Improving Customer Communication

Transcription

ISSUES PAPER
Improving Customer Communication
By Jay McKeever
Personalized, Consistent Communications
About The Author
A respected and versatile business professional, Jay McKeever’s vast career
experience encompasses a variety of industry genres, including positions in
communications, human resources, operations, contracting and marketing.
Before joining Cincom, Mr. McKeever spent 17 years at the United Parcel Service
(UPS) rising quickly to the position of operational supervisor where he successfully
improved operations results from 65 percent to 110 percent within the first six months!
He then served as a UPS Human Resources Division representative and eventually
led district customer communications for five years. It was during this time that
Mr. McKeever began developing his approach to customer-centric communications.
After UPS, Mr. McKeever joined Mortgage Now, a Cincinnati-based, mortgage-lending
firm. During his time with the organization, he developed and executed inventive
marketing strategies to successfully overhaul an underperforming market territory.
In 1996, Mr. McKeever joined Cincom Systems, Inc. as a business manager responsible
for product royalty payments and reporting to third-party vendors. In addition, in
his role as Cincom’s Director of Worldwide Marketing since 1999, McKeever currently
manages all marketing, customer communications and product development
operations. At Cincom, Mr. McKeever strives to deliver a consistent value proposition
to customers via a wide range of communications media, in particular electronic
and telemarketing media. He uses Cincom’s own software products to improve
communications quality, response time and return on investment.
When it comes to executing effective customer communications strategies,
Mr. McKeever has this to say: “Today we are seeing the need for an old-fashioned,
yet avant-garde approach to customer relationship management – getting to know
your customers, talking to them, listening to them. But a lack of real-time dialogue
prevents marketers from responding to customer queries with the appropriate product
or solution. Consequently, marketing becomes all about pushing messages into a
void where two percent response rates are considered successful! And unfortunately,
all but a few companies fail to communicate with relevance and within an
acceptable time frame. Only through personalization and real-time dialogue can
organizations align their products, pricing and promotions to meet customer needs
and demands.”
Improving Customer Communications
2
Our Background
Founded in 1968, Cincom started with a simple idea and blossomed into a
multinational enterprise. That simple idea was selling software separately from
hardware, an idea that revolutionized how computers and their components were
sold. Since our inception, we have provided software solutions that help our clients
create, manage and grow customers. Our software products include manufacturing
control systems, databases, document management, sales knowledge systems and
e-Business solutions.
To help you succeed, we’ve conducted a comprehensive analysis of the issues
currently plaguing business marketers. During our study, we examined scores of
analyst briefings and research documents to identify the foremost customer problems
affecting marketers, as well as possible solutions to those issues.
The information presented in this paper is based on proprietary research conducted
in the United States, the United Kingdom, Germany, Spain, France and Italy.
In addition to the information gathered from research and interviews, we’ve also
included information from current news articles, the expertise of Cincom staff, consultants
and business partners, including BearingPoint, Doculabs and Fujitsu Consulting.
The experiences of our own customers have taught us that success can be achieved
by implementing technology appropriately and effectively. We hope our knowledge
and insights assist you in implementing sound business strategies that enable you to
maximize the potential of your organization.
3
4
Executive Summary
Unfortunately, most customers can tell little difference between you and your
competitors. Worse yet, many companies are actually destroying customer
satisfaction by delivering communications that are:
1. Self-serving and company-centric
2. Overstating of actual products and service delivery
3. Confusing and annoying to customers with complicated messages
4. Inconsistently communicating over multiple channels
One of the most damaging outcomes of these inefficient marketing types is the
increased customer churn that inevitably results. The numbers speak for themselves:
• The typical U.S. company loses 15 percent to 20 percent of its customer base
each year and 50 percent within five years; some industries (auto,
telecommunications and airline) are losing nearly 50 percent of their
customers per year.1
• Customer loss and replacement in wireless phone services costs providers
$55 million a year.2
• Financial services companies are losing $700 million in profit annually by not
building meaningful relationships with customers.3
How did we get into this situation? More importantly, how do we get out of it?
The answer seems simple enough: When we charged down the road to global
expansion, one-stop shopping and CRM, we lost sight of the basics. To turn it
around, we need to revisit message development approaches from the ground up
by doing the following:
• Creating a new sense of relevance with the customer
1
Terry Vavra,
Ph.D., Don’t Let
Customers Short
Circuit Your
Retention Efforts,
Customer
Relationship
Management,
March 1996, pp
33-35
2
Brian
McDonough,
Wireless Carriers
to Their
Customers,
Wireless
NewsFactor, June
14, 2001
3
Customer
Relationship
Management
Confronts the
Financial Services
Crisis, Peppers
and Rogers
Group and Roper
Starch Worldwide,
December 2000
• Delivering customer-centric messages consistently across all channels
• Bringing technology-enabled communications to marketing,
sales and service staff
The good news is that we can get there. This research paper sheds new light
on the basics and reveals emerging practices for communicating product-service
differentiation, and delivering relevant messages to your customers – across all
touch points.
5
Table of Contents
Our Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Assessing Today’s Communications – Provider Beware! . . . . . . . . . . . . . . . . . . . . 9
Proliferating Communication Channels . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Communicating Without Differentiating . . . . . . . . . . . . . . . . . . . . . . . . . 11
Perfecting Customer Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Shifting to Customer-Focused Business Models . . . . . . . . . . . . . . . . . . . . 13
Improving Customer-Centric Processes . . . . . . . . . . . . . . . . . . . . . . . 13
Making the Shift to Customer-Centric Marketing . . . . . . . . . . . . . . . . 14
Delivering Customer-Focused, Contextually Relevant Messages . . . . . . . . 15
Creating a Single View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Communicating Clear, Unique Value Propositions . . . . . . . . . . . . . . . . . . 18
Improving the Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Providing Consistent Communications . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Delivering Consistent Messages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Delivering Value Over Multiple Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Making the Most of Existing Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Improving Data Access and Integration . . . . . . . . . . . . . . . . . . . . . . . . . 24
Improving Data Access and Quality for Better Communications. . . . . 25
Data Warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Using the Data You’ve Got. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Reducing Expensive Customer Service Inquiries . . . . . . . . . . . . . . . . . . . 28
Integrating Contextual Communications Increases ROI . . . . . . . . . . . . . . 30
Leveraging Success with Integrated, Electronic, Postal Mail, and
Outbound Telemarketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Producing Personalized Documents . . . . . . . . . . . . . . . . . . . . . . . . . 31
Automated Customer Correspondence . . . . . . . . . . . . . . . . . . . . . . . 31
Using Electronic Media: Personalization, Permission and Privacy . . . . . . . 33
Increasing the Potential to Grow ROI via Personalization . . . . . . . . . 33
Selling Complex Products and Services Online . . . . . . . . . . . . . . . . . 33
Taking Advantage of E-mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Improving Communications via Automation . . . . . . . . . . . . . . . . . . . . . . 36
Automating Marketing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Automating Sales Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Wrapping It Up: Discussion Review . . . . . . . . . . . . . . . . . . . . . . . . . 39
Parting Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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Assessing Today’s Communications –
Provider Beware!
Anyone in marketing knows that it’s becoming increasingly difficult to connect with
existing and prospective customers. Studies show that loyalty to brands has eroded
sharply. Adult shoppers across all age groups in the 1970s were highly influenced
by brand. Today, even those over 60 years old (the most brand-loyal segment of
consumers) has dropped by 20 percent in the past 25 years.4
And the return on marketing investments is dropping:
• Enterprise productivity demands closer scrutiny of marketing.
• The time to break even in the mobile phone industry has grown from
6.8 months in 1998 to 7.2 months in 2003.5
• Sixty-eight percent of marketers have difficulty or cannot measure the ROI of
their marketing campaigns.6
Faced with servicing a more educated, sophisticated clientele, today’s marketers and
customer service representatives must contend with challenging customer demands.
As product and services offerings become more abundant and less differentiated
from those of the competition, customer communications become a decisive factor
in determining which companies will win the hearts and minds of prospective
customers – and which will fall by the wayside.
Effective customer communications seems simple enough, but upon closer inspection,
it’s readily apparent that today’s corporations are delivering messages that are
fragmented, inconsistent and often downright confusing to the customer. Why? Here
are just a few examples of how most companies fall short:
• Value proposition messages – though good on paper – are not delivered
as promised.
• Messages are irrelevant to the individual customer’s situation or place in life.
• Call center communications often do not match those delivered in various
channels.
• Messages delivered on invoice statements or on other routine documents
are too legalistic and prompt customers to make calls into the service center
for clarification.
• A change-of-address request often necessitates a call to several different
customer service centers due to lack of data integration.
