Latest Updates: Customer RSS

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  Esteban Kolsky 07:00:40 am on April 13, 2009 | 5 | # |
  Tags: CRM, Customer, Customer Experience, customer experience management, customer first, customer loyalty, customer service, experience management, loyalty, Voice of the Customer

  Customer First? or Customer Only?

  Been reading a lot lately, trying to get caught up after spending so much time in the trenches doing some real work.  Almost everywhere I turn I read about “Customer First”.  Putting the customer first, or ahead of everything else you do.  Why, there is even an entity in the UK that is called Customer First to ensure UK organizations remain true to their customers.  Closer to home, Continental Airlines has been talking about the great results of their Customer First initiative, as well as Northwest Airlines (which merged with Delta recently, another Customer First organization) and even an organization as distinct as the City of San Antonio has gotten on board.

  With all these people you’d think that customer first is all it takes to succeed – but I would like to bring up a more interesting point: it is not about putting the customer first, it is about making the customer the ONLY reason for your existence.  Putting the customer first means that there are other things to distract you from your commitment to your customer.  Making the customer the only thing means that their needs will supersede all others.  It may seem a trivial difference, and hair-splitting semantically speaking, but think about it for a second…

  Do you want to commit all your resources to making your customers happy – or just the ones you can spare?
   
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  Kate Leggett 05:18:18 am on December 12, 2008 | 1 | # |
  Tags: Communities, Customer, forums, Voice of the Customer

  Launching a forum is really hard. You set up the software, provide initial content, send invitations to your users, then wait…and typically nothing happens.

  You know the statistics  – 70% of your forum visitors lurk, 20% join a conversation and only 1% regularly contribute.

  So how do you tip this statistic, especially at the initial stages where there is little activity on your forum? You can try a top-down approach of advertising your forum presence to your user community, or you can try a bottoms-up approach of enticing users without them knowing that you are doing this. Let me explain how this works.

  First, I don’t often mention the word forum, but instead I try to lure folks into using a forum. As a forum moderator, I identify questions from customers that go unanswered for a day or so and route these questions by email to the customer or the internal SME that I know can answer them.

  My email typically goes like this – “Hi Dan, I have Marie from Orbital Bank who has a question that I was hoping you could answer. Just click on the link (insert forum link) to provide your answer.”

  Few customers and no internal employee will ignore another customer’s question, and I normally get a reply posted right into the forum.

  The purpose of a forum is to get employees and customers to connect. Without mentioning the word forum, I’ve hooked my customer as once a customer has started a dialog with another customer they tend to stay in virtual contact, and use this communication channel again.

  Emailing one customer at a time with the URL to the forum and a call to action is a stickier way to get your customers and internal employees hooked on forums than any top down approach.

  So can you tell me what works for you?
   
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  Esteban Kolsky 07:28:51 am on November 3, 2008 | 1 | # |
  Tags: CRM, Customer, customer acquisition, customer acquisition costs, customer costs, customer maintenance costs, customer service

  The Evil Lies in Properly Calculated Customer Maintenance Costs

  (Part 3 of 3)

  Part 1 – Is it Really More Expensive to Get New Customers?

  Part 2- Segmented Customer Acquisition Costs Saves the Day

  OK, on the final part of this three part series – how to calculate your customer maintenance costs.  Yes, this is the longest one as far as the number of metrics to track, but if you have been following the series you know where this is going.  Check out the previous two entries before you continue on this one, trust me – it makes more sense that way.

  As you know, I advocate an individual approach to calculating customer acquisition costs, and customer maintenance costs.  You already read that I believe that true business decisions cannot be made in a bundle.  You cannot decide to cut costs for customer maintenance across the board, hurting those customers that need service but cannot get it since someone else abused it.  You cannot decide to implement a specific channel or program only for a segment of your customers just because you may think that, for example, business users will benefit more.  You have to make decisions based on the true costs of getting each customer, retaining and servicing them.

