| Experts Corner |  Communicating intelligently with existing customers is critical, and marketing spend is heavily weighted towards this pool. But businesses cannot afford to neglect prospecting activity. So, what techniques can businesses adopt to ensure that the search for new customers is both targeted and cost-efficient ?
David Jefferies, Marketing Director, Pitney Bowes
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| Highlights |
 Getting Off on the Right Foot: Avoiding Common Master Data Management False Starts
Companies wishing to start a master data management (MDM) project may be unsure where and how to begin. After all, MDM is a journey and success or failure at the first step either defines or dooms the further evolution of the project.
by Ravi Shankar, Director of Product Marketing
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| Abstract: Unless you work for YouTube or FaceBook, you probably look at Web 2.0 with some combination of excitement and terror. You’ve seen the success stories at companies such as Coke where a funny video about Coke and fizzy mints drove millions of dollars in sales with virtually no marketing investment. When it all comes together just right, it is truly magic. |
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| Author: By Doug Jones, Principal |
| Doc Type: Article |
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Format: HTML |
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| Abstract:
Given the choice of working on your company’s Order Management Improvement project or the launch of a suite of Web 2.0 technologies to support product development a quick read of CRM trade publications today would clearly indicate Web 2.0 is the “now” place to be. In fact, many companies don’t feel order and billing management are within the domain of CRM at all. Unfortunately for companies with less than stellar performance in these areas, customers might disagree with you.
If CRM is about knowing your customer and building trusted relationships, then for most customers, the actual buying and paying is not just the most often executed CRM transaction – it is the basis for which all other components of the relationship grow. A quick stroll through the blogosphere reveals scores of public domain conversations about major companies such as the following:
…a correct bill seems to be the exception rather than the rule. Your odds for a proper bill from Big Company X improve if you've had the same hardware and software for a while along with a comprehensive services agreement, but quickly go down hill if you change hardware or software or have service performed outside the services agreement. If you've never had an incorrect invoice from Big Company X, you've either never done business with them for more than one transaction, or aren't looking closely at your invoices. Or have never called for support that was supposed to be free.
What are you to do? You call Big Company X. Sometimes, you get a helpful person who straightens things out right away. More often, you get a surly person bent on making you pay your incorrect invoice. In the latter case, you then call your Big Company X representative, who apologizes all over themselves and promises to take care of things. You feel good about the situation -- until next month's bill arrives with the same unpaid (and unearned) charges upon it.
If Big Company X cannot get its own house in order, how are they supposed to do the same for the rest of us? A business computer company that cannot perform the most basic of all business functions on its computers? Ridiculous.1
In short, a knowledgeable, caring, and invested customer sums up the transactional interaction with their vendor as simply “ridiculous.” All things being equal, if given a choice, where do you think this customer will go to for their next purchase? Bluntly, somewhere else.
Quote to cash is both the economic engine of any company and the basis for the relationship that you have with your customers. A supreme focus on the quality of your customer relationships, with the support of Web 2.0 tools, can tell you this or you can ask some simple questions which may indicate a need for your company to address root cause issues before you become the favorite target of your customers rants.
· Can a customer get a quote from you quickly and easily?
· Can a customer easily place an order from the quote?
· Is the order placed from a quote accurate and easy for the customer to execute?
· Can you generate an accurate bill on time?
· Do you regularly handle a large volume of disputes that result in customer credits?
· If a customer disputes the bill can you have a straightforward conversation with needed supporting information such as a contract, pricing, installed products, order history?
· Is it easy to reconcile a contract / order / price sheet with an invoice?
· Do your quotes, orders, contracts and invoices look the same? (This sounds simple but if your documents don’t look the same you will confuse customers)
· Do your long time customers carry extra clerical staff to maintain their business relationship with you?
· Do you accurately inform customers the status of their orders at regular intervals? (Order Acknowledgement, Order Confirmation, Shipping Notification, etc.)
If you can’t answer the above questions definitively or these evoke negative responses, your organization most likely needs to focus on basic blocking and tackling in quote to cash. The work is often difficult and not glamorous but your customers will thank you for it – with their continued business.
Fixing Quote to Cash problems:
Define the Process End to End: Fixing the problem begins and ends with good understanding of current and desired process and awareness of points of failure. Most organizations separate the quoting, ordering and invoicing functions in different departments that each sub-optimize their own processes. Improvement initiatives should focus across these departments to avoid finger pointing and truly fix issues. If your organization lacks the ability to apply process management disciplines to Quote to Cash – get help.