It’s commonly understood that good communications are bi-directional in nature.
To that end, getting an effective message to the customer is only half the battle –
the other half entails effective listening. Marketers must ascertain what customers
are saying and thinking with two-way communications strategies based on oldfashioned listening skills. The key to any successful relationship – developing a
mutual understanding with your customers – will enable you to serve them in a
manner they expect, demand and, most importantly, appreciate.
4
DDB Life Study,
2000
5
Insight Driven
Marketing,
Accenture, 2003
6
Insight Driven
Marketing,
Accenture, 2003
9
Remembering the relationship adage, “If you love someone, set them free,” providing
your customers with convenience and freedom of choice in when and how they
interact with your company is key to securing their satisfaction. In this ideal
partnership, customers not only understand your message, but they are also able to
provide feedback if your message is somehow inappropriate or lacking. You know
the goal – to develop the customer relationships you need to stay competitive in the
industry – but to reach it, you must first understand the obstacles that stand in your
way. According to our research, customer communications across most industries
have deteriorated (in part) due to the following issues:
Proliferating Communication Channels
The traditional “Big Three” communication channels (contact centers, direct mail,
in-person contact) have expanded to include e-mail, fax, pagers, internet, VOIP
(voice-over internet protocol), consumer events, text messaging, ATMs, kiosks,
value-added resellers, distributors and so on. And more contact channels are
coming. Why?
• Explosion in choice and over-saturation of supply in all industry categories.
- Retail outlets in the U.S. have tripled since 1975.
- Discount stores have doubled since 1970.
- Apparel stores are up 50 percent.
- The average supermarket now carries 30,000 items.
- There are 850,000 eatery outlets in the U.S.
- Telecom services are up 60 percent since 1995.
- There are 8,200 mutual funds on the market today.
• Huge jump in number of marketing messages.
- The daily average in 1985 was 6507 and the daily average in 2003 was 3,000.8
- Direct mail went from 35 million in 1980 to 85.6 million in 1999.9
- Telemarketing calls now average 60 a month and some segments get as
many as 90 a month.
• More knowledgeable consumers with easy internet access.
• Category leaders like Wal-Mart, UPS and McDonald’s set higher expectations.
According to the Gartner Group, by 2005, 80 percent of financial services products will
be sold through at least 30 different delivery models. This communications channel
proliferation will make it necessary to optimize the sales-service experience
according to the individual requirements of these many different channels. And
although the majority of these new channels will be electronic, the various channels
will be dissimilar enough to prevent providers from being able to group them all
into the same category when developing communications strategies. That said, each
channel requires its own management strategies to operate successfully within an
overall corporate channel strategy.
The unique needs of the customer are reflected in the channels they use to
communicate. Unfortunately, many marketers have been unable to take advantage
of these diversities to better direct their marketing and sales efforts. For example,
7
A New Era of
Eros in
Advertising, Mark
Muro, The Boston
Globe, 1989
8
Statistical Fact
Book, Direct
Marketing
Association
9
Statistical Fact
Book, Direct
Marketing
Association
10
many companies cannot yet distinguish a marketing message geared toward a
customer accessing their account from a home computer, from that of a message
directed at a customer calling from a mobile phone. True, the message may
fundamentally be the same, but the communication nuances are quite different. In
this case, a mobile phone internet connection does not lend itself to the lengthy
text announcements and graphics that a home PC would allow. To work
successfully, communications must be tailored and managed according to the
capabilities and limitations of the intended delivery channel.
Messaging Gone Wrong
Product-centric communication doesn’t work anymore. No matter how much
flash, bangs and whistles are featured in your product-service lineup, if you don’t
communicate how your offering will meet the needs of your customers, they
simply will not buy from you. And as confident as you might be in the merits of
your own offering, you must first ensure that the customer remains the primary
focus of all communication.
• In a recent survey of 175 executives, Accenture revealed that 70 percent of
the respondents believe that clutter makes it difficult to capture customer
attention.
• Credit card company response rates to direct mail have dropped from
2.8 percent in 1992 to 0.6 percent just four years later.
• In 1980, we could reach 80 percent of a broad target audience with one
off-peak television commercial; today it takes 200 commercials to achieve
the same reach.
Communicating Without Differentiating
Today’s customers may be more demanding, but they have a difficult time
distinguishing one company’s product-service offering from the others’. To date,
most marketing evolves from a mass-communications culture, resulting in “lowest
common denominator” messages with no differentiation among providers. To stand
out in the current climate of increased competition and decreased differentiation,
marketers must clearly communicate what makes their offerings special – better
than those provided by the competition. If you are pretty secure in the
differentiation of your branding message, you should have no problem completing
this sentence: We are unlike any other competitor because … .
And please note, the “because” statement must refer to something the customer
actually cares about! Remember, as far as your customers are concerned, “It’s all
about ME!”
While the brand message must differentiate and relate, it must also be delivered at
every touch point with a correspondence and service offer consistent with the claim.
It’s not only a matter of the message itself being consistent over the various touch
points, but more importantly, the value message must be consistent with the service
levels provided, or the message is deemed untrue. Think of the millions of dollars
spent on communications to deliver a brand position that is destroyed the moment
that service does not match the claim. Some of the more successful institutions are
beginning to connect more readily to customers through ubiquitous marketing, sales
and service media. What’s at the heart of their success? Clearly communicating what
sets them apart and making good on that claim.
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12
Perfecting Customer Communications
Customer communications will be a decisive factor in determining which companies
will succeed in today’s marketplace. To enhance your ability to better serve your
customers, you must be able to capture, consolidate, analyze and distribute
information about them at every touch point.
Our research has identified four strategies for optimizing your
customer messages:
1. Shift to a customer-focused business model.
2. Develop customer-focused, contextually relevant communications.
3. Deliver a clear, unique value proposition.
4. Deliver this message consistently at every channel touch point.
Shifting to Customer-Focused Business Models
Shifting to customer-centric business models is a tough place to start on improving
communications because it is a multifaceted, complex issue. I am aware of the
difficulty firsthand because my own company struggles with this transformation
every day. Software companies such as Cincom grew up with a focus on products,
just as your company has likely evolved. Product focus is bred into everything we
do and undoing it is hard work.
Put your consumer hat on for a moment and ask yourself the following: Do you
want to purchase products that a company believes will make you more
productive? Or do you want the company to understand your situation and work
cooperatively with you to solve your business problems? If you prefer that companies
focus on your needs instead of how they can shoehorn their products into your
infrastructure, then you’re well on your way to recognizing the need for customercentric business models.
Improving Customer-Centric Processes10
Internal Processes – Financial services companies tend to be organized around
products, not customers. To create differentiation through customer relationships,
it is necessary to first change how the business is organized and to develop
customer-service processes before embarking on a customer relationship
management (CRM) initiative.11
Companies Failing at Customer Centricity – Thirty-seven percent of companies
still have a strategic and operational focus on the products and services they sell
rather than on the people they sell them to.12
CRM Software Use Is Not Yet Widespread – Only 30 percent of companies have
actually implemented a commercial CRM software package and most of these are only
a year old. Of these companies, 54 percent have implemented just one part of CRM.
10
Building Better
Customer
Relationships,
2002, Fujitsu
Consulting, pp 4
Gartner Report,
March 2001 as
reported in
Cincom EMEA
Research
11
Fujitsu
Consulting:
Building Better
Customer
Relationships,
2002, pp 23
12
13
Becoming customer-focused must go beyond lip service. We all have to learn to
trust our customers to define their needs and to make decisions about what they
need. Instead of selling, we need to help them buy what they need. This means we
must look at the products we offer, the culture we work in, the processes we use to
get things done, and the way our business is organized, even our compensation
and motivation systems. It all has to change.
Shifting to a customer-focused business model is outside the scope of this report,
but some basics relevant to customer communications include:
Choice and Flexibility – There is no one right way for the customer to contact
and interact with you. The right way is the way the customer wants to interact at
that particular moment. And that method may change only occasionally, or as much
as daily. Regardless of their preferred method of interaction, your communication
with the customer must be consistent and clear.
Ease-of-Use – All channels of communication must be user-friendly – even for a
novice or first-time user. Difficulty in finding information or getting service from
your company is one of the quickest ways to lose a customer.
Quick and Knowledgeable Responses – Customers should be able to locate
information quickly about products and services. When information can’t be
located, the customer should be automatically directed to a channel that can quickly
complete the request. But by sending your customer on a merry-go-round chase
through siloed channels, you will soon chase your customer to a competitor.
Assurance – The customer must feel that your word is as good as gold. When a
value promise is made, it must be kept.
