cus!
tomer focus groups or inter9ie a
number of ke, customers before
creating ,our CRM strateg," 6nternal
ser9ice pro9iding groups often fnd
themsel9es in this situation" 6f ,ou
manage such a group, consider
conducting a customer satisfaction
stud, before creating ,our CRM strateg,"
Choose a meeting location here ,our
group can ha9e both time and pri9ac,"
8hile e often conduct such meetings
on! site, our preference is to use a hotel
conference room or other meeting space
located aa, from the normal ork
en9iron! ment, to minimiMe distractions"
Of course, ,oull ant to ha9e a Hip
chart a9ailable and plent, of all space on
hich ,ou can post ,our Hip chart pages"
Bring e+tra markers, masking tape, and
push pins Bto fasten Hip chart pages to the
padded alls in hotel conference
roomsC" $nd ,oull need lots of 3ost!
itU notes"
To,s as
Tools Carol #err
also likes to
pro9ide small
to,s, such as
stress balls, (ill, 3utt,U, and
(link,sU, to help
participants focus" 8hen
indi! 9iduals ho are used
to being 9er, acti9e are
asked to sit in a meeting
for to hours or all da,, its
eas, to become restless"
3la,ing ith a mind! less to,
during brainstorming
actuall, helps keep
e9er,one on track"
The CRM (trateg,
Creation
MeetingBsC &o
long do ,ou
meet; &o man,
times; The
ansers to
those 1uestions
depend on the
nature and
comple+it, of
,our busi! ness"
You should
e+pect to spend
at least eight
hours on this
process,
possibl,
D5
more" (chedule
,our meet! ings in
four!hour blocks"
Tr,ing to do this
process in
shorter time
periods can be
frustratingE?ust
hen ,ou get the
momentum going,
its time to end
the meeting"
&o *ong 8ill
6t Take;
$s a rule of thumb, creating
,our CRM strateg, arrants
about the same amount
of time that ,ou spent
creating ,our business
plan"
6n our e+perience, 4 to 5/ or 5 to D ?ust
orks"
Open the initial meeting ith an
o9er9ie of the information ,ou sent out
to the participants" Thank them for
participating, reconfrm their commitment
Bhether its to participate in a sin! gle
meeting or to remain in9ol9ed during a
series of sessionsC, and re9ie the fnal
goal for ,our ork together"
6dentif, 3otential (trategies
8e suggest Isilent brainstormingK as the
frst acti9it, to collect clues about hats
important to managing customer relation!
ships" This techni1ue is an effecti9e a,
to elicit the isdom of the group" To begin,
distribute pads of 3ost!itU notes to each
participant" $sk them to silentl, and
indi9iduall, create as man, indi9idual
notes as the, can, listing e9er, a, ,ou
might be able to e+pand, enhance, or
impro9e customer relationships" $llo 5D
to /< minutes for this acti9it,"
8hen the participants ha9e
fnished creating their notes, its
time to share
them ith the
group" 8e fnd it
helpful to go
around the room
and ha9e each
participant read
one note,
repeating the c,cle
until all the notes
are shared"
0ncourage
participants to
create additional
notes as ideas
occur to them"
8hile
8hat $bout
-i9erse
Customer
(egments;
Fsing the 4<:/< rule, its
appropriate to focus on
the customer segment
thats most important to
,ou" 6f ,ou ha9e to or
more e1uall, importantE
and differ! entE
customer segments,
conduct a separate
brainstorming session for
each"
this ma, feel time!consuming, it ser9es
to spark additional ideas and to ensure
that e9er,one on the team is on the
same page"
D/ Customer Relationship Management
'o, take the notes and post them on
the all" You ill need a lot of space for
this because ,our goal is to cluster the
notes into related groups" 8e get the
group going ith these instructions:
)irst, ere going to place all of these
notes up on the all" 6t doesnt matter
here, so long as the, are at a height
that can be read and reached b,
other members of the team"
8ait until all the notes are on the all
before mo9ing to the ne+t instruction"
'o, our goal is to sort the notes so
that similar items and related ideas
are together" $gain, e are going to
do this silentl!" 6f ,ou disagree about
here an idea
belongs, ,ou can mo9e it back and
forth" 6f it mo9es back and forth more
than three times, make an addition!
al note so the idea is posted in both
locationsEbut no discussion or
argument as ,ou do this"
-epending on
the siMe
-eal ith &o
The, )eel
6ts not uncommon for
the silent brainstorming
acti9it, to be met ith
trepidation or giggles" 6t isnt
hat most of us do da, to
da,Eand participants ma,
orr, that the,re not
doing it right or ?ust think
its sill," $cknoledge those
feelings and fears as ,ou
rein! force the
importance of the
e+ercise and ask them to
trust the process"
of the group and the
num! ber of ideas,
di9ide the team into
groups of to or three
people each" $ssign
one or more clusters
of notes to each group"
&eres hat e tell the
participants:
'o take
,our clus! ter
of notes Bor
each cluster
in turnC and
look again at the ideas and items in it"
You ma, notice that most of the
things e9e ritten don are
actuall, tactics for ser9ing
customers" These tactics cluster
together because the, are related
b, strateg,Ethe, are part of a
common focus" Your ?ob no is to
name that strateg,"
D=
$n a9erage
team ill need =<
to 7D minutes per
cluster for this
process"
$fter the
groups ha9e
named their
clusters, it is time
for a report!out"
Tell each group,
IRead the ideas in
,our cluster and
then tell us hat
strateg,
'e9er Toss an
6dea Be sure to
keep the silent
brainstorming 3ost!
itU
notes, sorted b, their
clusters" 8hile not
e9er, brainstormed
tactic can or should be
implemented, hen
,oure read, to act on
,our CRM strateg, ,oull
be glad to ha9e these
ideas"
,ou belie9e these tactics represent"K
Create a list of these strate! gies on ,our
Hip chart"
'ote: if ,oure creating ,our CRM
strateg, o9er se9eral meetings, this is a
good place to end ,our frst one"
CRM (trateg, (election
$t this point, the CRM strateg,
de9elopment process can feel
o9erhelming" You ha9e so man, great
ideas, so man, direc! tions in hich ,ou
could go" &o can ,ou narro them don
and choose the right strateg,;
This ne+t part of the process is about
creating strateg! selec& tion criteria and
then e9aluating potential strategies using a
crite! ria matri+" You ma, ell ha9e done
this before in another con! te+t, such as in
a formal business plan de9elopment
process or informall, hile sorting in ,our
mind ,our criteria for bu,ing a car or a
house" 6f so, the process ill feel familiar" 6f
this is ne to ,ou, e in9ite ,ou to consider
all the other times that it might be helpful
for ,ou in narroing options and making
ise selections"
To create selection criteria, ,ou ill
again use brainstorming, but this time
e9er,one is in9ited to talk" Tell the group,
IBuilding on the ork e9e alread, done to
identif, potential CRM strategies, our task
no is to brainstorm a list of all the
ob?ecti9es e ha9e for CRM"K This is a good
time to re9isit ,our Customer (er9ice:(ales
3rofleEis ,our ob?ecti9e to create more
*e9el 5, initial or stand!alone transactions
or is it to create more *e9el =, customer
ad9ocates;
$lthough most of us are familiar ith
the traditional brain! storming process,
it pa,s to re9ie the rules:
D7 Customer Relationship Management
Brainstorming
The purpose of
brainstorm! ing is to
get as man, ideas as
possible out on the table
in a short time" 6deas
should not be debated or
discussed" Remind
participants that a negati9e
sigh or look can be as
stiHing to the
brainstorming process as
sa,ing,
IThat couldnt orkK or
IThats a dumb idea"K
)lip Chart
3rotocol
Remind the Hip chart
scribe to capture ideas
using the same ords as
the person ho stated the
idea" 6ts tempting to editE
and all too eas, to
inad9ertentl, miss or
change the par! ticipants
intended idea"
8hen ideas are coming
fast and furious, its helpful
to ha9e to Hip charts
and to scribes" The, can
take turn capturing ideas"
R 09er, idea is
elcome"
09aluation of
ideas should be
put on hold until
after the
brainstorm! ing
process is
complete"
R (peak one at a
time, so
e9er,one can
be heard"
R Capture e9er,
idea on the Hip
chart"
R Building on the
ideas of others
is alloed and
encouraged"
Continue
brainstorm! ing
until the group
has run out of
ideas" You can
usu! all, e+pect
to spend about
/< minutes
brainstorming"
(imilar to hat
as
done ith the
cluster anal,sis,
,ou ill no
combine
related ob?ec!
ti9es" These are
the crite! ria for
strateg,
selection" 6ts been our e+perience
that ith some groups these items ill
easil, cluster into a handful of f9e criteria"
6n other cases, its a more laborious
process that results in a list of 5D or
more criteria" There is no right numberZ
hoe9er, ,oull probabl, fnd it best to
focus on ,our top f9e criteria"
&o do ,ou kno hich criteria are
most important; Thats a good 1uestion" 6f
,ou ha9e ?ust a handful, it can be eas, to
simpl, rank!order them" 6f ,ou ha9e a
longer list, ,ou ma, ant to start b,
sorting into three categoriesEmust
ha9e, nice to ha9e, and not reall,
important after all"
8ith ,our prioritiMed criteria list, ,ou are
read, to create a criteria matri+" *ist each
criterion along the top of the grid and
DD
%reen -ot, Red -ot
To prioritiMe f9e to 5< items, list them on
a Hip chart, lea9ing ample space to the left
of each and beteen items" %i9e partic!
ipants colored adhesi9e dotsEone green, one
,ello, and one red" $sk participants to each
silentl, identif, their number!one choice, their
num! ber!to choice, and their last choice"
Then, ha9e them all go together to the Hip chart
and place the green dot b, their frst choice, the
,ello dot b, their second choice, and the red
dot b, their last choice" (tand back and let the
colors sho ,ou hich items are most or least
important"
list ,our potential strategies don the left
side" 'o, looking at each potential CRM
strateg, in turn, fnd out ho man, of ,our
criteria it meets"
)igure 7!5 shos a sample criteria
matri+" Your criteria matri+ should look
something like this" $s ,ou can see,
(trateg, = meets all f9e criteria" (trateg,
D, hich meets four
of the criteria, could also be included in ,our
fnal CRM strateg,"
Criterion * Criterion . Criterion 3
Criterion 6 Criterion 8
Strate+y *
Strate+y .
Strate+y 3
Strate+y 6
Strate+y 8
Strate+y 7

)igure 7!5" (ample criteria matri+
Your ob?ecti9e is to narro don ,our
items to no more than three to f9e ke,
strategies" Taken together, these are ,our
CRM strateg,"
Your fnal task in the de9elopment
process is to rite the CRM strateg,
statement" Fnless ,ou ha9e a group
particularl, talented at this, a draft of the
strateg, is best ritten b, either the
manager or one or to people selected b,
the team after the meeting"
Then a draft can be sent to the team
members for re9ie before
One Compan,s CRM!-ri9en (trateg,
One of our clients, a resort, has
de9eloped the folloing mis! sion,
ser9ice strateg,, and CRM strategies:
Mission< To create an inno9ati9e and uni1ue
e+perience for families, groups, and indi9iduals
in this fun, rela+ed en9ironment, through
enter! taining, educational programs from a
knoledgeable staQ interested in making
e9er, e+perience a happ,, treasured one"
Ser#ice Strate+y< 8e are &ill Countr,
friends creating treasured memories for the
naturall, curious"
CRM Strate+ies<
R 8e ill create relationships b, understanding
the uni1ue e+pectations of each of our guests
and e1uipping our staQ to meet those
e+pectations"
R 8e ill maintain relationships b, constantl,
identif,ing opportunities to enhance our
guests e+perience and further our mission,
including partnering ith other local
attractions"
R 8e ill e+pand relationships b, rearding
customers ho help us gro our business
b, recommending our resort to ne
customers and 9isiting us fre1uentl,"
settling on a fnal 9ersion" The strateg,
should capture the ideas of the team into
a document that pro9ides clear direction
for effecti9el, interacting ith and ser9ing
customers"
$ ell!defned CRM strateg,
statement is ,our roadmap for CRM
success"
$ good strateg, uses e9er,da,
language, supports meas! urable
goals, and includes a orkable plan"
*ook before ,ou create" -oes ,our
organiMation alread, ha9e a CRM
strateg,;
6nclude on ,our de9elopment team
representati9es from all the functional
areas affected b, ,our CRM strateg,"
You can facilitate the de9elopment
process b,:
R Brainstorming potential strategies
R -e9eloping selection criteria
R $ppl,ing a criteria matri+
Managin
g and
(haring
Customer -ata
T
he businessperson of ?ust a couple
decades ago had to spend a great deal
of time and mone, on intensi9e
research
and outdated databases to get e9en a
slight understanding of his or her
customers" Toda,, hoe9er, ,ou easil,
can fnd ,our! self o9erhelmed ith
customer information" Current IcannedK
data reporting on the ps,chographics and
demographics of spe! cifc geographical
areas is a9ailable ine+pensi9el, from hun!
dreds of sources" $nd ,ou can e9en
purchase fairl, sophisticat! ed data
collection softare tailored for ,our
business for ?ust a fe thousand dollars"
$s a result, the problem more and
more is not ho to get the information
,ou need but ho to determine hat ,ou
need and ensure ,ou dont get mired in
the information samp" Return to Your
(trategies
Your o9erall business and CRM strategies
ill dri9e ,our need for customer
knoledge" )or e+ample:
D
>
L
8hat Matters to
You;
I'ot e9er,thing
that counts can be
countedZ not
e9er,!
thing that can be counted
counts,K said $lbert
0instein" 3ost this 1uota!
tion near ,our desk as a
reminder hile ,ou ork
through this chapter" $s
the Chinese pro9erb sa,s,
I.ust because ,ou can do
something, does! nt
mean that ,ou should do
it"K -ont aste time,
mone,, and resources on
data ,ou dont need and
ont use"
R 6f ,oure a Horist
tr,ing to boost
,our edding
business, ,oull
ant to kno
the age of ,our
current
customers,
ho far the,
tra9el to do
business ith
,ou, ho the,
9ie ,our
ser9ice and
product 1ualit,,
and hat
factors the,
con! sider hen
selecting
edding
Hoers"
R 6f ,ou on a small bookstore hose
sales ha9e been dropping the last
to ,ears, ,ou might ant to kno
h! customers stop doing business
ith ,ou as ell as the
demographics of ,our current
customer base as compared ith
that of to ,ears ago" You also might
ant to kno ho ,our sales ha9e
changed, especiall, as the changes
relate to the customer base" This is
data
,ou can turn into 9aluable information"
)or e+ample, ,ou ma, fnd that ,our
customer base is no predominantl,
D< or o9er, hile ,our books and
magaMines appeal pri! maril, to the
,oung"
R 6f ,oure a ma?or electronics
manufacturer hos looking to boost
o9erseas business, a good place to
start is ith ,our current foreign
markets" 8hat do the, see as ,our
strengths and eaknesses;
6n each of these cases, there are
multitudes of data a9ailable that ,ou dont
need" Collecting it could get in the a, of
,our anal,sis" You need to be able to easil,
focus ,our data and information on ,our
CRM strateg," )or e+ample:
R $s a Horist, ,ou kno that ,our
customers bu, the most roses in Ma,
and the most potted plants in .une"
'ice information if ,oure tr,ing to
increase business in Ma, and .une in
those to product lines, but fairl,
orthless for ,our edding market
strateg,"
Managing and (haring Customer
-ata
DA
R $s the bookstore oner, ,ou easil,
can fnd out hich customers prefer
romance no9els and hich prefer
sci! ence fction, but that information
alone doesnt help much if ,our goal
is to bring in ne customers" But
compare ,our current customers
ith the demographics of ,our
neighborhood and ,ou might fnd a
uni1ue mar! ket niche, though"
R The electronics manufacturer ma,
disco9er that busi! ness is booming
on the 3acifc Rim" %ood nes, but it
doesnt sa, much
ithout
knoing h,
its booming" 6t
could be an
o9erall
industr, trend
that doesnt
signal an,
uni1ue
strengths for
this particular
busi! ness in
this market"
-ata 9s"
6nformation Once
,our strateg, is in
place and ,ou
kno hat ,ou
need to fnd out
about ,our
customers, ,oull
Demo+raphics
(tatistics such as
age, income, and
education le9el
used to
describe a group of
people defned b,
geograph,, customer
base, or other means"
Psycho+raphics
Common 9alues and
Ithought patternsK ithin
a group of people" 6ts
fre1uentl, used as a
subset of demographic
informationE for
e+ample, urban omen
in house! holds earning
less than VD<,<<< per
,ear, aged =D to 7D, ho
belie9e full! time da,care
is bad for children"
di9ide the search into to distinct areas:
"ata and information" Both pro9ide a great
deal of knoledge about ,our customers
and, to be most effecti9e, the, should
be used together" Beare the -ata -ump
-ata includes e9er,thing that can ha9e a
number attached to it" )or that reason, its
in9aluable in helping ,ou spot ma?or trends
in ,our business" Compare it ith data from
last ,ear, last month, or e9en a decade ago
and ,ou ill fnd trends that could point to
ma?or changes in ,our business" More
,oung families mo9ing into ,our
neighborhood; 6f ,oure a small retailer, that
fact alone can dramaticall, affect ,our
product mi+ and ,our marketing
strategies"
T,pical data are:
R 6ncome
R Years as a
customer
R $9erage purchase
R 0ducation le9el
R $ge
R 'umber of children
at home
R O63 code or telephone
pref+
Data $n, fact about
,our customer or
customers that ,ou
can attach a
number to"
6n the search
for knoledge
about ,our
customer, data
is the most
common place
to get
o9erhelmed"
This is in
part because data is relati9el, eas, to get"
Man, go9ernment and for!proft
organiMations collect information about
people in specifc geographic areasZ
customers are fairl, illing to pro9ide
basic information about themsel9es in a
simple sur9e," Conse1uentl,, the danger is
that ,oull be lured into a sense of
satisfaction because ,ou ha9e a lot of
numbers that describe ,our customers
hen, in fact, ,ou ha9e 9er, little on hich
to
8hen You $ssume """"
8itness hat happened hen a one!
store clothing retailer in a large urban
suburb used data about cars and
9acation
homes to build a marketing plan for her clothing
store:
IThese people must make a lot of mone,, so
6ll start carr,ing top! end items" The, also spend
a lot of time on 9acation, so 6ll carr, more
sportsear,K she reasoned" I$nd 6ll support it
ith a big ad9ertising campaign in the upscale
cit, magaMine, hich the, all must read"K
The assumptions made perfect sense" (o
h, did this retailer fnd her business in Chapter
5< ?ust to ,ears later; Because she didnt
realiMe Bas a ma?or competitor didC that her
customers preferred to do their sportsear
shopping in the tons near their 9acation
homes and the, could afford all these big!ticket
lu+uries because the, ere frugal hen it
came to items such as clothing"
6f onl, she had asked, I&o do the, afford
these things;K instead of making assumptions"
-ata
25
base a decision"
I8o,K ,ou sa,,
I><T of m, cus!
tomers on three
cars and a
9acation homeLK
)un
stuff to kno, but
it doesnt
$ccording to (herlock
IThere is
nothing so
decepti9e as
an ob9ious
fact"KE(ir $rthur Conan
-o,le
do much good unless ,ou kno hat
,oure going to do ith it" You need to turn
,our "ata into information"
)inding Meaning in 6nformation
8hat ,ou often need to
complement the
customer data is
information" This is
the knoledge
that comes from
asking 1uestions
such as h! and
ho" )or e+ample:
R 8h, do /<T of
,our
customers
tra9el
Database $
storage place for
data that allos ,ou
to 1uickl,
reference the
needed
numbers and often allos
,ou to pull out subsets
from those numbers" 6ts
often computeriMed but
it can be as simple as an
organiMed fling cabinet" 6t
usuall, does not store
information"
past to of ,our competitors to do
business ith ,ou;
R 8h, did ,our customer decide to
bu, the less e+pensi9e product;
R &o does ,our customer 9ie
,our customer ser9ice and ho
important is that to him or her;
6nformation about ,our customer can
help ,ou make ma?or decisions about
reorganiMing ,our business, ser9ice
offerings, marketing, and other strategies"
6t can tell ,ou e+actl, hat one customer
ants and needs
or pro9ide an
aggregate 9ie
of ,our
customers
feelings about a
specifc area of
,our business" 6t
ill support trends
,ou dis!
,n(ormation
$nsers
recei9ed hen
,ou ask a
customer h!
or ho"
6nformation makes data
meaningful"
co9er b, looking at the data" $nd it can
sometimes sho that a trend reall,
doesnt e+ist, despite the numbers"
8hereas data can be eas, to procure,
information can be 9er, elusi9e, time!
consuming to obtain, and e+pensi9e"
There
are no C-!ROMs a9ailable to describe hat
,our customers feel and ho the, make
their indi9idual purchase decisions" There
are no 1uick 1uestions that can be
ansered b, checking a bo+ or flling in a
little circle"
You can procure basic customer
information from sur9e,s ,ou put
together ,ourself" &oe9er, ,ou run the
risk of asking the rong 1uestions or
asking 1uestions in a a, that elicits the
rong ansers" 6f the ansers are ke, to
,our business and accurac, is a must, turn
to a professional research frm" The, ill
kno ho to conduct statisticall,
signifcant samplings of customers that
represent specifc demographics, put
together a tested sur9e,, ha9e
professional sur9e,ors ask the 1uestions,
and professionall, anal,Me the ansers"
Managing Customer 6nformationE
-atabases
You kno hat data and information ,ou
need" But before ,ou choose a database
s,stem, the place and manner in hich
,ou
-ig ith 8h, and &o
.im Me,er oned a small compan, that
made industrial magnets" &e anted to
kno h, three of his ma?or cus!
tomers mo9ed their business to competitors
last ,ear" (o, he called up each of his former
business clients and asked hat the problem
as" The anser, in all three cases, as IYour
prices are too high"K
.im as de?ected" &e kne his prices ere a
little higher but he
also kne his 1ualit, as better" &e didnt ant
to loer 1ualit, to be competiti9e"
&oe9er, he also made a solid decision"
6nstead of acting on this information, he asked to
meet ith each of the customers to del9e
fur! ther into the problem" 6t turned out that the
prices erent reall, the issue at all" The
companies needed better ser9ice, such as on!
line order! ing, ?ust!in!time deli9er,, and
customiMed specs" Because .im didnt offer these
things, the time and ork it took made doing
business ith him too e+pensi9e" &is
customers erent getting the 9alue the,
needed"
*uck, for .im he thought to ask h! and ho
his prices ere too high" &e as able to
offer the ser9ices the customers needed
and regain his business ithin a couple
months"
-ata 2=
ill store ,our
data, and before
,ou conduct a
sur! 9e, or
ferret out the
nec! essar,
demographic
infor! mation on
,our cus!
tomers, ,oull
need to make a
number of deci!
sions about ho
,ou ill manage
the data once
,ou get it" $mong
the most
important
decisions:
R 8ho ill be
respon! sible
for alloing
8hat -o You
'eed to
#no;
Fse this formula to deter!
mine ,our data and
information needs:
R 8hat do ,ou ant to
kno about ,our
customers;
R 8hat data ill point
,ou in the right
direction;
8ith the data in hand,
ask h! these numbers
are hat the, are" That
ill determine hat
information ,ou need to
gather"
access to the database, for deciding
hats on it, and for generating
reports;
R &o much ill ,ou tell ,our
emplo,ees about ho the
information ill be used;
R &o ill ,ou share the information
throughout the com! pan,;
R &o ill ,ou ensure ,oure using the
information
The Basics
&eres a checklist of information ,ou
should kno about ,our customers,
no matter hat ,our business:
R &o long ha9e the, done business ith ,ou;
R 8hat do the, like most about ,our compan,;
R 8hat do the, feel ,ou could impro9e upon;
R &o often do the, repeat purchase; B&o
does this compare ith the industr, norm;C
R 8hat life e9ents inHuence their business
ith ,ou; 0"g", marriage, retirement,
business merger, 6nternet access """"
R 8hich of ,our competitors do the, also do
business ith;
R 8hat factors inHuence their purchase
decisions; 0"g", product 1uali! t,, price,
deli9er, options, product line breadth,
customer ser9ice, speed of purchase, long!
term relationship " " " "
R 8hat is the t,pical life c,cle for each of ,our
products and customers;
BThis tells ,ou hen the customer ill be read, to
bu, again"C
ethicall, and legall,;
R &o detailed ill the information in the
database be;
R 8hat might the information be used
for, be,ond ,our primar, CRM
strateg,;
The 0mplo,ee Connection
)ront!line emplo,ees are a ke,
connection for managing cus! tomer
information because the, fre1uentl,
collect it" 8hether the,re retail sales
clerks or highl, trained technical
salespeo! ple, the,re ,our customer
interface" $s a result, ,ou must decide
hat the emplo,ees need to kno to
make their data collection easier"
Theres a caution here" 6ts possible to
?eopardiMe ,our busi! ness strateg, b,
putting the details into too man, hands"
Your front!line emplo,ees dont ant or
need all the details of ,our customer
relationship strateg," 8hat the, do need
is a reason! able e+planation that ill
anser their 1uestions and satisf, their
curiosit,, so the,ll be moti9ated to gather
the information" $nd the, need a
reasonable e+planation the, can gi9e to
curious customers, so the, can moti9ate
,our customers to pro9ide the
information"
(e9eral ,ears ago a large retail
organiMation anted to kno its customers
phone numbers so it could determine
hat geo! graphic area the, ere coming
from" This data, the, reasoned, could help
them focus their marketing efforts more
tightl," 6n point of fact, the, didnt need the
hole phone numberE?ust
the pref+ ould ha9e suffcedEbut
someone thought it might do some
good don the line to ha9e all those
phone numbers" That as a problem,
though" BRemember that Chinese pro9erb"C
8hen the checkout clerks asked
customers for their phone numbers, the
customers balked at the idea of gi9ing a
retailer such personal information" 6n fact,
man, of the sales clerks thought the
1uestion as intrusi9e, too" $s a result,
the emplo,ees soon learned to stop
asking" 6nstead, the, simpl, made up
phone numbers to satisf, their 1uota for
the da,"
The result; (uspicious customers,
anno,ed checkout clerks,
-ata
2D
3repareEand -ont 3ush
8hen training emplo,ees to gather
customer data, here are some tips:
5" Tell them h, the information is needed"
/" %i9e them specifc responses to possible
customer 1uestions about the re1uest"
=" Tell them hat to do if the customer
doesnt ant to gi9e the information"
7" -o not insist that the, get hate9er piece of
data ,ou are seeking from e9er, customer"
The realit, is that not e9er, customer is ill!
ing to participateEand thats important data
to capture, too" 3lus, if ,ou insist on capturing
data for e9er, customer, ,ou should e+pect
a percentage of that data to be Ibad,K made
up to fll in the form"
and totall, orthless data"
The problem could ha9e been
remedied up front b, frst determining
e+actl, hat information as needed,
then con! ducting some 9er, simple
training for the checkout
clerks"
$ relati9el, small
amount of ork up
front can sa9e
countless cus!
tomer
relationships, limit
ill ill among the
emplo,ees toard
management, and,
most important,
,ield the
necessar,
information"
To (hare or 'ot to
(hare;
Tr, 6t Out
6f ,ou dont kno hat
to tell
front!line
emplo,ees about
handling re1uests
for data from
customers, pick
to or three and
gi9e them as much
background as the, ask
for about the program"
Then ha9e them ork for
a da, at their ?obs,
gathering the information
from customers" The,
can then tell ,ou e+actl,
hat their coorkers
need to kno"
Customer information is ,our edge in the
customer relationship" $s an organiMation,
,ou ant as much information as ,ou can
get about each customer because it
gi9es ,ou a better idea ho to ser9ice
him or her" &oe9er, hen ,oure dealing
ith com! ple+, highl, proftable
relationships, the salespeople ha9e 9er,
real issues about the information ,ou
might be re1uesting: too much
information shared among others in the
sales force could result in internal
sabotage"
(oing (eeds of
-iscontent
.im 'elson as a stockbroker for a
ma?or 0ast Coast frm" &e had orked
to ,ears to help design a program for
a
large multinational corporation" 6n the process,
being a good emplo,ee, he shared e9er, piece
of information he gleaned from e9er,
customer contact" The result; $ coorker in the
annuities department recog! niMed an
opportunit, and sold the client on a different
product" .im
lost V=<<,<<< in commissionEand all respect
for his emplo,er"
The compan, could ha9e pre9ented this
either b, asking its sales! people to gi9e onl,
specifc data or b, screening access to the
sensi! ti9e portions of the database"
The ke, to ensuring this doesnt
happen is recogniMing that the
salespersons contact ith the customer
is important"
8hether the,re high!end retail
transactions or
more comple+
business!to!
busi!