Automate and Validate the links in the Chain: Companies that execute Quote to Cash well link and validate all data in the chain. Looking at a simplistic flow such as Price List > Quote > Order > Invoice one must make sure that data and business rules come from the same or reconciled sources. If they don’t you will, at best, generate errors and incur high cost manual checking and corrections downstream in the process. At worst you will get a complaint call from the customer about an incorrect order or invoice.
Go Upstream: Quote to Cash excellence requires early quality in the process. Pricing failures in quoting invariably result in customer credits and bad interactions with customers. To put it bluntly, you rarely solve billing problems in the billing department.
Communicate Status to Your Customers: Best in class companies inform their customers throughout the quote to cash cycle. If you aren’t providing your customers order acknowledgements, confirmations, shipping notifications and regular order and payment status in either push or pull formats you are generating inquiries that customers don’t feel they should have to make and cost you money. Providing this information in an accurate fashion is a point of entry to eCommerce, not a leading capability.
Measure, Measure, Measure: Quote to cash processes generate a tremendous volume of reported data in the typical company. Usually these measures are financial and volume related. Leading companies apply more systematic measurement and improvement programs around cost, quality and time related metrics. Cycle time metrics for orders and invoice can point their way to process improvements that get product to customers faster and result in faster payment and lower DSO. “Perfect order” and “perfect invoice” improvement projects can reduce customer complaints and dramatically lower processing costs.
Involve Your Customers: The one thing that Web 2.0 has taught us is that your customers are going to have a publicly available opinion about you regardless of whether you want one or not and they will have the tools and ability to syndicate their opinion of you across the internet. Actively involving customers in improvement projects lets them know you care about their business and are listening to them.
Conclusion:
Continuous improvement programs in Quote to Cash can yield direct cost savings for existing business, avoid significant headcount additions in growing business, and reduce overall customer churn and improve loyalty. Improvements are often measurable in real dollars, which for most businesses, and their customers and shareholders, are exactly the type of results that more glamorous CRM efforts continue to lack. |
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| Abstract: One-off CRM technology costs can be written off; ongoing senior people costs cannot. So a company that puts CRM into the title of one of its senior managers is making a real statement of commitment to CRM. GI Insight therefore decided to commission research amongst the UK’s top 500 companies to find out how many of them had that most expensive of people, a Head of CRM. The statistics were compared with those resulting from the same exercise two years ago in 2005. The study also investigated whether that CRM Head was a dedicated senior director, or whether they also had another main job, such as Marketing Director or Customer Services Director. This was felt to add colour to whether the role was being treated as a wholly absorbing directorial function, or whether it was diluted by combination with another discipline. And thirdly, the research also broke the findings down to compare different industry sectors.
The penetration of Heads of CRM was felt to be a good proxy for the commitment that these large industry sectors were showing, not only to the notion of CRM, but to its successful practice, and its permanence within the organisation. Convincing metrics demonstrating return on investment from CRM strategies and systems are now demanded by colleagues, analysts, markets and shareholders. So if an official and directorial role had been created form CRM, this was felt to be compelling evidence to an organisation’s seriousness about methodical customer management and development.
Our barometer of ‘CRM Commitment’, in the form of the proportion of the UK’s top 500companies with a Head of CRM, comes in at approaching half (48%) up four percentage points since this survey was last conducted in 2005 (44%). This lags the statistics quoted in our introduction concerning “return on customer investment” or “customer development spend versus prospecting spend”, both of which have achieved an overall majority score in top companies. We may conclude, therefore, that in many cases, measurable return on CRM investment has to be proved before a company will appoint a Head of CRM into a senior directorial role (regardless of whether this is an internal promotion or an external hire). In this sense, our Heads of CRM penetration is acting as a real indicator of commitment. CRM initiatives have been taken, hard bottom-line results measured, and ongoing metrics put in place, before CRM management is afforded senior status.
Further insight is available by drilling into this overall 48% commitment to understand whether Heads of CRM had been appointed in a dedicated role, or whether this was seen as inextricably conjoined to another function. The resulting breakdown showed that almost one fifth (19%) of top UK corporations now have a dedicated Head of CRM, a substantial increase on the proportion (14.5%) two years ago. This represents a growth rate in dedicated CRM Directors of almost one third in the last two years.
In 29% of top companies, the role of Head of CRM was combined with another senior function - most frequently either the Marketing or Customer Service directorship. These combinations make sense, in that Marketing and Customer Service are the areas of responsibility in which customer management and development strategies have mainly been implemented. It also provides corroboration that many organisations see the functions inextricably linked – a holistic view that shows real progress in the maturity of thinking about CRM in the country’s top commercial organisations.
