Customer Service & The Customer Service & The InternetInternet

Gary W. Koutnik, MAIGary W. Koutnik, MAI

March 15, 2003March 15, 2003

Discussion PointsDiscussion Points

• Why Customer Service is so ImportantWhy Customer Service is so Important• What Constitutes Good CS?What Constitutes Good CS?• A good definitionA good definition• How do you achieve good CS?How do you achieve good CS?• The internet, how does it come into play?The internet, how does it come into play?• Implementation Implementation • What is CRM?What is CRM?• ExpectationsExpectations• The cost of keeping a customerThe cost of keeping a customer• SummarySummary• End notesEnd notes

Why Customer Service is so ImportantWhy Customer Service is so Important

• Price is cut to the bonePrice is cut to the bone• Your competition is tightYour competition is tight• The supply chain is managedThe supply chain is managed• Your customers know what your Your customers know what your

competition is up tocompetition is up to• If you don’t take care of them-your If you don’t take care of them-your

competition willcompetition will

What Constitutes Good Customer What Constitutes Good Customer Service?Service?

• This will vary by industry but there This will vary by industry but there is a common threadis a common thread– Give the Customer What They WantGive the Customer What They Want– Give the Customer What They NeedGive the Customer What They Need– Exceed Customers ExpectationsExceed Customers Expectations– Do it Better Than Any Other FirmDo it Better Than Any Other Firm– It is more of a customer perceptionIt is more of a customer perception

Source: the aca group web siteSource: the aca group web site

So, how is customer service defined?So, how is customer service defined?

““You can be doing the best job in the You can be doing the best job in the world for your customer, but if there’s world for your customer, but if there’s something missing, if the customer is something missing, if the customer is unhappy, then all your opinions about unhappy, then all your opinions about your performance are worthless. Great your performance are worthless. Great service is a matter of perception. service is a matter of perception. Great Great service is what the customer thinks it service is what the customer thinks it isis.”.”

Mark H. McCormack Mark H. McCormack ““On Selling” – Dove Books, 1996On Selling” – Dove Books, 1996

How do you achieve good CS?How do you achieve good CS?

““ 1.1. Target the right Customer.Target the right Customer.

2.2. Own the customer’s total experience.Own the customer’s total experience.

3.3. Streamline business processes that impact the customer.Streamline business processes that impact the customer.

4.4. Provide a 360º view of the customer relationship.Provide a 360º view of the customer relationship.

5.5. Let the customers help themselves.Let the customers help themselves.

6.6. Help customers do their jobs.Help customers do their jobs.

7.7. Deliver personalize service.Deliver personalize service.

8.8. Foster community.”Foster community.”

Patricia Seybold Patricia Seybold

““Customers.com” – Time Books, 1998Customers.com” – Time Books, 1998

The internet, how does it come into The internet, how does it come into play?play?

• The customer can access you 24/7The customer can access you 24/7• Software can tailor customer experiences Software can tailor customer experiences

individually and collectivelyindividually and collectively• Software can build a tremendous data Software can build a tremendous data

basebase• Your competition is using it-you’d better Your competition is using it-you’d better

get on boardget on board• If you provide bad service, a customer can If you provide bad service, a customer can

set up an Ihateyourcompany.com web set up an Ihateyourcompany.com web pagepage

ImplementationImplementation

• CRMCRM– Customer Relationship Management Customer Relationship Management

Software ApplicationsSoftware Applications

• What is CRM?What is CRM?– ““Simply stated, Customer Relationship Simply stated, Customer Relationship

Management (CRM) is about finding, getting, and Management (CRM) is about finding, getting, and retaining customers.”retaining customers.”

Source: Real Market WebsiteSource: Real Market Website

Other Explanations of CRM?Other Explanations of CRM?

• Consolidate Customer info from Consolidate Customer info from multiple channels.multiple channels.

• It allows a firm to interact more It allows a firm to interact more directly with customersdirectly with customers

• It is a tool to get feedback from It is a tool to get feedback from customercustomer

• It’s a sales and marketing toolIt’s a sales and marketing tool

What is the function of CRM?What is the function of CRM?

• It allows the customer to handle It allows the customer to handle problemsproblems

• Gives all dept. a composite of Gives all dept. a composite of purchasing/service historypurchasing/service history

• Coordinates interactions with all Coordinates interactions with all customers touch pointscustomers touch points

• It analyzes data to find your most It analyzes data to find your most valuable customer & target services to valuable customer & target services to themthem

The big dilemmaThe big dilemma

• Off the Shelf?Off the Shelf?• Custom Designed?Custom Designed?• There are pros and cons to both There are pros and cons to both

approachesapproaches• HybridsHybrids

So you’ve decided on software-Now So you’ve decided on software-Now what?what?

• Customer-centric planning is the Customer-centric planning is the leading success predictors. leading success predictors.

• The real CRM project failure rate is The real CRM project failure rate is 35%. 35%.

• About 50% of projects are getting a About 50% of projects are getting a payback within 18 months.payback within 18 months.

Source: CRM Guru WebsiteSource: CRM Guru Website

What can I expect?What can I expect?

• Happier customersHappier customers• Fewer tech support callsFewer tech support calls• Usable metrics from data miningUsable metrics from data mining• Increased salesIncreased sales• Higher profitsHigher profits

Best ImplementationBest Implementation

• The Goal of CRM Is SalesThe Goal of CRM Is Sales• Keep It SimpleKeep It Simple• Keep An Eye On the Whole, But Keep An Eye On the Whole, But

Develop In PiecesDevelop In Pieces• Seed The Database Before Rolling Seed The Database Before Rolling

Out To SalesOut To Sales• Source: internet week Source: internet week

The cost of keeping a customerThe cost of keeping a customer

Question:Question:Do you know the difference in the cost of keeping a customer as Do you know the difference in the cost of keeping a customer as

opposed to acquiring new ones?opposed to acquiring new ones?