Best Value – In the end, customers want to feel they are receiving the best value
for their money.
Making the Shift to Customer-Centric Marketing 13
The challenge of transforming a product-driven company into a customer-focused
enterprise can be hampered by internal processes, such as operating independently
functioning business lines rather than basing the firm’s organization on the
particular customers or groups of customers being served. To make the change,
consider implementing the following processes:
1. Differentiate customers into segments by value and needs.
2. Discover the precise needs of each customer, by segment.
3. Access customer data and distribute it to authorized users.
4. Evaluate and develop products and services that can be customized around
segment or individual customer needs.
5. Redesign compensation and rewards to cause needed behavioral changes.
One-to-One B2B,
Peppers and
Rogers
13
14
Delivering Customer-Focused, Contextually Relevant Messages
What’s the difference between a product-centric and customer-centric approach to
communication? In a word: relevance. Whereas product-centric messages promote
features and price, customer-centric messages promote a totally personalized
solution based on individual customer needs. Product-centric communication
exploits the value of a single transaction while customer-centric communication
addresses the lifetime value of the one-to-one customer relationship.
This begins with content that is about customer pains and issues instead of the
wonders of our products. First, show the customer that you understand their needs
and their situation, and when you have gained their trust, guide them to see how your
products address their unique needs better than the products of your competitors.
It’s no surprise that personally relevant communication is of the utmost importance
to customers. In fact, one recent survey showed that only 26 percent of respondents
would even act upon impersonal, “Dear Customer,” correspondence. That leaves
three-quarters of your customers unsatisfied. So, now is the time to trade in the
“We We” product-focused communication for the personalized “Me Me” messages
that build repeat business. If you are doing this already, CONGRATULATIONS! If
not, why not?
When implemented correctly, customer-centric, contextually relevant communications
will enable you to:
• Build personal relationships that keep customers loyal.
• Strengthen customer satisfaction.
• Communicate customer specifics that reduce future inquiry (and thereby
reduce cost of communications).
What Is Context? – Context is the interrelated conditions in which information or
activity exists with other situational events that impact decision-making and the final
outcome. All consumption occurs within a context. The more you understand
customer context, the less information customers have to supply to you and the
better you can serve them. To better understand the concept of context, let’s take
a lead from screenplay writer Linda Seger: “Characters don’t exist in a vacuum.
They’re a product of their environment. A character from seventeenth-century France
is different from one from Texas in 1980.”
In a consumer-based business, a newly retired father of adult children is quite
contextually different from a 35-year-old father of two school-age children. Further,
Linda continues: “Understanding a character begins with understanding the context
that surrounds the character. What is context? Compare context to an empty coffee
cup. It’s the space surrounding the character, which is then filled with the specifics of
the story and characters. The contexts that most influence the character include the
culture, time in history, location and occupation.”
Additionally, context also includes customer interests, behaviors and experiences,
etc. – all factors that collectively determine the needs of the customer, as well as
help marketers offer products and services to best satisfy those needs.
15
What Is Contextual Content? – Content is a general term that describes customer
service scripts, articles, photos, illustrations, diagrams, videos, sounds, promotions,
animations, navigational links, functionality and online tools that appear in the web
browser view. Contents are contextual when they are personalized to be relevant to
each individual visitor’s situation – the visitor’s fine-grained profile of demographics
and informational interests, location, timing, needs and decision criteria.
What Is Contextual Marketing? – Marketing is contextual when it is made
relevant to each individual customer’s situation while also addressing the needs
of the sponsoring enterprise (awareness, positioning, qualification, barrier
identification, trust, closure). Contextual marketing brings customers and sellers
together so that the customers can make better decisions, faster and easier.
Customized Customer Messages – Customized messages are a highly effective
means of connecting with customers, particularly when those communications can
be personalized to address the specific needs of the individual customer.
Customizing messages could include useful research or supplemental information
that benefits the recipient and is relevant to their unique situation. Even though
producing such one-to-one communications is more resource-intensive (as targeted
materials have higher requirements for accuracy and timeliness), you can exploit
customization strategies as tangible elements of differentiation. Attention to detail
and attention to the customer as an individual – these are often overlooked, but
invaluable CRM principles for maintaining customer loyalty. Developing this type of
customized communication may expose some weaknesses in your current CRM
technology support, however, data access, knowledge management, document
composition and contact center software products are poised to fill this gap.14
Customers as Individuals – The time for one-to-one communications is at hand,
but too many managers have yet to understand how to manage the process. Most
marketers still treat powerful new CRM technologies as mere segmentation tools.
We need to break from the traditional thinking of customer clusters such as baby
boomers, or genXers. The new goal is a segment of one – the one individual.
For instance, consider how different the needs of a boomer responsible for caring for
elderly parents are from a boomer exiting out of the rat race for more emotionally
satisfying work. Both are boomers, but their needs are totally different. When you
get into a one-on-one conversation with a customer, these are the things you learn
and you know instinctively what to say to each customer.
Now there is a need for technology tools that can pick up on such nuances and
profile customers based on their current needs and interests. Today’s typical
customer databases contain identification information, demographic information
and transactional information. Most do not yet collect and use soft information
about customer needs and interests, and it is the latter that leads to a richer
conversation and to more relevant advice. Technology-enabled customer
communications should make every conversation with a customer increasingly
relevant to the individual’s life situation – their context.
Doculabs Report:
Functional
Assessment of
Cincom iD
Solutions™
14
16
As your client-information database grows, you can begin to operate your company
around the customer, instead of operating around what you want to tell your
customer. Soon, your products and services will become what your customer really
needs, not merely what you want to sell. If you care about customers, it will show.
And if you do not care about them, that will show too. If you are a true “customer
first” company, the customers will come to know you as trustworthy. Your business
will grow accordingly.
Delivering True Personalization – The most sophisticated marketers have
dedicated countless resources to acquiring complete customer profiles, creating
needs-based segments and delivering consistent conversations across the
organization. There is one final facet of personalization, however, that many
companies are still neglecting. To truly personalize a relationship, marketing, sales,
and certain service managers must be able to solicit customer preferences and then
change the way their organizations do business to satisfy individual needs. For
example, if a customer consistently uses online channels to communicate and
transact with his or her bank, mailing a check reorder form to that person ignores the
customer’s implied preference. If the bank sends the notice via e-mail and enables
the customer to reorder with a simple reply, it may go a long way toward locking in
that customer’s loyalty. The challenge for most institutions is overcoming a legacy of
“that’s the way we’ve always done it.” True personalization will only become
possible to the extent that firms can open up processes and allow customers to
dictate how products are delivered, how services are configured and, essentially,
how they themselves are treated.15
Creating a Single View
Truly personalized communications are not possible without first priming existing
data-management technologies to allow for full data access and integration.
However, once you resolve these outstanding technology limitations, you will be
equipped with a “single view” of your customer data and also be able to educate
and reward customers for using channels more discriminately.
And to transform your product-centered communication into customer-focused
messages that grab and keep the attention of your recipient, implement any or all
of the following strategies:
• Learn each customer’s needs, wants and expectations
- Use web surveys, scripted conversations and interactive content to solicit
responses that reveal important factors about the customer’s needs,
interests, economics, etc.
- Use interactive content tracking on your website and e-newsletters to
watch what content each customer selects to read. Use this content selection
process to build a profile of customer interests so the organization can make
future communications increasingly more relevant to each customer.
- Use a similar process to identify whether the customer has entered an
active buying cycle and determine if the customer is in an early or late
stage of this cycle to trigger promotional offers that are relevant to the
customer’s purchase readiness.
Peppers and
Rogers,
August 2001
15
17
• Access and integrate your data to enable a comprehensive client
profile … the elusive 360˚ profile
A major barrier to contextually relevant, personalized communications is
the inability for marketing and sales decision-makers to get easy access to
customer data. This data is usually resident on a variety of mainframe
computers and disparate data systems. The first step toward more effective
marketing, cross-selling and up-selling is to get this data into the hands of
business managers who can then construct the content scenarios needed for
more personally relevant customer communications. Data access and integration
brings all complex environments and data together. It provides compatibility
and interoperability between vendors’ hardware, software and packaged
applications. Data integration aligns information systems with an enterprise’s
business model through a combination of methods, tools and techniques
aimed at modernizing, consolidating and coordinating varying applications.
Such data access is now available and can be up and running in days instead
of the months required for more comprehensive data warehouse solutions.