To &oard or to
(hare; Rule of
thumb: The less
mone, a
salesperson stands
to make from a client
relationship, the more
information he or she ill
be illing to share ith
coorkers"
ness relationships,
the compan, ill
onl, lose if it
doesnt respect
the sales!
person!client
relationship" $t
the same time,
,our salespeople
ma, like to
hoard their data
because
the, ha9e unfounded fears of internal
sabotage" 6n this case, the anser is to go
back to ,our strateg, and determine
e+actl, hat information ,ou need" 0+plain
to the salespeople h, ,ou need the
information and hat e+actl, ill be done
ith it" Then
collect no more
and no
Beare of
(pies 6f the
information is
a9ailable to
,our
emplo,ees, assume its
also a9ailable to ,our
competitors" BYes,
corporate espionage is a
realit,LC The onl, a, to
ensure that highl,
sensiti9e data doesnt get
into ,our competitors
hands is to limit its
e+posure"
less from them"
-etails, -etails,
-etails 09en the
simplest cus!
tomer database
can store a
multitude of data
about ,our
customers"
Thats great if
,ou kno hat
to glean from the
fle, but it also
can become
confus!
-ata
2>
Yuestions to $sk 8hen -eciding
&o Much to (hare
R 6s this information that could be
obtained in another a,, such as
through sur9e,s or demographic
databases;
R 6s this information that a ne sales
representati9e ould readil, get on his or her
frst couple of calls to a client;
R 6s this information that could be used b, a
competitorEeither internal or e+ternal
Eto make an immediate sale;
6f ,ou anser ,es to these 1uestions, the
information can be shared" 6ts not uni1ue to
the customer:salesperson relationship,
customers offer it freel,, and failing to assess
and use it could lea9e ,ou 9ulnerable to ,our
competition" 6f ,ou anser no, its time to
rethink ,our strate! g,, possibl, asking the
salespeople hat the, feel comfortable sharing"
ing for the people using the database on a
dail, basis"
The goal is to fnd the right le9el of
information that makes ,our operation
effcient but also ensures that the
customer feels comfortable dealing ith
,ou" The second the customer
feels ,oure in9ading his or
her pri9ac, is the
second ,ou dri9e
a edge into ,our
relationship" That
ill 9ar, for e9er,
compan,, e9er,
customer, and
sometimes for
e9er, trans!
action"
)or e+ample, a
medical suppl, frm
ma, kno inti! mate
details about its cus!
tomers health and
thats
%et a
%atekeepe
r -esignate
one manage!
ment
emplo,ee as
the gate!
keeper for the CRM
database" &e or she
ill determine hat
information is put
into the database and
hat information is
a9ailable to other
emplo,ees" This person
also should be
responsible for ensuring
that data is used onl, for
the purpose gi9en to
customers hen the
data is collected"
fne because the customers ant that
knoledge a9ailable to the customer
contact people so the transactions are
effcient" That same information at the
fngertips of a telephone recep! tionist
at the local health clinic becomes
disconcerting"
8hen deciding hat information ill
be a9ailable to all emplo,ees ith
customer contact, di9ide the
information in ,our customer database
into three t,pes" Breakdons for a
retail operation might be:
-ont (ho 8hat You #no
The a, ,ou use ,our database can
pro9ide opportuni! ties to
?eopardiMe the customer
relationship"
$ large catalog compan, decided to tie all its
information about its customers into its
customer ser9ice netork" 8hen a customer
ould call, the computer ould displa, the
information before the customer ser9ice
emplo,ee e9en ansered the phone"
The customer ser9ice orkers soon
disco9ered the, could take ad9antage of this
information and boost their per!call sales
records" I6 see ,ou ha9e purchased childrens
clothing in the past, Mrs" .ones" $re ,our
children in need of ne inter coats; 8e
ha9e a good deal on them toda,"K
6nstead of making the purchases, though, the
customers started to feel uncomfortable
that this unidentifed person kne so much
about them" (ales o9erall declined and
customer satisfaction ith the cus! tomer
ser9ice department plummeted"
/mportant to Kno
R Correct spelling of customers name
R Customers address and phone
number
R Correct pronunciation of customers
name
R 8hat honorifc to use BMr", Ms", Miss,
Mrs", or -r"C
*ice to Kno
R &o the customer has paid for
merchandise in the past
R &o long the person has been a
customer
R 6f more than one person from the
business or household places orders
R 8hat the customer usuall, purchases
R 8hat the customer purchased last
R 6f the customer has had complaints
and hat the, ere
*ot for General Knole"ge
R The customers age
R The customers income le9el
R The customers marital status and
number of children
R The customers education le9el
R $nsers to specifc sur9e,
1uestions designed to dis! co9er
attitudes about the compan, and its
products and ser9ices
-ata
2A
Fse these le9els as a guide for pro9iding
access to the infor! mation" The frst le9el
can be a9ailable immediatel," The second
might come up on the computer screen
onl, after the customer ser9ice orker
re1uests more information" The third can
be eas! il, screened so its a9ailable onl,
to management"
-ata Mining Toda, and Tomorro
09en hen ,ou carefull, craft data and
information collection efforts to match
,our CRM strateg, and ,our o9erall
business strateg,, ,ou ma, fnd ,ourself
ith more numbers than ,ou could
possibl, digest in a lifetime of customer
anal,sis" &oe9er, ith ?ust a fe legal
and ethical ca9eats, ,ou can use this
information for man, purposes that can
help ,ou spot trends ithin ,our
customer base" &ere are some tactics to
tr,:
0 (nal!1e the "ata against last !ear2
three !ears ago2 an" ,ve !ears ago.
09en if ,oure looking at aggregate
num! bers such as total customer
interactions, differences of more
than DT could signal a trend"
0 Cross&reference the information.
(imple computer pro! grams can take
to sets of data and combine them" 6n
that a,, ,ou can fnd out if ,our
customers beteen =< and 7< ,ears
old spend the most mone, hile
those D< to 2< spend the least, for
e+ample" 'ice to kno for tar! geting
prospects and planning ,our product
line"
0 3inpoint ma4or pro%lems. 6nformation
retrie9ed through sur9e,s can point
,ou to ma?or problems ,ou hadnt
real! iMed" )or e+ample, if ,oure
ondering h, no one is using ,our
ne online ordering s,stem,
customers ma, tell ,ou that the, dont
on computers, that its too confusing,
or that the, simpl, like the sound of a
human 9oice"
0 Compare the customer "ata to !our
%usiness "ata. -id ,our customer
demographics change at the same
time ,our sales in one product line
soared; You ma, ha9e disco9ered a
ne ps,cho graphic component to
,our customer base"
0 Monitor seasonal changes in the "ata.
*ook for sales
>< Customer Relationship Management
)ollo the Rules
$s ,ou use the data and information
,ou9e gathered, remember a fe
rules of the statistics game:
5" /nformation is ala!s ol". 6t can onl, tell ,ou
hat ,our customers did or thought
,esterda," 6t ill not guarantee a thing about
hat the, ill do tomorro"
/" One person "oesn-t represent the group" )ocus
groups and sur9e,s can be a lot of fun
because ,ou reall, get to kno an indi9iduals
or small groups feelings" &oe9er, the onl,
data that can sho trends comes from
statisticall, signifcant samples of the larger
group"
=" Data is not a crutch5 it-s 4ust a tool. 8hen Coke
introduced 'e Coke in 5A4D, it had
thousands of taste test results sa,ing people
preferred the taste of the ne product
o9er the old"Yet sales crashed almost
immediatel, and the compan, hurriedl,
reintro! duced Classic Coke ithin eeks of
abandoning it" 6t had failed to take into account
that, e9en though people liked the taste of
the ne product better, it asnt the taste
of the Coke the, had gron to lo9e"
trends Bor trends in customer
complaintsC
based on the
time of ,ear"
That can help
,ou determine
A++re+ate Data
-ata that has not
been anal,Med or
put into an,
statistical
format" 6ts also called ra
num%ers" Statistical
Si+ni1cance $ measure
of ho likel, the data from
a sampling is going to
represent the data
from the entire
group" Fsuall, the
larger
the sample, the
more statisticall,
sig! nifcant the
data"
staSng or point ,ou to
marketing needs
during off seasons"
0thics and *egalities
of -ata Fse
Remember that
,ou can use the
information
,ou9e obtained
directl, from a
customer onl,
for
the purpose ,ou9e told him or her" You
cannot sell it to other companies or use
it for future research pro?ects unless
,ou ha9e the customers informed
consent"
-ata
>5
Managers Checklist for Chapter D
*et ,our business and CRM strategies
guide ,our need for data and
information"
-ata ill point to the information ,ou
need"
-ata helps ,ou identif, trends"
6nformation helps ,ou spot specifc
business issues"
Tell emplo,ees hat the, need to
kno about ho the data ill be
used"
3ro9ide database access onl, to those
ho trul, need it"
Maintain and respect customer pri9ac,
at all times"
*ook at a,s to merge and cross!
reference the data"
Tools for
Capturing
Customer
6nformation
Y
ou kno hat data and information ,ou
ant" You kno hat ,oull do ith it
once ,ou get it" You kno holl ha9e
access to it and ho ,oull maintain
customer pri9ac," But ho, in the /5st
centur, information econom,, do ,ou
begin to get that information; -o ,ou ha9e
to spend a lot of mone,; 6s
IcannedK data orthless; &o can ,ou get
?ust hat ,ou need ithout being
samped b, meaningless statistics; $nd
hat if ,our customers ont cooperate;
Yes, customer data and information
collection is enough to make the sa99iest
manager tear out his or her hair" There are
so man, optionsEand so little time to
make decisions that can spell success or
death for ,our business"
8here to %et the -ata and
6nformation
The most effcient a, to narro ,our
options is to look at the ad9antages of
each source of data" %enerall,, as the data
and information become more tailored to
,our business and more accurate, the,
also become harder and more e+pensi9e
to obtain" &eres a list of common sources
of customer information:
>/
L
Tools for Capturing Customer
6nformation
>=
o#ernment
reports. Cit,,
count,, state, and
federal
go9ernments all
produce
demographic
reports based on
geograph," You
can easil, fnd
outEusual! l, for
no mone,Esuch
information as
ho ,our
communit, has
changed
$9oid 6nformation
O9erload
IThe biggest problem
facing $merican business
toda, is that most
managers ha9e too much
infor! mation" 6t daMMles
them, and the, dont kno
hat to do ith it all"K
E*ee 6acocca
o9er the ,ears and hat the go9ernment
e+perts feel trends in ma?or industries ill
be" The disad9antage is that the data is
generic and tells ,ou 9er, little about
,our specifc customers and prospects"
Pri#ate reports. There are man,
companies that pro9ide detailed
information on populations based on O63
code or telephone pre! f+" Fnlike the
go9ernment data, the, ill gi9e more
precise information on education le9el,
age, income, a9erage length of tenure in
the neighborhood, t,pe of emplo,ment,
and other sta! tistics that can help a local
business pinpoint trends that could affect
marketing efforts"
/rade associations. Man, trade
associations conduct ,earl, sur! 9e,s to
determine trends in their industr," These
ill detail ho the industr, is changing, ho
the ke, pla,ers are, and hats e+pected
for the future" The,re a perfect starting
place, so dont ignore them, but remember
that this information is a9ailable to all ,our
competitors too"
Point o( sale. 09en the smallest compan,
ith little or no 6T technolog, ill keep
some records based on sales
transactions" $ friend ho holds se9eral
garage sales a ,ear knos that the best
da,s are Thursda,s in her neighborhoodZ
after a couple ,ears, she 1uickl, learned
not to bother ith the eekends"
But technolog, allos e+tremel,
sophisticated 3O( Bpoint of saleC information
EcomputeriMed cash registers can
record the time of da,, the e+act products
purchased, ho the customer paid for the
merchandise, and the siMe of transaction"
These s,stems ill generate reports that
can help ,ou predict staffng
>7 Customer Relationship Management
le9els and pro9ide in9entor, control tools"
$t the same time, these s,stems
fre1uentl, allo ,ou to input basic
information at the time of sale such as a O63
code, a telephone number, or the gender
of the customer"
(imilar s,stems are a9ailable for
business!to!business sales" (ome allo
the salesperson to input data from a
laptop com! puter the second a contract
is signed" Others re1uire clerical orkers
to input the information from in9oices"
&elp desk soft! are tracks transactions
through Itrouble tickets"K
8hether ,ou use sophisticated
technolog, or the bare!bones
Ie,eballK method, this is the frst stage in
getting real informa! tion about ,our
specifc customers"
;mployees. 6n Chapter D e talked about
ho to moti9ate front!line staff to obtain
information and salespeople to share their
information about the customers" These
to groupsEas ell as other emplo,ees
Eare the ne+t logical step in obtaining
Ipassi9eK customer information"
0mplo,ees become ,our e,es and
ears as the, communicate ith
customers"
)or e+ample,
business!
Passi#e
,n(ormation
Fseful data that
the cus! tomer
doesnt kno he
or
she is suppl,ing" (ome
clothing retailers note ho
e+pensi9e their
customers ?eelr, is" Car
salespeople ill note
hat 9ehicle the
customers spouse
dri9es" Comments
such as I6t took me
fore9er to fnd this
on the shelf K fre!
1uentl, are
recorded as
passi9e infor!
mation"
to!business
salespeople
fre1uentl, 9isit
their cus!
tomers offces"
The, note ho
bus, the
production plants
are at different
times of the da,,
if the customer is
adding pro!
duction space,
and if theres a
sense of opti!
mism in the air"
Retail emplo,ees
can
record ho often customers ask to pa,
ith a credit card the business doesnt
take, ho often customers ask for
products the store doesnt carr,, or ho
often customers become frustrated
because the, cant fnd something"
The 9alue of this information is that it
can be communicated directl, to the
people in ,our organiMation ho most need
it"
6nformation
>D
I.ust *et Fs #no """"K
$ small computer components
manufacturer anted to dis! co9er hat
it could do about customer complaints
that deli9!
eries erent arri9ing on time" 6nstead of
chastising the deli9er, depart! ment, it brought
in se9eral deli9er, emplo,ees to meet ith
se9eral salespeople" The salespeople ere able
to e+plain that certain products had to be
deli9ered ithin 5/ hours because the, ere
ke, components to industrial s,stems that
ould idle the customers factories if the,
erent orking" (alespeople ere supposed to
put a IrushK on these orders, but sometimes
the, forgot and sometimes the instructions
ere ignored" Other products could be
deli9ered in to or three da,s ith no
concern"
The deli9er, department reacted b, creating
a to!tiered s,stem" 6nstead of shipping all
items frst!order in, frst!order out, the,
created a list of items that ala,s ent out
immediatel," 6f it meant some less important
items had to ait until the ne+t da,, that as
O# because the customers didnt care"
&a9e the salespeople sit don ith the
deli9er, people" &a9e the product
engineers sit don ith the customer
ser9ice department" (uddenl, ,our
emplo,ees are sharing customer
information the, didnt e9en kno the,
had"
Sur#eys. (ur9e,s are a onderful a, to
fnd out e+actl, hat ,our customers are
thinking about something" The, range from
9er, informal sur9e,s of one or to
1uestions to elaborate tele! phone
sur9e,s conducted b, professional
research frms" The larger the sample, the
more ,ou can e+trapolate the results to
the rest of ,our customers" &oe9er,
e9en a small sample can point to areas
that ,ou need to e+amine further"
(imple, Craft, (ur9e,
$ ma?or crafts retailer anted to kno if
it as orthhile to de9elop a 8eb site
from hich customers could directl,
purchase products" (o, sales clerks asked each
customer for one eek if the, e9er bought
an,thing o9er the 6nternet and, if so, ould the,
bu, fabric, ,arn, or other craft supplies that a,;
Yes, it as informal, but hen more than
half the customers said the,d probabl, bu,
some things that a,, this retailer kne ho
it should proceed"
&pen9ended
Cuestion $
1uestion that
cannot be
ansered ith
I,esK or Ino"K
Man, sur9e,s
ill ha9e
customers rank
the impor! tance
of something or
gi9e a simple ,es
or no anser"
09en if ,ou9e ne9er conducted a sur9e,,
,oure no doubt famil! iar ith them from
being a sur9e, respondent at one time or
another, especiall, during election season"
$s in the case of the crafts store, the data
from closed!ended 1uestions can confrm
or point to logical ne+t actions"
Open!ended 1uestions, on the other
hand, can pro9ide e9en more 9aluable
insight into hat the customer reall, ants
from his or her relationship ith ,ou" This is
especiall, 9aluable if ,oure looking at a
small group of people" )or e+ample, car
deal! erships fre1uentl, ill sur9e, in!
depth the people ho bu, cars 9alued at
more than V2<,<<< and those ho ha9e
purchased more than three cars from the
dealership in the last 5< ,ears" ?ocus
+roups. $s ith sur9e,s, focus groups
can run the
gamut from an
informal lunch
ith ke,
customers
$sk the
Right
Yuestion
s
8hen using
sur9e,s, be ar, of asking
a 1uestion incorrectl, or
not asking it at all" #ristin
$nderson orked ith a
hospital using a nation! all,
normed customer
satisfaction sur!
9e, to fnd out hat
pleased patients and
famil, members and
hat might make
them prefer other
hospitals" The
idespread sur9e,
e+amined e9er,!
thing from staQ helpfulness
to the 1ual! it, of the food"
The, forgot one 1ues!
tion, though: 8ere ,ou
able to easil, fnd ,our a,
through the hospital; )ocus
groups later re9ealed that
Ia,! fndingK is an
important factor hen
customers e9aluate their
o9erall hospi! tal
e+perience"
to highl,
sophisticated,
professionall,
run meet! ings
ith statisticall,
selected
customers"
)ocus groups
are e+cel! lent
for getting at
com! ple+
problems or for
gen! eral
brainstormingE
fnd! ing out in
general hat
people think of a
product or
ser9ice"
&oe9er, unless
,ou conduct
man,
such groups,
,our sample ill
be too small to
reall, learn ho
the market is
changing or hat
,our t,pical
customer feels"
6nformation
>>
%i9e a *ittle to %et a *ot
Customers dont necessaril, like to gi9e ,ou
information about themsel9es" 6f ,ou fnd the,
balk at ,our sur9e,, offer an incenti9e, such as a
coupon for 7<T oQ their ne+t purchase, an
opportunit, to in a trip, or a token of
appreciation" 6n business!to!business settings, a
personal incen! ti9e isnt ala,s appropriate"
Consider instead offering to make a donation to a
charit,"
&o )ar -o 6 'eed to
%o; Theres no rule
about ho to get
,our customer
infor! mation" The
important
thing is that ,ou
get some
information and
start using it to
help ,our
emplo,ees
become more
aare of
ho important the
informa! tion can
be" -ont orr,
Better to
$sk for
3ermission
than
)orgi9enes
s
6f ,oure asking customer
for their e! mail
addresses, do not
assume the, are gi9ing
,ou permission to
contact them that
a,"You must ask for that
permis! sion at the time
,ou solicit the infor!
mation"
too much at frst about it being e+tremel,
accurate" .ust start getting into the habit
of collecting the information and using it"
8hen to %et 8hat
Tr, narroing ,our
cus! tomer data
and informa! tion
collection efforts
e9en further b,
collecting specif!
ic information at
9arious points in the
life c,cle of a
customer" #e, contact
points and the
information ,ou should
collect at each
include:
Customer
$ssistance
6f ,ou dont ant to spend
the
time and mone, to
conduct elaborate
sur9e,s ith man, open!
ended 1ues! tions, ask
?ust a handful of ,our cus!
tomers the open!ended
1uestions" )rom their
responses, ,ou can
design a check!oQ
sur9e, based on the
most common ansers"
*. Be(ore you ha#e customers. Fse
demographic and ps,! chographic
information to determine ho ,our
customers should be, ho ,ou ill
market ,our business, and hat prod!
ucts and ser9ices are important to offer"
(tart (mall
Choose three ke,
customer
segments and hold
focus
groups to fnd out hat
the, like and dont like
about ,our business"
Those groups could be:
R Top spenders
R *ong!time customers
R Recent defectors to
,our competi! tors
8hat -o
Customers
Reall, 8ant;
*ong before (aturn
Corporation introduced
an, cars to the
marketplace, it held focus
groups ith people
hod recentl, bought
cars" $mong the
1uestions asked as
I8hat did ,ou dislike most
about the sales
transaction;K 8hen
omen o9er! helmingl,
responded that the, hated
haggling o9er the price, the
compan, kne it had a
uni1ue marketing niche
and the Ione!price, no!
hagglingK con! cept of car
purchasing as born"
.. ,nitial contact
with a
customer or
prospect.
