Taking CRM to the next level ... Making your customer care profitable.

The Essence Of Appropriately Conducted CRM Should Be Customer Care By far and away, the primary focus of savvy contact center/CRM executives is "customer care." For without customer care, there is no customer to manage by CRM.

In this particular editorial, we would like to discuss the methods and processes by which management can convert a CRM/customer care center into a profit center.

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Traditionally, customer service centers have always been regarded as cost centers. In the 80s, when this publication was launched, customer care was not as important and vital as it is today. Back then, believe it or not, many vendors even refused to obtain 800 numbers by which to welcome customer input and provide customer service. I recall many shortsighted business people saying, "Why should I pay for the phone call to encourage my customers' complaints?" That shortsighted approach cost the misguided vendors a ton of business. Slowly and gradually, the customer got the respect that he or she richly deserved; namely, outstanding customer service became THE source of customer satisfaction without which no company could exist. As I have stated in several of these editorials in the past, companies live or die from repeat business. That is, without an outstanding customer care strategy, no company can exist profitably.

Taking Your Customer Care Program To A Profit Center

Believe it or not, I addressed this topic back in the mid-80s in this, our flagship publication, then called Telemarketing[R] magazine.

Not only did we cover this topic editorially in this publication, but I also frequently included it in the conference programs of our industry's leading trade show in the 80s and 90s, which was called Telemarketing and Business Telecommunications[TM] (TBT). Yes, this was indeed the hot topic back then, and it is a very hot topic even now. The difference is that now, customer care and CRM are backed by sophisticated technology. Today, it has become a very complex project. Among other things, in order to prepare for conversion of customer care centers to profit centers, one would have to develop a functional and practical strategy for the following steps:

1. First and foremost, you need to build, nurture and reinforce relationships with all of your customers. If your company does not have what it takes to manage relationship building with all of your accounts, then at the very least, I suggest that you focus on the 20 percent of the customers that give you 80 percent of your business.

Building a relationship with a customer requires monthly, if not weekly, contact with the account, always offering a helpful idea by which your customer can run his or her business more effectively and/or more profitably. You really need to make a living in providing unparalleled and genuine service to your customers if you truly want the relationship to continue. Always remember that it costs 10 times more to get a new customer than to service an existing one properly.

2. Management must have the willingness and open mind to act on feedback. Many companies, unfortunately, do not like to receive customer feedback. They simply offer an off-the-shelf product and tell their customers to take it or leave it. Obviously, in today's business environment, there is absolutely, positively no room for companies that think that way. Quite possibly, the company in question won't be around for a long time.

I learned a long time ago that a mind is like a parachute, it only works when it's open. Consequently, the successful businesses of tomorrow are those in which everyone at the company has a positive, can-do and flexible attitude. Anything short of that would be a disaster.

3. Conduct focus groups. Frequent focus groups with your customers are extremely useful to help you keep your customers satisfied. Traditionally, focus groups unveil problems with a company's product or service and, more importantly, such groups generate new ideas that can help the company to solve the deficiencies of the product and thereby ensure business continuation via customer satisfaction.

4. Training is the key. Obviously, in order to convert the customer care center to a profit center, one has to focus on the training of the CSRs (customer service representatives). This neglected group of people is the first contact with your customers and it is where perceptions are formed. And remember: One never gets a second chance to make a good first impression.

Accordingly, before you even think of appropriate customer care, you must first think about outstanding--and I mean outstanding--employee care. If anyone at your company is not treated appropriately, particularly your frontline people such as customer service representatives, the dissatisfaction will come through their contact with your customers and that could spell disaster in your CRM activity.

As I have stated in numerous editorials, every company talks about customer care and customer satisfaction but no company that I know, with a few exceptions, talks about employee care and employee satisfaction.

A Success Story From Telerx

Approximately one month ago, I had the pleasure of visiting Telerx (www.telerx.com) and had the privilege of meeting Nancy Gussow Gross, Vice President of Corporate Communications at that company.

The purpose of my visit was to find out how this company is transforming customer care from a cost center into a revenue generator by combining outstanding service with solution-based selling. Indeed, I was extremely impressed to learn that Telerx has actually been able to increase the revenues of a durable goods manufacturer by an average of 20 percent per order compared to the prior year. In addition, the company was able to achieve a 90-percent customer satisfaction rate, a significant increase in product satisfaction. Just as importantly, during the first quarter of integrating a sales component into the customer care program, the increase in contact center-generated revenue exceeded an ambitious goal of 20 percent. Following is some additional information about how Telerx was able to achieve the above objective of profitability.