More detailed analysis of the results of this study revealed a number of sectors that score particularly highly for appointing Heads of CRM. Three industries really stand out from the crowd – Retail, Media & Entertainment and Travel/Leisure/Hotels.
Retail
Because transactional data is so fundamental to customer relationship management in retail, the sector’s leading position for appointing dedicated Heads of CRM may well also reflect some of the ways in which retailers can use the data and analysis outputs that come out of their CRM programmes.
Entertainment
This was entirely unexpected. Music labels, publishers, broadcasters, cinemas, and so on are, after all, mainstays of the above-the-line advertising industry. However, customer value is often much higher now than in the past. Newspapers are engaging their readers with a wide range of online and offline services, music publishers are also issuing games, technology, infotainment products and much more. And the culture of home entertainment has been vastly boosted by increasing levels of DVD viewing and television usage.
Travel/Leisure/Hotels
Businesses in this sector seem to be coming back into play as effective CRM players. This is a crucial return to form for the sector, seen in the 1980s as pioneers of loyalty and database marketing initiatives, but who slipped to the back of the pack in the 1990s and the early years of the new millennium. |
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| Author: By Kate Leggett, Director e-Service Product Strategy |
| Company: KANA |
| Doc Type: Article |
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| Abstract: My friend Jennie who had founded a company called Vokalize, recently died. Her company’s mission was to amplify the voice of customers, and her business card read “Amplifier.” Her death made me think hard about the importance of the mission of her company and made me wonder how the power of the collective voice could be leveraged as an asset in customer service. |
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| Abstract: When it comes to marketing budgets the well-worn ‘customer is king’ mantra holds fast. Businesses are acutely aware of the comparative expense of attracting new customers over retaining and nurturing existing clientele, and marketing spend is accordingly weighted towards patrons over prospects.
But, of course, no business can afford to focus on existing customers alone. The challenge lies in adopting successful prospecting campaigns that have credence yet won’t break the budget.
Affinity marketing offers one such solution. Put simply, this is the process of ‘piggy-backing’ another company’s communications in order to target your message to a wider, verified prospect pool. Usually, the company chosen will operate in a related market, making the affinity partnership immediately rational to consumers.
A more recent technique - trans-promo - lends itself quite gainfully to the affinity method. ‘Trans-promo’ marketing is the term given to the use of marketing and promotional messages on bills and statements or other transactional documents. For the sender, trans-promo makes perfect sense. These businesses are duty-bound to despatch transactional communications. And research show that the attention consumers give to transactional documents far outweighs that typically given to standard direct mail promotions. Thus, the sender is able to use its existing, regular communication with the customer to cross-sell or up-sell, at little additional cost.
To date, within Europe, trans-promo has been used solely by businesses as a means of cross-selling or up-selling their own products or services. In other words, the messages appearing on bills and statements are marketing the sender’s own products or services – not those from a third party partner. But, across the globe – initially in Japan and subsequently in the USA – businesses are quickly recognising the two-way benefits of affinity trans-promo.
Undoubtedly, these trailblazers have been spurred on by technological advances in digital colour production printing. The combination of relevancy and colour has been shown to increase response significantly and such a combination is now both possible and cost-effective. Crucially, trans-promo is achievable at any scale due to the relatively low cost of digital colour and the fact that businesses of all sizes now have solutions to analyse and segment customer data.
So, European businesses look poised to embrace affinity marketing through trans-promo mail. But are consumers ready for billboard bills and showcase statements? Will European consumers welcome these integrated third-party messages?
According to our research, consumers in the romance countries are most-receptive to the idea of third-party messaging. But UK and German consumers also show a healthy appetite. If the message fits, there is real scope for successful cross-border promotions.
If the trans-promo approach to affinity is adopted, care must obviously be taken that the promotional message fits sensibly with the host-document – and the recipient. A utilities bill reminder may not be the best vehicle to deliver promotional messages regarding energy-hungry appliances. Similarly, if a credit card customer is continuing to miss monthly payments, he or she is unlikely to be a current prospect for high-value goods or services. As ever, the onus comes back to careful data management and clear communication between both parties.
Certainly, there is a significant and receptive European market for mailed affinity messages. These may simply be incorporated within the direct marketing of the host company – leveraging the power of joint branding.
Affinity marketing offers a cost-efficient, low risk strategy. Whilst the concept of affinity mail is not new, the rise of trans-promo as a vehicle to deliver these affinity messages is a trend set for rapid and expansive European growth. |
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