3eople dont ha9e
to bu, something
to be consid!
ered customers
for infor! mation
purposes" $
simple ritten or
in!person sur9e,
can help ,ou fnd
out the folloing:
R &o the, heard
about ,our
operation
Bgood for
marketing
informa! tionC
R 8hat their frst
impres! sion is
R &o much
effort the,
e+erted to
contact ,ou
Bho far the,
dro9e if ,oure
a retailerZ
hether the,
used a
magaMine
repl, card,
6nternet
search, or
other source if
,oure in
business!to!
business
salesC
R 8here the, currentl, get similar
products and ser9ices
R 8hat the, ould like to see ,ou oQer
Bin other ords, hat the, like about
,our competitorsC
3. ;arly in the relationship. $fter the
frst purchase, ,ou can begin de9eloping
a database on the specifc customer"
Begin b, recording information such as:
R 8hen the purchases are made
R &o the, are paid for
R $n, specifc re1uests
R &o large the purchases are
R 8hat e+actl, as purchased
6nformation
>A
8hats 6t 8orth to You;
$ good rule of thumb for ho much to spend on
a data and information collection effort is to
look at the cost of the decisions that ill come
out of it and plan about 5<T of that cost to
procure the knoledge"
)or e+ample, if ,our sales ha9e gone don V5
million during the last ,ear, e+pect to spend
about V5<<,<<< to fnd out h, that happened
and hat ,ou can do to remed, it"
6f ,oure looking to spend about VD<,<<< to
de9elop a 8eb site so ,our business!to!
business customers can order directl, an,
time da, or night, plan to spend about VD,<<< up
front to make sure the,ll use it"
6f ,ou ant to kno generall, ho ,ou can
impro9e ,our business b, retaining
customers, calculate ho much customer
defection cost ,ou last ,ear and budget 5<T
of that cost for ,our research efforts"
R $n, complaints
R &o the customer contacts ,ou
6. Later in the relationship. 8hile this
9aries idel, from one business to
another, 9irtuall, e9er, businessperson
knos his or her IgoodK customers" The
retailer knos hich faces he or she sees
again and again" The industrial
salesperson knos ho bu,s the most
and has the feest complaints" (elect
these people for specifc sur9e,s or
focus groups to disco9er:
R 6ndustr, trends
R 3roblems ith ,our organiMation that
could cause defec! tions
R Trends in products, purchasing
methods, deli9er, meth! ods, or
other components of the customer
relationship
8. At a pause in the relationship.
Man, businesses ha9e times hen a
customer naturall, falls from their acti9e
list, especiall, hen the business has an
&ourglass Customer (er9ice: (ales 3rofle"
Realtors, for e+ample, dont e+pect to see
the same faces e9er, month" Bridal
shops dont e+pect to see their customers
againEfor at least a couple ,ears"
&oe9er, that doesnt mean the, stop
being customers" These people are an
important source of business referrals
and
$dd $d9isors
to
Your Team
Man, businesspeople
conduct ongoing focus
groups ith ke, cus!
tomers under the guise of
a Icustomer ad9isor,
council"K 8hen ,ou treat
them like ad9isors,
customers often are
moti9ated to gi9e more
information" The, also ha9e
a reason to sta, lo,al
to the compan,"
future business"
$fter all, people
bu, bigger
houses hen
the, ha9e
children and
brides ma, ha9e
friends or
daughters ho
become brides"
8hen natural
pauses occur,
use a sur9e, or
focus group to
disco9er hat
the cus! tomer
liked and disliked
about the entire
process
of orking ith ,ou" Fse the data from
these transactions as comparisons for
upcoming months and ,ears"
7. At the end o( the relationship. 6f
a customer stops doing business ith
,ou, he or she is a ke, source of
information" Fse a sur9e, to fnd out:
R 6f there as a customer ser9ice
problem
R 6f ,our products no longer met their
needs
R 8ho the, started doing business ith
instead of ,ou
R 6f the reason as unrelated to ,our
relationship Bthe, mo9ed to
another stateC
The Computer 6s Your )riend Bbut 'ot
$la,s Your
Best )riendC
There is no 1uestion that computers ha9e
changed the orld of customer
relationship management" The, not onl,
pro9ide the means to obtain much of the
data, but also store the data and generate
reports based on the data" Theres nothing
so onder! ful as the number!generating
potential of a large database ith a sa99,
6T person at the helm"
Yet that doesnt mean its right for ,ou"
$s e9e mentioned through this chapter
and Chapter D, the goal is not to see ho
much information ,ou can get on ,our
customersZ its to get information that is
useful to ,ou and ,our coorkers" That
doesnt ala,s necessitate a huge
database" 6n fact, sometimes
6nformation
45
*o!Tech 8orkaround
The customer ser9ice manager at a large mail
order compan, became concerned hen
emplo,ees said the,d been getting a number
of calls complaining about incorrect sales ta+
being added to their in9oices" The
sophisticated database onl, alloed the
customer ser9ice orker to enter a code
for Iin9oice dispute,K not for the
specifcs of the dispute" $s a result, this
manager armed her emplo,ees ith pads of
paper and pencils" 09er, time the, recei9ed a
complaint about sales ta+, the, simpl, made a
mark on the paper" $t the end of a month, she
tallied up the complaints and took the number
to the accounting department" &er approach
might not ha9e been high!tech, but it got the
?ob done"
it means ?ust a sheet of paper and a pencil"
)or that reason, keep these things in
mind hen planning ,our database,
hether its a subset of a large corporate
data! base or the entire s,stem for a
compan,:
*. Small computers ha#e bi+
capabilities. Basic programs such as
8ord
N
or 0+cel
N
can tabulate data and
present it in charts" $ softare designer
can ine+pensi9el, create a database
specifcal! l, for ,our compan, that ill run
on a t,pical 3C and generate reports on ke,
customer interactions as ell as cross!
reference basic customer facts such as
customer O63 code and a9erage purchase"
.. ;#en the best system can't do it
all. Man, large corpora! tions ha9e
elaborate customer information
databases, but the, cant ala,s capture
the information ,our indi9idual department
needs" Think outside the database bo+ for
the best a, to get the information as
1uickl, as possible"
3. 4ou +et what you ask (or. Computers
dont kno hat ,ou antZ the, kno onl,
hat ,ou actuall, ask for" Computers are
literal and do ?ust hat ,ou tell them to do"
$s a result, its important to ha9e some
basic training on ,our specifc database
s,stem if ,ou plan to ask for tailored
reports" 6f ,oure ha9ing a s,stem built for
,ou, make sure ,ou9e included all the
basic reports in ,our specs"
Yuer, Right
$ 1uer, is a a,
of ask! ing a
computeriMed
data!
base for a report" #noing
ho to 1uer, to get
cross!referenced
informa! tion or small
subsets of data can take
some practice and the
tutelage of the softare
designer" 6f ,ou dont do it
right, ,ou ont get the
information ,ou ant"
Belie9e 6t or 'ot
You can pro9e
an,thing ith
statistics" 8ant to
pro9e that the
orld is Hat; .ust
ask a mathe!
matician and
,oull ha9e the
proof" &o about
pro9ing that
bees cant
actuall, H,; $sk
an aero! nautical
engineer" Or per!
haps ,oure out for e9idence that ,our
customers all lo9e ,ou; 'o problem" .ust
tell the database manager thats hat ,ou
ant and the proof ill be on ,our desk in
the morning"
Girtuall, all of us ha9e gron up in a
orld ?aded b, num! bers" There are
books ritten about ho to lie ith
statistics"
B8hether e attribute it to Ben?amin -israeli,
Mark Tain, 8inston Churchill, or an,bod,
else, e tend to accept as truth the
statement, IThere are lies, damn lies, and
statistics"KC 8e9e seen politicians arp
numbers until the facts are
unrecogniMable" 8e9e probabl, e9en
fudged a fe numbers in our on li9es
and 1uickl, learned that no one Bsuch as the
6R(;C as the iser"
$dd to this a health, dose of life
e+perience" )or instance, after =< ,ears
orking in this industr,, ,our marketing
manager knos ho to reach ,our
customers" $n,one from the %6 %eneration
Bthe group that came of age during the
%reat -epression and 8orld 8ar 66C knos
that price is the most important attribute
for an, product" Your much ,ounger cus!
tomer ser9ice people kno that people
get impatient if the, ha9e to ait more
than a minute, that time is the most
impor! tant attribute" $nd ,ou kno that
none of that is a gi9en"
3rice and time ma, both be important"
Or neither ma, mat! ter much" 6f ,ou reall,
ant to fnd out hat matters to ,our
customers, ,ou ha9e to be illing to let go
of hat ,ou think ,ou kno and to ask
,our customers"
(o, ,ou9e collected the real data and
information, but oth! ers still cling to their
personal 9ies" $s a manager, ho can
6nformation
4=
,ou con9ince the people making
business decisions that the data is 9alid;
6n a orld of number!ear, professionals,
that can be the biggest challenge of an,
CRM effort" These tactics ill make that
challenge a little easier:
*. Ask (or input up (ront. 6f ,oull be
asking people to use this information,
make sure the, ha9e a sa, in ho its
collected" &a9e them re9ie sur9e,s, sit
in on focus groups, or e9en ork the 3O(
to make sure the,re comfortable ith the
pro! cedure" %et their bu,!in in the
beginning so the, cant com! plain about
the data once it comes in"
.. Create the tools that ensure
consistency. -ont ?ust tell ,our
salesclerks to ask for certain information"
3ro9ide an actual script for them" -e9elop
forms that make it eas, for them to ?ot
don the ansers" Train them on ho to
ask for the information"
3. Reco+ni)e that it is work. 6f ,oure
asking ,our emplo,ees to ask 1uestions or
e9en suppl, information the, ha9e in their
fles, ,oure asking for e+tra effort" The
information ill be of better 1ualit, and
more reliable if ,ou let them kno ,oure
aare of the effort" )or e+ample, if ,ou
ant telephone cus! tomer ser9ice
people to add a 1uestion to each call,
remember that their per!da, call a9erage
likel, ill go don during the sur9e,
period"
Tr, gathering the information o9er a
specifed period of time, so the
emplo,ees kno hen their e+tra effort
ill be fn!
ished" $lso offer a little incenti9e, such as
an hour of 9acation or a priMe for the
person ith the most sur9e,s"
6. Gse those open9ended
Cuestions. Gerbatim comments can
bring customers to life and make them
more real for emplo,! ees ho dont
ha9e routine customer contact" 8hen a
sales! person hears a customer sa,ing
he or she doesnt care about price as
much as 1ualit, and performance, the
information sinks in much faster than
reading a report that sa,s 2>T of
customers rank 1ualit, as more
important than price"
To pro9ide poerful 1uotes, record
focus groups or tele! phone sur9e,s
and ha9e them edited for the
strongest com!
ments, then pla, them for emplo,ees
or ha9e the comments transcribed for
bigger groups"
8. /abulate the open9ended
Cuestions. $ common response to
man, sur9e,s containing open!ended
1uestions is IBut thats ?ust one person"K
3rofessional sur9e, frms ill put
responses into se9eral categories and
gi9e ,ou data based on those ord,
comments"
7. Don't #iew it in black and white.
0ach customer has a differ! ent perception
of an e9ent or product based on his or
her e+pectationsEand those
e+pectations can change b, the sec!
ond" )or e+ample, if ,oure in a hurr, and
stop at the local
diner for lunch, a to!minute ait to get
seated is defnitel, poor customer
ser9ice" 6f ,oure aiting for a friend and
ha9e planned a leisurel, lunch, those
same to minutes can seem prett,
speed," The eather, the customers
personal life, and
9irtuall, e9er,thing happening in
the orld at the
second ,ou
asked a 1ues!
$ Big )renM,
but
'o Trend
6n the three months
leading up to .anuar, 5,
/<<<, sales of diesel
generators sk,rocketed in
the north! ern Fnited
(tates" 6f managers at hard!
are and Heet and farm
stores had looked at those
numbers as a trend,
the, ould ha9e
been more than
tripling their orders
the ne+t fall" *uck,
for most of them
that the, ere ell
aare of the
millennium h,steria
that caused people
to bu, such
products in case the
electricit, failed"
tion can ha9e an
impact on the
anser"
Remember that
hen looking at
indi! 9idual
comments"
2. Ask why. 6f the
data is
contradictor,
ith some! thing
,ou kno to be
true, ask ,ourself
h, that might
be" 6t could be
that ,ou forgot a
ke, 1uestion,
such as the
hospital that
forgot to ask
patients and
9isitors about
the ease of
fnding their a, around" 6t could be that
,ou ha9e an imperfect sample of
customersEretailers ho sur9e, onl,
beteen 5< a"m" and 7 p"m" likel, ont
get full!time hite!collar orkers in their
samples" $nd ne9er forget: it also could be
that hat ,ou thought as true simpl,
isnt"
6nformation
4D
Fse different tools to get different data
and information"
The more time!consuming and
e+pensi9e the tool, the bet! ter the
resulting information"
Collect different information at different
stages in the cus! tomer relationship"
(ometimes ,ou ha9e to thro out the
computer"
Fse tactics that ensure emplo,ees ill
belie9e the data"
(er9ice!*e9el
$greements
IJ(
*$ is ?ust a ne!age term for the
age!old telecom con! tract,K rites
.ulie Bort in her article, I(*$ (a99,, )i9e
(ecrets for Making (ure You %et the Most
from Your (er9ice! *e9el $greementsK
B*etork 6orl", (eptember />, 5AAAC" $nd
shes right" &oe9er, toda, ser9ice!le9el
agreements co9er much more than
telecommunications" (*$s can also be found
in 6T
Binformation technolog,C, $(3 Bapplication
ser9ice pro9idersC, and 6(3 B6nternet ser9ice
pro9idersC agreements" $nd, hether ,ou
enter into a formal contract or use the
concept in informal partnership
discussions, understanding (*$s can help
,ou ensure that e9er,one in ,our team is
on board and contributing to ,our
strateg,"
(er9ice!*e9el $greements -efned
6n the ords of .oel (n,der of *etork 6orl",
an (*$ Iis reall, ?ust a description of the
ser9ice ,ou9e bought and paid forW"K
8hile .oel is literall, correct, an (*$ implies
Eand spells out in detailEsomething more"
$ccording to the $(3 6ndustr,
42
L
(er9ice!*e9el
$greements
4>
Consortiums
$u!er-s Gui"e to
Service&7evel
(greements, an
(*$ should
include:
R the purpose of
the
(*$,
R -escription of
ser9ice,
R -uration of
ser9ice,
R
6nstallati
on
timetab
le,
R 3a,ment terms,
Ser#ice9le#el
a+reement $
promise or
guarantee of
performance
beteen a
ser9ice pro9ider and a
customer" Traditionall,,
(*$s are used in busi!
ness!to!business
settings, for agree!
ments ith
telecommunication, 6T
Binformation technolog,C,
$(3 Bappli! cation ser9ice
pro9idersC and 6(3
B6nternet ser9ice pro9idersC
frms"
R Termination conditions, and
R *egal issues such as arranties,
indemnities, and limita! tion of liabilit,"
The (*$, then, is a contract beteen the
ser9ice pro9ider and the customerE
t,picall, a business or organiMation,
rather than an indi9idual consumer"
Three #e,s to 0Qecti9e (*$s
8hether ,oure the ser9ice pro9ider or
the customer, a ell thought out and
clearl, e+ecuted (*$ can strengthen ,our
rela! tionship b, setting reasonable
e+pectations, clear measures of
performance, and reards hen
performance is e+cellent or remuneration
if it falls short"
To see this more clearl,, lets consider a
t,pical consumer agreement for
telephone ser9ice compared ith a (*$
beteen a telecom pro9ider and a call
center" Our e+amples look from the
customers point of 9ie, but feel free to
imagine ,ourself on either side of these
agreements" Consider the role the agree!
ment does or does not pla, in keeping the
customer lo,al"
3ut on ,our consumer hat for a moment"
$s a residential customer, ,ou ha9e a
ser9ice agreement ith ,our local tele!
com pro9ider" You agree to pa, a certain
amount per month and the pro9ider agrees
to gi9e ,ou a dial tone" You ma, also
contract ith this same pro9ider for
additional ser9ices, such as
caller 6-, last call return, phone or line repair,
and the like" You decide to add a second
line for ,our ne home offce" You call and
to make an appointment for line
installation" IOur techni! cian ill be
there beteen 4 and noon"K
You dont ant to take the entire
morning off ork" 6snt a more defnite
appointment a9ailable;
I'o" 8ell call ,ou hen the technician is
on the a," Thats the best e can do"K
(o ,ou take the morning off ork, ait
for the tech """ and ait """ and ait" $t
55:D<, ,ou call the dispatcher for a status
check " " " again"
IOh, the other ?ob ran long" The tech
ont be able to make it" 8ell ha9e to
reschedule" &o about 4 a"m" to noon, a
eek from toda,;K
You ma, get angr,, but short of
sitching ser9ice pro9iders, theres not
much ,ou can do"
'o, put on ,our business hat" Your
organiMation also con! tracts for
telephone ser9ices" *ets imagine, for
e+ample, that ,ou ha9e a customer
contact center here 5<D ser9ice
repre! sentati9es handle incoming
customer calls /7 hours a da,, > da,s a
eek" 6ts imperati9e for ,our business
that customers ha9e /7:> access, so
,ou need a 9er, high le9el of perform!
ance from ,our telecom pro9ider" (o,
,ou establish a ser9ice! le9el
agreement"
6n it, ,ou detail accounta%ilit!" 6s ,our
pro9ider ?ust bringing a dial tone to ,our
internal telecommunication s,stem; Or is
,our pro9ider responsible for ensuring that
,our internal telecommunication s,stem
is functioning correctl,; 8hat about third!
part, softare or hardare; 8ill ,our
pro9ider take responsibilit, for telephone
lines installed b, another 9endor; $nd
hat ill the pro9ider be responsible for if
fre, Hood, or an act of %od interrupts ,our
ser9ice;
'e+t, ,ou detail performance levels"
8hat amount of time, if an,, is it
acceptable for ,our phone connections to
be IdonK; &o 1uickl, ill ne lines be
installed hen ,ou choose to e+pand ,our
ser9ice; 09er, ke, aspect of
performance is co9!
(er9ice!*e9el
$greements
4A
Accountability Responsibilit," This
part of the (*$ defnes hat each part, to
the agreementEthe ser9ice pro9ider
and the customerEis responsible for"
Per(ormance le#els 0+pectations for ho
the re1uirements of the agreement ill be
fulflled"
Remuneration Compensation hen
performance fails to meet the agreed!upon
le9el"
ered, in a 1uantifable a,, so ,ou and the
ser9ice pro9ider kno hen the
performance le9el is met and hen
performance is unsatisfactor,"
)inall,, ,ou detail in ,our (*$
remuneration" Remuneration is hat the
ser9ice pro9ider promises to gi9e ,ou if it
fails to meet performance le9els" Fsuall,,
its a percentage of the fee for ser9ice"
This part of the (*$ can also include
reards if the pro9ider gi9es an
e+ceptional le9el of ser9ice performance"
You ant to bring in three ne phone
lines" You call and make an appointment" 6n
accordance ith ,our (*$, installing ne lines
of this t,pe ma, take as long as 74 hours"
Because the sooner the lines are in, the
more the pro9ider makes, the com! pan,
has an incenti9e to do a speed, ?obEand
it does, getting ,our ne lines up and
running less than /7 hours after ,our call"
$s the customer, its eas, to see ho
the (*$ benefts ,ou" Thinking of the
consumer e+ample, ,ou ma, e9en ish
,ou had an (*$ to hold o9er the head of
,our local telecom ser9ice pro9ider"
&oe9er, from the ser9ice pro9iders
point of 9ie, the (*$ is more than a big
stick ielded b, customers to get per!
formance"
Remember our defnition of customer
relationship manage! ment: a
comprehensi9e approach for creating,
maintaining, and e+panding customer
relationships" The crafting of the (*$ pro!
9ided an opportunit, to create a customer
relationship ith rea! sonable and
achie9able e+pectations" 6t as a time for
engaging the customer in the creation of
a ser9ice plan that orks for both the
pro9ider and the recei9er" Clear
e+pectations for both the e9er,da, e9ents
of the ser9ice relationship, such as
e+panding
A< Customer Relationship Management
ser9ice, and fallbacks and compensation
for those times hen, despite best
efforts, things didnt ork as ed hoped,
also keep the customer relationship on an
e9en keel"
Creating an (*$
$s a manager interested in promoting CRM,
,ou ma, be on the pro9ider or the recei9er
side of the (*$" 0ither a,, the process for
creating ,our ser9ice!le9el agreement
remains the same, especiall, hen the
ser9ices ,oure contracting are tools to
sup! port ,our CRM strateg,"
There are si+ steps to the (*$ process
map"
Step * in the process is to re9ie ,our
CRM strateg," Because (*$s are
traditionall, focused on ho does hat
and
hen, its critical to begin ith h! an, of
us are doing an, of it" The ke, focus should
ala,s be to create and retain customers"
8ith a clear understanding of hat ,ou
ant to accomplish, ,ou can mo9e to Step
.: meet ith the other part, to defne
re1uirements and e+pectations" 6ts
important to be e+tremel, clear in ,our
defnitions because ,ou and the other
part,E
-ont $gree to -isser9ice
Your Customers Carol #err
recentl, purchased a ne computer"
The retailer e+plained that she could
order her 3C direct
from the manufacturer for V/<< less than the
cost of the displa, model" $fter recei9ing
assurances that the computer ould be read,
b, a spe! cifc date, Carol placed her order" 8hen
Carol called to check on the status of her
computer a da, before the promised deli9er,,
she learned that the manufacturer as behind
and hadnt e9en started to build her unitEand
that it ouldnt be read, for at least to more
eeks" -isappointed, but needing her ne 3C,
Carol offered to pa, the e+tra
V/<< and take the Hoor model" IOh, e cant do
that"You cant cancel an order once its been
placed"K $fter se9eral con9ersations, a fe
heat! ed ords, and to calls beteen the
manager and the manufacturer, Carol as able
to gi9e the store V/<< more and take home
the Hoor model" This is a clear case here the
(*$ beteen the reseller and the
manufacturer must ha9e made sense to
someoneEbut in the end it did! nt build
customer relationships for either of them"
(er9ice!*e9el
$greements
A5
Motorola Fses $nalogies
Fse analogies and e+amples to enhance
understanding for ,our re1uirements
and e+pectations" )or e+ample, a
pro?ect
group at Motorola needed to create a ne
agreement ith a ke, cus! tomer for
prioritiMing crises" I09er, eek, or more often
e9en, the, ould call ith a ne crisisEoften
caused b, something that hap! pened on their
end" $nd the, e+pected us to drop e9er,thing
and mo9e mountains" $nd e did, but e did it
so often e ere actuall, creating more
crises on our side" 6t as a 9icious circle"
09er,thing as becoming a crisis"K
The team leader set up a meeting ith his
customer" 8e coached him to use the language
ith the customer that hed used ith us" 6n the
meeting, he e+plained to his counterpart, I8e
can mo9e mountains, ?ust not e9er, mountain,
e9er, da,"K The image added both humor and
clarit, to the discussion" $nd the customer
agreed to prioritiMe and e+pect Ionl, to
mountains mo9ed b, miracle each month"K
hether a ser9ice pro9ider or a
customerEma, ha9e different
orld9ies"
-ont lea9e an, e+pectation or
re1uirement unstated" 8alk together
through the ser9ice process" 8hat ill it
look like, feel like, sound like hen
e9er,thing is going ell; 8hat t,pes of
issues or ser9ice interruptions might ,ou
anticipate and ho should those be
handled; (ee Chapter A, Managing
Relationships Through ConHict, for more on
handling possible ser9ice problems"
Yuestions to $sk
To help ,ou anticipate problems, use
this checklist" )or each item, ask
,ourself, I8hat performance
problems
might occur around this issue;K 6f a
performance problem is likel! or if it puts ,our
customer relationships at e8treme risk, then it
should be part of ,our re1uirements and
e+pectations discussion"
R 3ersonnel
R )acilities
R 3oer
R 6nternet:telecommunications connections
R Merger:ac1uisition
R -isaster
A/ Customer Relationship Management
8hen ,ou think ,ou9e defned the ke,
performance re1uirements and
e+pectations, check again ith ,our CRM
strateg," 8ill this performance trul, help ,ou
achie9e ,our CRM goals;
8hen both sides ha9e agreed upon the
ke, performance re1uirements and
e+pectations, ,oure read, for Step 3:
defne performance measures" &o ill
,ou determine if the agreed! upon
performance le9el is being met;
Measures should be time! l, and accurate,
ithout placing an, undue burden on
an,one"
6f ,our (*$ concerns an application, ,ou
ma, measure per! formance ith an
application monitoring tools" This softare
solution can detect and record problems,
identif, slodons, and run in!depth
reports on transactions and response time"
6f human performance is at issue, ,ou ma,
need both 1uantitati9e and 1ualitati9e
measures" $gain, compare ,our
performance meas! ures ith ,our CRM
strateg," $re ,our measures getting at the
performance elements that most promote
,our CRM approach;
&anging Fp
Operators at a ser9ice repair call
center ere measured on length of
call" Ostensibl,, the purpose of this
measure
as to create call eScienc,, to discourage calls
that ere unnecessaril, length, and chatt," 6n
realit,, the operators kne that at three
minutes, the red light on their phones ould
begin to blink" (ome, hile in mid! ord, ould
choose that moment to hang up on the
customer" Their reasoning: IThe customer
ould ne9er belie9e 6 hung up on purpose hile
6 as speaking and management ould ne9er
belie9e that 6 need! ed more than three
minutes to get all the information from the
cus! tomer" But 6 did and 6 do" &anging up ?ust
seems like the best option"K
-o ,our performance measures
inad9ertentl, encourage the rong
performance;
Step 6, defne reards and penalties,
goes hand in hand ith (tep =" The
performance measure means little until
its used to gi9e reards or to make
corrections" Traditional (*$s focus on
remuneration, on hat the ser9ice
pro9ider ill gi9e back if performance
falls short" *ittle, if an,, attention is gi9en
to reards for great performance"
(er9ice!*e9el
$greements
A=
IThe reard is, the, get to keep the
contract,K one manager told us" I8h,
should 6 gi9e them e+tra if the, do hat the,
said the, ould do;K
%ood point, but hat about those times
hen the ser9ice pro9ider goes abo9e and
be,ond; You ma, ant to be more
creati9e in defning reards" )or e+ample,
,ou could ask for a letter of
acknoledgment and praise that ,ou can
share ith the ser9ice team W or e9en use
in marketing" The ke, is taking this
opportunit, to defne a,s
to dra customer
attention to
superior
performance"
Before lea9ing
(tep 7, compare
,our remunera!
tion and reard
agree! ments ith
,our CRM strateg,"
$re ,ou penaliM!
ing an, beha9ior
that ma, actuall,
promote ,our CRM
strateg,; $re ,ou
rearding an,
beha9ior that
doesnt ser9e
,our CRM strateg,;
'o ,oure
read, for
implementation,
Step 8, monitor
performance"
&eres here the
rubber meets the
road" You9e
-ont Bu, the
3roblem
IBu,ing the problem"K
Thats the
automoti9e
industr,s phrase for
those times hen
the, ?ust gi9e the
customer mone, to
go aa,, rather than
f+ing their
automobile" 6n the
automoti9e orld,
this strateg, makes
sense" There are
some lemon
cars that ?ust cant be
f+ed to the cus! tomers
satisfaction" &oe9er, in
an (*$, beare of the
temptation to ?ust
Ipa, the priceK and settle
for per! formance that
doesnt meet the mark"
Yes, ,ou ill be in
compliance ith ,our
agreement, but ,ou
ont be inning the
long!term lo,alt, of ,our
customer"
defned e+pectations and re1uirements,
set up measures, and decided hat ,oure
going to doEto reard or to correctE
based on the results" 3ut the process into
motion and atch it go"
#eep ,our CRM strateg, in mind as ,ou
re9ie ,our moni! toring efforts" $re ,ou
the monitoring police or the performance
partner; 8e belie9e that ,our monitoring
process can and should actuall, model the
t,pes of relationship ,ou ish to pro! mote
ith ,our customers"
The fnal step, Step 7, is to re9ie the (*$
regularl,, at
A7 Customer Relationship Management
Monitoring
$dults $t a
managed health
care pro9ider
based in
Minneapolis, member
ser9ices repre!
sentati9es are regularl,
monitored for 1ualit, of
calls" $ computer s,stem
randoml, samples their
calls for a super9isor to
re9ie and grade"
&oe9er, representati9es
ho9e pro9en
themsel9es b, earning
consis! tentl, high
ratings can monitor their
on callsZ the super9isor
makes ?ust a fe spot
checks each ,ear" This
process ensures 1ualit,
and models an attitude
that Ie treat people as
9al! ued, capable adults"K
8hat does ,our
monitoring process
model;
least annuall," The
frst ,ear, e
recommend that
,ou re9ie the
agreement e9en
more often, so
,ou can make
an, needed
ad?ustments in
e+pecta! tions
and
re1uirements"
(ometimes its
onl, after an (*$
is in place that ,ou
realiMe that a
measure is
sending
performance in
the rong
direction or that
,our monitoring
process is too
cumbersome to
pro! 9ide timel,
information"
01uall,
important in this
step is realiMing
that
,our CRM strateg, ma, change o9er time,
so ,oull need to ad?ust ,our (*$ to sta,
current ith it" The folloing bo+ sum!