Background

A manufacturer of food storage products and small electric kitchen appliances had experienced phenomenal growth selling the product and accessories directly, via the Web, toll-free numbers and retail outlets since its introduction in 1987. The company's premier product is a category market leader.

Early on, the company realized the important role its customer care program played in the success of its brand.

Recognizing that each contact is an opportunity to build--or risk--lifelong relationships with customers, the company began to search for a customer care partner. Requirements included the expertise and experience to develop a team of product experts whose interactions would enhance the relationship with its customers and, therefore, its brand. Senior management, committed to obtaining "best-in-class" practices across the organization, was looking for:

1. A strategic outsource partner with a highly developed specialization in customer care and consumer affairs.

2. Documented success in providing consumers with contact experiences that exceed their expectations.

3. Specialized technology with future scope and bandwidth projections.

4. The ability to turn call data into strategic and actionable knowledge.

5. The skill to create a client-focused culture within a dedicated team.

6. A strong commitment to continuous improvement, enhanced service and cost efficiencies.

The result of the search was the creation of a partnership with Telerx.

Taking It To The Next Level--Driving Revenue

Like all marketers, the client company was under increasing pressure to grow revenue. The company looked for help with integrating strategic selling with customer service. Now, instead of just taking orders and making product suggestions, revenue generation is a formal part of the program.

The key to integrating a sales effort and capitalizing on revenue opportunities was maintaining--not compromising--the superior level of service the company's customers expect. To achieve that goal, Telerx and the client collaborated with a third-party marketing consultant to create a three-pronged approach to the sales effort integration:

1. A solution-selling training program was developed to equip the representatives with the knowledge and skills needed to recognize and capitalize on revenue opportunities. The training also helped these representatives, who had been so focused on customer care, overcome their concerns about selling to customers. Since solution selling hinges on asking appropriate questions to better identify and offer products that meet customers' needs, representatives quickly felt comfortable with the process. They view it as a way to provide enhanced customer service--not just trying to sell.

2. A sales goal incentive was developed and implemented for the customer service representatives. Under the tiered incentive program, representatives can earn cash bonuses based on the number of machines and/or accessories sold monthly. Since the quality of each phone call is paramount, monthly quality monitoring results are also factored into the incentive payout.

3. The skill sets learned during the solution-selling training are reinforced through monthly quality monitoring and feedback sessions.

Results from the solution-selling initiative have exceeded the company's goals. During the first quarter of the program, the customer care team generated a revenue increase that exceeded the aggressive goal of 20 percent.

For more information about Telerx, please contact Ron Abel, Executive Vice President, at [e-mail] or 800-283-5379.

As always, I welcome your comments. Please e-mail them to me at [e-mail].

Congratulations To The CRM Excellence Award Winners

In this issue, our editors have announced the winners of the prestigious CRM Excellence Awards, Part I.

If one was asked to define the essence of CRM in two words, then one would have to say "customer care." If four words were used, one would have to say "customer care par excellence." The winners of TMC's 2005 CRM Excellence Awards have distinguished themselves by offering proven products and services for successful CRM and customer care applications. On behalf of the CRM/customer interaction industry and the editorial staff of Customer Inter@ction Solutions[R] magazine, the industry's preeminent publication since 1982, I would like to extend heartfelt congratulations to all of the winners. Following is a list of the 2005 CRM Excellence Award winners. (Please see the complete company descriptions and list of products and services on page 50).

The following companies have earned the 2005 CRM Excellence Award:

Aplicor

Best Software

Citrix Online 

ClientLogic

Cross Country Automotive Services

Eagle IP LLC 

Empirix, Inc.

Epicor

eTelecare Global Solutions

IEX 

KANA

Maximizer Software 

MEDFONE, Inc.

Proficient Systems Inc.

salesforce.com

SAS 

The SAVO Group

Siemens Communications, Inc.