  When it comes to customer maintenance costs, most companies just take the total they spend on customer service (by their definition) each year and divide it by the total number of customers.  Simple, and ineffective.  You can harbor expensive customers (constantly demanding service) as well as not properly reward inexpensive ones (they never, or rarely, require service).  You can ignore budding problems, such as the excessive cost of a specific segment, tool, or channel, by not properly focusing.  What is the solution? There are two things you have to consider for properly measuring customer maintenance costs.

  First, the overhead costs you have for maintaining a customer service operation.  This is where you can see real savings when outsourcing, for example, or by decreasing specific sunk maintenance costs (such as what happens when you optimize your KM initiative).  This is the base cost per customer — not per interaction — for infrastructure deployment.

  Second, I am assuming you already know your transaction costs per channel, broken down into different type of transactions (if not, as they say on TV – get them!).  Monitor interactions and add those costs to each personalized customer maintenance cost as they happen – yes, that also means web self-service or similar automated transaction tools (e.g. IVR) which tend to be ignored by most organizations since they are either cheaper than regular channels, or there is no prescribed way to track users through those channels (you may even have to ask users to log-in to get service).

  OK, so this gives you a basic cost per customer for maintenance.  Now, the final step is to compare each personalized costs against the average per segment, channel, or transaction – and assign bonus points (or deduct from the total cost of maintenance) to those that are below the average.  This will reward those customers that don’t abuse the system with increased access to different tools, technologies, or even a higher status with the organization – depending on your business decision on who gets access to what.  Of course, you need to constantly (once a month would be fine, no longer) update the scores, the averages, the bonus points, and the status of each customer to ensure they receive all their benefits.

  Chances are that you will have to make some small to medium changes in the way you measure and monitor your data and interactions; you will be surprised at how much certain segments or channels will cost you to maintain, and change your opinion on who is your best customer.  A simple per-customer benefit calculation (revenue minus cost) will allow you to create literally segments-on-the-fly as needed, based on all new different metrics, benchmarks, and results.

  Are you ready to try a new approach to rewarding good customers and bechmarking your true costs?  Who knows, maybe you get to debunk the original entry for this series “a new customer is X times more expensive to acquire than to retain a current one”.

  Ready to prove the myth wrong? Let me know how this goes for you…

   

• Esteban Kolsky 05:24:19 am on October 30, 2008 | 1 | # |
  Tags: CRM, Customer, customer acquisition, customer relationship management, customer segments, LinkedIn, segmentation

  Segmented Customer Acquisition Costs Save the Day

  (Part 2 of 3)

  Part 1 – Is It Really More Expensive to Get New Customers?

  Well, I hope you have read the previous entry in the series, if you have not – follow the link above and read it.  Yes, it is necessary to set the proper background for this one.

  Let’s dig a little bit deeper into customer acquisition costs.  In my previous entry I talked about a model where each customer carried its own acquisition cost.  You kept detailed records for each customer and how they become your customer.  You use these numbers to make customer-related decisions – satisfaction, loyalty, segments, etc.

  Of course, I can already hear the first complaint – what about if we cannot do that.  I would not expect you to go beyond your normal course of business to find out, but I’d expect your systems to be setup in a way that will allow you to capture that information.  If you do carry out a promotion or campaign, you know whom it went out to, and you tend to have unique identifiers (name and address, name and email, etc.).  Same thing with  leads captured, you know where they all came from.  You also know the costs for each of those events.  Presto!  you have the information you need.

  First, create a unique identifier for your prospects, make sure you collect the necessary data, and retain for each prospect what the costs have been for you to reach out to them.  Then calculate a cost per customer for each customer you already have in your database (if you don’t want to go through the trouble, average them – not recommended but doable).

  Second, change your new account creation process so it accomplishes two things: one, captures the latest marketing campaign or event that convinced the new customer to sign up; two, look into past campaigns to determine whether another marketing effort was aimed at this customer in the past – to see if you have a prospect cost for them. This way when you create a new customer, you already have their personal customer acquisition cost.