mariMes the steps e9e ?ust discussed"
Creating an (*$ 3rocess Map
(tep 5: Re9ie ,our customer relationship
management strateg," (tep /a: Meet to
defne re1uirements and e+pectations"
(tep /b: Compare to ,our CRM (trateg," -o the
re1uirements ,ou set trul, help ,ou achie9e
,our CRM goals;
(tep =a: -efne performance measures"
(tep =b: Compare ,our performance measures
ith ,our CRM strate! g," -o ,our measures
get at the performance elements that most
promote ,our CRM approach;
(tep 7a: -efne reards and penalties"
(tep 7b: Compare ,our remuneration
agreement ith ,our CRM strateg," $re ,ou
penaliMing an, beha9ior that ma, promote
,our CRM strateg,; $re ,ou rearding an,
beha9ior that doesnt ser9e ,our CRM
strateg,;
(tep Da: Monitor performance"
(tep Db: Re9ie ,our monitoring efforts hile
considering ,our CRM
(er9ice!*e9el
$greements
AD
strateg," $re ,ou modeling the t,pe of
relationship ,ou ish to pro! mote;
(tep 2a: Re9ie the (*$ annuall,"
(tep 2b: 'ote an, changes to ,our CRM strateg,"
&o must the (*$
change to sta, current ith ,our CRM strateg,;
Fsing (*$s to (upport 6nternal Customer
Relationships
Fsed ith ,our internal customer
relationships, (*$s can help ,ou achie9e
to of the CRM success factors listed in
Chapter 5:
5" Builds strong internal partnerships around
the CRM strateg,"
/" 0mplo,ees at all le9els and all areas
accuratel, collect information for the
CRM s,stem"
$s e stated in Chapter 5, CRM is
e9er,ones responsibilit,"
ICRM does not belong ?ust to sales and
marketing" 6t is not the sole responsibilit,
of the customer ser9ice group" 'or is it
the brainchild of the information technolog,
team" W CRM must be a a, of doing
business that touches all areas"K 6nternal
(*$s can help other areas kno e+actl,
ho the, support CRM"
)or e+ample, imagine that ,oure the
manager of the cus! tomer ser9ice group"
Your relationship to ,our organiMations
CRM strateg, seems prett, clear" Your
group is in contact ith customers
e9er, da,, using CRM tools to track each
transac! tion, spot ne trends as
customer e+pectations change, and
identif, opportunities to e+pand the
ser9ice relationship"
6n addition to ,our contact ith e+ternal
customers, ,our group has internal ser9ice
relationships ith man, other areas,
including the arehouse" $fter reading this
chapter, ,ou decide to create an (*$ ith
this group" $s internal partners, ,ou
recogniMe that the agreement ill in9ol9e
performance!le9el e+pectations on both
sides" Youll bring ,our concerns and in9ite
,our counter! parts to bring theirs" Youre
there to discuss hat ,ou e+pect and hat
,ou need, so that at the end of the da,
e+ternal customers are ell ser9ed" CRM,
ser9ing customers so ell that the, ant to
continue to do business ith ,ou and to
fnd ne a,s to do
business ith ,ou, is the touchstone
for a good agreement" )or e+ample,
one of #ristin $ndersons clients
recentl,
installed a ne CRM softare tool to track
customer problems" Customer ser9ice
representati9es ere instructed to open
a ticket for each customer incident" (ome
incidents ere comple+ and needed to be
escalated to the engineering group for
resolu! tion" The engineers ere good
about acting to resol9e the issue, but
lous, about recording their actions and
closing out the trou! ble ticketZ it ?ust
seemed like unnecessar, e+tra ork to
them"
The manager of the customer ser9ice
group met ith the engineering team"
8ithout using the term Iser9ice!le9el
agree! ment,K he took them through the
process during the meeting" Once the,
understood h! the information on the
trouble ticket as important and ho it
as used, the, ere much more ill! ing
to complete the online forms" 6n return,
the, asked that some of the forms be
simplifed and that the groups agree on
some common shorthand a,s of
entering information" Recent monitoring
shos that the engineers are folloing
through on their performance
commitments" The internal partnership
beteen engineering and customer
ser9ice is stronger than e9er"
Your internal ser9ice!le9el agreement
ma, not ha9e the
%et Out of .ail )ree
$ conference attendee told us about
his department man! agers creati9e
effort to de9elop better orking
relation!
ships ith other internal areas" The original
corporate culture placed a lot of energ, on
blaming and berating other departments for
prob! lemsEhich did nothing to get issues
resol9ed for customers" One da,, the manager
brought in the I%et out of .ail )reeK cards from
his
famil,s Monopol,
N
game" The ne+t time
someone began ,elling about a mistake and
blaming his department, he pulled out a card,
signed it, and handed it o9er" I6m sorr, there is a
problem and 6 ant to get it f+ed, $($3" $nd to
make it up to ,ou, heres this card" The ne+t
time ,our area makes a mistake, pull this out
and e ont ,ell or gripe or com! plain" 8ell
?ust get to business fnding a solution"K
-o ,our internal ser9ice agreements allo ,ou
to Iget of out ?ailK
and get to business on behalf of ,our
customers;
(er9ice!*e9el
$greements
A> fnancial reards or remunerations"
&oe9er, ,ou can be cre! ati9e" Ma,be
,oull decide to reard superior
performance on either side b, hosting a
piMMa part, in appreciation"
Making (*$s 8ork
6deall,, ser9ice!le9el agreements are a
a, to ensure that ,our performance
enhances customer relationships" But (*$s
arent a substitute for the ongoing, da,!
to!da, ork of unco9ering hat ,our
customers e+pect and need, and
searching for ne a,s to pro9ide it to
them"
(er9ice!le9el agreements dont ork
hen:
R Compliance to the Iletter of the laK
in the agreement means more than
ser9ing the customer"
R Customer needs and e+pectations
change, but the (*$
doesnt"
R 3enalties are ignored or seen as a
Icost of doing busi! ness"K
R (uperior performance isnt
recogniMed and acknol! edged in
a meaningful a,"
Make sure that ,our formal and informal
(*$s dont fall into one of these
performance traps"
The (*$ modelEdefning accountabilit,,
performance le9! els, and reard and
remunerationEis a poerful tool for ,our
efforts" 8e encourage ,ou
to take the (*$ model and use it ith ,our
business!to!business customers, ,our
consumer customers, and ,our internal
cus! tomers"
Managers Checklist for Chapter >
$ ser9ice!le9el agreement is a
promise or guarantee of per!
formance beteen a ser9ice pro9ider
and a customer"
(*$s can help ,ou ensure that e9er,one
in ,our team is on board and
contributing to ,our customer
relationship man! agement strateg,"
$n effecti9e (*$ ill spell out
accountabilit,, performance le9els, and
remuneration"
Creating an (*$ is a si+!step process: B5C
re9ie ,our cus! tomer relationship
management strateg,, B/C meet to
defne re1uirements and e+pectations,
B=C defne performance measures, B7C
defne reards and penalties, BDC monitor
per! formance, B2C re9ie" $t each step
of the a,, use ,our CRM strateg, as a
touchstone to ensure that ,our efforts
ill ser9e to maintain and gro
customer relationships"
(*$s ith internal customers can help
,ou create strong internal partnerships
around the CRM strateg, and can
encourage emplo,ees at all le9els and
all areas to collect accurate
information for the CRM s,stem"
0!
Commerce:
Customer
Relationshi
ps on the
6nternet
.
ust a fe ,ears ago, #ristin $nderson
attended a Chapter *eadership session at
the 'ational (peakers $ssociation
conference" $s -irector of Communications
for the Minnesota Chapter, #ristin as
looking for a,s to get more information to
chapter membersEher '($!M'
IcustomersKEhile spending less of their
mone," -uring a round!table discussion,
#ristin
learned that se9eral chapters had done
aa, ith e+pensi9e printed nesletters in
fa9or of e!Mines or 8eb!based
publications"
IBut hat about members ho dont
ha9e e!mail;K she asked"
There as a moment of pause, then
the discussion leader replied, IOur
chapter doesnt ha9e an, members ho
dont ha9e e!mail"K #ristin ?ust stared"
&e ent on to e+plain, I8e used to ha9e
members ho did! nt ha9e e!mail" (ome
of them ?ust didnt think the, needed itE
the, had ample business and their
customers erent complain! ing" Others
didnt ant to make the fnancial
in9estment" $nd some ere ?ust plain afraid
of the 6nternet" But a couple of ,ears
A
A
L
5<
<
Customer Relationship Management
ago e made a decision to alk the talk of
our mission, to
Jad9ance the art and 9alue of e+perts ho
speak professionall," 8e challenged all
our members to mo9e into the electronic
age and offered assistance and ad9ice to
those ho ere unsure" Toda,, not e9er,
chapter member hasEor needsEa 8eb
page marketing their ser9ices, but e9er,
member can and does com! municate
ith clients, and colleagues 9ia e!mail"K
$ leader from another chapter
concurred: I0lectronic com! munication is
a must" You ont be taken seriousl, in
this busi! ness or an, business ithout
it"K The message as clear: if ,ou ant to
be a business professional, ,ou need to
be on the infor! mation superhigha,,
the 6nternet"
$ fe ,ears ago, e ere inclined to
argue that not e9er, business needs to
take this road" Toda,, e are hard!pressed
to fnd e+amples of thri9ing businesses
that dont dri9e on the infor! mation
superhigha, in one a, or another" 6n fact,
e are pre! pared to argue that e!
commerce is a nonnegotiable if ,ou ant
to ma+imiMe ,our CRM successEno matter
hat ,our business"
You ha9e to understand enough about the
6nternet to under! stand ho e!commerce
changes and ill continue to change ,our
customers e+pectationsEand ho it is
changing their relation! ships ith other
ser9ice pro9iders" $s ,ou ill read in Chapter
5<, )ighting Complacenc,, ,ou are in
competition ith e9er, other customer
ser9ice pro9ider ,our customer
e+periences"
8hos Fsing the 6nternet;
Girtuall, 09er,one Consider this"
$n, one of us can donload the federal
ta+ forms e need from the 6R( 8eb
site" 6s e9er,bod, doing
so; 'o" Man, ta+pa,ers dont ha9e 6nternet
access or the, fnd the prospect of searching
the 8eb site to be intimidating" (o, the, contin!
ue to rel, on the forms the, get in the mail or
from local libraries and post oSces" &oe9er, a
human resources manager recentl, shared
ith us, I6 got m, forms from someone ho used
the 6R( 8eb site"K
(o, e9en those people ho are ?ust
passengers are using the super! higha," $nd
man, of them are easing into taking the
heel"You ant to be out there and read, for
them"
0!Commerce: Customer Relationships on
the 6nternet
5<5
CRM on the
6nternet 0!
commerce reall,
isnt a ne game"
6ts an e+ten!
sion of the game
e9e been
pla,ing since the
dan of
commerceEthe
game of creating,
main! taining, and
e+panding
customer
relationships"
#ristin $ndersons
grandfa!
Customers on
the 'et
$ccording to
'ielsen:'et Ratings,
52>"D million people
in the Fnited (tates ha9e
home 6nternet access"
Thats nearl, 2<T of all
$mericansEand the
number is rapidl, groing
across all demographic
groups" $dditionall,, nearl,
half of all $mericans bu, on
line" Can ,ou reall, afford
not to be on the 'et;
ther, hom e rote about in the
3reface, ne9er kne about e! commerce"
&oe9er, if Carl T" $nderson ere running a
grain ele9ator toda,, he ould fnd the
6nternet to be a poerful tool for
communicating ith co!op members,
atching the market for pricing trends,
scheduling shipments, and completing
sales" To pla, the game of business in this
centur,, its important
to kno hat e!commerce can do for ,ou
and ho its chang! ing customer
e+pectations" 8orking ith the
touchstone of ,our CRM strateg,, ,oull be
able to use ne rules and the ne tools
offered b, e!commerce to satisf, ,our
customers"
The 6nternet can enable ,our customer
relationship manage! ment strateg, in
three a,s"
Le#el *< ettin+ in(ormation out to
customers. The 6nternet can pro9ide an
a9enue for getting information about ,our
business and ,our products and ser9ices
to ,our current and potential customers"
$t its most basic le9el, this means letting
them kno ,ou are there and ho to
reach ,ou in the Ireal orld"K 6t can be as
simple as a 8eb!based brochure that
describes ,our products and ser9ices
and tells customers here ,ou are
located and ho to reach ,ou b, phone"
Le#el .< ettin+ in(ormation back
(rom customers. The ne+t le9el of
sophistication means ,ou not onl, pro9ide
information to ,our customers, but also
learn more about them and from them"
The 6nternet allos ,ou to collect all sorts
of usefulEand sometimes not so useful
Edata about ,our customers"
5<
/
(ometimes this means customers
respond to 1uestions and pro9ide ,ou
useful information" 6n other cases ,ou ma,
be able to collect information thats 9er,
useful to ,our business ithout interfering
at all ith the customer e+perience"
Le#el 3< ;9commerce sales. $t its
highest le9el, ,ou can use the 6nternet to
deli9er products and ser9ices to ,our
customers" You can ha9e mutuall,
rearding relationships ith customers
,ou ne9er see, meet, or speak ithL Your
entire relationship can successfull, e+ist
in c,berspace" 8ith the technolog,
a9ailable toda,, ,ou can sell ,our products
o9er the 6nternet, respond to customer
1uestions, offer additional products and
ser9ices
based on pre9ious purchases, and
e9aluate customers satisfac! tion ith
,our offeringsEall ithout e9er dealing
ith them in person" *e9eraging the 6nternet
can free up resources to deli9er higher
le9els of 9alue to customers in ne a,s"
*e9el 5: %etting 6nformation out to
Customers
8ith half of $merican households ired to
the 6nternet, and the numbers groing
throughout the Fnited (tates and the orld,
,ou should e+pect ,our customers to
search the 8eb for infor! mation about
,ou and ,our products and ser9ices" )rom a
CRM standpoint, its helpful to think about
this le9el of 6nternet acti9i! t, in to a,s,
passive and active"
8hether ,ou intend it or not, hether
,ou create it or it comes from another
source, ere illing to bet dollars to
donuts that ,ou ha9e a presence on the
6nternet" $ search of
the 6nternet ma, re9eal ,our passi9e
presence in an, number of a,s" &ere are
?ust a fe:
R 0lectronic Yello 3ages, such as
"(uper3ages"com
R Con9ersations in an online chat or
on an industr,! or association!
based bulletin board
R References in articles
8hile ,ou dont directl, control these
sources of informa! tionEhat e
consider ,our passive 6nternet presence
Eit pa,s to be aare of hat ,our
customers ill fnd hen the, look
the 6nternet
5<=
around the
superhigha, for
,ou" 6f ,ou fnd that
negati9e
information is out
there, hat Melinda
%oddard of Roche
-iagnostics calls
Iord of mouse,K
then ,ou can plan
a strateg, to rebut
it direct! l, or to
arm ,our
customer
#eep Fp to
-ate (earch for
,our compan,s
contact
information
through
se9eral online ,ello or
business page sites" Most
of these sites ant to
hear from ,ou if ,our
information is missing or
inaccurate" Be proacti9e in
keeping it up to date"
contact emplo,ees to address it if
customers bring it up"
You can also ha9e an acti9e 6nternet
presence at *e9el 5 b, putting up a
simple, information!based 8eb page or b,
placing articles on sites ,our customers
and potential customers are likel, to
9isit" The ke, is to
put ,our
information here
customers and
potential
customers ill fnd
it and use it to do
business ith ,ou"
$fter all, the core
of CRM is creating,
maintain! ing, and
e+panding cus!
tomer
relationships" You
cant do that if the,
cant fnd ,ou"
Check Your
(ignposts
8hen customers search
for ,our compan,
through the elec! tronic
Yello 3ages or in a general
6nternet search, ho
1uickl, does ,our
information appear; Make
it a point to conduct a
monthl, 6nternet search
for ,our compan, contact
information"
*e9el /: %etting 6nformation Back from
Customers
The ne+t le9el is to use the 6nternet to get
information back from ,our customers"
There are three general a,s to do this"
)irst, ,ou can simpl,
ha9e an e!mail
address and
make it a9ailable
to
,our customers"
)or e+am! ple, at
the
"briefcase!
books"com site,
,ou can click on
infoPclpub"com
to ask a general
1uestion
&a9ing a
3resence You
dont ha9e to ha9e
,our on 8eb
page to ha9e an
6nternet presence" )or
e+ample, man, small bed
and breakfast operators
ha9e 6nternet listings ith
their area B]B association
or ith their local
chamber of commerce"
5<
7
Take Our Challenge
*og onto an 6nternet search engine" -o a
search using ,our compan, or product
name" Brose through the results and
then
ask ,ourself these 1uestions:
R &o eas, is it for a customer to fnd and
contact ,ou 9ia the
6nternet;
R $re there an, other companies or 8eb sites
ith similar names that might confuse ,our
customers;
R &o could ,ou make it easier for customers to
fnd ,ou through an
6nternet search;
$ 1uick search of Ibriefcase booksK on
"google"com brought
up the home page for this book seriesE
"briefcasebooks"comEas the frst entr,"
&oe9er, it also brought up a site for a
softare com! pan, that has a page
recommending fction books, a possible
source of confusion for readers and potential
readers of this series"
or send a suggestion to .ohn 8oods and
the team at C8* ho put the series
together in partnership ith Mc%ra!&ill" Or
,ou
ma, click on the
$sk the
0+perts #ristin
$nderson adds to
her acti9e 6nternet
presence
b, participating in the
I$sk the 0+pertsK
netork through
"Training(uper(ite"co
m" 09er,
time she chooses to
anser a 1uestion and its
posted on the site, #ristin
increases her
9isibilit, to clients
and potential
clients" 8here could
,ou or a member of
,our team increase
,our 6nternet
presence; $nd if
,ou ser9e internal
customers, here
could ,ou increase
,our presence on
,our orga! niMations
intranet;
Motivating
9mplo!ees book
and send a
1uestion or
comment
directl, to co!
author $nne
Bruce"
(econd, ,ou
can also collect
information from
,our customers
b, asking them
to register at ,our
site" The
registration
process allos
,ou to col! lect
some general
informa! tion up
front" $nd, hen
customers log in
on sub! se1uent
9isits, 8eb!
based softare
can track the a,
the, use the site so ,ou can learn about
hat information the, seek out frst and
most often, hat areas of ,our site the,
dont bother to 9isit, and ho fre1uentl,
the, stop off at ,our (uperhigha, e+it" 6f
,our customers might balk at signing in
the 6nternet
5<D
?ust to cruise ,our
site, ,ou can use
CRM softare
tools to track
them based on
their purchases"
$ third a, to
collect data from
,our customers is
b, putting
sur9e,s or a
1uestion of the
da, on ,our site"
6t also ser9es to
acti9el, engage
them in
Fse Your
-atabases Make
sure that
customer
purchase tracking
tools inte!
grate ith other
customer databases" )or
e+ample, in collecting
past!due pa,ments from
a customer, it makes
business sense to offer
more leea, to a long!
term customer ho
ala,s
pa,s, albeit oQ schedule"
,our site" $nd offering to e!mail them the
results or to post the results on ,our 8eb
page gi9es ,ou another opportunit, to
communicate ith this ke,
group"
*e9el =: 0!
Commerce (ales $s
organiMations ,earn
to mo9e be,ond
the tradition! al
orld of bricks and
mor! tar, the call
goes out: I*ets get
on the 6nternet and
sell stuff"K 8e
encourage ,ou
to alk before ,ou
runEor
Check the 0!
Mail 6f ,ou make
an e!mail
address
a9ailable to ,our
customers, make sure
someone checks it
regularl,Ese9eral times
a da, is
best" Customers e+pect
1uick replies to e!mail,
e9en if that repl, is
simpl,
I8e got ,our message and
ill ha9e an anser for
,ou ithin 74 hours"K
dri9eEon the e!commerce higha,"
09en if ,ou launch all three le9els at the
same time, consider them in a linear
fashion" 6ts important to kno hat
information is alread, out there about ,ou
Eor about ,our industr, or ser9ice
segment" $nd before ,ou start charging
credit cards and shipping products, its 9ital
that ,ou ha9e s,stems and processes in
place to recei9e and anser customer
1uestions and concerns"
There are to parts to a le9el!= 6nternet
presence"
One part is the actual sales of products
and ser9ices" This is hat comes to mind
hen e hear the term Ie!commerce"K
*arge!scale retailers use sophisticated
applications to manage online sales" This
re1uires a large in9estment and re1uires
high! 9olume sales to make it pa, off" 6f ,ou
arent read, to be in e! commerce in such
a dedicated a,, ,ou can still offer ,our
5<
2
products and ser9ice b, linking to
another e!commerce source" )or
e+ample, man, authors ill link their
personal sites to their book publishers site
or to a large book retailer, such as $maMon
or 4<<!C0O!R0$- Bformerl, (chartM Business
BooksC"
The other part
of ,our le9el!=
presence is
pro9id!
The 'et as
Research
Research suggests
that up to >DT of
online shoppers
dont complete their
purchase on the 6nternet"
6nstead the, use e!
commerce sites to fnd
and research products
before completing their
purchase either b, phone
or ith a 9isit to a store
location"
ing real!time
customer
ser9ice
support"
-a9id (ims,
riting in
crmguru"coms
Customer
Relationship
Management
3rimer, notes,
I09er, per! son
ho uses online
help instead of
calling ,ou sa9es
,ou mone,"K &e
1uotes a 8eb!based customer ser9ice
application 9endor ho e+plains, IThe
hole point of online customer ser9iceE
e!ser9! iceEis to ha9e people taking
up ,our ebsites time instead of
taking up ,our customer ser9ice reps
time"K
You can
pro9ide online
customer
ser9ice through
Customer
(er9ice and
0!
Commer
ce )orrester
Research found
that =>T of all online
bu,ers ha9e re1uested
customer ser9ice
online"
A<T of online shoppers
consider good customer
ser9ice to be critical
hen choosing a 8eb
merchant" &o good is
,our online customer
ser9ice;
the folloing
means:
R Search engines
E$ site!
based search
engine helps
,our customer
fnd ansers to
his or her
1uestions,
locate
information,
and con! nect
1uickl, to the
right
department"
0 Fre:uentl! (ske" ;uestions <F(;s=>
$ place on ,our 8eb site here ,ou
list and respond to the most com!
mon concerns e+pressed b,
customers"
R 7ive helpEYour customers can
actuall, speak to a cus! tomer
ser9ice representati9e hile the,re
online 9isiting ,our site through Goice
o9er 6nternet 3rotocol BGO63C applications"
the 6nternet
5<>
R Online or"er tracking>8ith
customiMed applications, ,ou can allo
customers to track the progress of
their order, ?ust as )ederal 0+press
allos customers to check pack! age
status o9er the 6nternet"
'aMan )ath,, riting for
"suite5<5"c
om, I0!
commerce: $ll
$bout Customer
Relationship
ManagementK
B$pril 5,
5AAAC, said, IThe
epitome of online
ser9ice is to
respond to
customers in a
consistent and
high!1ualit,
manner through
their channel of
choice, hether
Eoice o#er
,nternet
Protocol HE&,PI $
fea! ture that
allos 9isitors to a
8eb site to click a Icall
agentK button" 6f ,our
customer has a
multimedia 3C, the ser9ice
representati9e can ha9e
a con9ersation ith the
customer right o9er the
6nternet" Or, the
customer ma, send a
message for the ser9ice
rep to call back on a
separate line"
that is the e!mail, the phone or online
chat"K
Choosing the Right Gehicle
&a9ing a presence on the electronic
superhigha, doesnt re1uire that ,ou
purchase a brand!ne *e+us, but ,ou
should not assume that the cheapest
model ith no options ill do the ?ob"
Choosing the right e!commerce 9ehicle
for ,ou and ,our customers is a three!
step process"
(tep one is to go back to ,our
customer relationship man! agement
strateg," Refresh ,our memor," $sk
,ourself three 1uestions:
5" 8hat am 6 tr,ing to accomplish ith CRM;
/" 8hat kind of e+perienceBsC do 6 ant m,
customers to ha9e;
=" 8hat information do 6 need to get to
or from m, cus! tomers to enable
deli9er, of an e+ceptional
customer e+perience;
8e suggest that ,ou keep a ritten cop, of
,our CRM strateg, close at hand as ,ou
ork through the ne+t to steps of the
process" Make sure e9er, decision ,ou
make along the a, is aligned ith ,our
o9erall CRM strateg,"
5<
4
(tep to is to plan out here ,ou ant to
go" Think about the Customer (er9ice:(ales
3rofle discussed in Chapter / and Chapter ="
8here do ,ou ant to take ,our customers
during their online 9isit; $maMon"com
uses its online presence to foster
customer relationships at all three le9els"
$n, indi9idual can search the $maMon
database and purchase a book or other
product" Thats the stand!alone transaction
piece" $maMon also encourages ,our ne+t
purchase, the Irepeat customerK piece,
ith its Icustomers ho bought this
product also bought these productsK
feature" 8hen e 9isit $maMon"com, e
are automat! icall, recogniMed and greeted
ith I&ello" 8e ha9e recommen! dations
for ,ou"K $maMon"com also nurtures the
Icustomer ad9ocac,K piece b, asking
customers to re9ie the books and
products the, fnd on its electronic pages"
This in9itation encourages customers to
9isit the site after the, make and recei9e
their purchase, ?ust to put in their to
cents about their satisfaction or
dissatisfaction ith hat the, recei9ed"
Taking its customers on this highl,
sophisticated road through the its 3,ramid
3rofle re1uires that $maMon"com in9est
large amounts of fnancial and human
capital in its e!commerce connections"
$maMons applications represent the
monster (FG of e!commerce" $nd it orks,
and orks ell, for that compan,"
You, hoe9er, ma, ant to begin ith a
more modest in9estment as ,ou choose
,our e!commerce 9ehicle" Consider ho
,our compan, and ,our department
currentl, connect ith customers" Think
about ,our e+ternal customersEthose
ho pa, mone, for ,our products and
ser9icesEand ,our internal customersE
other departments or indi9iduals ho
depend on ,ou and ,our group"
Make a list" 3ut a star b, the
connections that alread, use the 6nternet"
&eres our list to get ,ou started:
R Yello pages:phone director,: More
and more customers search for
compan, contact information 9ia the
6nternet" $re ,ou listed; 6s the listing
accurate and up to date;
R 0!mail: 6s ,our e!mail address easil,
a9ailable to ,our customers; Man,
organiMations no use e!mail in the
the 6nternet
5<A same a, that 4<< numbers
ha9e been used for decades"
R 8eb site: 6s ,our site passi9e, more
of an electronic brochure for ,our
products and ser9ices; Or does it
allo customers to search for
information and )$Ys; Can
customers bu, directl, 9ia ,our 8eb
site; -oes ,our site help ,ou learn
more about hat ,our cus! tomers
are looking for;
R *i9e interaction 9ia the 8eb site: Can
customers connect ith ,ou hile at
,our 8eb site b, using document
shar! ing or a Go63;
'o, consider additional a,s ,our
customers ma, ant to connect ith ,ou
9ia the 6nternet"
(tep three is to choose the e!
commerce 9ehicle or Heet that best
matches here ,ou are and here ,ou
ant to go" *ist all ,our options" -o ,our
research" $nd consider the cost" -ont bu,
an application that ,ou arent fnanciall,
prepared to staff and support" 6ts better to
?ust ha9e an e!mail
address and a
passi9e 8eb page
than to in9ite cus!
tomers to engage
ith ,ou and
make purchases
at a site that
doesnt run
smoothl, """ or at
all" Remember that
,ou can
implement the
e!com! merce
sales portion of
,our CRM strateg, in
stages" You dont ha9e
to do e9er,thing all at
once"
'ordstrom"co
m
I8e anted something
9er, interacti9e
for our cus!
tomers,K said 3aul
Onnen, CTO of
'ordstrom"com" I$
lot of people ha9e
one phone line and
the, cant be on the
6nternet and call the
customer ser9ice center
at the same time"The,
dont ant to ait for the
turnaround of an
e!mailZ the, ant
something simultane!
ous"K GO63 as the anser
according to an article in
/nfo*es b, Bob Trott and
.essica -a9is B-ecember 55,
/<<<C"
Three Rules for (uccess on the Road
to 0!Commerce 'o ,oure read, to re9
up ,our e!commerce 9ehicleBsC, hether
e!mail, ,our 8eb site, or a sophisticated
real!time inter!