Once your enterprise data is available and integrated, you can begin to
assemble the elusive 360-degree view of your customer that is often promised
yet rarely attained. A 360-degree view would be expected to include the
customer’s purchase history with your company, a record of all communications
they have had with any department, all billing and transactional information,
any known channel or product preferences and each individual customer’s
responsiveness to your sales and marketing efforts. With analysis and the
complete customer view, your firm could present personally relevant information
and offers to your existing customers, thus increasing repeat-customer buying.
• Understand and apply contextual marketing to communications
Corporations are constantly trying to discover their customers’ needs, wants
and expectations, how they buy and what they will pay. Contextual
communications are about this and much more. It is about the oddities,
quirks, biases, emotions and sudden, unexpected, impulsive twists in
decisions that constitute human behavior. If the choice is presented the right
way, people will more predictably make a favorable decision. The trick is to
enter the context, understand where you are in this context and then control
the conversation relative to the context. Contextual communications are
predictive. How you communicate is more critical to revenue generation,
customer acquisition and customer loyalty than your back-end processes.
Back office is important, but unless it also improves communications,
it can only save you money … it cannot make you money.
Communicating Clear, Unique Value Propositions
To deliver an effective value proposition, organizations should start by developing
an effective value message differentiated by exceptional customer service. By
improving customer satisfaction, marketers are discovering they can turn segments
previously labeled as under-performers into profitable and loyal customers. Start by
understanding customers on an individual level and aggregating this “true view”
into segments. Then serve each segment in an appropriate, relevant manner. Again,
consider that whereas the customer on the home computer has the time and display
space for a more complex marketing message, the customer on the mobile phone
would need a quicker and more concise pitch. To emerge from industry obscurity,
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develop your customer communications strategies around your channel strategies,
making sure each customer receives messages via his/her preferred channel.
On the mobile phone or in the mailbox, make it your business to know where
to reach them.
Improving the Value Proposition
Information-based strategies leverage expert knowledge of the profitability,
preferences and transaction histories of individual customers to increase the
effectiveness of marketing, sales and service. To transform your ho-hum, run-of-themill value message into an eye-popping, head-turning, “must have” proposition that
positions you head and shoulders above the competition, we suggest you
implement the following solutions:
• Define what makes your product-service offerings unique and better than
those of your competitors.
• Improve customer service and market it as a key differentiator.
• Offer value-added services to your most profitable clients.
• Provide highly customized, one-to-one relationships, through a personalized
selling environment.
Mini Case Study Number 1
Bank XYZ* has 2,067 branches in the U.K. alone, catering to the needs of one
million business account holders and seven million personal account holders.
With such a massive client base, the bank depends on technology to enable it to
provide consistent levels of customer service.
Goal: Centralize customer information and permit access from thousands of
authorized worldwide branches.
Challenge: Send out over 24 million personalized letters per year.
Solution: Automating intelligent correspondence enables the bank to create a
seamless customer service environment from all their branches worldwide.
Key Results:
• Improved customer service
• Fifty percent time savings in document production
• Centralized access to customer data ensures consistency across all branches
* Company names have been changed.
Providing Consistent Communications
Today’s corporations must have processes in place to address customer difficulties
in the most efficient manner possible. Also imperative is the ability to understand
customer needs, the ability to anticipate and improve service, and last but not least,
the ability to protect customer privacy. Failure to deliver a consistent message
across all touch points has decreased marketers’ ability to meet those service
requirements. The result has been waning customer satisfaction levels and increased
service costs. Sharing customer data throughout your enterprise is mission-critical
for effectively reversing this harmful trend. Communications through channels must
be accurate and contextually relevant to truly assist consumers in their decisionmaking. Providing consistent transactions through enterprise-wide information
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sharing makes it possible for you to deliver exceptional service while protecting
your professional image.
Delivering Consistent Messages
• Extend business process flow across multiple channels
Once they have the data in a single view, organizations can convert their
knowledge into a set of business rules that automate complex processes
to market, sell and service customers. This enables organizations to more
effectively respond to each individual’s situation while working within
parameters that ensure appropriate profitability. At the heart of this process is
automating a knowledge-based system that allows expertise to be distributed
consistently, quickly and cost-effectively throughout all contact channels.
Providing continuously updated and accessible information to both direct
and indirect salespeople gives you a tremendous competitive advantage.
Empowering your sales channels with consistent and accurate information
lets you “stack the deck” and supports your efforts to be professional,
knowledgeable and easy to do business with. But in the case of many
companies, the complexity of products combined with multiple sales
channels makes selling and servicing complicated, labor-intensive and costly.
By extending your best sales and service processes across your enterprise,
you ensure that customers receive the best response you can offer, no matter
how they contact you. Customers receive what they need and you retain more
customers while increasing your share of profit. Data from existing systems
can be aggregated and combined with new and updated information to give a
comprehensive view for each of your customers. In addition, real-time access
to data across your entire enterprise ensures consistent customer experiences
at every touch point. You can also enhance service quality through automated
channels by deploying expert knowledge at the point of customer contact –
including contact centers and the web – enabling you to deliver higher quality
service and sell more cost-effectively.
• Equip all customer service reps with the ability to provide consistent
customer transactions
As today’s customers have more choices and greater expectations of customer
service, ensure your contact center agents possess the knowledge to sell and
service customers intelligently enough to create repeat business. At the
moment of interaction, agents should have immediate access to any relevant
customer information, including profile, history, preferences, associated
documents and more. Armed with the information, agents will deliver more
personalized service, smartly selling solutions rather than simply pushing
products. Customer information should continually accumulate at each point
of contact to create a comprehensive, useful knowledge base.
• Create an integrated customer communications solution
Look for an integrated solution that supports multiple document types and
provides a single solution for a wide variety of applications, ranging from
statements to ad hoc correspondence to complex regulated documents such
as insurance policies or warranty statements. The strength of the solution
should be its ability to produce complex, personalized documents in a wide
range of application scenarios – and its ability to deliver those documents
through multiple channels.
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Such a solution would provide the following business benefits:
- Makes it easier for companies to design the look and feel of their
customer documents.
- Provides opportunities for branding within customer documents, as
well as opportunities for special promotions or cross-selling offers.
- Enables organizations to automatically incorporate data from outside
sources, such as databases, business applications and legacy systems in
customer documents.
- Delivers these benefits in both interactive and batch production
environments, providing consistent appearance for ad hoc and
periodic communications.
- Allows organizations to personalize both the content and
composition of customer documents.
Serving nearly two million members, Corporation ABC* is using an intranet-based
personalized correspondence generation system to manage much of its
communications. The company generates thousands of letters monthly to its
customers thanks to a rules-based correspondence system.
Goal: Upgrade or replace an outdated mainframe-based document generator
to create dynamic, personalized documents via a web browser from anywhere
in the world.
Challenge: Generate thousands of personalized letters each month from over 800
workstations in diverse locations.
Solution: Corporation ABC implemented an intranet-based personalized
generation system.
Key Results:
• Eliminated the expense and headache of maintaining software on over 800
workstations in different locations.
• Saved time and money by eliminating the need for customer service to type
unique information into each letter. Correspondence can now be
personalized automatically – without typing a single word.
• Greatly improved appearance and consistency of letters.
• Enabled over 1,200 web users to generate customized letters.
* Company names have been changed.
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Delivering Value
Over Multiple Channels
To deliver value on a personalized basis, you need customer data. More specifically,
you need customer data put into the hands of those employees who routinely
communicate with customers. This allows you to analyze the data, segment your
customers and improve your communications accordingly. In this section, we will
look closely at two important, but often neglected, communications media:
• Contact center transactions
• Printed documents
Making the Most of Existing Data
To become a one-stop-shop for your customers, you’ll have to offer the
personalized service that enables you to up-sell and cross-sell successfully. But if
you don’t know your customers, how can you recommend additional products and
services to them? Put simply, you can’t.
A major obstacle to personalization is the inability to acquire essential customer data.
In fact, as stated in Forrester’s Personalizing Financial Services report, 68 percent of
the 50 financial services firms interviewed cited “getting good data” as the biggest
challenge to personalization. Further, in many cases, the information that firms do
have is incomplete because customers’ assets are spread across several institutions.
According to a PRG/Roper Starch study, if you can provide a high-level of service
and relationship management, 55 percent of respondents said they would likely
consolidate their business with one provider. So, since comprehensive profile
data is integral to personalization, yet difficult to attain, we find ourselves in
a bit of a Catch-22.
The advice of many executives? Start with the information you have and then
supplement it with third-party sources. Also, where possible, ask customers to
disclose information in the interest of serving them better. The key is to convince
customers that providing this information will directly benefit them.16
16
Forrester
Research
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Signs You Are Taking Full Advantage of Your Customer Data
• You can access and analyze data that can be used to make effective sales
and marketing decisions.
