Beyond CRM: How to improve customer interactions

Time for a new strategy for communicating with your customers

Customers have much more power these days - so why do so many companies fail to build a proper strategy to engage them and win their loyalty? Quocirca's Louella Fernandes explains how they need to rethink their relationship.

In today's global business environment, customer loyalty is under pressure: intensified competition, deregulation, greater choice and social networking have all contributed to increased customer power.

Customers, faced with a dizzying array of products and services, expect customised offerings and personalisation from their suppliers across all channels whether email, websites, SMS, social networks, traditional mail or call centre interactions. And with their heightened expectations, expanded choices and lowered tolerance for inconvenience, consumers are less loyal as lower exit barriers threaten to increase customer attrition.

As such, retaining customers and minimising customer churn against a backdrop of cost-reduction imperatives are major concerns for organisations today.

Many are now recognising optimising the way in which they communicate with their customers is a critical success factor. Customer communications are critical customer relationship tools; they are the foundation for every customer interaction, whatever the channel of delivery.

Whether it is transactional statements and bills, ad-hoc proposals, quotes or customer correspondence - all provide an opportunity to gain customer knowledge and strengthen the relationship.

Yet the reality that businesses face is a customer communications environment that is costly, disparate and fragmented across multiple channels. Traditional approaches to generating and delivering communications can be plagued with inefficiencies.

Many enterprises deploy a range of systems, developed and maintained by IT to generate communications - often using Microsoft Word or similar word processing packages, backed by thousands of templates for contracts, insurance policies, account notices and marketing collateral.

Different departments may manage their own templates and store them in their own repositories. Without centralised management and administration it is almost impossible to keep templates up to date and ensure consistent corporate branding and compliance.

Meanwhile, for customer service representatives, determining what letter should be sent can be a manually intensive, time-consuming process, and such communications often require review and approval before they are delivered to the intended recipient, further adding to processing time and pushing up costs.

Such a fragmented approach is not only expensive to maintain and support but can lead to inconsistent and unclear - and often completely incorrect - communications.

And while many organisations have amassed a wealth of data after having invested heavily in customer relationship management systems to help gather, analyse and segment customer data, few are able to turn this into true customer knowledge to drive consistent customer communications.

With the multichannel environment becoming ever more complex, ineffective communications manifests itself in higher operating costs, lower customer satisfaction, regulatory non-compliance and additional customer care costs. And in today's consumer-driven world, where social networking is widespread, the impact of viral marketing cannot be ignored; one poor customer interaction can tarnish brand reputation for a long time.

All this points to an overwhelming strategic need to develop a co-ordinated, unified customer communications management (CCM) strategy.

Quocirca defines CCM as encompassing the creation, delivery, storage and retrieval of all outbound and inbound communications, across every customer touch point.

CCM can be either a suite of products or a unified platform, and capabilities typically include data integration for the access to customer information from systems such as ERP, CRM or content management systems to create a full customer profile; document composition tools to create multichannel communications; production and distribution tools to manage high-volume transactional and ad-hoc communications; and finally storage and retrieval tools to enable users such as customer service agents to rapidly create and access customer documents for faster call resolution time.

Organisations that adopt a CCM strategy can effectively reduce enterprise-wide communications costs, strengthen customer loyalty and build competitive advantage. Providing a consistent, differentiated customer experience has a significant impact on customer loyalty, which in turn contributes to growth and profitability. The benefits of coordinated and consistent multichannel communications are manifold.

Operating costs are reduced by using a single system to create and produce printed and electronic communications. Whereas traditional document creation and generation tools are often print-centric, highly IT-reliant and costly, CCM document creation tools place the ongoing maintenance of communications in the hands of business users rather than IT staff, thereby reducing time and cost.

Customer loyalty is increased through the provision of relevant and contextual information at every interaction. With a CCM platform in place, a customer should be able to initiate contact with the organisation through one channel, such as the call-centre, and then complete the interaction through another, such as the web, with a seamless transfer of information between the different underlying technologies.

Accurate and clear online self-service communications can also deflect costly customer service calls to more cost-effective, web-based interactions. Call-centre costs can be further reduced by equipping agents with accurate information to service calls, ensuring that call handling is prompt and reliable.

Clearly, for any CCM strategy to work, an organisation must have customer knowledge - a multi-dimensional view of the relationship that the organisation has with the customer - and use it at every customer touch point.

Without this knowledge, it is impossible to provide a positive customer experience at the next interaction. Having an integrated view of customer profitability, acquisition costs and lifetime value provides the critical information needed to target the appropriate customers with the right products at points in time when they would be most receptive.

Many organisations may possess such customer knowledge - for instance through segmentation and analysis that reveals customer preferences and predicts customer behaviour. However, it is using this knowledge to develop seamless customised communications across all channels and empowering frontline employees at every customer touch point that is the foundation for a successful CCM strategy.

Adopting an enterprise CCM strategy may seem a daunting task; the key to success lies in first identifying those communications processes which can benefit most immediately from transitioning to CCM.

CCM should be viewed as a long term strategy which can be built up gradually to enable an organisation to benefit from a true enterprise approach to CCM. The benefits are clear—stronger, more profitable customer relationships leading to greater customer loyalty, increased revenues and distinct competitive advantage

Quocirca's report 'Turning customer interaction into profitable relationships' can be downloaded here.

A leading user-facing analyst house known for its focus on the big picture, Quocirca is made up of a team of experts in technology and its business implications. The team includes Clive Longbottom, Bob Tarzey, Rob Bamforth, Louella Fernandes, Fran Howarth and Simon Perry. Their series of columns for silicon.com seeks to demystify the latest jargon and business thinking. For a full summary of the consultancy's activities, see www.quocirca.com