55
<
action" &eres here man, of us get
distracted from our 9ie of the forest b,
all those reall, cool trees out thereL
Throughout ,our e!commerce
implementation, keep ,our focus b,
remem! bering three rules for success:
R 0!commerce doesnt need to cost
big bucks"
R #eep it current" Customers e+pect
6nternet data to be more current
and up to date than an, of ,our
print materials"
R (tri9e to keep it personal"
-ont %et &ung Fp on
Technolog,
0!commerce CRM applications gro out
of the same strat! eg, seed as all other
CRM applications" Beare of technol!
og, for technolog,s sake" #no hat channels
,our customers prefer and at hat le9el of
sophistication the, use those channels" 8hile
the number of homes and businesses linked to
us b, the information super! higha, rises, not
e9er,one is dri9ing a fast car" .ust as e see old
clunk! ers on the roada,s, there are clunker
computers:softare out there" 8hat speed are
,our core customers dri9ing at; Can the, load
and use ,our e!application easil, at that speed;
Too man, spinning graphics and the page ont
load" $nd remember: ,ou cant ask someone to
look at ,our 8eb site as the, talk to ,ou on the
phone if their 6nternet connec! tion is using
their phone line, and their computer cant handle
GO63"
0!Commerce 'eed 'ot Be 0+pensi9e
$ simple pageE an electronic brochureE
that sa,s ,oure out there in IspaceK and
directs them to ,our IplaceK is better than
no presence" Carol found a lo9el, bed and
breakfast in Marion, ("C" hile searching the
8eb for a hotel near -arlington for a planned
9isit to the spring '$(C$R race" (he made
reser9a! tions o9er the phone and sent the
deposit b, Isnail mailK because the B]B
didnt accept credit cards, but it turned out
to be the perfect placeE=< minutes from
the racetrack, home,, ith opportunities
to meet and 9isit ith other race fans that
she ouldnt ha9e had at one of the big
chain motels"
the 6nternet
555
#eep 6t up to -ate
This is not about
being on the
cutting edge of
technol! og," This
is about updating
electronic
information the
same as ,ou
update infor!
mation elsehere"
6t takes more
attention, though,
because its Iout
thereK
'e
Customers
Minnesota
Orchestral
$ssociation
launched online
ticket purchases ?ust a
fe ,ears ago" The, found
that this tapped a hole
ne group of patrons,
indi9iduals ho regularl,
searched the 8eb for
enter! tainment e9ents
and ho no consid!
ered and attended
concerts"
somehere" 6ts not like ,our bricks!and!
mortar presence: ,ou alk though ,our
facilit,, ,ou handle papers, ,ou see
signage and realiMe it is rong and needs
to be changed and updated" But, ?ust as
e ma, forget to listen to our on 9oice
mail mes! sage to test it, e forget to
cruise and test our e!commerce
connections" )or e+ample, a local
restaurant still hadnt changed its 8eb
information to the ne area code, e9en
to months after the old area code
stopped orking" The 8eb page in9ited
guests to call the restaurant for
reser9ations, but an, potential customer
ho tried ould get a Ithat number is no
longer in ser9iceK message"
Make 6t 3ersonal
Think about ho each aspect of ,our 8eb
site ill either enhance or detract from the
customer e+perience" $nother a, of
thinking about it is to ask this 1uestion: 8ill
hat ,oure asking ,our cus! tomer to do
make their li9es better or easier in some
a,;
)or e+ample, $maMon"com allos Carol to
add items to a
I8ish *ist"K That a, hen her parents or
fa9orite aunt are looking for a gift idea, the,
can log onto the site and ala,s fnd a list
of things she ould lo9e to recei9e" The,
enter their credit card information and their
gift is shipped directl, to her doorstep" 6ts
the e1ui9alent of the bridal registr,, e9en
hen ,oure not getting marriedL )rom the
customers standpoint, its eas,: Carol can
add things as she is brosingEand her
parents dont ha9e to orr, about going to
the store, fnding something the,re not
sure she ill like, and then shipping it 5D<<
miles from 'orth -akota to Te+as"
55
/
)inding (er9ice
Bob Trott and .essica -a9is rote about
I0lusi9e Customer
(er9iceK in /nfo6orl" B-ecember 55, /<<<C"
One comment, b, an industr, anal,st, is 9er,
striking: IMore than D<T of 8eb sites dont ha9e
an,thing on their main page that tells customers
here to go for ser9ice"Thats ab,smal"Thats like
alking into a brick!and!mortar store and not
seeing an, salespeople on the Hoor"K &o eas, is
it for ,our cus! tomers to locate ser9ice
assistance on ,our 8eb site;
$nd hat does $maMon"com get out of
this; The, no ha9e information about
items Carol is likel, to purchase in the
future, topics shes interested in, and
products other customers like Carol ma,
be interested in"
8hat -oes the )uture &old;
ICustomer contact means customer
contact,K she insisted" IThe
6nternet cant replace that, cant substitute
for that" Besides, onl, ealth, people can
afford to ha9e it"K 6n 5A44, e heard a lot of
customer ser9ice managers talking that
a," Toda,, bricks!and!mortar stores are
con9erting to bricks!and!clicks entities at
an amaMing pace" .ust look at the number
of depart! ment stores that offer online
shopping inside the store" The,
dont ha9e it in stock; Youd rather ha9e it
deli9ered than schlep it home; Youre
bu,ing a gift that ,ou ould like to send
direct! l, to the luck, recipient; Then ?ust
step up to the kiosk, acti9ate the mouse,
and begin shopping"
6n fact, hold onto ,our mouse padE
theres a ne e9olution coming" 8ere
going mobile" 0!commerce is changing
from bricks!and!clicks to place!and!
space" 'o, ph,sical store loca! tions,
factories, and distribution centers arent
going aa," But not e9er, business 9enture
ill need them" Yet almost all com! panies
and organiMations ill need to create and
manage elec! tronic contacts ith
customers that ork ell on a cell phone
or a handheld de9ice"
6n a recent (tart the 8eek 6nspiration
3ack, eCustomer! (er9ice8orld"com
asked its subscribers, I$re You Read, for
m(er9ice;KEthe mobile e9olution" Fsing
)red 'eell and
the 6nternet
55=
#atherine 'eell *emons ne book,
6ireless Rules, eCustomer(er9ice8orld"com
in9ited readers to test their knol! edge
of the future of ireless communication"
You can take the same 1uiM in our sidebar"
)red 'eells
YuiM
&eres )red 'eells 1uiM, as presented b,
eCustomer(er9ice8orld"com" (ee ho ell ,ou
score:
5" B, hat ,ear ill the number of ireless
connections to the J'et out! number the
number of ired;
aC
/<</
bC
/<<D
cC
/<<>
/" &o man, ireless de9ices ill be in the
hands of F"(" consumers b, the end of /<<5;
aC D<
million bC
5<<
million cC
/<<
million
=" 8hat proportion of the 0uropean population
ill be surfng the J'et from their cell phones
b, /<<=;
aC
5<T
bC
/<T
cC
=<T
7" 6n f9e ,ears time, .apan ill ha9e more
ireless phones than aC 3ets
bC
3eopl
e cC
Cars
D" B, /<<=, hat share of 6nternet users ill trust
ireless transactions;
aC
//T
bC
7=T
cC
2=T
dC
4=T
Answers
5" aC 8ireless connections ill outnumber ired
b, /<</"
/" cC /<< million ireless de9ices ill be in the
hands of F"(" consumers b, end /<<5"
=" cC =<Tof 0uropes population ill surf from cell
phones b, /<<="
7" bC 3eopleL
D" cC 2=T of 'et users ill trust ireless
transactions b, /<<="
55
7
Being present on the 6nformation
(uperhigha, is a none! gotiable if ,ou
ant to ma+imiMe ,our CRM successE
no matter hat ,our business" 'earl,
half of all $mericans bu, online" Can ,ou
reall, afford not to be on the 'et;
The 6nternet can enable ,our
customer relationship man! agement
strateg, to get information out to
customers
B*e9el 5C, get information back from
customers B*e9el /C, and complete e!
commerce sales B*e9el =C"
6nformation about ,ou and ,our
organiMation is out there on the 8eb,
hether ,ou planned it or not,
hether ,ou like it or not" 6t ?ust
makes sense to kno and manage
hats there"
Fse the 6nternet to learn about ,our
customers and to gi9e them
opportunities to e+press concerns,
ideas, and re1uests to ,ou"
(ales come immediatel, to mind
hen e think of e!com! merce" Make
sure ,our e!commerce sales
connections le9erage ,our Customer
(er9ice:(ales 3rofle"
Managing
Relationshi
ps Through
ConHict
6
ts the nature of relationships to ha9e
conHict" 09en the best relationships go
through times of conHict" .ust ask an,one
hos been married or had a close friend
longer than a fe months"
8ith customers, conHict can come
hen ,ou err, the, err, some third part,
gets in9ol9ed and errs, or e9en as a result
of an act of %od" $n, time hat ,ou ant
as a customer is differ! ent from hat ,ou
get, there can be conHict" (ometimes,
there can be conHict hen ,ou get e+actl,
hat ,ou asked for, but not hat ,ou
e+pected"
ConHict can be destructi9e" $nd conHict
can be construc! ti9e" Carol #err and her
husband once spent a 'e Years holi! da,
at the historic %allatin %atea, 6nn in the
mountains of estern Montana" The entire
sta, had been onderful until 'e Years
-a," The, oke up late and padded don in
their slip! pers for brunch e+pecting to
fnd another e+ceptional meal aaiting
them" To their disma,, the, found the
dining room as
55
D
L
55
2
closed to refnish the Hoors" 'o one had
mentioned this in an, of the con9ersations
the,d had ith the staff in the pre9ious
four da,s of their sta," )ortunatel, -iane,
ho as orking the front desk,
remembered that the chef as sta,ing at
the 6nn
Bha9ing orked late on 'e Years 09eC and
called his room" 8ithin minutes she had
seated them in front of the freplace in the
bar, she had brought them mimosas, and
she had the chef preparing a special meal
?ust for them" -iane could9e made the
appropriate apologies and recommended a
nice restaurant in ton and made the
conHict go aa," But she intuiti9el, sa the
opportunit, in the situation and created
to 9er, lo,al cus! tomers ho recommend
the %allatin %atea, 6nn e9er, oppor!
tunit, the, get"
6n our e+perience, e miss the
constructi9e opportunit, hen e go
into conHict a9oidance"
$s a manager, ,our ?ob is to remo9e
fear of conHict" %i9e ,our emplo,ees the
tools the, need and an en9ironment that
encourages them to look for not onl, the
response that makes the conHict go
aa,, but also the opportunit, to mo9e
the cus! tomer relationship to the ne+t
le9el of commitment"
Remember: I3roblems are
opportunitiesK becomes an empt,
platitude the frst time ,ou get angr, or
upset hen an emplo,ee alerts ,ou to a
problem"
'on9erbal (ignals Can Cause
3roblems Michelle as a manager at a
large tra9el agenc, in -en9er, CO" (he
kne customer conHicts ere
important and, hen
told of them, immediatel, began to consider
the best possible response" 8hat Michelle didnt
realiMe as that her I6m thinking seriousl,K face
looked a lot like man, peoples I6m reall, mad at
,ouK face" &er staQ became fearful of bringing
problems to her" 6t as during a 54<!degree
feedback session that Michelle learned that her
non9erbal message as totall, erasing her ITell
me about problems, 6 ant to hear and helpK
9erbal message" Toda,, Michelle tells this stor, to
all her emplo,ees, so the, kno that the facial
e+pression is ?ust thatEand she orks at mak!
ing her non9erbal message support her
intention"
Managing Relationships Through
ConHict
55>
Managing the Moment of ConHict
6t ould be great to be able to identif, and
respond to potential conHict before it e9er
reached the le9el that the customer
became aare of it" &oe9er, its more
often the case that a customer
e+periencing a problem or percei9ing that
a conHict e+ists brings it to our attention"
6n that moment, hether face to face,
phone to phone, or o9er the 6nternet,
theres an opportuni! t, to sa9e that
customer relationship, as ell as to
identif, other customers ho ma, be at
risk of disappointment" $ll too often,
companies miss one or both of those
opportunities"
Managing the moment of the
interaction ith the customer re1uires
that e9er,one in ,our organiMation be
clear about four things:
5" 0ach and e9er, customer relationship is
9aluable"
/" )i+ing or responding to the immediate
situation is the frst order of business"
=" )inding root causes is the second
order of business Bso ,ou can
pre9ent it from e9er happening
againC"
7" One incident ma, be a bellether,
signaling ,ou that other customer
relationships are at risk"
Complaints: *isten Carefull,
#ristin $nderson recentl, tried to
make an earl, morning deposit at the
$TM ?ust outside her bank" The machine
hirred and hummed, but couldnt pull the
deposit en9elope inside" 6t sounded like a
mechanical problem, so #ristin hit the cancel
button and left ith her en9elope" *ater that
morning, she ent into the bank to make her
deposit ith a teller" (he e+plained the $TM
problem" I8ell, it must be orking no,K he said,
Ibecause no ones complained"K Oh ,es,
someone had complainedEand as complaining
right noL Because the teller didnt kno BaC ho
important it is to 9alue complaints or BbC ho and
to hom to report the complaint, he missed an
opportunit, to
9alue this customers illingness to report a
problem and tr, again, and he missed an
opportunit, to sa9e other customers from
frustrating deposit attempts"
-o ,our staQ members kno the
importance of managing e9er, customer
complaint;
55
4
*ook for
3roblems $s
managers,
especiall,
managers
concerned ith
customer relationship
management, its
incumbent upon us to
acti9el, seek
out problems"
Galue the
Customer 8hen
a customer
ser9ice
representati9e,
or an,
emplo,ee, gets
into task mode,
it can be eas,
to forget to
9alue each cus!
tomer
relationship and
instead focus on the task at hand" Consider
the cashier ho patientl, aits for a
customer to dig the last needed penn, out
of allet or purse, hile a ITake a
penn,:*ea9e a penn,K container sits on the
counter ithin fngertips reach" &o man,
of ,our emplo,ees ould be aare and
take the initiati9e to tell the cus! tomer,
IThats O#" 6 ha9e the penn, ,ou need right
hereK;
Before ,ou get too hard on ,our staff, its
important to real! iMe that ,our on
s,stems ma, be contributing to this lack
of
focus on the
9alue of a
customer" )or
e+ample, to
The Real Galue
of
Your
Customers
Fse this simple formula:
$9erage 9alue of a
customer transac! tion:
^^^^ _ 'umber of
transactions per ,ear: ^^^^
[ $nnual 9alue of a
cus! tomer _
'umber of ,ears a
customer is lo,al: ^^^^
[ *ifetime 9alue of a
cus! tomer: ^^^^"
combat the
continuing issue of
emplo,ee theft, the
cash draer has to
balance to the penn,
or there ill be
conse! 1uences"
&oe9er, if the
cashier and the
team ho put
the cash
register s,s!
tems in place
kne the
real 9alue of their customers, donating 5<,
/D, or e9en 5<< pen! nies a da, to the
ITake a penn,:*ea9e a penn,K container
ould look like a great in9estment"
)i+ the 6mmediate 3roblem )irst
The customer hos standing in front of
,ou, hos on the phone ith ,ou, or
hos ?ust sent ,ou e!mail must be the
frst order of business" (eminal research
b, e!satisf,"com and the F"(" Offce of
Consumer $ffairs shos that most
businesses hear from onl, 7T of unhapp,
customers" The other A2T of
ConHict
55A
those unhapp,
folks ?ust keep
1uietEand the
9ast ma?orit, of
them ill ?ust
ne9er do business
ith that compan,
again" (o, the
customer ho
tells ,ou about the
problem is doing
,ou a huge fa9or
and deser9es
,our utmost
attention"
6n addition, if
,ou respond to a
complaining
3ut a 3rice on
Their &eads
$t (te *eonards -air,
(tore in 'oralk, CT,
emplo,ees are in9ited to
en9ision customers ith
the fgure VD<,<<<
tattooed on their fore!
heads" $t (te *eonards
the, estimate that the
a9erage customer ill
spend
at least that much mone,
during their lifetime of
9isitsEand the, ant
e9er, emplo,ee to
remember that"
customer ith care and concern, its
possible to create a stronger relationship
than ,ou had before the conHict" 8h,;
Because hen e9er,thing is going along
smoothl,, customers ma, take ,ou for
granted" 8hen the, 9enture a complaint
and are treated ith appreciation and
concern, the, can reall, e+pe! rience and
9alue a relationship ith ,ou"
Our friend (usan purchased a )iskars
#angarooU Container to hold the 7<!gallon
plastic bag hile she remo9ed the lea9es
from her ,ard" (he disco9ered, hoe9er,
that the o9erstuffed bag of lea9es created
a
9acuum hen
she tried to pull it
from the
container" $n
inno9ati9e person,
(usan sol9ed the
problem b, poking
some air holes in the
bottom of the con!
tainer" On a him, she
found the )iskars
8eb site and
sent an e!mail
outlin! ing the
problem and her
solution" The ne+t
da, she recei9ed
a personal repl,
acknoledging
the prob! lem and
thanking her for
her suggestion"
(hes
-ont Mess
Fp to
Make Fp
Responding to a cus!
tomer problem ith care
and concern can create a
stronger customer rela!
tionship than ,ou had
before, ?ust as the glue in
a repair can make that part
of the ob?ect stronger
than it as before"
&oe9er, dont create
conHict ?ust to get an
opportunit, to appl,
some relationship glue"
Most customer upsets
are ne9er brought to
,our attention" $nd oft!
broken customer
relationships, like oft!
broken 9ases, lose
much of their 9alue"
5/
<
eagerl, aiting to see if ne #angarooU
Containers ill include her adaptation, but
e9en if the, dont, she no holds a arm
place in her gardener heart for )iskars"
)ind the Root Cause $fter You (ol9e the
(ituation
The .apanese ha9e a sa,ing, I)i+ the
problem, not the blame"K 6n $merican
societ,, it sometimes seems that e are
interested onl, in f+ing the blameEand in
making sure that none of it fnds its a, to
us"
But its important in customer
relationship management to fnd the
causes of customer conHict, not so that
someone or some department can take
the heat, but rather so together e can
eliminate, or at least control, the
incidence of the conHict" To do this, ,our
CRM s,stem should:
R Track complaints b, t,pe and
fre1uenc,"
R Compare reported timelines and
e+periences ith the actual facts"
)or e+ample, a large arehouse!t,pe
retailer e orked ith recei9ed
complaints from customers that ITheres
no one here to help me" 6 can ne9er fnd
an,one"K Yet the staffng for! mula said
that there as the IrightK number of
people on the
Hoor for the 9olume of customers" -id
the oner need
3ut Yourself in Your
Customers (hoes 8e9e been
orking ith a ne resort here one of
the fea! tured acti9ities is hiking" On one
of our 9isits to the resort, e
took a hike ith one of the staQ, $udie" (e9eral
hours later, e returned to the lodge tired and
hungr, after getting lost repeatedl, hile tr,ing
to na9igate the trails" Recounting our ad9entures
to the assistant manag! er, $udie remarked, IYou
kno, 6 ala,s thought customers ere ?ust
stupid hen the, complained about our maps
and trails being hard to follo" 'o 6 understand
h, the, ha9e such a hard time fnding their
a,LK
(ometimes the best a, to fnd the root
cause of a problem is to e+perience ,our
product or ser9ice as the customer ould"
Take ,our map in hand and go hike the trail
,ourselfL Make sure putting ,ourself in ,our
customers shoes is part of ,our CRM strateg,"
ConHict
5/5
$n Ounce of 3re9ention " " "
#ristin $nderson conducted a customer
ser9ice assessment for a small
communit, hospital" 6t as founded b, a
religious
order and had recentl, been purchased b, a
large, secular healthcare chain" $s part of the
con9ersion, almost all of the religious icons
ere remo9ed" But the nails and shados on the
alls remained" #ristin heard se9eral 9isitors
comment, I6t looks like thie9es broke in and
stole e9er,! thing"K 8ith all those shados
shoing on the alls, it didnt make mem! bers
of the communit, feel that the heritage of their
hospital, of their communit, as 9alued" 8hen
the management team realiMed the prob! lem, it
didnt take long to pull all the nails, patch the
holes, and put a
fresh coat of paint on the alls"
-ont ait for a consultant to come in and
point out the ob9ious" B, the time se9eral
customers e+perience it, e guarantee that
at least one emplo,ee is also aare" Fse ,our
CRM strateg, to focus attention on resol9ing
the conHict for good"
to bite the bullet of labor costs and add
more staff to keep his customer
relationships strong; 'o" )urther
in9estigation shoed that the ser9ice
representati9es on the Hoor ?ust erent
ob9ious to customers" $ change in uniform
to a bright 9est changed the customer
e+perience"
6dentif, and 'urture Other I$t!RiskK
Customers
One customer complaint or incident can
be a signal that other customer
relationships are at risk" 3roduct recalls
are a classic e+ample of this principle"
The unfortunate,
and sometimes
e9en tragic,
e+perience of
one cus! tomer or
a group of cus!
tomers triggers
the compa! n, to
contact all cus!
tomers, asking
them to return the
product or gi9ing
them the parts
needed to make a
safet, ad?ustment"
Answer (impl, a
repl, or response
to a 1uestion or
issue" The
dictionar, defnes it
in part as I$ spoken or
ritten repl, or response
to a 1uestion, re1uest,
accusation, or
communication"K
Solution %oes to the
ne+t le9el" The dictionar,
defnes it as IThe act of
sol9ing a problem"K 6n
other ords, ansers get
customers oQ the line"
(olutions build customer
relationships"
5/
/
)i+ 6t 6mmediatel, and )i+ 6t Right
Carol #err recentl, recei9ed an e!mail
attempting to sell her on a Ine,
inno9ati9e, must!ha9e product for
trainersLK (he
asnt interested, and as a bit anno,ed that
the e!mail began, I$s a member of the ^^^^^^
association, 6 kno that ,oull be interested in
""""K (o much for the associations promise not to
sell her name" 'ot si+ hours later, Carol
recei9ed an e!mail from the Member (er9ices
-irector for the association" The message
acknoledged and apologiMed for the
unauthoriMed use of the associations e!mail
list, thanked the members ho had alerted the
main oSce, and outlined the process for
pre9enting such abuses in the future"
The earlier ,ou can identif, the cause
of other at!risk cus! tomers, the less it
ill cost ,ouEin direct e+penses and in
lost customer good illEto resol9e the
conHict for them, too"
8hether the conHict is large or small,
ph,sical or s,mbolic, reaching out to all
affected customers tells them that ,ou
9alue their business and that ,ou are
acti9el, nurturing ,our relation! ship ith
them" You arent ?ust pro9iding 1uick
ansers to cus! tomer 1ueries" Youre
pro9iding real solutions that add 9alue to
the time, and mone,, the, spend ith
,ou"
IBut J'ice 'e9er Bought Me a
CustomerK
I8e alread, pro9ide great customer
ser9ice,K the general man! ager
enthusiasticall, e+plained" I6 hardl, e9er
hear a customer complaint" Oh, some
customers are harder to deal ith than
others, but thats ?ust the nature of
people" The issue e face is price
competition" J'ice ne9er bought me a
customer, but 69e gotten plent, of them to
sitch 9endors for a fraction of a cent" 6n
our business Bpaper grocer, bagsC, there
is no such thing as customer lo,alt,"K
$nd, he implied, no real customer relation!
ships to be managed"
8e talked more ith this general
manager about his indus! tr,, his target
customers, their bu,ing patterns, and
hat he kne about his competition" Yes,
,ou could fnd the e9idence to build a
strong case for price!focused
competition" Customers did indeed sitch
for a fraction of a cent" But this anal,sis
ConHict
5/=
8here Theres a
Customer,
Theres a
Relationship
6s it possible that in some industries, in some sales
situa!
tions, there isnt a real customer relationship to
manageEin good times, much less in times of
conHict; Yes, it can be true for some products
and for some customers" %asoline is a case in
point"
.ust look ho far people ill dri9e to sa9e a
penn, on a gallon of gasoline" But e9en then, price
isnt the onl, or e9en the dominant deci! sion
dri9er for all customers" )or e+ample, hen to
or more stations compete at a single
intersection, claims of 1ualit, BI)resher gasoline,K
one chain boasts about its prehistoric productC
and ser9ice BI8e pro! 9ide full ser9ice at self!
ser9ice pricesKC can be the distinguishers" $nd,
hile orking ith a national ser9ice station
chain, e learned that successful stations ha9e
a core of lo,al customers ho place their
relationship ith the station o9er a penn, in
price"
(o, if price appears as a ke, dri9er for ,our
customers, dont be lulled into complacenc,,
thinking that managing the customer relationship
doesnt count" 6t doesL $nd, in such a setting, CRM
strategies and tools for managing relationships
through conHict are e9en more important"
begged a critical 1uestion: ho and h,
did price become the primar, dri9er of the
bu,ing decision; This is a critical 1uestion
because its diffcult, e+tremel, diffcult, to
compete solel, on price and make a proft"
3rice becomes the critical dri9er
hen one of three situa! tions e+ists:
5" (er9ice 1ualit, seems
in"istinguisha%leEcustomers dont
percei9e an, real difference beteen
,our offering and that of ,our
competition"
/" (er9ice 1ualit, seems universall! poor
Ecustomers do not belie9e that an,
pro9ider can be relied upon to pro9ide
a superior ser9ice e+perience"
=" (er9ice 1ualit, seems universall!
goo"Ecustomers belie9e the, ill
recei9e an acceptable or e9en
superior ser9ice e+perience at an,
location" This is more often true across
a brand, such as a particular hotel
chain, than across an entire industr,
segment"
5/
7
6n all three of these situations, the abilit,
to identif,, track, and respond to a conHict
situation ith ease and elegance can gi9e
,ou and ,our organiMation a marketplace
ad9antage" You see, its hen things go
rong that ,ou get the customers emo!
tional attention" &old it carefull,, 9alue it,
and soothe it into trust and e+ceeded
e+pectations and ,ou can in the
customers lo,! alt,Ea lo,alt, that is
stronger than Ia fraction of a cent"K *ets
look at hat that means for each situation"
8hen (er9ice Yualit, (eems
6ndistinguishable
Miller!*ittle %iant makes a 9er, fne black
rubber bucket for use on ranches and
farms" The -ura)le+ 3ail is a great product,
sold side b, side ith competing buckets,
some of hich ma, sell for less" ICrack!
proof, crush!proof, and freeMe!proofK pro!
claims the label" (ure, but ho trusts a
label; The proof comes hen -ais, the co
steps on the -ura)le+ and, behold, it isnt
crushed" Miller!*ittle %iant tested its
product to ensure that it could stand up to
an, farm,ard incident" But, in the real orld,
customers are incredibl, creati9e in their
product use and abuse" 8hat sur9i9es an
angr, co ma, not last through an
encounter ith 5<!ton truck" $nd hen
the orst happens, hen against all odds
the Icrush!proofK is crushed, Miller!*ittle
%iant ants to kno about it" $ndEthis is
ke,Ethe compan,
ants to make it right ith the customer"
(o, Miller!*ittle %iants sales force is in
fre1uent communication ith its dealer
netork" Or, -ais,s oner can tell Miller!