TeleTech

Voxify

Witness Systems

Z-Firm LLC

RELATED ARTICLE: Making Your Customer Care Profitable: A Different Perspective

The process of changing contact care from a cost to profit center involves a change of goals, processes and culture. Setting new goals and modifying processes can sometimes be accomplished over the course of weeks, but changing your organization's culture to one that supports and rewards profit-driving behaviors can take months or even years. Often, organizations underestimate the level of effort needed to "keep the ball rolling" over the duration of the change process. Without constant monitoring and course correction, the best plans will fizzle out or veer off in the wrong direction.

The process of properly targeting, training and monitoring employees is fairly simple, but far from easy. Maintaining visibility, distilling information and making the right decisions that support changing an existing culture is a major undertaking. Many organizations make the mistake of attempting to take on this challenge with no purpose-built automation, creating more manual work, while not efficiently deriving benefits. Software doesn't sleep, and when attempting to divert the path of a river of habits and old behaviors, you need to apply constant effort.

Changing From Cost Goals To Profit Goals

While the primary goal of creating a profit center is simple, transferring those goals down to actionable activities and then ensuring that those goals are completed can become a day-to-day management nightmare. If the primary goal is to increase sales through cross-selling, what are the elements that must be in place for the agent to be successful? The client must be satisfied with the organization at every level to continue the relationship with the vendor. The agent must know the client's needs and be sufficiently familiar with its products and services to suggest the correct item to meet the client's needs. Finally, the agent must have the right skills to sell and incentives to put forth sufficient effort.

Simple, right? It is when all the parts are in place; but what about when the client isn't happy because he or she has been on hold for 15 minutes, or the agent has been told that each call should be no more than four minutes in length, so he or she doesn't have the time to complete the sale? Or the agent doesn't have the product knowledge or skills to make the sale? If any of these situations exist, then the simple goal of selling a new widget or extension to an existing service plan has little chance of success. The question is, do you even know what problems exist and what to do to fix them? Should you increase call duration targets to enable the agent to close more business? Keep in mind that this decision could increase hold times and therefore meet profit goals, but lower customer satisfaction. What you need is a way to change goal weightings and priorities, then monitor how they affect key performance indicators.

The main issue is the data that track all of these issues are stored in different systems, such as ACDs, workforce management and quality management, and there is no way to see the relationships between average hold times, customer satisfaction, call quality, close rates and a multitude of other indicators. Many organizations spend countless hours having reports pulled and spreadsheets built and updated to attempt to build a cohesive picture of what's happening in the business. However, without an automated system to bring these data together, the time required can cause the information to be so out of date it loses much of its relevance. By implementing a system that consolidates information, and then applying goals throughout the customer care employee hierarchy, from the highest-level executive goals down to appropriately weighted individual agent activities, you will be able to guide your organization in achieving the correct balance of activities and priorities to move from cost-creating behaviors to profit-producing habits.

Improve The People And The Processes

So, if an organization can properly lay out goals, guidelines and incentives, and then monitor them to fine-tune what's happening, you can drive profitability, correct? Actually, it isn't quite that easy. If it were, then all that any organization would have to do is put together a great incentive plan after it figures out what goals and policies are best to achieve its target results. The variable is the performance of the people in the contact center and the processes that are in place to improve each individual's performance.

The maximum organizational performance comes from hiring the best-suited people and then providing them with the best training, coaching, mentoring, guidance and working environment. But often the goals of maximizing performance and achieving profits in the call center are not viewed as priorities for departments outside of the call center. For example, most training and human resource departments are not measured on how their activities affect the performance of the contact center. If the hiring process isn't bringing in new agents that get up-to-speed quickly and achieve results, shouldn't the HR manager be pushed to improve? Similarly, trainers should not be measured by how many people they train, but if their efforts improved the performance of their students and, subsequently, the bottom line. In this way, every department that can push the profit goals of customer care has "skin-in-the-game" to ensure that profit goals are met, and they are all held accountable. This type of total performance culture enables bringing ancillary processes, such as training, mentoring, hiring etc., into the mix to drive the successful implementation of changing from an activity-based cost center to a goal-oriented profit center.

For more information about Performix Technologies, visit www.performixtechnologies.com.

By Robert Mattson, Director of Product Marketing, Performix Technologies

Sincerely yours,

Nadji Tehrani 

Executive Group Publisher, Editor-in-Chief

By: Nadji Tehrani, Executive Group Publisher, Technology Marketing Corporation