• You can understand individual customer profitability across operating
divisions.
• You can identify customer needs and find ways to meet those needs.
• You can create products and services that encourage or change customers’
buying behavior.
• You can sell more products and services to existing customers.
• You can define customer communications touch points across your
enterprise.
Improving Data Access and Integration
In today’s depressed spending environment, all IT departments are asked to do more
with existing systems, including existing data. This includes providing service reps
with desktop access to existing data for real-time decision-making. Unfortunately,
data is housed in disparate subsets and formats and is queried by various database
management systems running on diverse hardware platforms using different
operating systems. To make matters ever more incongruous, a lot of existing data
resides in legacy systems running on a mainframe, as these statistics show:
• 70% of corporate data resources are hosted on mainframe systems.
- Gartner Group
• 80% of corporate data is held in non-relational data sources.
- Butler Group
• 40% of all application development effort is spent on accessing existing data.
- IDC
The objective of data integration is to bring these disparate environments together
and have them working in unison. Data integration provides compatibility and
interoperability between multi-vendor hardware, software and packaged applications.
Another task of data integration is to align information systems with an enterprise’s
business model through a combination of tools and techniques aimed at modernizing
and coordinating varying applications. Data integration solutions for relational data
are fairly common, yet a great deal of data continues to be inaccessible – locked
away in mainframes. With the modern requirements for systems related to e-commerce,
integrating all data has become an expensive, yet necessary, undertaking.
Marketers not only need the ability to access and integrate the data from their
collection of data sources, they need to do it as efficiently and cost-effectively as
possible. With the appropriate data integration solution, you can:
• Provide a single, up-to-date view of enterprise data so it appears as if it is
from a single database system.
• Maintain the integrity of core data systems, minimizing disruption to business
and allowing existing systems to be left intact.
• Eliminate the need to create large data warehouse systems and associated
problems. Problems such as out-of-date data and the difficulty and expense of
creating and maintaining the system are eliminated.
• Integrate new businesses and systems quickly with no major IT efforts needed.
• Extend data quickly and securely to channels, customers and partners.
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External Data
• Industry Trends
• Competitive Research
• Market Share
• Brand Measures
Client Data Sources
• Profiles
Location
Income Decile
• Transactions
• Interactions
360-Degree
Integrated View of
Customer
Client-Inferred Data
• Topical Interests
• Preferred Touch Points
• Timing of Touches
• Buying-Cycle Stage
• Barriers to Purchase
Improving Data Access and Quality for Better Communications
There are four different paths you can take to access data currently “trapped” in
disparate data systems:
1. Implement a comprehensive CRM solution that replaces existing systems.
While many are pursuing this direction, many are also failing at it and find
the disruption to business and the cost of execution prohibitive.
2. Install a data warehouse that replicates existing data from disparate
systems. Many companies are headed in this direction, but setting up a
warehouse from pre-relational files requires specialized knowledge and
custom development and a lot of time before the warehouse is functional.
3. Create a portal that can access and input data through a browser. While
being time responsive and friendly to users, this solution puts additional
transactional load on the existing systems that are typically near capacity.
4. The Cincom TIGER™ Approach that lets you access, integrate and
replicate data across heterogeneous platforms and file systems.
This gives you a relational interface to non-relational data, and a fast means of
accessing mainframe data through SQL queries. The TIGER system includes
components for data access, data integration, data transformation, a real-time
data cache and analytics with lower cost and overhead, and rapid installation.
Cincom TIGER’s approach accesses transactional data and stores this “single
view” of each customer in a cache where it can be accessed using any tool
that supports relational or XML APIs. Unlike the snapshot techniques used in
the data warehouse environment, the system monitors changes to the
transactional data sources and periodically applies them to the cached copy.
Data upgrade periods are typically measured in hours, but are set by the user
based on business requirements – including real-time, if needed.
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Data Warehousing
• In a survey by the Winter Corporation, the number of corporate databases
containing more than one terabyte of data has doubled from 1998 to 2000.
• The average enterprise will have approximately 2.7 million terabytes of
available stored information in 2004 with a compound annual growth rate
of 72 percent from 1999 to 2004.
• Wal-Mart’s data warehouse is now legendary topping 100 terabytes.
• Huntington National Bank, Columbus, Ohio, reports that it has integrated
data from all 17 of its sources of customer data so it can paint a real-time
picture of each individual customer. This gives Huntington employees a
single source for all data.
• Capital One Financial Group, Richmond, Virginia, maintains an aggressive
customer acquisition and retention effort supported by a data warehouse
that took six years to build.
• Grim statistics on the failure rates of large data warehouse projects abound,
with some industry observers noting that more than 50 percent of such
efforts either fail outright or fall well short of expectations. In part, it evokes
the proverbial story of the dog catching the car. The challenge of generating
insights from data magnifies as the data grows.
• A survey of 605 company executives conducted by Seisint, Inc. and ORC
International reveals respondents believe that, on average, only 66 percent
of their data that would be useful to their company’s decision-making
process is accessible.
• Typically, if a marketing manager wants to get an analysis of customer data,
the request is handed off to the IT department. The request goes into the
queue for database queries and in large companies, the resulting report can
take days or even weeks to produce.
• What marketers want is the ability to sift through the data and create
customer segments based on virtually any combination of attributes and then
design a strategy for reaching those segments, without involvement of IT.
Using the Data You’ve Got
Communications into channels or to customers have not served businesses or the
targeted individuals well. Response rates across all industries, all media and all
communications disciplines are poor: response rates universally hover in the two
percent range. At the same time, recipients tend to see most communications as not
relevant to their needs. Lack of relevance is a major reason for poor response rates.
Two interrelated strategies can help you attain productivity gains:
1. Customer centricity and
2. Contextual communications
By shifting the messages and offers to a customer point of view and then
personalizing these messages and offers so they reflect the individual’s situation,
you will increase the relevance of your communications. Our experience indicates
that response rates can improve from two percent to 10 percent, and sometimes as
high as 50 percent when communications are made more relevant to customer
needs and customer context.
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Once you have the data in a single view, managers can convert their knowledge
into a set of business rules that automate complex communications processes to
market, sell and service customers. You can respond to each individual’s contextual
situation while working within the parameters that assure appropriate profitability.
Create meaningful dialogues with customers at all interaction and transaction touch
points and, in the process, establish lasting and profitable customer relationships.
Companies must engage in intelligent conversations with customers and that means
creating a seamless customer experience across all interaction touch points. The
main prerequisite to achieve this level of marketing is the ability to access a single
view of the customer.
As reported in Measuring Client Value (CMA Management, June 2001), Royal Bank
of Canada began consolidating its data in the 1970s and recently adopted a set of
analytical tools to work in concert with its data warehouse for use by branch managers.
Cathy Burrows, senior manager in client relationships, said, “We can now look at
segments based on attitudinal and behavioral factors as well as current and potential
profitability, expected purchasing behavior, vulnerabilities and channel preferences.
Strategies can now be developed not only for each segment but also for hundreds of
micro-segments within each segment. The ultimate objective of this quest being
one-to-one marketing.”
While such analytical marketing of segments as small as one makes all the sense in
the world, amazingly it runs into culture and habit based on years of mass-marketing
campaigns. Many marketers veer from the challenge of creating the hundreds of
smaller, tightly-focused programs produced on a continuous basis.
The bank teller, the shop keeper, the grocer all knew customers’ habits and needs
at particular moments in their lives and would look out for ways to help them. Now
we have been giving up personalized service of the past in the name of scale and
efficiency. Each of us has become a faceless, nameless person standing in the teller
line or the grocery checkout lane. We all get the same homogenous mailers, the
same TV commercials spouting “lowest common denominator” messages that
proclaim value propositions that do not match the service we need as customers.
We’d change to another vendor, but the one down the street is just the same. What,
however, if that vendor was more enlightened and could actually deliver
personalized conversations and personalized services that matched our needs?
Possible Solution: Rules-based Contextual Marketing
You take the expertise of your best marketers and salespeople, comb through the
actions that make them successful and you match this up with how customers make
decisions to create rules that guide communications. For example, if a customer
does A, B, C and D, but not E and F, recommend Product X. And if the customer
does not buy X, suggest Y. Put that expert knowledge into an “expert decision
engine” and it can guide the actions of your marketing, sales and customer
service staff. Each communicator can now understand what is important to each
customer and convey the right information to achieve your immediate objective
and to provide a level of service that customers rarely find in today’s mass
markets.
