No More Menial Jobs and 2 Other Steps to Customer Experience Transformation

As a marketing consultant, I read great articles about Customer Relationship Management (CRM) every day on the job. Most of them focus on the sales and marketing aspects of CRM … what strategies to employ, tools to use, messages to send out and so on. But let’s not forget that world-class CRM programs also include awesome customer service, essentially creating a Total Customer Experience that fosters long-term, profitable relationships with customers.

As a marketing consultant, I read great articles about Customer Relationship Management (CRM) every day on the job. Most of them focus on the sales and marketing aspects of CRM … what strategies to employ, tools to use, messages to send out and so on. But let’s not forget that world-class CRM programs also include awesome customer service, essentially creating a Total Customer Experience that fosters long-term, profitable relationships with customers.

For many companies, however, the customer service element in CRM is often an afterthought. Banished to a windowless office in the bowels of the company, customer service teams are quite literally out of sight, out of mind. Much of the time, this function is even outsourced entirely. But I have a sneaking suspicion things are going to change big time in coming years, and here’s why.

It’s no secret that companies are now dealing with super-informed, savvy and influential end-users who leverage Social Media and the vast research resources of Web 2.0 to make their purchase decisions. Let’s call this new end-user ‘Customer 2.0.’ In this new paradigm, the balance of power is shifting away from the sales and marketing teams, as firms are discovering that Customer 2.0s are by and large unresponsive to traditional sales and marketing tactics.

This means that customer service is, quite literally, becoming the first and only line of defense. If customer service is poor, it follows that the overall Customer Experience should be lousy, too. Given these facts, it shouldn’t be too controversial to suggest that in the business world of tomorrow, excellent customer service will not only the hallmark of a successful firm, but a Key Performance Indicator (KPI) by which success is measured.

Providing top-notch customer service necessitates transforming the way a firm does business and engages with its clients—aligning it to a model where customer service plays a central role in the firm’s operations. Welcome to the world of Customer Experience Transformation.

For customer service, I define Customer Experience Transformation in three broad swathes:

1. PersonnelIt’s time to view customer service as a profit center, not a cost center.

Say goodbye to the days in which customer service is viewed as a cost center, staffed with bottom-of-the barrel employees who can easily be replaced. To the contrary, customer-focused firms hire smart, savvy and highly motivated customer service representatives, knowing full well that these valuable employees are the firm’s principal ambassadors to the outside world.

I recently read an excellent article in Ad Age titled “Are You Ready for a World Without Menial Jobs?” The crux of the article is that instead of cutting costs, the world’s most successful retailers are actually investing heavily and spending for more than their rivals when it comes to recruiting, training and retaining customer service staff. Turns out, this steep up-front investment ends up paying off in spades down the road, in the form of higher sales and increased profitability.

2. SystemsWorld-class service needs world-class infrastructure supporting it.

Truth be told, customer support is only as good as the systems a firm has in place to support its operations. In the world of Customer 2.0, a Web presence acts as a primary point of engagement with customers. In that vein, it’s crucial to provide customers a Web presence that is not only clean, clutter-free and easy-to-navigate, but also—especially when it comes to providing personal or account info—personalized and secure. Furthermore, a website must be also optimized for ALL major Web browsers and operating systems, including—and especially—mobile.

In the age of Social Media, no firm that’s serious about providing customer service can avoid having a social media strategy. Without getting into a nuanced approach required for firm-wide Social Media engagement, as regards customer service, Social Media can and should be used to listen to, engage with and monitor a company’s customer base. There are some great SCRM (SocialCRM) and Social Media monitoring tools out there. Supported by savvy staff, they can be used to ensure customers are being engaged with quickly and effectively.

Internally facing, there are myriad important questions to ask, as well. Where are customer data stored, and how often is this database updated? How often are these data being synced with information from outlying systems, including IVRs, marketing tools, etc? What CRM solution is being used, and are best-practices being followed? If not, good luck tracking KPIs.

3. DNAChange the way you act, and you’ll change the way you’re perceived.

In many ways, corporate DNA is the most important element in Customer Experience Transformation. Corporate DNA is synonymous with corporate culture, which permeates the way in which an organization engages with its customers. For many companies—especially those in legacy industries—becoming customer-focused requires a major pivot.

To illustrate this point, let’s focus on the healthcare industry. Because in the US, health insurance is almost always procured by the employer, the primary point of engagement with end-users is usually when they call up to see why claims haven’t been paid. Now if you’ve never had healthcare in the US, you know this is most definitely not a pleasant experience. No wonder people don’t care for healthcare companies, in general.