Answer:Answer:Acquiring a new customer cost from eight to ten times as much as Acquiring a new customer cost from eight to ten times as much as

keeping an existing customer.keeping an existing customer.

The Real WorldThe Real World

• Are there success stories in the Are there success stories in the real world?real world?

• YesYes• The Aberdeen Group is an IT The Aberdeen Group is an IT

research and consulting company research and consulting company & they track them& they track them

• Mammoth Golf'sMammoth Golf's SuccessSuccess

More Real WorldMore Real World

• Lands EndLands End• Wells Fargo BankWells Fargo Bank

SummarySummary

• Customer service is probably the single Customer service is probably the single biggest interaction between a firm and a biggest interaction between a firm and a customercustomer

• It can “make or break” a companyIt can “make or break” a company• Software and the internet can create a Software and the internet can create a

win-win scenariowin-win scenario• It may be time to redefine what It may be time to redefine what

customer service really iscustomer service really is

Summary ContinuedSummary Continued

• The company needs to be behind The company needs to be behind customer service 100%customer service 100%

• The personnel in the company The personnel in the company need to be properly trainedneed to be properly trained

• Keeping happy customers is better Keeping happy customers is better (and cheaper) than just acquiring (and cheaper) than just acquiring new onesnew ones

Some Providers of the Some Providers of the SoftwareSoftware

There are many more. Point your browser to Google and search for CRM software

Recommended ReadingRecommended Reading

Customer Service on the InternetCustomer Service on the Internet

Jim Stern (John Wiley & Sons, Inc. 2000)Jim Stern (John Wiley & Sons, Inc. 2000)

Customers.comCustomers.com

Patricia Seybold (Times Books, 1998)Patricia Seybold (Times Books, 1998)

E-Service: 24 Ways to Keep Your Customers-When the E-Service: 24 Ways to Keep Your Customers-When the Competition Is Just a Click AwayCompetition Is Just a Click Away

Ron Zemke, Thomas K. Connellan, Tom Connellan Ron Zemke, Thomas K. Connellan, Tom Connellan

(AMACOM, 2000) (AMACOM, 2000)

BibliographyBibliography

Jim Stern, Jim Stern, Customer Service on the Internet Customer Service on the Internet John Wiley John Wiley & Sons: 2000& Sons: 2000

Patricia Seybold, Patricia Seybold, Customers.comCustomers.com Time Books: 1998 Time Books: 1998

Mark H. McCormack, Mark H. McCormack, On SellingOn Selling Dove Books: 1996 Dove Books: 1996

Doug Howardell, Doug Howardell, How To Improve Customer ServiceHow To Improve Customer Service March 27, 2003 March 27, 2003 <http://www.theacagroup.com/customerservice.htm<http://www.theacagroup.com/customerservice.htm>>

  

  

Bibliography ContinuedBibliography Continued

Realmarket, Realmarket, What is CRM?What is CRM? March 23, 2003 < March 23, 2003 < http://www.http://www.realmarketrealmarket.com/.com/crmdefinecrmdefine.html.html>>

  Sweeeny Group, Inc. Sweeeny Group, Inc. CRM DEFINITIONCRM DEFINITION March 25, 2003 March 25, 2003

<<http://www.http://www.sweeneygroupsweeneygroup.com/.com/crmcrm..htmhtm>>  Software Magazine, September 1999 Section: IT Software Magazine, September 1999 Section: IT

FRONTLINESFRONTLINES

  

Bibliography ContinuedBibliography Continued

CRMguru.com CRMguru.com The Blueprint for CRM Success: The Blueprint for CRM Success: Outcomes of a comprehensive study identifying Outcomes of a comprehensive study identifying best practices leading to ROI and factors best practices leading to ROI and factors contributing to failurecontributing to failure March 27, 2003 < March 27, 2003 < http://www.http://www.crmgurucrmguru.com/blueprint/index.html.com/blueprint/index.html>>

  Joanna L. Krotz , Joanna L. Krotz , Who's your best customer?Who's your best customer?

Microsoft's Bcentral web site, March 15, 2003 <Microsoft's Bcentral web site, March 15, 2003 <http://www.http://www.bcentralbcentral.com/articles/.com/articles/krotzkrotz/106.asp/106.asp

  

  

Bibliography ContinuedBibliography Continued

Aberdeen Group, Aberdeen Group, What Works: Ten Significant What Works: Ten Significant Implementations in Services ManagementImplementations in Services Management, March 1, , March 1, 2003 < 2003 < http://www.http://www.aberdeenaberdeen.com/.com/abab_company/_company/hottopicshottopics/top10fsm/default./top10fsm/default.htmhtm>>

  

Network Computing; May 31, 1999 Section: Business to Network Computing; May 31, 1999 Section: Business to Business: SEARCHING FOR ONLINE CUSTOMER SERVICEBusiness: SEARCHING FOR ONLINE CUSTOMER SERVICE

  

Bibliography ContinuedBibliography Continued

Richard Karpinski, “Inside IBM’s CRM Richard Karpinski, “Inside IBM’s CRM Play,“Play,“Internet WeekInternet Week 4 0ctober. 2001. 4 0ctober. 2001.

Dr. S. Thomas Foster, Jr., “freequality Dr. S. Thomas Foster, Jr., “freequality archived thoughts," Date unknown 10 April archived thoughts," Date unknown 10 April 2003 <http://www.freequality.org/beta2003 <http://www.freequality.org/beta%20freequal/fq%20web%20site/archive.htm>%20freequal/fq%20web%20site/archive.htm>