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Transforming Call Centers Into Comprehensive Contact Centers
It wasn’t too long ago that organizations struggled to successfully operate call
centers with their accompanying staff, business processes and technologies. In the
past, call centers were established with the purpose of cost reduction. As such,
call centers were often considered to encompass low-level business functions,
and significance was considered minimal. Today, however, organizations are now
realizing the critical importance of every customer contact and are starting to
understand the inherent value of the call center upgraded into a multimedia
contact center. Currently, the strategy of many organizations is to transition the
capabilities of existing call centers into multiple, channel-based contact centers.
As the number of customer contact options grows, call centers find they must
be able to communicate via multiple channels (apart from the phone), including
internet, e-mail, voice mail, fax, postal services, etc. In an effort to make all
means of communication operate successfully, organizations are now looking for
unified messaging solutions to help manage the flow of interactions across the
various channels. In addition, companies are integrating their call centers with
web pages to enable customers to self-serve, as well as to schedule callbacks or
initiate online chat sessions with customer service representatives. These contact
centers provide customers with a mutually beneficial amount of freedom and
ability. But as the prevalence of contact centers grows across all industries, the
quality of “live” phone calls or person-to-person contact becomes even more
critical as they are the likely result of a less than satisfactory self-serve experience.
Typically, customer service-focused software vendors provide applications that
support servicing simultaneous customer inquiries from traditional channels (inperson contact, phone, postal mail and fax) and non-traditional channels (web,
e-mail, chat, voice-over-IP and wireless). These applications should be capable
of managing business rules across all available contact channels.
Reducing Expensive Customer Service Inquiries
As customers gravitate toward alternative means of contacting your business, contact
centers must contend with many different types of customer interactions. Plus, today’s
particular customers expect you to know who they are and why they are calling.
Ignorance to their plight, or the necessity to repeat a previously explained situation,
will result in customer frustration and loss of business for your company. If you can
meet the challenges posed by the new communication mediums and manage to use
said channels successfully, you can both attract and retain customers.
Some of the techniques to use in managing your contact center profitably include:
• Leverage customer information across the organization
When customers need assistance, they prefer to deal with an organization that
can access information quickly, and provide an update without first passing
them through a series of different departments. The goal is higher quality
contacts via better information, better timing, and above all, better service. As
previously mentioned, you should achieve and leverage a 360-degree view of
the customer across your organization. Contact center software packages contain
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several types of technology to handle this. Some of the most common are:
- Complete contact history with call outcomes, so agents can handle problems
without having to pass the customer to another department.
- Immediate information access for agents, with CTI screen pops based on
ANI, DNIS and input from IVR, displayed right on the agent’s desktop.
- Ability to forward information quickly and easily to other departments, thus
reducing fulfillment times for customer requests.
- Automatic recording and tracking of customer issues to contact center managers.
- Automated direct transfer of data to back-office systems to reduce the
amount of post-call work or “wrap-up” time.
• Manage contact-center performance
Organizations are realizing the critical importance of every customer contact,
and have begun to make the call center the focal point of CRM strategies. As
call centers are transformed into CRM contact centers, how well you manage
their operation will have major profit implications for your company. Contact
center software packages contain several types of technology features to
handle communication functions. Some of the most common features include:
- The ability to measure effectiveness of campaigns, lists, agents and the
entire contact center with comprehensive predefined and ad hoc reports.
- Automatic recording and tracking of customer issues to contact
center managers.
- Workflow automation to streamline the fulfillment of customer requests,
even when multiple business units are involved.
- A rules-based recommendation engine that helps agents cross-sell and
up-sell more effectively.
- Unified messaging and web integration to manage the flow of interactions
across multiple communication methods.
- Online scripts to reduce agent training time and guide agents through
complex call flows.
• Dealing with the increasing volume of messages across all media
Today’s savvy customers expect your company to respond to e-mails, faxes
and voice mails with the same sense of urgency you would a phone call or
personal visit. But the increased ease with which customers can contact you
has led to a dramatic increase in the volume of incoming messages. Contact
center software packages designed to handle this increased burden will
include:
- Unified messaging with a single, universal “inbox” on the agent’s desktop
that supports delivery and retrieval of all types of messages.
- Intelligent routing that directs contacts to the most appropriate agents based
on skill level, subject matter or customer information, not just volume or
time of day.
- Immediate response capabilities even over the web, with web chat, live
agent callback and voice-over-net.
- Dynamic call blending to balance inbound and outbound loads during peak
or slow periods, and make it easier to schedule resources.
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Enabling Unified Messaging
As call centers evolve outside traditional boundaries, getting each message to the
right person at the right time, regardless of channel, can create a challenge. And
with integrated management, this obstacle will become even more critical. This
scenario is especially relevant when looking at an informal call center, in which
everyone in the company is an agent. At some point in this environment, everyone
in the organization will interface with the customer. Unified messaging technology
makes this more efficient by allowing both the customer and the “agent” to
communicate in the method most desirable to them at a particular point in time.
Unified messaging in the call center allows marketers to manage incoming nonvoice contacts in the same manner as voice contacts – with the same sense of
urgency. In addition, with a unified infrastructure, there are integrated
management and reporting capabilities as well. Unified messaging also enables
intelligent routing of e-mails, faxes and voice mails, allocating a specific customer
communication to the most appropriate agent. Some responses, such as e-mail,
can even be automated. This guarantees that the customer is contacted quickly
with some relevant information, even if a follow-up call is still necessary. Not
only does this make the most of your personnel resources, it can also have a
significant positive impact on customer loyalty.
Integrating Contextual Communications Increases ROI
Clearly, an effective CRM strategy should include a means of cost-effectively
producing personalized customer communications – ideally, communications
ranging from a simple personalized letter to a complex, customized investment
plan brochure or personalized merchandise catalogs. Unfortunately, however,
customer communications is a significant gap in the CRM technology offerings
currently available on the market. Traditional CRM vendors have not addressed
integrated print and electronic communications. Capabilities for automating the
production of customer communications are noticeably absent from their products.
Leveraging Success With Integrated, Electronic, Postal Mail, and Outbound
Telemarketing
Integration of e-mail and direct mail with telemarketing can increase overall ROI from
your communications campaigns from the traditional two percent to 15 percent, or
more … even potentially a magnitude of several hundred percent difference! If you
are already doing this, congratulations! Most marketers tend to wait until the mail
responses have peaked before launching the phone. The rationale for this old-line of
thinking is that mail is less expensive so why cannibalize a $1 e-mail message or a $5
mailer with a $20 outbound call. Our experience, based on 20 years of successful use
of what we call contextual marketing, is that mail is simply a springboard for the
phone follow-up. Why wait for 98 percent of the names to get cold while waiting for
a two percent mail response.
Inbound telemarketing over a toll-free 800 line and well-targeted outbound calling are
the most accepted forms of telemarketing because customers can choose when to
respond and receive immediate gratification. This requires thorough training, scripting,
quality monitoring and detailed results analysis. Our experience indicates that interactive,
customer-centric and tightly structured conversations will generate a higher qualified
response. Be sure to script your call for voice mail because that is frequently where
your call will go. Good telemarketing will not only achieve excellent response rates,
but it will create a measurable “halo” effect with 10 percent to 12 percent of those
who are not interested.
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Producing Personalized Documents
You know that your customers want to be treated as individuals. As previously
mentioned, one survey showed that only 26 percent of respondents would even act
upon impersonal – Dear Customer – correspondence.
One of the key components of a customer relationship management (CRM) strategy
is customer correspondence. Within many customer service centers, there is a critical
need for products that can simplify the process of developing customer communications
– communications for which accuracy, timeliness and personalization are at a premium.
And, increasingly, customers are requesting delivery of those communications
through the channel of their choice.
However, many CRM products lack document automation functionality – they
cannot address the requirements that many organizations have for producing timely,
personalized communications based on customer service interactions.
While document composition tools have been a mainstay for automating the generation
of print output for mass distribution, few offerings have been able to automate the
production of all document types, in a wide range of applications. Increasingly,
organizations require tools with the flexibility to address not just high-speed, highvolume print applications, but also the ad hoc custom correspondence characteristics
of a customer service response, delivered through e-mail or fax as well as print.
There is a clear market for document composition tools that can serve as a
complement to other CRM-enabling technologies.
Many marketers will need to revise and develop new and efficient processes to
manage the production of personalized documents. Some areas that should be
considered are:
• Use of graphics and color to create easier-to-read communications.
• Replacing legalistic and confusing language in “form letters” with plain
English. This allows the letters to communicate as intended, and where
appropriate, leading to increased opportunities for cross-selling and up-selling.