Now, of course, denying and approving claims is far from the only thing that healthcare companies do. But, as a customer, you’d never know it. What this implies is an industry ripe for transformation.

If a healthcare company wants to be regarded as a healthcare company—as opposed to a health insurance company—then why not start by acting like one? Better yet, act like a health partner, providing customers with practical healthy lifestyle tips and ideas that will improve their health and, presumably, lead to fewer claims down the road.

Better yet, find out more about customers and send out highly personalized healthcare information they can use in their daily lives. Or, taking it a step farther, how about using that information to create fun contests and social media engagements customers can participate in, ‘gamifying’ the user experience.

In this model, although the business model has not changed, the overall customer experience has been transformed, resulting in a more positive brand perception, higher lifetime value and, of course, increased profitability.

Is your organization creating an awesome customer experience? If you have any questions or feedback, please let me know in your comments.

Thanks,

—Rio

Updating Your Marketing Database

It’s amazing how quickly things go obsolete these days. For those of us in the business of customer data, times and technologies have changed along with the times. Some has to do with the advent of new technologies; some of it has to do with changing expectations. Let’s take a look at how the landscape has changed and what it means for marketers.

It’s amazing how quickly things go obsolete these days. For those of us in the business of customer data, times and technologies have changed along with the times. Some has to do with the advent of new technologies; some of it has to do with changing expectations. Let’s take a look at how the landscape has changed and what it means for marketers.

For marketing departments, maintaining updating customer data has always been a major headache. One way to update data is by relying on sales team members to make the updates themselves as they go about their jobs. For lack of a better term, let’s call this method internal crowd-sourcing, and there are two reasons why it has its limitations.

The first reason is technology. Typically, customer data is stored in a data hub or data warehouse, which is usually a home-grown and oftentimes proprietary database built using one of many popular database architectures. Customer databases tend to be proprietary because each organization sells different products and services, to different types of firms, and consequently collects different data points. Additionally, customer databases are usually grown organically over many years, and as a result tend to contain disparate information, often collected from different sources during different timeframes, of varying degrees of accuracy.

It’s one thing having data stored in a data warehouse somewhere. It’s quite another altogether to give salespeople access to a portal where the edits can be made—that’s been the real challenge. The database essentially needs to be integrated with or housed in some kind of tool, such as an enterprise resource planning (ERP) software or customer relationship management (CRM) software that gives sales teams some capability to update customer records on the fly with front-end read/write/edit capabilities.

Cloud-based CRM technology (such as SalesForce.com) has grown by leaps and bounds in recent years to fill this gap. Unlike purpose-built customer databases, however, out-of-the-box cloud-based CRM tools are developed for a mass market, and without customizations contain only a limited set of standard data fields plus a finite set of “custom fields.” Without heavy customizations, in other words, data stored in a cloud-based CRM solution only contains a subset of a company’s customer data file, and is typically only used by salespeople and customer service reps. Moreover, data in the CRM is usually not connected to that of other business units like marketing or finance divisions who require a more complete data set to do their job.

The second challenge to internal crowd-sourcing has more to do with the very nature of salespeople themselves. Anyone who has worked in marketing knows firsthand that it’s a monumental challenge to get salespeople to update contact records on a regular basis—or do anything else, for that matter, that doesn’t involve generating revenue or commissions.

Not surprisingly, this gives marketers fits. Good luck sending our effective (and hopefully highly personalized) CRM campaigns if customer records are either out of date or flat out wrong. Anyone who has used Salesforce.com has seen that “Stay in Touch” function, which gives salespeople an easy and relatively painless method for scrubbing contact data by sending out an email to contacts in the database inviting them to “update” their contact details. The main problem with this tool is that it necessitates a correct email address in the first place.

Assuming your salespeople are diligently updating data in the CRM, another issue with this approach is it essentially limits your data updates to whatever the sales team happens to know or glean from each customer. It assumes, in other words, that your people are asking the right questions in the first place. If your salesperson does not ask a customer how many employees they have globally or at a particular location, it won’t get entered into the CRM. Nor, for that matter, will data on recent mergers and acquisitions or financial statements—unless your sales team is extremely inquisitive and is speaking with the right people in your customers’ organizations.