*ittle %iant about the bucket disaster
directl, 9ia phone or e!mail" 6ts Miller!*ittle
%iants prompt and caring response,
focused on maintaining the rela! tionship
ith the customer, that garners it superior
lo,alt, in a market here there seem to
be fe distinguishers"
8hen (er9ice Yualit, (eems Fni9ersall, 3oor
8hen an industr, has a reputation for poor
ser9ice, there is tremendous proft
opportunit, for an, compan, that makes a
strategic commitment to managing
relationships through conHict" )e
enterprises are as oft!maligned as the cable
TG industr," Yet,
ConHict
5/D before a larger compan, bought it out,
Continental Cable9ision of (t" 3aul, M', as
creating a 9er, different reputation" 6t e9en
on kudos from TV Gui"e magaMineL &o; B,
9aluing and managing customer
relationships, e9en in times of conHict"
8hile others in its sector had the attitude
I6f ,ou dont like it, ?ust tr, to be happ, ith
a fe measl, broadcast stations,K
Continental Cable9ision of (t" 3aul as fnding
a,s to oo back unhapp, customers" $fter
anal,Ming h, so man, cus! tomers
ould discontinue their cable in the
summer and then reconnect their ser9ice
during the Thanksgi9ing marketing cam!
paign, the, created a plan to allo
customers to put their cable
Ito sleepK for a month or three, hile
the, spent the precious da,s of
Minnesotas summer at the lake"
6f a customer couldnt get the TG remote
to ork properl, ith the cable bo+, a
ser9ice representati9e ould call and 9isit
9ia a special channel" 8hile the
con9ersation took place o9er the phone
line, ,ouEand an, other interested
customerEcould atch the
representati9e as he identifed the e+act
make and model of ,our remote and then
alked ,ou through the
Turn Complaints into (er9ice
Opportunities
R *ist ,our f9e most common customer
complaints"
R $nal,Me each complaint to fnd out the root
cause" )or
e+ample, Continental Cable9ision of (t" 3aul
noticed that man, cus! tomers discontinued
ser9ice in the summer and signed up again in
the fall" Customer inter9ies re9ealed that
customers resented pa,ing for ser9ice in the
summer hile the, erent using it and ere
illing to go ithout ser9ice in (eptember and
October so the, could sign up for free
installation in 'o9ember"
R -etermine the cost of doing nothing" 6s this a
problem orth address! ing; Continental
Cable9ision looked at both the lost re9enue
and the cost of remo9ing each customer
from its rolls and then adding that same
customer back on four months later"
R )inall,, determine the potential proft
opportunit," Continental Cable9ision found that
a customer ho might cancel for four months
ould often put his or her cable ser9ice Ito
sleepK for onl, to months, thus garnering
to more months of re9enueL
5/
2
programming process until ,ou reached
success" One rep e9en took ad9antage of
this ser9ice to sho a customer a ne
cross! stitch techni1ue" $nd customers
lo9ed itL
Continental Cable9ision of (t" 3auls
success ith its cus! tomers made it
an attracti9e purchase" 8e hold out
hope that others ill tr, to cop, its
successZ hoe9er, it doesnt appear that
TV Gui"e ill be gi9ing more kudos to
other cable pro9iders an, time soon"
8hen (er9ice Yualit, (eems Fni9ersall,
%ood
&ere it helps to consider ho customers
9ie the reputation of companies, chains,
and franchisers ith a single brand ho
do business ith their customers in
man, different locations"
)or e+ample, the Marriott &otels are
consistentl, ranked in the top echelon of
guest satisfaction" $ recent stud, b, ."-"
3oer and $ssociates and Fre:uent Fl!er
magaMine ranked Marriott third Bin a tie ith
&,attC" Consumer Reports affrms that,
regardless of hich Marriott propert, ,ou
9isit, ,ou can e+pect a clean, ell!
appointed room and a 1ualit, e+perience"
Marriott pa,s attention to customer
relationship manage!
ment" Through its aards programs,
Marriott collects preference information
and tracks usage" Marriott also
encourages guests
to gi9e comments, good and bad, about
their e+periences, along ith suggestions
for impro9ing" 6n addition, Marriott, like
other high!1ualit, hotel chains, tracks
ser9ice performance b, propert," $
guest complaint at a single propert, can
harm the entire Marriott brand" Marriotts
customer relationship manage! ment
strateg, recogniMes that the 9alue of a
guest is far more than a single room for a
single night" $ guest is orth the sum
total of his or her lifetime 9isits and the
9alue of the other guests he or she ill
inHuence to also sta, at MarriottEor to
sta, aa," ConHict, hate9er its cause, is
a test of the consistenc, of the Marriott
e+perience"
8e shared information of the t,pe
e9e ?ust been describing ith the
general manager of the grocer, bag
compan," IOh, 6 see,K he replied" I6n our
industr,, customers e+pect plent, of
conHict" $nd the, dont belie9e an, one
pro9ider is reall, better"
ConHict
5/>
Be 3repared for ConHict
&alf of all small businesses fail after one ,ear,
but onl, DT of fran! chises fail" $fter f9e
,ears, independent small businesses fare
e9en orse, ith 4<T failing, hile onl, /DT
of franchises fail" 8h,;
Michael %erber, author of The 9 M!th Revisite"
B&arperBusiness,
5AADC, e+plains that a guiding principle for
franchises is to create a consistent,
predictable e+perience for their customers in
all their loca! tions" This includes creating a
consistent, predictable, an" positive e+pe!
rience hen conHict occurs" 0mbrace this
principle in ,our CRM strat! eg, and make sure
that ,our CRM tools support it"
8hether the, bu, from m, competitor or
me, the, e+pect that the,ll get a decent
grocer, bag deli9ered more or less on
the date promised in more or less the
1uantit, ordered ith paper! ork that is
more or less correct" 6f the, get a pallet
here the printing is smeared, the,ll send
it back or e9en ?ust use it, fgur! ing thats
the best the, can e+pect" 6 kno e do a
better ?ob than the other gu,Z a misprinted
pallet ouldnt make it out of our factor,"
But e arent doing an,thing to make our
customers aare of that"K
$s our con9ersation continued, he
began to see ho, ith a CRM strateg, in
place, he could begin turning the customer
transactional data that alread, e+isted in
9arious back!offce s,s! tems into a
9aluable tool for creating customer lo,alt,"
Customer Relationship Management 6s
an 0arl, 8arning (,stem
09er, Tuesda, morning, like clockork,
the management team at $cme
Manufacturing met for a eekl, update"
$cme made and sold high!end e+ercise
e1uipment, built!to!order units that ere
all the rage because of $cmes patented
s,stem" $t each meeting, area managers
reported the number of units built that
eek, the number shipped, and the
number returned" The, reported the
fnancials and predicted future earnings"
$nd the, patted themsel9es on the back
and said, I%ood ?obK to each other hile
the, silentl, thanked their stars that the,
ere part of a Isure thing"K
5/
4
This da,, hoe9er, the call center
manager as late to the meeting" Ger,
late" 8hen she entered the room, her
peers could see that something as rong"
I8e9e got a problem,K she began" 6t
seemed that for se9eral eeks no,
customer care representati9es had been
getting a fe calls from customers asking
here their merchandise as" Customers
e+plained that the pa,ment had been
charged to their credit card and the, had
aited the si+ to eight eeks the, ere
told to aitEor e9en longer" 'o the,
anted to kno e+actl, hen their
e+ercise e1uipment ould arri9e"
8hen the reps tried to pull up the
orders in their s,stem, the, could fnd no
indication that the order had e9er been
sent on to manufacturing" The best the,
could do as reenter the order and tell
the customer to ait another si+ to eight
eeks" (o, thats e+actl, hat the, did"
Talking ith each other during breaks, the
reps realiMed that more and more
customers ere calling ith this same
problemE and those customers ere less
and less understanding about the
additional dela," The, asked their manager
about it" (he said she ould in9estigate and
began running data reports" 6t took a da, or
to for the information technolog, group to
link the pa,ment report ith the
manufacturing report, but the, did it"
I6ts a big problem,K the call center
manager continued" I6t seems that there
as a s,stem glitch ith one of our sales
channels,K she e+plained" The, ere
putting together a solution that ould be
implemented ithin /7 hours" But in the
mean! time, it ould be a painstaking
process to identif, the missed orders,
reenter them, and then inform the
customers of the problem and the dela,"
$ll customer relationships can go
through times of conHict" (ometimes, like
at $cme, conHict is caused hen s,stems,
tech! nolog,, products, processes, or
people fail" Customers can also be
responsible for conHict" 8ere illing to bet
that there isnt a person out there,
including us, ho hasnt at least
contributed to a product or ser9ice
problem" $t other times, conHict arises
because hat customers ant and hat
,ou pro9ide no longer
ConHict
5/A
3lan for 3roblems
The senior management team at (chans
6ce Cream, a famil,! oned compan,
located in Marshall, Minnesota, holds
monthl,
I3re9entati9e *aK meetings"The meetings are
named for the premise that the 9er, act of
planning for problems makes that problem less
likel, to occurEas e all kno, popular belief
sa,s its far less likel, to rain if ,ou ha9e an
umbrella ith ,ou"The 3re9entati9e *a group
asks hat kinds of problems or conHicts might
rain don on (chans" )or each
problem, an umbrella plan is created for the frst
/7!74 hours of response" $sk the same
1uestion about ,our customer relationships"
Then,
look at ,our CRM strateg, and the tools that
support it" 8hat data reports could tell ,ou that
a storm might be breing or that the rain is
alread, here; $cme could ha9e tracked
customer problems b, t,pe" $n, problem that
happened to ` number of customers could
ha9e triggered an alarm and an in9estigation"
match" 8hate9er the issue, ,our CRM
strateg,Ethe 9ision that dri9es it and the
tools and technologies that support itE
must stand read, to identif, conHict earl,
in the game and to help ,ou reco9er
customer trust and customer lo,alt,"
8hat happened at $cme Manufacturing
can happen to an, compan, hose CRM
strateg, and s,stem are not poised to
identif, problems and support ,ou and
,our team in handling
Create a Team of Trend
8atchers $cmes customer ser9ice
representati9es dealt ith the Ino
shipmentK problem for a long hile
before the, raised the
issue ith their manager" 8h,; The, didnt kno
hat the, ere seeing" Turn ,our team into
sa99, trend atchers:
5" 6nclude information about problem reports
in ,our regular team meetings"
/" $sk staQ, fre:uentl!, hat t,pes of comments
and 1uestions the,9e been hearing from
customers"
=" 3ro9ide an a9enue for ,our team to 9olunteer
this information %efore ,ou ask"You might ha9e
an online or paper form, or something as sim!
ple as ,our on open door polic,"
7" 3ositi9el, reinforce staQ members for all the
information the, share ith ,ouEthe false
alarms and the real rain"
5=
<
$nticipate Customer
'eeds
$ managed healthcare pro9ider tracked
the number, reason, and length of calls made b,
enrollees in their frst months of ser9ice" The,
found that customers fre1uentl, lost, misplaced,
or simpl,
ne9er bothered to read their ne member
packets" 6t as easier, those customers felt,
?ust to make a phone call" 0asier for themEand
more e+pensi9e for the plan"
Based on this customer intelligence, the
ser9ice group began to make Ielcome to our
planK calls to ne enrollees" -uring the call the,
confrmed that the ne member had recei9ed
and could fnd the information packet" $nd the,
ansered the top f9e ne enrollee 1ues!
tions, before the enrollee had to call to ask" The
result: happier and more cooperati9e
customers and loered e+penses"
them" Of course e changed the name
and some of the details, but the situation
is true" $nd its chilling to note that hen
$cmes patent e+pired, so too did its Isure
thing"K
8hat if the Customer 6s the 3roblem;
The general manager at the bag
compan, e spoke ith said it: I(ome
customers are harder to deal ith than
others"K (hould ,our CRM s,stem Hag
IdiffcultK Ba"k"a" Ieccentric,K
Idemanding,K Ideadbeat,K or e9en
Ioutright meanKC customers; The anser is
,es """ and no"
8e readil, acknoledge that customers
create a health, portion of the conHict
the, e+perience" &oe9er, more often
than not, as the ser9ice and product
pro9ider, ,ou ha9e an opportunit, to
mitigate or e9en eliminate that conHict
e+peri! ence" 'oting and profling
customers ho misuse or misunder!
stand ,our products and ser9ices can
help ,ou fnd better a,s to do business
ith them"
The danger of Hagging diffcult
customers as IdiffcultK is that it implies
hopelessness about impro9ing the
1ualit, of the customer relationship" The
general manager e spoke ith began
our con9ersation so con9inced that his
customers ere
Iprice pirates,K ala,s seeking bount, at
the manufacturers e+pense, he couldnt
see the opportunities for creating lo,alt,
ConHict
5=5 through customer relationship
management that ere there for the
taking" -ont let Hags on customer
accounts or fles create the same blind spot
in ,our organiMation"
Managers Checklist for Chapter A
ConHict is una9oidable" -ont be
fatalistic, but accept the realit, that ,ou
ill indeed e+perience conHict in ,our
cus! tomer relationships" $t some
point, for some reason, hat 6 get as a
customer isnt going to match hat 6
e+pected"
Make sure all ,our emplo,ees belie9e
,ou hen ,ou sa,,
I3roblems are opportunities"K (trategiMe
a,s to utiliMe CRM tools and process to
make certain that conHict is a
constructi9e e+perience that can
help ,our business gro"
$t the moment conHict becomes
apparent, ,our primar, focus must
ala,s be f+ing the immediate
situation" )irst, make sure ,our CRM
tools allo ,our emplo,ees to focus on
the current customer and situation"
Then look for a,s to use ,our CRM
tools and processes to identif, root
caus! es and opportunities to nurture
other at!risk customers"
6f price appears to be the primar,
dri9er for ,our cus! tomers, effecti9e
strategies and tools for managing
cus! tomer relationships through
conHict can create a diQeren! tiator
that puts ,ou ahead of the
competition"
$s ,ou de9elop ,our CRM strateg,, look
for opportunities to build in earl,
arning s,stems" -ont be blind!sided
b, problems that ha9e alread,
alienated man, of ,our cus! tomers"
$s diffcult as it is, ala,s look for the
sil9er lining in those diffcult customers"
8hat can the, tell ,ou that helps ,ou
further ,our relationship ith all ,our
customersEboth the ones ,ou ha9e
toda, and the ones ,ou plan to ha9e
don the road;
)ighting
Complacenc,:
The I(e9en!Year
6tchK
in Customer
Relationships
T
he scene as a focus group inter9ie
ith sales representa! ti9es" These
menEand the, ere all menEsold
high!tech,
back!offce solutions for fnancial
institutions" Contracts ere large and
often negotiated for terms of f9e to
se9en ,ears"
I8hat might make a customer choose
to go ith another 9endor instead of ,ou,
hen the current contract runs out;K the
moderator asked"
I6d ha9e to be hit b, a car, someho
not on the scene, because the,
loooooo9e me,K replied one" The others
laughed and nodded their heads"
IM, customers are lo,al to me,K
e+plained another" I6m their knight in
shining armor" (omething goes rong,
the, call me and 6 get it f+ed"K
I(mugK begins to describe the attitude
in the room" 6t sound! ed like business as
good, e9en great" 8ith all those lo,al cus!
tomers, h, as a consultant called in and
taking up 9aluable selling time conducting
focus groups; Because a large number of
those supposedl, 9er, lo,al customers
had left, ere thinking about lea9ing, ere
alread, talking ith the competition"
5=/
L
)ighting
Complacenc,
5==
There as a real and dangerous
disconnect beteen ho these sales
professionals 9ieed the customer
relationship and hat actual customer
bu,ing beha9ior shoed" 8h, didnt the
sales team see it; $nd ho can customer
relationship manage! ment help ,ou
pre9ent it, hate9er team ,oure on;
But The, *o9e MeL
The sales reps in the focus group pointed
to the most recent customer satisfaction
sur9e, as e9idence of their strong bond
ith their customers" Man, customers had
included gloing remarks about their
sales representati9e" The 9erbatim com!
ments from those customers confrmed
that there as a sincere and heartfelt
belief that the sales representati9es cared
and orked hard on the customers behalf"
Yet, those results didnt e+plain the trend
in contract reneal, or lack thereof"
The group had theories: I6ts the
econom," 8hat can ,ou do;K I6ts all these
mergers and ac1uisitions" The, ant to
sta, ith meEith usEbut the, ?ust
cant because the, ha9e to go ith the
ne oners 9endor"K I6m doing e9er,thing
6 can" 6ts those product de9elopers that
are to blame" 6m orking on the
relationship, but the, arent deli9ering on
the product"K 09er, the! or, contained
some truthEthe econom,, the bu,outs,
I9apor! areK products" But, e9en more
important, e9er, single theor, let the sales
representati9es off the hook" 8hat more
could the, do;
$sk the Right Yuestions
Customer satisfaction sur9e,s onl, gi9e
,ou ansers to the 1uestions ,ou ask"
Re9ie the sur9e, ,ou use" 8hat is
missing; 8hat 1uestions arent ,ou asking;
&ere are to ke, 1ues! tions that should be
included:
R 8ould ,ou recommend $cme products and
ser9ices; 8h, or h, not;
R &a9e ,ou recommended $cme products and
ser9ices ithin the last three months; 8h, or
h, not;
Customers ho sa, that the, are satisfed or
9er, satisfed ith ,ou, but ho arent
moti9ated to recommend ,ou, are relationships
at risk"
5=
7
This compan, had fallen under the allure
of complacenc," 6n the conte+t of CRM,
complacenc, is the self!satisfed, taking!it!
for!granted belief that ,our customers are
!our customers" 6ts belie9ing that because
,ou9e done the hard ork of listening and
learning, ,ou no kno them, the, lo9e
,ou, and so the rest ill be cake"
The 6llusion of Complacenc,
The mo9ie, The Seven Year /tch, rests on the
premise that com! placenc, is an illusion"
%eorge $+elrods delightful farce shos
that e9en a sensible man ith a good
marriage ill begin to ,earn for hat he
doesnt ha9e" 8hile his ife is at the
seashore in Maine, Richard (herman BTom
0ellC sees his da,dreams begin to take
form ith his ne neighbor, Maril,n Monroe"
6ts a pleasant fantas,Euntil he realiMes that
his ife &elen B09el,n #e,esC ma, ha9e
,earnings of her on" 6n the end,
complacent
no more, Richard
rushes
Complacency
(elf!satis! faction, or
smugness in the
belief that ,our
customers
are ,our customers " " " for
life"
off to Maine to
shore up the
most important
rela! tionship in
his life"
$ll of us, and
especiall, the
sales
representati9es
in
our focus group, can learn three lessons
from Richard (hermans e+perience"
R *esson 5: 09er,one looks"
R *esson /: -ont e+pect them to let on
that the,re looking"
R *esson =: 6f ,ou dont take actions to
keep them, the, ma, ell ander"
8hen ,ou understand these lessons,
,ou can use the poer of customer
relationship management to keep ,our
customers as !our customers" $nd ,ou
can e9en e+pand those relation! ships
and encourage customers to use more
of ,our products and ser9ices, to acti9el,
seek ne a,s to be in partnership ith
,ou, and to recommend ,ou to potential
ne customers"
)ighting
Complacenc,
5=D
*esson 5: 09er,one *ooks
09er,one looks" 8ho do the, look at; Your
customers look at ,our direct
competition" (ometimes the, look ith
intent to shop" Other times ith ?ust a
passing IOh, theres anoth!
er compan, offering those
particular
products and
ser9ices"K
8hether or not
the, are seeking
a ne
relationship, the
fact that ,our
customers are
aare that the
uni9erse contains
other possibilities
impacts the a,
the, 9ie and
relate to ,ou"
The sales
representa!
ti9es in our focus
group resisted
this truth" The,
Competing ith
)antas,
(ure, ,our competitors
arent as alluring as Maril,n
Monroe" You ma, belie9e,
or e9en kno, that the,
cant pro9ide ,our le9el of
1ualit," But does ,our
customer kno that;
Reall,, reall, kno that;
(ometimes ,our harshest
competition is hen ,our
customer gets the i"ea,
the fanta! s,, that there is
a better customer
ser9ice partner out
there, somehere"
seemed to sa,, IYeah, the competition is
out there, but m, cus! tomers, m, 9er,
lo,al customers, ould ne9er e9er look
unless the, ere force" to"K 6n truth, their
customers could not not look" B.ust tr, to
not notice ,our competition for a da,"C
8hat this lesson tells us is that e must
ala,sEbefore, during, and after the sale
Econsciousl, position hat e offer 9is!
a!9is our competition"
09en if ,our direct competition isnt
highl, 9isible, ,our cus! tomers are ala,s
looking at and comparing the elements of
the a, ,ou manage their ser9ice
e+perience ith the a, simi! lar ser9ice
e+periences are managed b, other
ser9ice pro9iders" 8hether it is phone
ser9ice, 8eb site access, billing, product
packaging, the look of ,our facilit,, or an,
one of a m,riad of other elements, ,our
customers compare the e+perience the,
ha9e ith ,ou and ,our team ith the
e+periences the, ha9e ith others" This is
here CRM can be especiall, poerful in
focusing all the parts of ,our organiMation
on enhancing the customer relationship"
5=
2
The Competition 6s $la,s
There
&elp ,our team to a9oid complacenc,
b, reminding them that competition is all
around, ala,s in sight" $ great a, to bring
home this point is to illustrate that almost all of
us ha9e particular ser9ice pro9iders to hom
e are e+tremel, lo,al"Yet, at the same time
as e espouse our lo,alt, e ma,, in fact, also
do business ith their competition" $sk ,our
team: -o ,ou ha9e a fa9orite grocer, store; 6s
it the onl, place ,ou shop; Banks, dr, cleaners, or
online ser9ices can also pro9ide great
e+amples"
The point is that ,ou are ala,s
competing for ,our cus! tomers attention
and business" (ometimes the
competition is ob9ious, such as hen
,ou go head!to!head to in a contract"
(ubtler is the da,!to!da, competition that
pits ,ou and ,our organiMation against
,our customers fantas, of ideal ser9ice"
*esson /: -ont 0+pect Them to *et on That
The,re *ooking $ customer ho is
seriousl, searching for a ne relationship
ma, be 9er, reluctant to let ,ou kno
the, are looking" That can be doubl, true
hen the, ha9e a friendship ith ,ou or
another emplo,ee, in addition to their
customer relationship ith ,our
organiMation"
This as the case for the fnancial
ser9ices compan, sales reps" Customers
considering other options didnt ant to
hurt their sales rep b, e9en suggesting
that the, might end the rela! tionship" Yes,
on occasion, a customer mentioned
some frustra! tions and problems the,
ere e+periencing and the sales rep rode
in like a hite knight and got things
straightened out" But the customer ?ust
couldnt get out the ords, I8ere glad
,ou sa9ed us" But ed like to do business
ith a 9endor ho ouldnt put us in that
position in the frst place" $nd ed like a
sales rep ho spent less time putting out
fres and more time helping us build our
success"K
*esson =: 6f You -ont Take $ctions to #eep
Them, The, Ma,
8ell 8ander
8hether the, are acti9el, looking or not,
hether the, tell ,ou about it or not, its
up to ,ou to reinforce the current
relation!