Automating Customer Correspondence
Document automation software products automate the process of document
creation in many application scenarios. Perhaps their widest deployment has been
in applications designed to generate output for mass distribution, such as highvolume statements, bills and direct mail. At the other end of the spectrum, document
composition tools have focused on the automation of complex, personalized
documents. This ad hoc document automation includes insurance and health plan
policies, loan documentation and personalized customer correspondence. These
documents are generally low in volume, but high in complexity, involving
considerable customization that entails the use of multiple fonts, color, graphics and
other design elements. These high-complexity documents are precisely the type
required for effective customer communications in any CRM strategy.
In an environment of reduced IT resources, deploying multiple software solutions
to address these disparate document requirements is no longer an option. What
organizations require is a single-vendor solution for document production that can
handle the entire range of document applications while enabling multi-channel
delivery of the customized documents.
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A French insurance company needed to control and optimize the processes
of account management and payments. Around 100 internal users on average
printed 3,500 documents per month. The existing letter production application
had poor graphics capabilities and the number of standard letters had grown to
over 600, with many duplicate letter formats. With management finding it difficult
to manage so many letter formats and being unable to either change letters in line
with policy shifts or to control the free-drafting paragraphs, they empowered the
users to revamp the system in participation with the MIS department.
In the audit that focused on both the ergonomics and the content of the letter
models, the letter formats were progressively reduced from 600 to 70. The new
system has a tree structure of pull-down menus that were organized by the letterwriting department and includes logical security and authorization capabilities.
Particular attention was given to ergonomics and training, where only two hours
of training were required to become a competent user.
Along with major strides in letter quality and in the management of
communications, involving users in the project improved the business modeling
activity and helped to create a more adaptable solution. The company plans to
extend their capabilities with the addition of statistical and measurement tools
to help further optimize processes and to identify hidden costs.
A large international bank centralized its customer databases while simultaneously
providing access to more than 2,000 branches and divisions throughout the
world. Their challenge was to cut the production costs of producing more than
24 million personalized letters a year.
The adopted solution introduced interactive and intelligent functions to the letterproduction process. Users are assisted by an array of 450 letter models where the
content can be altered to suit the needs of the customer. For example, if the letter
concerns an unauthorized overdraft, content is automatically modified according
to the number of notifications already sent. The wording of the letters is also
amendable to take into account the size of the overdraft.
This solution creates logical rules within letters, reducing both the number of
decisions to be made and the amount of manual interventions. For example, a
significant number of letters are produced to accompany complex loan offers,
rules are associated with the loans and the system assists users to write the most
pertinent letters, while restricting the choice of wording available to prevent the
introduction of errors or inconsistencies.
The cost of producing personalized letters was reduced by 50 percent, and every
authorized user in the bank has access to all of the letters produced.
32
Using Electronic Media: Personalization, Permission and Privacy
Increasing the Potential to Grow ROI via Personalization
According to a study by consulting firm Speer and Associates of Atlanta, only
two percent of the companies they polled achieve any level of personalization.
Even when personalization is in place, it’s generally of the “Yahoo!” variety, where
clients can customize home pages, pay bills and sign up for e-mail alerts. And while
this may be an adequate level of service for some, clients who want a firm to
interact with them according to their individual needs and preferences will find it
sorely lacking.
In fact, a recent study conducted by the Peppers and Rogers Group and Roper
Starch Worldwide finds impressive benefits for firms that adopt a relationship
strategy on all customer tiers. According to the report, about one-fourth of
consumers (26 percent) who rated companies as “poor” on CRM said they were
likely to switch one or more products during the next 12 months. But only one
percent of consumers who rated it as “high” said they were likely to do so. Even at
a conservative $100/household/year profitability, reducing attrition by only nine
percent would translate to substantial money for the average firm. An institution
with just 20,000 customers would increase profits by $180,000 by incorporating CRM
practices such as recognizing returning visitors and anticipating their needs.17
All interactive communications media can be improved with personalization. To
encourage customers to reveal useful information, you will likely need to first show
them the value they will receive from personalization and, second, reward them for
giving you the information you want – online registration, promotional contests,
password authentication, free demonstrations or educational materials. Blend this
with your existing customer database information, then relate each type of customer
action that you can monitor with a “topic tree” of various customer needs. This
allows you to form an “interest-based” customer profile. Using configuration and
business rules within an “expert system,” you can then match communications
content that will most closely address an individual’s interests. Communicating
around what customers’ interests are will allow you to treat each customer uniquely.
Does it work? Jupiter Communications cites that web personalization boosts customer
acquisition by 28 percent in 12 months. Amazon has a 66 percent re-purchase rate
(twice that of most retail book stores). MBNA Financial cites customer balances are
44.8 percent higher than industry averages.18
Selling Complex Products and Services Online
Marketers must be highly responsive and able to coordinate activity and deploy
knowledge across multiple sales channels. To meet customer requirements
consistently, you must be able to communicate product and sales knowledge as
requested, so customers are never kept waiting for a response. Knowledge-based
technology captures the knowledge from product and engineering experts, so
salespeople, partners and even customers can quickly configure the products and
options that meet their specific needs. This type of system manages every step of
the configuration process – from needs analysis and product configuration, through
pricing and financing, to proposal and contract generation. Flexible deployment
options allow configuration on the road, on the phone and on the web.
Peppers and
Rogers,
Completing the
Data Puzzle,
August 2001
17
One-to-One
Workshop Series,
Peppers and
Rogers
18
33
According to Datamonitor, the next evolution of web-based services will entail
helping consumers with decision-making. With this type of software, you can
provide automated decision-making and advice via the internet, intranet, contact
center or mobile devices. In fact, according to Nielsen Net Ratings, most online
consumers favor websites that offer more than one service. By expanding online
service to include personalized, automated advice, marketers are likely to expand
their sales channel, develop loyalty among customers and improve their overall
bottom line.
Providing Web Self-Service
By allowing them to perform many of the service transactions themselves over the
internet, customers will feel as though they have greater control and flexibility in
the way they are served. The ability to perform tasks themselves empowers the
customer and is likely to improve their level of satisfaction. In addition, since web
self-service requires no human contact, it is a cheaper support channel and will
help your company reduce overall operating expenses.
Marketers can also leverage web self-serve transactions to expand their knowledge
of the customer. For example, a registration page might allow for demographic
information to be collected about the account holder. By gathering this relevant,
useful data, your company can use it to improve its understanding of buying
patterns and preferences. As such, you will be better able to target prospects and
subscribers based on their demographics, buying history and database profiling,
rather than hit-or-miss mass marketing to the unknown.
Taking Advantage of E-mail
It first happened back in 1998 – the year when Americans sent more e-mail than
postal mail. Today, you cannot be in business without extensive customer
communications via e-mail. Yet nearly half of all retail websites do not respond to
e-mail! And, of course, the biggest problem with e-mail is its unsolicited use – or spam.
We’re all painfully familiar with the impact of this electronic nuisance. Consequently,
internal standards and assurance for e-mail communications are essential.
There are three e-mail rules to live by:
1. First, don’t spam. (Period.) You will do nothing but destroy a trusting
relationship with customers.
2. Have a spam policy attached to any e-mail, e-newsletter or marketing
campaign that you distribute.
3. Get permission from customers. Let them opt-in (not opt-out) to receive your
e-newsletters and marketing campaigns.
34
Most companies, due to inappropriate use of the channel itself, have missed e-mail’s
business-building potential. In fact, a recent study by the Direct Marketing Association
concludes that most e-mail campaigns are bombs – response rates average less than
one percent, and most e-mail is not even opened. This trend will continue until
marketers shift their e-mail communiqués from feature-benefit (messages that are
appropriate only in ads and collateral) to custom-tailored messaging. The e-mail
medium is an opt-in channel; any unrequested communication seldom receives
more than a one percent response rate. Why bother?
On the bright side, e-mail can be used for a host of useful customer
communications:
• E-newsletters
• Special promotional initiatives
• Postcards and reminders
• Campaign announcements
• Technical updates
• Sales lead and customer follow-ups
• Warranty updates
• Service news
• Products announcements, upgrades and recalls
• Sales and staff training
• Personnel news
People will opt-in to receive your e-mail if it is engaging and useful. Your task is to
communicate the facts about your company and products by punctuating your
missives with content that will engage, inform and motivate recipients to take action,
that is, link to your website, download useful information, and of course, buy, buy,
buy! In e-mail, content is king. So, unless you have an unusually talented staff of
writers in-house, you should consider outsourcing the creative portion of your e-mail
to specialists who know how to say a lot with a little.
Automating customer service with e-mail technology enables you to quickly deliver
consistent, personalized information. As CRM managers know, a quick response is
key to customer happiness. To automate customer service via e-mail, an integrated
contact center application should feature a seamless interface to popular e-mail
management systems. Likewise, the e-mail management system should have tools
to assist with timely and accurate responses to customer e-mails. Automating e-mail
responses to fairly predictable, repetitive requests and inquiries will save you money.