The other way to update customer data is to rely on a third-party data provider to do it for you—to cleanse, correct, append and replace the data on a regular basis. This process usually involves taking the entire database, uploading it to an FTP site somewhere. The database is then grabbed by the third party, who then works their magic on the file—comparing it against a central database that is presumably updated quite regularly—and then returning the file so it can be resubmitted and merged back into the database on the data hub or residing in the CRM.

Because this process involves technology, has a lot of moving parts and involves several steps, it’s generally set up as an automated process and allowed to run on a schedule. Moreover, because the process involves overwriting an entire database (even though it is automated) it requires having IT staff around to supervise the process in a best-case scenario, or jump in if something goes wrong and it blows up completely. Not surprisingly, because we’re dealing with large files, multiple stakeholders and room for technology meltdowns, most marketers tend to shy away from running a batch update more than once per month. Some even run them quarterly. Needless to say, given the current pace of change many feel that’s not frequent enough.

It’s interesting to note that not very long ago, sending database updates quarterly via FTP file dump was seen as state-of-the-art. Not any longer, you see, FTP is soooo 2005. What’s replaced FTP is what we call a “transactional” database update system. Unlike an FTP set-up, which requires physically transferring a file from one server and onto another, transactional data updates rely on an Application Programming Interface, or API, to get the data from one system to another.

For those of you unfamiliar with the term, an API is a pre-established set of rules that different software programs can use to communicate with each other. An apt analogy might be the way a User Interface (UI) facilitates interaction between humans and computers. Using an API, data can be updated in real time, either on a record-by-record basis or in bulk. If a Company A wants to update a record in their CRM with fresh data from Company B, for instance, all they need to do is transmit a unique identifier for the record in question over to Company B, who will then return the updated information to Company A using the API.

Perhaps the best part of the transactional update architecture is that it can be set up to connect with the data pretty much anywhere it resides—in a cloud-based CRM solution or on a purpose built data warehouse sitting in your data center. For those using a cloud-based solution, a huge advantage of this architecture is that once a data provider builds hooks into popular CRM solutions, there are usually no additional costs for integration and transactional updates can be initiated in bulk by the CRM administrator, or on a transaction-by-transaction basis by salespeople themselves. It’s quite literally plug and play.

For those with an on-site data hub, integrating with the transactional data provider is usually pretty straightforward as well, because most APIs not only rely on standard Web technology, but also come equipped with easy-to-follow API keys and instructions. Setting the integration, in other words, can usually be implemented by a small team in a short timeframe and for a surprisingly small budget. And once it’s set up, it will pretty much run on its own. Problem solved.

Get Your PCRM On!

Never heard of PCRM? Well, that’s because it doesn’t exist—not yet, anyway. But it should. For those who are unfamiliar with Customer Relationship Management, or CRM, it describes a strategy for managing a company’s interactions with customers and prospects. The key to any CRM program is that interactions are with your customers and prospects—and that means you know something, usually a lot, about them.

Never heard of PCRM? Well, that’s because it doesn’t exist—not yet, anyway. But it should. For those who are unfamiliar with Customer Relationship Management, or CRM, it describes a strategy for managing a company’s interactions with customers and prospects. The key to any CRM program is that interactions are with your customers and prospects—and that means you know something, usually a lot, about them.

And as any experienced database marketer knows, knowledge means power—power to tailor the marketing message based on what you know or learn. Essentially, it’s a marriage of marketing and data. Unfortunately, however, many CRM programs miss the boat when it comes to taking advantage of this fact, and fail to communicate with customers and prospects on a 1:1 basis. Hence the need for Personalized CRM, or PCRM, instead.

Personalization is important because, let’s face it, we live in an age of information overload. According to an article in the New York Times published in 2007, at the time Americans were exposed to 5,000 ads a day—and it’s safe to say that number has continued to climb since. And unless you’ve been living under a rock for the past 10 years, this fact has been painfully obvious. For marketers, it’s meant a steady and inexorable decline in response rates across the board, in an increasingly futile attempt to get the attention of a distracted populace. How pronounced has the decline been? While a 3 percent response rate might have been the gold standard for a prospecting direct mail campaign 10 years ago, for example, today it hovers at around 1 percent, according to the DMA.

One effective strategy to cut through the clutter is personalization, or 1:1 marketing-a strategy you should be implementing across the board on all your CRM initiatives. Think about it: These are your customers and prospects, and you’ve captured tons a data about them. You know when they became customers, and how. You know what campaigns they’ve responded to, banners they’ve clicked, emails they’ve opened, and so on. You know their gender. You may even know their birthdays. So use this data to drive personalization!