)ighting
Complacenc,
5=> ship and to acti9el, gather
impressions, opinions, information, and
e+periences that ill help ,ou impro9e
,our offerings" This is hat strengthens
customer lo,alt," $nd this is e+actl, hat
,our CRM strateg, and tools are poised to
do"
6n Chapter 5, e rote, I8ith CRM, lo,al
customers arent a happ, accident created
hen an e+ceptional customer ser9ice
representati9e, salesperson, or product
de9eloper intuits and responds to a
customer need" 6nstead, ,ou ha9e at ,our
fnger! tips the ultimate ad9antageE
customer intelligence: data turned into
information and infor!
mation turned
into cus! tomer!
satisf,ing action"K
*ooking is not
neces! saril, about
lea9ing" 6n
fact, hen
customers re9ie
their alternati9es,
the, often are
more appre!
ciati9e of hat ,ou
offer" Carol #err
tries to bu, all of
her grocer, items
at Central Market"
The store is ell lit,
clean, attracti9e
" " " and large" Carol
can
3a, $ttention to
Them $ll
The old adage is true:
the s1ueak, heel gets
the grease" 6ts natural to
pa, attention to the
cus! tomer in crisis or
to the customer ho is
demanding" $t such
times, 1uiet, eas,!to!
ser9e customers often
get taken for granted"
BeareL The calm and
cooperati9e customer
ma, feel unimportant and
unappreciated" Turn ,our
back and that customer
ma, alk aa,"
get most e9er,thing she needs, the 9er,
best!1ualit, products, and all at a good
price" Yet, Carol confesses that she also
shops the competition hen shes in a
hurr, because its closer to home" $nd
e9er, time she does, shes left ondering,
I8h, cant the, be more like Central
Market;K
Your customers ma, not ha9e the
opportunit, to comparison shopEand ,ou
ma, not ant them that close to ,our
competi! tion" 6n such cases, do it for
them" 3ut hat ,ou offer into con! te+t b,
comparing and contrasting it ith hat
else is out there"
The member companies of Contractors
/<<< do an e+cellent ?ob of this" 6n order to
e9en be a member of Contractors /<<<, a
plumbing frm must be able to pro9ide a
superior le9el of ser9ice and 1ualit," The,
must use onl, the best products and hire
onl,
5=
4
highl, 1ualifed technicians" $s a result,
the, are also not the lo!cost pro9iders
of plumbing ser9ices" $nd under a I,ou
get hat ,ou pa, forK philosoph,, thats
actuall, a good thing" Members
understand that their relationship ith
the cus!
tomer is made or broken not during the
actual time of ser9ice, but rather hen
the customer talks to neighbors about
the, had done and ho much the, paid"
Charlie $9oles, 0+ecuti9e -irector for
Contractors /<<<, e+plains, I8e ant to
come back to that house the ne+t time
plumbing ser9ices are needed, so
before he or she
lea9es, a
Contractors /<<<
training
$rm Them
$rm ,our
customer to
demonstrate the
9alue of ,our
relationship to a third
part,, hether a boss,
spouse, friend, or sales
profes! sional from the
other team %i9e ,our
customer the ords and
information he or she
needs to full, e+plain the
9alue ,ou offer"
$n eas, a, to do this is
to create a list of
common customer
1uestions and
complaints"You ma, be
able to pull them as a
report from ,our CRM tool"
Then ask ,our team to
create ansersEideal
responses to the
cus! tomerEfor
each one" Re9ie
the ansers
together"
Customer
'eeds Change
technician makes sure
the customer can
e+plain hat ork as
done, h, it needed to
be done, the
ad9antages of ha9ing it
done b, one of our
profes! sionals, and
h, the price charged
as fair and rea!
sonable" 6ts a big ?ob"
Our
bCRMc data on hat
cus! tomers ask
about, call back
about later,
complain about
and the like ga9e
us the
information e
needed to put our
e+planations
together"K
O9er time, hat ,our customers need
from ,ou and ho the, ant to do
business ith ,ou ill change" CRM
pro9ides a a, for ,ou to keep in touch
ith these changes, to e9en predict their
direction and scope"
#ristin $nderson orked ith the Star
Tri%une nespaper in
Minneapolis some ,ears ago, not long after
an automated tele!
)ighting
Complacenc,
5=A
Change 8ith Your Customers
Measure the pace of change for ,our
customers" Create a timeline for ,our
compan," Mark changes in hat ,ou
offer
to customers and ho customers do business
ith ,ou" 8hether ,our timeline reaches back
to the 54<<s or ?ust to the past 54 months, ,ou
should see some signifcant shifts" 6f not, ,ou
ma, be caught in compla! cenc,Emissing the
changes that ,our customers ant to make"
-ont let their last change be to a ne ser9ice
pro9ider"
phone s,stem for nespaper deli9er,
Istarts and stopsK had been installed" $t
that time, /<T of homes in the Star Tri%une
deli9er, area had onl, pulse dialing and
could not use the ne touch!tone s,stem"
$nother, larger percentage of customers
?ust didnt ant to talk to a machine" $s
subscribers began e+peri! encing
automated s,stems in other areas of their
li9es, the process began to feel more
familiar" 8hen the, realiMed that
the, could no stop their morning paper
before their trip out of ton, e9en hen
the, didnt think about it until 55:=< p"m",
man, became strong ad9ocates for it"
'o, man, of those same customers are
online"
Fnderstanding the changing needs and
desires of ,our cus! tomers is critical to
continued success" 6f ,ou dont
understand those changes, ,ou lose ,our
customers, little b, little"
-ont Be Too )ar $head
You ma, fnd ,ourself ahead of the
cur9e of customer change" Being
read, ith the ne+t great thing
before
,our customers are read, to bu, it can put
,ou out of business" Or make ,ou a huge
success"
)ounded in Memphis,T' in 5A52 b, Clarence
(aunders, 3iggl, 8iggl,
N
as $mericas frst true
self!ser9ice grocer, store" (hoppers,
accustomed to presenting their orders to
clerks, didnt kno hat to make of the self!
ser9e carts" But (aunders shoed them ho and
the rest is histor," BRead more about it at
"piggl,!iggl,"com:c^stor,"html"C
R 8here are ,our customers leading ,ou;
R 8here are ,ou leading the pack;
R 8here could ,ou be leading them;
57
<
Make 3arting (uch (eet (orro
8hat if ,ou spot a relationship here a
customer is alread, on the a, out, about
to become a former customer; -ont gi9e
up" 6f the customer chooses to lea9e, its
also possible that the customer ill also
choose to return" The manner in hich ,ou
handle things right no ill be the last and
most lasting memo! r, for this customer"
The human temptation is to react to the
nes in one of to a,s" On one end of
the spectrum is gi9ing upEIOh, ell, that
customer is gone"K (o ,ou turn ,our
attention elsehere" Yet, in the best case,
the customer ma, not choose to lea9e
after all"
The other end of the spectrum is to get
angr,EI)ineL 8e didnt ant ,our business
an,a,"K 6n fact, ps,chologists tell us that
its often easier for us to face a breakup
hen e are angr, ith the other person
than hen e feel re?ected b, him or her"
$nd the same issue comes into pla, ith
customer ser9ice rela! tionships"
To create the best possible parting,
and e9en forestall it, fol! lo these
guidelines:
Reser#e your #alue Jud+ment. 6t ma,
?ust be that ,ou are no longer a good ft" 'o
harm, no foul" Galue ?udgments tend to
force us into defending our positions" $nd
defending often dis! tracts from
affrming hat this customer reall,
needed, hat this customer reall,
e+perienced during their relationship ith
,ou, and hat this customer e+pects to
e+perience ith the ne pro9ider"
Conduct an e$it inter#iew. Fsing the
channel of contact most preferred b, this
customerEbe it phone, 8eb, or face to
faceE ask the customer to share ith
,ou an, concerns or ideas" $sk h, the
customer is choosing to lea9e" $nd end
the inter9ie b, telling the customer that
,ou ould elcome him or her to return
at an, time"
Share what you learn. (ince no one
department or area can ha9e sole
responsibilit, for CRM, use ,our tools to
let others kno hat created the
breakpoint for this relationship"
)ighting
Complacenc,
575
Rene Your Gos
%ood friends of ours had a rather unusual
marriage agreement" 09er, ,ear, on 'e
Years -a,, .ohn and (usie reneed their
edding 9os" I6ts reall, a contract,K (usie
e+plained" I8e ant to remind oursel9es
e9er, ,ear of the promises e9e made
and of our commitment to follo through
on them"K 6n
5A4>, that sounded a little strange" 6n /<<5,
-r" 3hil Mc%ra is burning up the sales
charts recommending similar a,s to
negotiate ,our relationship in his book,
Relationship Rescue) ( Seven&Step Strateg!
for Reconnecting ith Your 3artner"
Customer relationships also need
periodic celebration and affrmation" $nd,
after times of change, the, also ma, need
to be renegotiated" Fse ,our CRM data to
determine an appropri! ate time inter9al
for ,our customers" 6n ,our situation, it ma,
be e9er, ,ear or e9er, three ,ears or
e9er, three months" Managers
Checklist for Chapter 5<
Remember: the 1uestions ,ou ask
customers determine the ansers
the, can gi9e" Be sure to ask
1uestions that enable customers to
tell ,ou hat the,re reall! thinking"
Your CRM strateg, should encompass
understanding hich customers are at
risk, h, the,re at risk,
market:industr, trends, and here ,our
customers are going" You ant to be
there ith themL
09en hen customers lea9e, CRM
doesnt stop" -eparting customers are
great sources of information that helps
,ou keep other customers" Besides,
parting on good terms and using the
information the, pro9ide to impro9e
,our cus! tomer relationships greatl,
increases the likelihood that those
departed customers ill be back"
3eriodicall, Irene ,our 9osK b,
re9ieing e+pectations ith ,our
customers" 6ts not so much about the
ne+t con! tract as it is about
understanding hat ,ou each need to
be successful going forard and ho
,ou can continue to support each
others success"
Resetting Your
CRM (trateg,
'
o ,ou are on the fnal chapter" You9e
created a strateg," You9e in9estigated
specifc topics like e!commerce and
handling conHict" $nd ,ou9e been
reminded in Chapter 5< that, to be
successful, ,our CRM initiati9e needs to
keep mo9ing for!
ard" 8hats left; (ome ho!tos for
sustaining ,our CRM effort" 6n this chapter
ell appl, a process for assessing, align!
ing, and continuall, reneing ,our CRM
strateg,"
Michael &ockmuller, a senior
organiMational de9elopment con! sultant
for the Cit, of $ustin, T`, calls this process
Iconducting a corporate reset"K $s Michael
e+plains, I8e created this process as a
check for our business plans, and fnd it
orks ell for testing an, organiMational
strateg," The purpose is to fnd alignment
beteen hat customers ant, hat our
strateg, tells us to do, and the tactics
e9e chosen to implement that strateg,"
(ome! times e are right on track, but
usuall, one of to things has happened"
0ither customer needs ha9e shifted, so our
strateg, no longer points us in the best
direction" Or, there has been Jdrift in hat
emplo,ees are doing to implement the
strateg," $ corporate reset ensures that
e9er,one is implementing the right
strateg, for the right reasons"K 8e9e
customiMed this process for use in reset!
ting ,our CRM (trateg,"
57/
L
Resetting Your CRM (trateg,
57=
)ollo Through
Most managers and e+ecuti9es begin
strateg, de9elopment ith positi9e
intentions about re9isiting the process,
reneing goals, and
making ad?ustments to reHect market
changes"Yet, in the hectic acti9ities of da,!to!
da, operations, those good intentions can fall
to the a,side" To help ,ou follo through:
R (et a date in ,our planner toda, for ,our
frst and secondEand e9en thirdECRM
strateg, reset" Make a ritten
commitment to ,ourself to follo through"
R 6nclude resetting ,our CRM strateg, as one of
,our annual ob?ecti9es" Make a commitment to
,our boss, and ask to be held accountable"
Read,, (et, ResetL
The process for resetting ,our CRM strateg,
has three phases" $s in Chapter 7, here
e looked at a process for creating ,our
CRM strateg,, the a, that ,ou implement
this process ill 9ar, ith the nature and
comple+it, of ,our customer relationships"
&oe9er, the basic roadmap remains the
same" 3hase 5 looks
at ho ,our CRM strateg, is impacting ,our
target customers" 6s it orking to create
the e+periences, the bu,ing patterns, the
recommendations, and the e+panded
business opportunities ,ou originall,
sought to create; 3hase / re1uires ,ou to
look internall," &o ell is ,our CRM
strateg, understood, recei9ed,
and implemented b, the emplo,ees
responsible for creating and managing
,our customer relationships; 6n 3hase = e
take the information learned b, looking
outard and inard and use it to reset the
CRM strateg,"
3hase 5" $re You &itting Your Target;
The ultimate test for ,our CRM strateg, and
the tactics ,oure using to implement it is
customer satisfaction" %o back to ,our
ideal Customer (er9ice:(ales 3rofle" $re ,ou
getting the number of initial:stand!alone
transactions that ,ou ant or need to gi9e
,our profle a strong foundation; &o
about repeat customers; $nd customer
ad9ocates; $re the percentages of each
of the three le9els of customer relationship
right for ,our business;
57
7
(ub?ecti9e
and
Ob?ecti9e
CRM measures can
come in the form of
su%4ective measures, such
as customer satisfaction
sur9e,s or track! ing
complaints and
compliments" $nd CRM
measures can be o%4ective,
looking for hard data such
as a9erage length of
transaction, transaction
accurac,, abilit, to resol9e
customer issues in the
frst contact, and the like"
Make sure ,ou look at
both"
There are at
least four
1uestions ,ou
need to ask in
3hase 5 of ,our
CRM strateg,
reset"
R (re !our CRM
strateg!
measures in
place+ You ill
t,picall, ha9e
CRM measures
at to le9els"
The frst
measure the
o9erall CRM
strateg, and
often look
specif! call, at
ho ell the
CRM strateg, contributes to the larger
organiMational business goals and
ob?ecti9es" The second measure the
indi9idual tactics ,ou implement" )or
e+ample, meas! ures of customer
retention or customer churn
address o9erall business goals"
Measures of length of time on hold or
in line address tactics"
R /s the "ata from !our measures
%eing collecte"2 ana& l!1e"2 an"
share" ith the right people in
!our
organi1ation+ )or
e+am!
#noing
0nough $ call
center manager
ho knos
e9er,thing
to kno
about a9erage length of
call but doesnt also kno
ho that relates to cus!
tomer satisfaction,
customer lo,alt,
and customer bu,ing
beha9iors doesnt kno
enough"
ple, comparing
the to t,pes of
measures cited
in the paragraph
abo9e can tell
,ou hich tactics
con! tribute to
,our o9erall goals,
hich are neutral,
and hich ma,
actuall, detract"
R (re the measures accurate+ .ust
because ,ou ha9e a s,s! tem in
place to capture CRM performance
data, doesnt mean that that s,stem is
orking"
R (re !our measures an appropriate
re?ection of !our CRM strateg!+ 6f, for
e+ample, ,our CRM strateg, stresses
cre! ati9e and inno9ati9e solutions to
customer problems and needs, that
implies that ,ou ill 9alue creati9e
and inno!
57D
9ati9e
emplo,ees"
&oe9er, an
organi! Mation
ere familiar
ith tracked
these
Icreati9e and
inno9a! ti9eK
solutions b,
asking
emplo,ees to
fll out
Ie+ception
reportsK e9er,
time the, had
to create a
special
solution" The
tone of the
measure!
ment and
tracking
process
made
$ccurate
Measures
#ristin $nderson
recentl, orked
ith a client to
ana!
l,Me customer transaction
data for trends in
customer spending
patterns" (he as the
frst to notice that,
depending on ho ,ou
asked the 3O(
B3oint of (aleC s,stem to
run the data, ,ou could
get some 9er, different
numbers" 'ot goodE
and, actuall, 9er, easil,
correctedEonce the
problem as surfaced"
$re ,ou using
inaccurate or mis!
leading CRM performance
measures;
emplo,ees feel defensi9e and a bit
concerned that the, ere going to
get in trouble for orking outside
the bo+" This is not the
a, to
encourage
creati9e
responses to
customers"
3hase /" -oes
Your CRM
(trateg, 8ork
for Your 3eople;
This phase is about
check! ing in ith the
emplo,ees responsible
for creating, managing,
and e+panding
customer relationships"
6s ,our CRM strateg,
orking for them; 6f
the, do not
The Reluctant Yes
3roblem
I6 dont get as concerned
about hearing Jno to one
of these four 1uestions,
as 6 do about failing to hear
a resounding J,es,K
e+plains (te9en -ietM, an
O- consultant ith the Cit,
of $ustin, T`" I6f 6 hear a Jno,
the prob! lem is likel, to
be ob9ious to e9er,!
one, and it ill be
relati9el, eas, to focus
attention on f+ing it" 6ts
the 1ualifed or reluctant
J,es that can allo poorl,
aligned strategies and tac!
tics to remain in place"K
feel aligned ith ,our CRM strateg,, it ont
matter ho careful! l, ,ou crafted it, and it
ill ne9er li9e up to its potential"
8e fnd that internal focus groups are a
terrifc tool for this phase" 6n a small
department or functional area, ,ou ma,
antEand be easil, able toEin9ol9e all
emplo,ees" )or larger
57
2
Missing the Mark
Carol #err recentl, signed up to rent
mo9ies at a ne 9ideo store"
Completing the 2!inch b, 7!inch ne
member form,
she noticed that it asked for her home phone
number and O63 code tice" 8h,; IBecause thats
the a, e ha9e to enter it into the data base"
The, use one phone number to search for
,our record" The other is so e can contact
,ou if there is a problem"K
6ts great that the technolog, s,stem is
designed to easil, pull up customer records,
but asking the customer to riteEand the
ser9ice representati9e to enterEthe same
number tice doesnt make sense" Can ,ou
fnd e+amples in ,our department or area of
CRM tactics, tools, or measures that miss the
mark;
areas or for a compan,!ide CRM strateg,,
look to talk ith a representati9e
sample of emplo,ees"
Create a
discussion
The,re $ll
6mportant 6ts
ob9ious to think
about emplo,ees
ho ha9e direct
contact ith ,our e+ternal
or internal customers"
-ont forget, hoe9er, to
include the important
emplo,ees ho support
them"
guide of the
topics ,ou
ish to co9er
and the
1uestions ,ou
ill ask" Your
discussion
guide should
also include:
R
,ntroductions.
Fsuall,, ,ou ill
ask someone
outside ,our department, or e9en a
professional focus group facilitator, to
guide the discussion" The facilitator,
often called the moderator, should
introduce himself or herself and
pro9ide an opportunit, for the
participants to introduce themsel9es"
R A statement o( purpose. 0+plain
that ,ou are orking on resetting ,our
CRM strateg, and that their feedback
is 9ital to the process"
R A statement o( con1dentiality. 6f
,ou are recording the session, ho ill
the audiotape be used; Fsuall,, ,ou
ill e+plain that the focus group report
or summar, ill include participant
comments, but that no participant ill
be identifed b, name"
57>
?ocus +roups %uided discussion
groups of si+ to ten partici! pants" The
purpose is to elicit reactions, ideas, and
concerns"
B'ote: )ocus groups are not a time to correct or
educate"C
There are man, great books and resources for
conducting focus groups" 8e still go back to Ron
Oemke and Thomas #ramlingers classic Figuring
Things Out) ( Manager-s Gui"e to *ee"s an" Task
(nal!sis B$ddison! 8esle,, 5A4/C for a description
of the emplo,ee focus group process" )olks
from ,our organiMations market research area
ill tell ,ou
that there is a science, ith 9er, specifc
rules, for conducting focus groups" 8e often
take a more rela+ed approach ith internal
focus groups, but for the no9ice facilitator it
makes sense to start more for! mall, and to
use someone ith e+perience as ,our focus
group dis! cussion leader"
R !ousekeepin+ about the
process. Tell the group ho long the
focus group ill last" 3lan for A< minutes
as an a9er! age length" You ma, ant
to ask participants to turn off pagers
and cell phones"
-iscussion 1uestions for a CRM strateg,
reset ma, include:
R 6ts important for an, business to
create, maintain, and e+pand
customer relationships" 8hat
approach or approaches does ,our
department or functional area use to
accomplish this; BThe moderator ma,
use a Hip chart to capture a list of
comments"C
R -o ,ou belie9e Ba particular approachC
is orking; &as it been helpful to ,ou
in ,our contacts ith customers;
8h, or h, not;
R 8hat do ,ou think ,our organiMation
should do to create, maintain, and
e+pand customer relationships;
One of the things that e often fnd is
that support emplo,! ees feel out of the
loop hen it comes to ,our CRM strateg,"
The, ma, be focused on their specifc
?ob tasks but often feel disconnected
about ho and h, their ?ob duties are
important to the compan, and its abilit,
to ser9e and retain customers"
57
4
(pecial Treatment for (pecial
Customers
To a9oid routine responses, emplo,ees
in all areas must con! tinuall, focus on
being sensiti9e to customer needs,
especial!
l, hen those needs change and process or
tactics are realigned to bet! ter meet them"
One research frm began to do a lot of
go9ernment contract busi! ness"
%o9ernment customers ha9e some uni1ue
needs" $s ,ou might e+pect, there is a lot of
paperork and a number of hoops to ?ump
through hen ,ou are a supplier to a
go9ernment agenc,"
The account managers failed to e+plain these
ne customer re1uirements to emplo,ees in
an internal support area" These emplo,! ees
began to see the go9ernment customers as
being unreasonable and demanding" The,
resented the special treatment these
customers re1uired"
$fter this attitude surfaced through an
emplo,ee opinion sur9e,, management as
able to take steps" The, met ith this group
and began to gi9e them the information the,
needed to understand h, go9ernment
customers needed to be handled differentl,,
ho impor! tant this ne segment as to
o9erall business goals, and h, the CRM strateg,
supported all these e+tra efforts to please this
customer"
The result; (upport ser9ices ere no longer
at odds ith front!line contact emplo,ees and
their go9ernment customers" (er9ice and
satis! faction impro9ed for e9er,one"
3hase =" Time for Change
'o, ,oure read, to create the reset for
,our CRM strateg," 3ull together the
information ,ou gathered in 3hase 5 and
3hase /"
6t ma, be helpful to displa, ,our ke,
fndings in to parts" )irst, list the CRM
strengths and successes ,ou
unco9ered"
6ts important to acknoledge and
celebrate hat ,oure doing ell"
The second part of ,our ke, fndings
identifes eaknesses" 3rioritiMe this list" 6f
,our fndings sho that ,ou need a ma?or
CRM strateg, reset, re9isit Chapter 7 and
use that process
once again"
More often, ,our list of eakness or
opportunities ill focus on specifc CRM
tactics and tools" You can address these in
a orking session ith a group of the
indi9iduals responsible for
57A
6s 6t (trateg, or Tactics;
6n our e+perience, CRM strategies ha9e
more longe9it, than CRM tools and
tactics" $s ,ou mo9e into 3hase =, be
cautious about information that seems to sa,
that ,ou need to totall, redesign ,our CRM
strateg," More likel,, it is the tactics and tools
,oure using to implement it that are misaligned"
8e9e seen more than one case here
CRM databases and infor! mation collection
tools hi?acked the CRM strateg, process" 8hen
tools dri9e the process, its eas, to get caught
up in all the things ,ou
coul" do, or that customers shoul" ant, and to
miss hat the, actuall, re1uire and hat orks"
customer relationships" $gain, use some
of the brainstorming processes
described in Chapter 7" $nd remember
those
3ost!itU notes e told ,ou
to keepEthe
ones that ,our
team used to
create ,our initial
list of potential
CRM strategies;
'o is the time to
pull them out, dust
them off, and use
them to ?ump!
start ,our ne
dis! cussions"
Closing 8ords
There are three
fnal
-ont )orget to
CelebrateL
Fsher in ,our reset CRM
strateg, and nel,
realigned tactics ith a
celebration of ,our
successes"This can be a
terrifc time to do an annual
aards e9ent for
emplo,ees in ,our
organiMa! tion or
department ho9e gone
abo9e and be,ond for
customers or ho con!
tributed to ,our CRM
approach ith their
inno9ati9e ideas"
thoughts e ould like to lea9e ,ou ith
as e bring this book to a close"
&a9ing a clear and appropriate CRM
strateg, is a nonnego! tiable for business
toda," Your CRM strateg, should link to and
support the o9erall business strateg, and
goals for ,our organi! Mation" This is as true
for internal ser9ice!pro9iding functional
areas, as it is for non!proft and 9olunteer
organiMations, as it is for go9ernment
organiMations, as it is for traditional
consumer retailers" 6t doesnt matter ho
,our customers are, hat t,pes of
products and ser9ices ,ou pro9ide, or
hat forces are acting upon ,our
marketplace" 09er, manager needs a CRM
approach
5D
<
Tool Test
&o do ,ou kno
if ,ou ha9e the
right CRM tools;
Certainl, not b, choosing
the biggest and neest,
the one ith the most
bells and histles"
The right CRM tool for
,ou is the one that:
R $llos ,ou to implement
,our CRM
strateg,
R 8orks for ,ou Band ,ou
and ,our team are
illing to ork itC
R 8orks for ,our
customers, and
R 6s affordable"
as a guide to
business
success"
CRM is a
comprehen! si9e
approach for
creat! ing,
maintaining and
e+panding
customer rela!
tionships" 6ts a
mistake to
confuse ,our CRM
approach ith
the tools and
tactics ,ou
choose to help
,ou implement it"
Your CRM tools
ma, be high!tech
or lo!tech"
CRM tools cant
substi!
tute for good customer ser9ice skills" $t
the end of the da,, the best customer
e+periences are human and feel humane"
6t takes peopleEpeople ho understand
hat customers ant and ho care about
deli9ering it to themEto create those
e+perience" 09en if the customer and the
ser9ice pro9ider ne9er meet, hen solid
customer!handling skills inform the
design of the e!com! merce interaction,
satisfaction is increased"
8ed lo9e to hear hat ,ou are doing to
create, maintain and e+pand customer
relationships" 6f ,ou ha9e a comment, a
1uestion, or an idea to share, please let
us kno" You can con! tact us b,:
0!mail: #ristinP#ristin$nderson"com
3hone: AD/ A/<!/2/4
Mail: #ristin $nderson and Carol #err
(a, 8hat; Consulting
=A</ 8est D<th
(treet, (uite $ 0dina,
M' DD7/7
Conduct a CRM strateg, reset to fnd
alignment beteen hat customers
ant and hat ,our strateg, tells ,ou to
do and the tactics ,ou9e chosen to
implement that strateg,"
5D5
The ultimate test for ,our CRM
strateg, and the tactics ,oure using
to implement it, is customer
satisfaction"
Resetting ,our CRM strateg, has three
phases: ho ,our CRM strateg, impacts
target customers, ho ell ,our CRM
strateg, is understood, recei9ed and
implemented b, emplo,ees, and ho
to take hat ,ou learn to create the
actual Ireset"K
&a9ing a clear CRM strateg, is a non!
negotiable"
CRM is about ,our approach, not the siMe
of ,our tools"
CRM cant substitute for high 1ualit,
customer ser9ice skills"
This page intentionally left blank
6nde
+
4<<!C0O!R0$- and use
of links from other
8eb sites, 5<2
$
$dams, (cott, and
Mission
(tatement %enerator,
7>
ad9ocac,, customer
ad9ocates as a
group, //!/=
and $9on, 7=
encouraging,
7=!77
managing,
7/!77 and
(aturn, 7=
special treatment, =>!