  OK, now there is one more wrinkle.  Some organizations, not all of them, will require an additional “plus” to be added to each account.  If you have a very large organization, and you spend some money in branding or marketing, spreading your name and making sure you remain in people’s mind, then you need to account for that as well as part of acquisition cost.  This is another shifting number, but not really hard to pin down.  Take your marketing or branding budget from last year, divide it by the total number of new customers you had last year – you have your “plus” number.   Add that number to each customer’s acquisition cost number – for last year only.  Make sure you update it every year for prospects and new customers that you reach out to for that year – even if they were there the year before.  Now you have a complete cost for acquisition for each customer.

  Yeah, I know.  Not everyone will have access to all this data.  True.  But you may be able to get some.  You may also be able to capture the data you don’t have today and start storing it for future use.  Further, you may be creating an excellent customer acquisition cost for use next year, or the following and you want to add these calculations.  Whichever way, you can see how useful it will be to have this. Now you can make better decisions on retention, customer maintenance, and <gulp> firing them.  Yep, now it  becomes a real simple business equation.

  If you dare to dream, think about benchmarking this and comparing yourself to your industry, across industries, across geographies – anywhere.  Once you create and embrace a model that others use as well, comparisons are easy.

  What do you think? Some food for thought? Care to try any of these in your organization?

  PS – stay tuned for a discussion on how to calculate a better customer maintenance cost…

   
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  John Chmaj 08:00:51 am on July 8, 2008 | 0 | # |
  Tags: CRM, Customer, Customer Experience, customer experience management, customer service, Customer Support, Experience, KM, knowledge, Knowledge Management, support

  Most support organizations have resources related to knowledge management: webmaster, KB administrator, and content manager among others.  They are the ingredients of a well managed program, not the recipe for success.  Ask yourself a few simple questions to expose where you may need to improve:

  • Who OWNS all the content on internal and external knowledge bases?
  • Who UPDATES all that content? (Not necessarily the same!)
  • What is the process for communicating new product information forward to support, both prior to major launches and during the ongoing support life cycle?
  • Who owns the schema (metadata, keywords, etc.) for all content? Is there someone responsible that it all fits together when it hits the search and browse websites?
  • Who ensures all the content available is relevant, up to date, and consumable?
  • What is the agreed-upon mechanism for resolving conflicts between new and old content?

  If the answer to any of these is “no”, “I’m not sure” or “we figure that out on a case by case basis” then you’re probably spending too much time managing your KM initiative without really managing your program!  Count up the number of meetings, disconnects, customization and one-off projects you need to keep things in line.  You will see that coordinating content, schema and tools REQUIRES time even if your organization chooses to manage these areas as separate functions.  The results of not managing your program are at best incremental, time-consuming improvements, at worst a continual stream of errors, adjustments and just plain bad user experience for your sites.

  Developing an effective KM Program starts by thinking about the WHOLE objective: a great user experience, driven by an intuitive UI, effective user interactions, and quality content.  With that as your guiding goal, consider organizing around the core processes, including:

  • Identifying, prioritizing and normalizing content from across the organization to a common, high-quality user experience
  • Managing policies and communications from the ‘front’ (websites & tools) to the ‘back’ (product and content groups), and all constituents in between, to achieve a common set of rules and standards around how information is developed and organized.
  • Establishing a Steering Committee or Center of Excellence that can serve as a clearinghouse for all ongoing questions and issues around content ownership, commitments, policy and deadlines
  • Developing a ‘product life cycle’ view of information, that engages everyone from products, support, and IT to commit to a common process for evolving KM tools and capabilities

  A KM Program is not a ‘nice to have’ – you have one already, the question is:  do you know it?  And if you don’t, what is it costing your business in time, effort, money and customers?  There IS a better way, just commit to KM as a critical business process and the approach becomes clear.

  Are you committed?

   

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