35
Ensuring Privacy In Communications
How do you balance a communications strategy that requires large amounts of
customer-contributed information with their growing concerns about privacy?
• Use a prominently displayed comprehensive privacy policy that tells
why you need the information and what it will do to make the customer’s
life better.
• Explain clearly what you will NEVER do with the information.
• Explain what options the customer has regarding privacy.
• Explain under what circumstances you are required to notify customers
regarding their data.
A survey by AT&T indicated that of people who are reluctant to supply personal
data, 28 percent would do so if the website had a privacy policy, and if that is
combined with a recognizable approval seal, the number goes up to 58 percent.
Improving Communications via Automation
Automating Marketing Operations
Marketing automation solutions enable your organization to coordinate marketing
operations to more effectively target products, services, promotions and offers to
the appropriate customers. The key capabilities of these software products are their
ability to capture and analyze customer data that can then be used to design,
execute and measure the viability of marketing campaigns. Automated marketing
solutions often include campaign management applications that support the design,
execution, tracking and analysis of campaigns for multiple channels. These
applications work with data segmentation and models created within the solutions’
marketing analytics applications. Some vendors of marketing automation solutions
focus on providing marketing analytics applications designed to facilitate the
capture, management, analysis, segmentation and modeling of customer data.
Organizations seeking these types of solutions look for applications that provide a
data model or support an existing data model where customer data can be captured
and warehoused. These applications typically support the capture of data from
multiple channels, including the web, e-mail and telephone and from multiple
sources such as customer databases and third-party data marts. Additionally, these
applications include tools for managing and consolidating data for analysis,
segmentation and modeling.19
Doculabs CRM
Market and
Product Strategy
Internal
Recommendation
Report
19
36
Automating Sales Processes
Sales automation enables organizations to create and maximize efficiencies in the
sales process. Sales automation applications typically support key processes
including lead generation, prospecting, contact management, proposal creation and
opportunity planning. The overall goals of a sales automation strategy are to better
identify profitable prospects and customers, using sales-automation applications to
optimize various sales processes.
Organizations seeking sales automation solutions are looking for applications that
support direct and distributed sales forces, including field and inside sales
representatives, telesales staff and sales managers. These programs typically provide
tools for managing and distributing leads, generating proposals and for scheduling
and managing appointments. Buyers also seek advanced applications that support
the standardization of selling processes, management of sales territories and robust
analytics for sales forecasting across accounts, channels and territories. Another key
capability organizations look for in sales-automation applications is rapid
deployment of the application and accurate data synchronization to support mobile
and distributed sales forces. Organizations also look for sales automation
applications that can integrate with campaign management and marketing
automation solutions.20
Manage Sales Leads to Closure – Effective sales automation also provides the
tools needed to capture product, service and business knowledge, making it easier
and less expensive to do business while increasing sales and profitability. When
equipped with an expert knowledge system, you increase the success of your
agents and service reps while managing the only thing that is constant – change!
This type of system provides you with the ability to:
• Organize customer, product, pricing and external information.
• Configure products.
• Cross-sell and up-sell.
• Generate quotations and proposals.
• Build a product catalog.
• Enter and submit orders.
• Manage all sales leads and orders to closure.
Doculabs CRM
Market and
Product Strategy
Internal
Recommendation
Report
20
37
Summary
Wrapping It Up: Discussion Review
In this paper, we have discussed the following facets and issues of customer
communications:
Assessing Today’s Customer Communications
• Communications channels are proliferating.
- Too many media alternatives make it harder to target customer groups.
- Customers and decision-makers are inundated with messages.
- Messages are product-centric and self-serving.
- Company marketing is about products, rather than relationships.
- Communications generally lack focus on customer needs and interests.
• Messages lack differentiation and are confusing and inconsistent.
- From one company to another, product-centric marketing messages all
sound the same.
- Increased industry competition without value differentiation.
- Too often, delivered messages are true for everyone, but relevant to no one.
- Communications are often technical, legalistic and ineffective (trash-bound!).
- Messages are delivered without a consistent cross-channel strategy.
Perfecting Customer Communications
• Shift to a truly customer-centric business model.
- Transform internal business culture, organizational structure and processes.
• Develop customer-focused, contextually relevant communications.
- Learn each customer’s needs, wants and expectations.
- Communicate with maximum personal relevance.
• Deliver a clear, unique value proposition.
- Define what makes your services unique and better than your competitors.
- Differentiate yourself based on exceptional customer service (that will get
you noticed!).
- Improve your service to make your value message TRUE (mere lip service
won’t cut it!).
39
• Manage integrated message content across every customer touch point.
- Develop specific message strategies for each customer touch point.
- Access and integrate customer data for accurate targeting and
personalization.
- Extend business process flow across multiple channels to provide
consistent service.
Delivering Value via Communications
• Get a comprehensive, 360-degree view of each customer.
• Build sound strategies for multi-channel content management.
• Use integrated inbound/outbound contact centers.
• Produce personalized, meaningful messages and documents.
• Focus on the three Ps in customer service: personalization, permission and
privacy.
40
Parting Words
In this age of information, marketers communicate with clients across a multitude of
media including e-mail, phone and wireless. Though the means of message delivery
may be limitless, the real issue is whether or not you are getting the true value of
your message across to your clients and prospects. After all, if your value
proposition is poorly crafted, unclear or inconsistent, no matter how it’s delivered, it
will end up in the wastebasket – electronically or literally.
And because today you have the opportunity to contact your customers across
more touch points than ever before, every customer service encounter has the
potential to gain repeat business – or have the opposite effect. That’s why now,
more than ever, marketers must take extra care to consider the quality of messages
they are sending. Are the communications you deliver confusing your clients, or
worse … irritating them? And what about your value proposition? Do your messages
tell your customers what makes your services different, special and better than
those offered by your competitors?
This paper has provided you with sound strategies, sensible solutions and useful
tools to help you overcome your communications dilemmas. Whether you’re
currently struggling with product-centric communications, an unclear value
proposition, inconsistent messaging or costly customer transactions, the information
provided in this document should help you to focus your efforts on what is needed
to maximize your communications ROI.
To conclude, please bear in mind that communicating successfully across all touch
points is a substantial undertaking. Trying to do too much too fast could be as
detrimental as not making any changes at all. But don’t wait until you build a huge
multi-terabyte database to begin. Start today and work thoughtfully and steadily.
Decide where you are headed and get there in doable incremental steps. By starting
small and fixing problems along the way, you can map offerings to customer
segments while getting the desired results more quickly.
41
42
43
Cincom has helped some of the world’s leading organizations transform corporate information into a
competitive advantage through leading software and service solutions. Here are just a few:
American Bankers
American Community Mutual Insurance
American General Annuity
American Ordnance LLC
American Power Conversion
AmerUS Life Insurance Company
Anheuser-Busch
AT&T
Atlantic Mutual Insurance Company
Aurora Healthcare
Bertelsmann Music Group
Cap Gemini Ernst & Young
Christian Children’s Fund
Citibank
Cubic Corporation (Cubic Defense Systems)
Duke University Medical Center
Dun & Bradstreet
Ericsson Inc.
Fannie Mae
Federal Express
Federal Reserve Board
Gencorp/Aerojet
General Dynamics OTS Aerospace, Inc.
GKN Aerospace North America, Inc.
Great American Insurance Company
Hallmark
Highmark
Ing (U.S.) Financial Holdings Corp.
Kansas City Power & Light
KDI Precision Products, Inc.
Litton EOS
Mayo
MCI WorldCom
Meijer
MetLife
Morgan Stanley & Company
Nationwide
Northwestern Mutual Financial Network
Penn State University
Pepco
Prudential Financial
Purdue University
Sallie Mae
Telephonics
Temple University
Thales ATM, Inc. (Airsys)
The Trane Company
Verizon
Washington University in St. Louis
CINCOM, , Cincom TIGER, iD Solutions, and The World’s Most Experienced Software
Company are trademarks or registered trademarks of Cincom Systems, Inc.
®
All other trademarks belong to their respective companies.
© 2004 Cincom Systems, Inc.
FORM CW041108-1 11/04
Printed in U.S.A.
All Rights Reserved
®
®
The World’s Most Experienced Software Company®
World Headquarters • Cincinnati, OH USA • US 1-800-2CINCOM • International 1-513-612-2769 • E-mail [email protected]
http://www.cincom.com • For local international offices, go to: www.cincom.com/international

Improving Customer Communication

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