Category — Thinking Differently

Much is being made this month of the birth anniversary of the evolutionary biologist Charles Darwin on the 12th February.  So it is appropriate to look at how the new economic and social environment will affect CRM.

The climate of 2009 will see the nature of CRM mutate from ‘what customers give us’ to ‘what we give customers; and get back’. The idea of providing value for money to customer ‘tribes’ will begin to dawn as communities are explored.  A notion quite distinct from the previous view of CRM as individual cross-selling and retention for shareholder profits.

“2009 is a big year for CRM and a big deal. Transformational might actually be more than a political term.” Paul Greenberg

Customers well understand their ‘premium’ status, and those who give their time and money to companies will want more back to solve personal requirements. Companies who helpfully seek to alleviate the emotional and practical issues of recession will build trust. If companies continue to take the profit from customer knowledge, customers will just opt out of relationships.

Reciprocity for mutual benefit - not only between company and customer, but between customer and customer - is a fundamental part of this new thinking. Here, North America, with its strategic use of social software and experiential marketing, definitely leads the way.

Organisations that see themselves as ‘service platforms’ and build facilitative skills will have tuned into the right wave length. Which is why there is a growing emphasis on new business models utilising both technology and partnerships. Stephanie Seakins, principal consultant at OgilvyOne Hong Kong stresses that Asian companies “are now prepared to consider new thinking in order to recover lost reliability and credibility.”

Other signs of the CRM mutation are a change from ‘customer management’ to the more co-creative ‘customer engagement’, and the popularity of sales through service - where service is an entree, rather than an afterthought, that leads to the provision of a personalised solution. If you don’t listen more carefully to your customers your competitors and other consumers will.

According to Paul Greenberg, US author of CRM at the Speed of Light, CRM in 2009 is about understanding, involving and benefiting customers, and I would agree that that is a good summing up - as long as profitability is also added on the end. The secret of corporate sustainability is the constant balancing of benefit between company and customer.

Sales through service is a seductive little term that’s been around for a while which is about to get a big ‘heave-ho’ up the hype cycle. Its rise in the customer relationship lexicon comes from contact centres eager to become profit centres, but beware it’s simplicity,  the emphasis is on service not sales.

We were amazed to see that 9 in 10 call centres have introduced this practice, are in the process of doing so, or are currently considering making this shift. - CSO Insights, 2007 Survey on Call Centres

Sales through service revolves around a ‘conversation’, even if that is machine to human. That conversation can be kicked off by the company, but the approach is more often made by the customer when looking for a service.

Examples of StS are:-

• Key account managemers, whose role is to understand client’s needs and find solutions from his company. The best do this through personal conversation, like the IBM client manager for an airline who spends most of his time talking in the airline’s staff canteen.

• The Dyson field service team, who, whilst carrying out servicing in the customer’s home find out through conversation what issues and needs the customer has. They are well versed in all the products and connected to operations to put right any issues. Customers have been highly delighted with this ‘time saving’ service.

• John Lewis, who thought that leaving customers to browse was what they wanted, but customers thought staff were being aloof and unfriendly. After a 5 year sales through service programme, staff now acknowledge the customer, open up conversations, and close sales by matching product to need as closely as possible – even if it means selling a lower priced product than the customer had intended to buy.

• Amazon, who were founded on a sales through service philosophy.

• O2, who supply service contact centre staff with information on the customer’s risk of attrition, and the three best offers (sales or service) to make to that customer based on propensity modelling and the content of the call. Around 6% of their 50million annual calls now generate revenue, and customer satisfaction is reported to have risen.

All the examples emphasise that StS is not just about revenue generating sales, it is about exchanging value. That may be free upgrades, helpful advice, or customer care, in exchange for customer engagement, recommendations, valuable data – and yes, at some point sales.

Back in 1999 CRM equalled call centre: wall to wall stands at every CRM exhibition exuded the relationship benefits of the channel. But, in reality call centres have not equalled better relationships and dealing with modern ‘contact centres’ is high on the list of stressful experiences. Many customers would prefer efficient self service to talking to a run of the mill call centre agent.

At CallNorthWest’s directors debate on ‘Automation and Strategic Planning for the Future’ recently, Director Tim Kirby reminded the call centre industry that hearing your child was going to be a city trader would be wonderful news, whereas being told they were going to work in a call centre would be disheartening, to say the least. Yet in both roles they would spend all day wearing headphones to engage with people on the telephone in order to build up assets.

As companies return from India a little wiser, how to lift the image of the industry in the UK is taxing minds. On the expert panel with me at the event were Directors from Vertex, O2, arvato services, and Dimension Data. In the audience senior managers from SME’s, international companies and government pooled ideas - even a Government minister has promised an appearance at the next event!

Distilling all the thoughts the answer to this question is not easy and has several strands:-

• Beak the habit of micro management and spending excessive amounts of time reporting facts irrelevant to good service such as wrap up time and calls per agent; call answering is a poor proxy for customer service. Analytics are needed but should reflect customer outcome priorities, not transaction costs.
• Promote your strategic value. How does what you do meet company goals other than cost reduction? Where do you engage customers over the ‘customer journey’? For example, are you key to the renewal of service contracts. Do you detect customer attrition, or warm customers for cross-sales? If you don’t know your value how will others?
• Where is the future for customer contact in your organization? The call centre of today will not be around in 10 years time, and the changes will be driven by technology - real-time marketing, social software, virtualisation. Do you have a pilot team in place with IT and customer experts to experiment you way into the future of conversational marketing?

Paper on the past and future of call centres - Your call is important to us - prove it!

Do you ask yourself any of the following:-

• How can I cut costs and give customers a better experience
• Is there climate change or isn’t there?
• How do I allocate my digital marketing spend?
• Do we give out plastic bags?
• Is there any benefit to us in Facebook?
• How can we compete with China on labour costs - should we use ’slave’ labour?
• Advertising isn’t working - what about word of mouth?
• How do I engage marketing with the call centre data - they are so busy with fluffy creative?

If so the answer is not a tactical one. It is a fundamental change in organization mindset from product marketing for mass consumption to conversational marketing to mass innovation. New ‘mutual’ marketing has three rules

• Join in the conversation
• The business of business is social
• Be ‘of service’ to stakeholders

Click here for presentation from IDMF