=4 testimonials,
helping ith, 77
agreements,
ser9ice!le9el, See
ser9ice!le9el
agreements
$maMon"com
and customer
relationship
management, D,
5<4 personaliMing
relationship,
555!55/
use of links from
other 8eb sites,
5<2
$merican Customer
(atisfaction
6nde+, 2
$nderson, #ristin, Knock
Your
Socks Off (nsers,
=2
anser, defned B9s"
solutionC,
5/5
$(3 6ndustr, Consortium,
$u!er-s Gui"e to
Service&7evel
(greements, 42!4>
$9oles, Charlie,
1uoted on
informing
customers, 5=4
$9on, and learning
from cus! tomers,
7=
B
Balanced (corecard
and creating
customer rela!
tionship strateg,,
7A!D<
defned, D<
best practices,
e9aluating, =7
Bort, .ulie, 1uoted on
ser9ice! le9el
agreements, 42
brainstorming
and creating
customer rela!
tionship strateg,,
D5!DD
dealing ith
feelings, D/
keeping ideas
generated, D=
prioritiMing
selection criteria,
D7!DD
process,
D7
protocol,
D7
purpose,
D7
silent,
D5, D/
and
to,s, D<
Briefcase Books and
customer
communication,
5<=!5<7
Bruce, $nne, and
customer
communication,
5<7
business, 3eter
-rucker, 1uoted on
purpose, 5
$u!er-s Gui"e to
Service&7evel
(greements, 4>
5D
=
5D
7
6nde+
C
Can,on of the 0agles
'ature
3ark and *odge, and
e+pand! ing
customer
relationship, 75
Caribou Coffee, and
repeat
customers, /5!
//
Catbert, and CRM
strateg,, 7>
Churchill, 8inston,
1uoted on distrust
of statistics, 4/
Coca!Cola, and dangers
of trust! ing data, ><
communications
ith customer
ad9ocates, 7/!
7=
electronic, AA!55=
ith e+isting
customers, /2
importance of e!
mail, AA!5<< through
6nternet, 5<5!5<>
learning from
customers, 7=
ireless, 55/!55=
competition
pro9iding
comparisons, 5=>!
5=4
ubi1uitous, 5=2
complacenc,, in
customer rela!
tionships,
a9oiding, 5/=
customer beha9ior,
normal,
5=D!5=4
defned, 5=7
fghting,
5=/!575
pa,ing attention, 5=>
complaints
handling, 55>, 5/2
tracking, 5/<!5/5
turning into
opportunities, 5/D
conHicts
a9oidance 9s"
opportunit,,
55D!552
and business
failures, 5/> and
CRM as earl,
arning s,stem,
5/>!5=<
and managing
customer rela!
tionships, 55D!
5=5
principles for
managing moment
of conHict, 55>!5//
tracking complaints,
5/<!5/5
turning into
opportunities, 5/D
Consumer Reports, on
Marriott
&otels, 5/2
Continental
Cable9ision of (t"
3aul, and customer
relation!
ship management,
5/D!5/2
Contractors /<<<, and
informing
customers, 5=>!
5=4
controlled
demassifcation, 75
CRM, see customer
relationship
management
customer, see
customers customer
intelligence, defned,
/ customer needs
determining, 2=, 2>!
2A
keeping up ith
changes,
5=4!5=A
leading
changes, 5=A
customer
preferences
accessibilit,, 5D
importance, 5=,
5D
customer
relationship
manage! ment BCRMC
affrmation and
celebration, 575
and all emplo,ees, 5/
at $maMon"com, D,
5<2, 5<4,
555!55/
best practices,
e9aluating, =7
celebration of
successes, 57A
changing strateg,,
574!57A
competition
pro9iding
comparisons,
5=>!5=4
ubi1uitous, 5=2
complacenc,, in
customer
relationships,
a9oiding, 5/=
customer
beha9ior, normal,
5=D!5=4
defned, 5=7
6nde+
5DD
fghting, 5=/!575
pa,ing attention,
5=>
conHicts
a9oidance 9s"
opportunit,,
55D!552
and business
failures, 5/> and
CRM as earl,
arning s,stem,
5/>!5=<
and managing
customer
relationships,
55D!5=5 principles
for managing
moment of
conHict, 55>!
5//
5/<!5/5
turning into
opportunities,
5/D
and creating 6nternet
presence,
5<>!5<A
customer
satisfaction as
ulti! mate test of
strateg,, 57=!
57D
customer
ser9ice
support through
8eb, 5<2!5<>
defned, /
dri9es structure and
technolog,,
>
as earl, arning
s,stem, 5/>!
5=<
e+plained, /!D
former customers,
dealing ith,
57<
informing customers,
5=>!5=4
importance in all
situations,
5//!5/>
integrating
databases, 5<D and
internal partnerships,
5/ on 6nternet, AA!
55=
*e9itt, Theodore, cited
on, 54
measures
sub?ecti9e and
ob?ecti9e,
577
using, 577
9erif,ing, 577!57D
not a trend, 5D
personaliMing
relationship
online, 555!
55/
planning to re9ie
strateg,,
57=
resetting strateg,,
57/!5D<
responsibilit, of all
in organi! Mation,
/, AD!A>
re9ieing strateg,,
57=!574
in ser9ice sector,
5//!5/>
and ser9ice!le9el
agreements,
42!A>
strateg,, see
customer rela!
tionship
strateg,
success factors,
55!57 s,stems
and purposes,
4!A and
technolog,, 2!4,
5= tools
integrated, 5=
testing, 5D<
tracking repeat
customers, 75
trends, atching for,
5/A, 5=A
See also Customer
(er9ice: (ales
3rofle an"
customer
relationship
strateg,
Customer Relationship
Management 3rimer,
5<2 customer
relationship strateg,
according to
Customer
(ales:(er9ice 3rofle,
/4!/A,
D=
according to
customer seg!
ments, D5
affrmation and
celebration,
575
celebration of
successes, 57A
changing,
574!57A
choosing,
72!D2
competition
pro9iding
comparisons,
5=>!5=4
ubi1uitous, 5=2
creating
criteria matri+, DD
5D
2
6nde+
general
suggestions, 7>
keeping ideas
generated in
meetings, D=
meetings to
create, 7A!D2
prioritiMing
selection crite!
ria, D7!DD
selection
criteria, D=!D2
starting points,
7>!74 teaming to
create, 74!7A
riting, DD!D2
customer
satisfaction as
ulti! mate test,
57=!57D
defned, 74
and emplo,ees,
57D!574
e+ample, D2
former
customers,
dealing ith,
57<
informing
customers, 5=>!5=4
intrinsic to customer
relation! ship
management, =!7
as part of larger
strategies, 74
planning to re9ie,
57= resetting, 57/!
5D<
re9ieing, 57=!574
and ser9ice!le9el
agreements,
42!A>
sharing ith team
members, A
success factors,
55!57
tactics
defned
, 74
9s" strateg,, 57A,
5D<
and three le9els of
sales:ser9! ice,
/<!/=
5/A
9s" tactics, 57A, 5D<
9s" tools, 5D<
9s" strateg,, 5D<
customer ser9ice,
see customer
relationship
management
Customer (er9ice:(ales
3rofle
changing, =/
and
communications, /2
and creating 6nternet
presence,
5<>!5<A
customer
ad9ocates
as a group,
//!/=
managing,
7/!77
special treatment,
=>!=4
described, 5>!/A
&e+agon 3rofle
described,
/2!/>
&ourglass 3rofle
described,
/7!/2
importance for
strateg,, /4!/A
initial transactions
as a group, /<!/5
managing, =4!7<
special treatment,
=2!=>
managing, =<!7D
measuring results of
strateg,,
57=!57D
pitfalls, />!/4
purposes of, 5>!54
3,ramid 3rofle
described, /=!
/7
repeat customers
as a group, /5!//
segmenting, ==
to perspecti9es,
7<
special treatment, =2
and sales as start of
relation! ship, 54
shapes, /=!/>
three le9els
described, /<!/=
custom
ers
ad9oc
ates
as a group, //!/=
managing, 7/!77
special treatment,
=>!=4 affrmation
and celebration, 575
alternati9e terms,
54
at!risk, 5/5!5//
a9oiding Isecond!
classK feel! ing,
=>
6nde+
5D>
beha9ior, 5=7!5=4
comments,
appreciating, 554!
5/<
communications,
and e+isting
customers, /2
competition
pro9iding
comparisons,
5=>!5=4
ubi1uitous, 5=2
complacenc,, in
customer
relationships,
a9oiding, 5/=
customer
beha9ior, normal,
5=D!5=4
defned, 5=7
fghting,
5=/!575
pa,ing attention,
5=>
complaints
handling, 55>, 5/2
tracking, 5/<!5/5
turning into
opportunities,
5/D
conHicts
a9oidance 9s"
opportunit,,
55D!552
and business
failures, 5/> and
managing
customer
relationships, 55D!
5=5
principles for
managing mo!
ment of conHict,
55>!5// tracking
complaints, 5/<!
5/5
turning into
opportunities,
5/D
con9enience, and
data collec! tion,
572
cost of ac1uisition,
/5
data
defned, 5D, 2<
managing and
sharing, D>!
>5
9s" information,
DA!2/
diffcult, Hagging,
5=<!5=5
disser9ice caused b,
policies,
A<, A/
each represents
relationship,
5/=
e+pectations, changes
in, 7=, 47
e+periences, best
are human and
humane, 5D<
e+ternal
defned
, D
importance of, D
)eng (hui of
customer e+peri!
ence, =A!7<
focus groups, >2,
>4!4<, 57> former,
dealing ith, 57<
information
anal,Ming,
2A!><
basics, 2=
capturing,
>/!4D
collecting,
27!2D
con9enience of
customer,
572
cost of collecting,
>A
for customers, 5=>!
5=4
espionage,
22 ethics,
27, ><!>5
gatekeeper,
2>
guidelines on
gathering, >>!
4<
hoarding, b,
emplo,ees, 22
legalities, 27, ><!>5
needs, determining,
2=, 2>!
2A
needs, keeping up
ith,
5=4!5=A
principles, ><
sharing ith
emplo,ees,
2D!2>
sources, >=!>2
tactics for using
to inHu! ence,
4/!47
used b,
emplo,ees to
com! pete
internall,, 2D!2>
5D
4
6nde+
see also
information
initial
transactions
capturing
information, 7< as
a group, /<!/5
managing, =4!7<
special treatment,
=2!=>
internal
defned
, D
and ser9ice!
le9el agree!
ments, AD!A>
6nternet access, 5<5
keeping it simple, =4,
=A
and online customer
ser9ice,
5<2
life c,cle, 2=
life e9ents, 2=
multiple bu,ing
relationships,
75!7/
needs
determining, 2=,
2>!2A keeping up
ith, 5=4!5=A
leading changes,
5=A
perceptions, 47,
5/<!5/5, 5=D
pri9ac,, respecting,
2>!2A, >> repeat
as a group,
/5!//
managing, 7<!
7/
segmenting,
== special
treatment, =2
to
perspecti9es,
7<
research b,
Reichhold and
(asser, 5
satisfaction, as
ultimate test,
57=!57D
segmenting for
customer rela!
tionship strateg,,
D<
special, and special
treatment,
574
sur9e,s,
importance of, /4
three le9els,
described, /<!/=
treatment not
egalitarian, /4,
=2, 574
unhapp,
customers,
research,
554!55A
use of 6nternet for
research,
5<2
9alue of customers,
554, 55A
9alue of multiple
bu,ing rela!
tionships, 7/
and ord of mouth, =4
customiMation, 75
C8* 3ublishing
0nterprises and
customer
communication,
5<=!5<7
-
data
access, 2=
aggregate, defned,
><
anal,Ming, 2A!><
customer, managing
and shar! ing, D>!
>5
danger of
assumptions, 2<
defned, 5D, 2<
demographics, DA
determining needs,
2=, 2>!2A 9s"
information, DA!2/
keeping up ith
needs, 5=4!5=A
needs dri9en b,
customer
relationship
strateg,, D>!DA
planning, 4<!
4/
ps,chographi
cs, DA
1uer,ing, 45!
4/
sharing ith
emplo,ees, 2=
statistical
signifcance,
defned, ><
tracking relationship,
for affr! mation
and celebration,
575
See also database
an" infor!
mation
databas
e
access
, 2=
and customer
con9enience, 572
defned, 75
gatekeeper, 2>
integrating
databases, 5<D
managing, 2/!>5
6nde+
5DA
mining, 2A!><
reports, 5=!57
sharing ith
emplo,ees, 2=
tracking repeat
customers, 75 see
also data an"
information
-a9is, .essica, on
online cus! tomer
ser9ice, 5<A, 55/
demassifcation, and
$l9in
TofHer, 75
demographics defned,
DA
-ietM, (te9en, 1uoted
on re9ie! ing
customer
relationship
strateg,, 57D
-israeli, Ben?amin,
1uoted on distrust
of statistics, 4/
-o,le, (ir $rthur Conan,
1uoted on facts, 25
-rucker, 3eter,
1uoted on the
purpose of a
business, 5
0
e!commerce
applications and
strateg,, 55<
future, 55/!55=
three rules for
success, 5<A!
55/
See also 6nternet
an" 8eb 0instein,
$lbert, 1uoted on
knoing hat
matters, D4
electronic commerce
See e!com! merce
e!mail
collecting
customer
informa! tion,
5<=!5<7
importance of
checking often,
5<D
importance of
using, AA!5<<
unauthoriMed use of
mailing list, 5//
emplo,ees
collecting
information from
customers, 27!
2D, 4=
encouraging
to deal ith
customer prob!
lems, 552
to report potential
prolems,
5/5, 5/A
to atch for trends,
5/A f+ing problem
not blame, 5/<
hoarding information
on cus!
tomers, 22
monitoring ith
respect, A7 pro9iding
ith scripts, 4=
re9ieing customer
relation! ship
strateg,, 57D!574
sharing information
on cus!
tomers, 2D!2>
training to collect
data, 2D
using customer
information to
compete internall,,
2D!2> orking ith,
to gather infor!
mation, 4=
9 M!th Revisite"
B%erberC, 5/> e!
satisf,"com, and
research on unhapp,
customers, 554!55A
)
)ath,, 'aMan, 1uoted
on online customer
ser9ice, 5<>
)eng (hui, of
customer e+peri!
ence
defned, =A
e+amples, =A!7<
Figuring Things Out
BOemke and
#ramlingerC, 57>
)iskars, and
appreciation of cus!
tomer comments,
55A
Hagging, diffcult
customers,
5=<!5=5
focus groups
as ad9isor, council,
4<
customer input, >2
ith customer
segments, >4
defned, 57>
and established
customers, >A
guide to conducting,
57>
52
<
6nde+
at pauses in
relationship, >A!4<
(aturn Corporation, >4
orking ith
emplo,ees, 4=
)ord, &enr,, 1uoted on
customer choices,
75
)orrester Research
and customer
relationship
management
pro?ects, 2
and online customer
ser9ice,
5<2
Fre:uent Fl!er, on
Marriott
&otels, 5/2
%
%allatin %atea, 6nn,
dealing ith
customer problem,
55D!
552
%erber, Michael, 9 M!th
Revisite", 5/>
%etman, Robin, and
e9aluating best
practices, =7
%oddard, Melinda, cited
on Iord of mouse,K
5<=
go9ernment, and
special treat!
ment, 574
&
&arle,!-a9idson and
Customer
(ales:(er9ice 3rofle,
/>
&e+agon 3rofle
described,
/2!/>
reducing
9ulnerabilit,, =2
&ockmuller, Mike,
1uoted on
resetting
customer
relation!
ship strateg,, 57/
&ourglass 3rofle
described, /7!/2
6
6acocca, *ee, on
information and
managers, 57, >=
information
anal,Ming,
2A!><
basics, 2=
capturing
through e!mail,
5<=!5<7
guidelines, >>!4<
on initial
transactions, 7<
tools, >/!4D
through 8eb site,
5<7!5<D
collecting, b,
emplo,ees, 27!
2D, >7!>D
communicating
through
6nternet,
5<5!5<> cost
of collecting,
>A 9s" data,
DA!2/ defned,
5D, 25
determining needs,
2=, 2>!2A
espionage,
22 ethics,
27, ><!>5
gatekeeper
, 2>
hoarding, b,
emplo,ees, 22
6acocca, *ee, on
managers and,
57
importance of h!
and ho,
2/, 47
integrating
databases, 5<D
keeping up ith
needs, 5=4!5=A
legalities, 27, ><!>5
and managers,
57 passi9e,
defned, >7
permission to
use, >> point of
sale, >=!>7, 57D
principles, ><
sharing ith
emplo,ees, 2D!2>
sources, >=!>2
sur9e,s, of
customers
dangers of,
2/
importance
of, /4 9alue
of, >D!>2
tactics for using to
inHuence,
4/!47
used b,
emplo,ees to
com! pete
internall,, 2D!2>
See also data
6nter$CT, and
e9aluating best
practices, =7
6nternet
e!mail
6nde+
525
collecting
customer
infor! mation,
5<=!5<7
importance of
checking
often, 5<D
importance of
using, AA!5<<
unauthoriMed use of
mailing list, 5//
presence,
acti9e
creating,
5<>!5<A
guidelines,
5<4!5<A
listing through 8eb
sites, 5<=
promoting
e+pertise, 5<7
presence,
passi9e
fnding, 5</!
5<=, 5<7
updating, 5<=
a,s to enable
customer rela!
tionship
management
strat!
eg,, 5<5!5<>
8eb site, collecting
customer
information, 5<7!
5<D
See also 8eb
#
#aplan, Robert, and
Balanced
(corecard, D<
Knock Your Socks Off
(nsers
B$nderson and
OemkeC, =2
#ramlinger, Thomas,
Figuring
Things Out, 57>
using, 577
9erif,ing, 577!57D
millennium frenM,,
impact on sales,
47
Miller!*ittle %iant, and
customer relationship
management, 5/7
Minnesota Orchestral
$ssociation, and
online ticket sales,
555
Mission (tatement
%enerator, 7>
Motivating 9mplo!ees
BBruceC,
5<7
Motorola, use of
analogies in
ser9ice!le9el
agreements, A5
multiple bu,ing
relationships,
managing, 75!7/
'
'ational (peakers
$ssociation, and
importance of e!
mail, AA!
5<<
'eell, )red
1uiM on ireless
communica!
tions, 55=
6ireless Rules, 55/!
55=
'ordstrom"com, and
Goice o9er
6nternet 3rotocol, 5<A
'orton, -a9id, and
Balanced
(corecard, D<
*
*emon, #atherine
'eell,
6ireless Rules, 55/!
55=
*e9itt, Theodore,
cited on cus! tomer
relationship, 54
M
Marriott &otels, and
customer
relationship
management,
5/2!5/>
Mc%ra, 3hil,
Relationship
Rescue, 575
measures, of
customer relation!
ship management
sub?ecti9e and
ob?ecti9e, 577
O
Onnen, 3aul, 1uoted
on Goice o9er
6nternet 3rotocol,
5<A
3
3iggl,!8iggl,, and
keeping ahead
of customers,
5=A
problems
a9oidance 9s"
opportunit,,
55D!552
and CRM as earl,
arning s,stem,
5/>!5=<
customer
perceptions, 47,
5/<!5/5, 5=D
52
/
6nde+
and managing
customer rela!
tionships, 55D!
5=5
pre9enting, 5/A
principles for
managing mo! ment
of conHict, 55>!5//
5/<!5/5 turning into
opportunities, 5/D
ps,chographics,
defned, DA
3,ramid 3rofle,
described, /=!
/7
Y
1uestions
asking naturall,, 5=
asking the right
1uestions, >2,
5==
a9oiding anno,ing,
57
open!
ended
defned,
>2
tabulating
, 47
9alue for
emplo,ees, 4=!47
R
Reichhold, )rederick,
and research on
customers, 5
Relationship Rescue
BMc%raC,
575
root cause, of
problems, 5/<!
5/5
(
sales
customer ser9ice
support through 8eb
site, 5<2!5<>
through 6nternet, 5</,
5<D!5<> and ser9ice
as a team, 5A!/<
and ser9ice!
le9el agree!
ments,
42!A>
as start of
relationship, 54
(asser, 0arl, and
research on
customers, 5
(aturn Corporation
and customer
ad9ocates, 7=
and customer focus
groups, >4
(chans 6ce Cream,
and pre! 9enting
problems, 5/A
(chartM Business
Books, use of links
from other 8eb
sites, 5<2
ser9ice
goes be,ond bu,er,
5A
and sales as a team,
5A!/<
ser9ice!le9el
agreements
accountabilit,
defned, 4A
1uestions, 44
analogies and
e+amples, A5
anticipating
problems, A5
a9oiding
disser9ice to cus!
tomers, A<, A/
$u!er-s Gui"e to
Service&7evel
(greements, 4>
conditions for
success, A>
creating, A<!AD
and customer
relationship
strateg,, 42!A>
defned, 42!4>
ke,s to effecti9e,
4>!A<
performance
le9els, defned,
4A le9els,
1uestions, 44!
4A measures,
A/ monitoring,
A=
problems in
using, A>
process map,
A7!AD
remuneration
defned, 4A
1uestions,
4A
specif,ing,
A/!A=
re1uirements
and e+pecta!
tions, A<!A/
re9ieing regularl,,
A=!A7
reards, A/!A=
Seven Year /tch, 5=7
(ims, -a9id, 1uoted
on online
customer
ser9ice, 5<2
(*$ See ser9ice!le9el
agreements
6nde+
52=
(leep 'umber (tore,
and refer! rals, 77
(n,der, .oel, 1uoted on
ser9ice! le9el
agreements, 42
solution, defned B9s"
anserC,
5/5
(taples"com, and
business ser9! ices,
75
Star Tri%une, and
automated
telephone
s,stem, 5=4!5=A
statistics
danger of, 4/
statistical
signifcance, defned,
><
(te *eonards -air,
(tore, and 9alue of
customers, 55A
strateg,
defned,
74
9s" tactics, 57A, 5D<
See also customer
relationship
strateg,
(uper 4 Motel, and
guest prefer! ences,
5=
sur9e,s, of
customers
dangers of, 2/
de9eloping
check!off, >> at
end of
relationship,
and established
customers, >A
importance
of, /4
incenti9es,
>> initial
contacts, >4
at pauses in
relationship, >A!4<
1uestions
asking naturall,, 5=
asking the right
1uestions,
>2, 5==
a9oiding
anno,ing, 57
open!ended,
defned, >2
open!ended,
and percep!
tions, 47
open!ended,
tabulating, 47 open!
ended, 9alue for
emplo,ees, 4=!47
9alue of, >D!>2
on 8eb site, 5<D
orking ith
emplo,ees, 4=
T
tactics
defned,
74
9s" strateg,, 57A, 5D<
Target and 3,ramid
Customer
(ales:(er9ice 3rofle, /=
technolog,
automated
telephone s,stem,
5=4!5=A
and customer
relationship
management
general, 2!4
subordinate to
strateg,, 5=,
57A
and database, 4<!45
e!commerce
applications and
strateg,,
55<
three rules for
success,
5<A!55/
future, 55/!55=
point of sale s,stem,
57D
Goice o9er 6nternet
3rotocol
BGO63C
ad9antages, 5<A
and customer
ser9ice, 5<2,
5<A
defned, 5<>
and 'ordstrom"com,
5<A
ireless
communications,
55/!55=
See also database,
6nternet, 8eb
Te?as BrestaurantC,
and e+pand! ing
customer
relationship, 75
testimonials
helping customers
ith, 77
using, 77
TofHer, $l9in, and
demassifca! tion,
75
52
7
6nde+
tools, customer
relationship
management
testing, 5D<
9s" strateg,, 5D<
total 9alue of
multiple bu,ing
relationships, 7/
to,s, as tools for
meetings, D<
5/A
Trott, Bob, on online
customer ser9ice,
5<A, 55/
Tain, Mark, 1uoted
on distrust of
statistics, 4/
F
Fni9ersit, of Michigan
Business
(chool and $merican
Cus! tomer
(atisfaction 6nde+,
2
F"(" Offce of Consumer
$ffairs, and research
on unhapp, cus!
tomers, 554!55A
G
9alue
of customers, 554,
55A, 5/2
of multiple bu,ing
relation! ships,
7/
9ision, and strateg,,
74
Goice o9er 6nternet
3rotocol
BGO63C
ad9antages, 5<A
and customer
ser9ice, 5<2,
5<A
defned, 5<>
and 'ordstrom"com,
5<A
GO63, see Goice o9er
6nternet
3rotocol
8
8eb
collecting
customer
informa! tion,
5<7!5<D
customer ser9ice
support,
5<2!5<>
sales, 5<D!5<>
See also 6nternet
8ild Rumpus
Bookstore, and
customer
e+perience, 5A
6ireless Rules B'eell
and
*emonC, 55/!55=
8oods, .ohn, and
customer
communication,
5<=!5<7
O
Oemke, Ron
Figuring Things Out,
57>
Knock Your Socks Off
(nsers, =2
1uoted on price
and ser9ice,
5A

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