When it comes to implementing 1:1 communications, the good news for marketers is two-fold. First, in our multi-channel world there are increased opportunities to add a personalized touch to your communication strategy; email, direct mail, landing pages and mobile can all be personalized based on your CRM data. Second and perhaps more importantly, the past few years have witnessed a proliferation of new and exciting technologies that make it ridiculously easy for rank-and-file marketers to communicate on a 1:1 basis, much of it not requiring any IT support.

Direct mail, for example, can now be personalized using Variable Data Printing (VDP) software, a technology used by virtually all digital printers in business today. Never tried it? Well, maybe it’s time you did, as the days of ‘spray and pray’ are long gone. And although VDP may be more expensive than traditional offset, the improved response rates can mean improved ROI. On the Interactive side, email marketing and demand generation software have grown up to the point where it’s a snap to personalize both images and text in an email message based on profile data, not to mention trigger multi-touch drip-marketing campaigns based on lead scoring.

When driving customers of prospects to the Web, keep in mind that a personalized landing page can convert traffic up to five times better than a generic Web page ever will. The fact is, keeping customers and prospects focused on the marketing message interlaced with personalized content is a winning combination.

Tearing Down the CRM Barriers

In networked CRM, there’s no tightly defined “conversion path.” Instead, every social media touchpoint serves as a point of entry, interaction and advocacy. Other than that, everything you do in your traditional CRM program you can apply to your networked CRM ecosystem. It just takes a little ingenuity.

OK, let’s get started. To begin, I have a few questions for you:

  • Is a “registered user” a better indicator of interest in your company than someone who chooses to “follow” you on Twitter?
  • Is a customer who forwards your email to a friend any more valuable than someone who celebrates your product(s) by creating and posting a video to YouTube for everyone to see?
  • Is a call-center inquiry any more personal than a conversation that takes place between you and a consumer on your Facebook wall?

My guess is that the customer who’s choosing to follow you, retweet you, fan you, check into your place of business or respond to your Facebook wall post is more committed, more influential and more valuable to you than the average “member” in your database. Why? These actions are implicit personal endorsements of your brand broadcast to a network of hundreds of friends and followers.

Yet, despite all the different ways consumers are engaging retailers today, CRM still remains an entirely linear process for most companies.

  • Step 1: Drive to website/store/call center;
  • Step 2: Acquire contact information;
  • Step 3: Send email and/or direct mail piece;
  • Step 4: Repeat step 3 until they shop; and
  • Step 5: Win them back.

This process exists for a reason — it works. When applied skillfully, this system allows retailers to target communications, measure important things like return on investment and lifetime value, and ultimately market more effectively and efficiently.

So, what’s the catch?

The shortcoming of this process is that retailers are undervaluing and underserving those who have chosen to interact with them outside the gated community of their traditional CRM program. In working with clients, I’ve consistently found a large percentage of consumers who follow or fan brands in the social media realm are nowhere to be found in their databases. At a minimum, this is in the thousands for most brands and maybe even the millions if you’ve been working your social media mojo.

The linear model of CRM is no longer adequate. It’s time for what I’m calling “networked CRM.”

In networked CRM, there’s no tightly defined “conversion path.” Instead, every social media touchpoint serves as a point of entry, interaction and advocacy. Other than that, everything you do in your traditional CRM program you can apply to your networked CRM ecosystem. It just takes a little ingenuity.

Segmentation and targeting take on new forms. For example, set up different Twitter accounts for different audiences. Dell operates more than 80 Twitter accounts, covering a broad range of interests, from regional deals to crowd-sourcing innovation. But the rules of relevance and moderation in communications still apply. No marketer would imagine calling their customers at home eight times in a day to talk about a new product line, but that’s exactly what a major retailer did recently when it sent its fans eight wall posts about its new product.

As for analytics, while there are no ready-made identifiers like member IDs or source codes — as is the case in a traditional CRM program — there are a plethora of nontraditional measurement options. At its simplest, you can use bit.ly or site-side analytic referral tags to track clickthroughs from wall posts and tweets.

If you’re more ambitious, build individual profiles by using social media overlay services such as Rapleaf or Flowtown, experimenting with Facebook and Twitter application program interfaces to reap information, or even just ask your customers to provide the information.

Social media can no longer be a mere afterthought. This isn’t about blowing up your existing CRM program, but rethinking it to encompass some of your most valuable customers.