Customer Management

Customer Management (S.Swaminathan, CEO & Ajay Kelkar, COO of Customer Equity Solutions (CEQUITY), A technology-driven customer experience management company) © Copyright 2008 Cequity www.cequitysolutions.com

Jet Airways has one of the best customer management One of the major challenges with customer management for programs in the airline business in India. While it is true that enterprises is making the customers feel a sense of belonging they deliver great value to a frequent flier, new opportunities towards the company. Else, customers will be loyal only to always exist to proactively manage and build unique either points or some offers they get from time to time. If any experiences with individual customers. other company offers a better program or a compelling offer, they will switch. Because, in a sense, creating best-in-class Take a look at this scenario, for example. Over the last customer management programs means ‘building faithfulness’ one year, a friend of ours has slowly been switching to a or ‘unquestioned evangelism’ for the products of the company. competitive airline. The other airline offered him free business class upgrades and made him experience their airline and High Customer Satisfaction scores does not mean companies service. Over the last 3 months he has not used Jet Airways have great Customer Management programs in place. In the at all. Being a frequent flier too and a member of their automotive business, on average 85% of all people report program, Jet Airways would definitely know his average usage being satisfied with the cars they’ve purchased - but only over the couple of years and should have been worried why 40% buy from the same dealer again. In business to business he has not been travelling with them at all. But, there is no categories like office automation products, computers etc., communication (sure he gets his statements, new routes 65-85% of defectors report that they were either satisfied mailer, special offer booklets etc.) – a call or a statement or even very satisfied with their former supplier. Customer insert, even an SMS from them letting him know that they are Management programs must be designed to get sensitive to missing him would have helped! He is quite amazed changing customers’ lifecycle of relationship with the company and intrigued. Transactional relationships don’t build from the time they are enquirers to the time they are your customer bonding. advocates. Also, they must increasingly be able to respond to an individual’s behaviour and needs. Adding an emotional element to managing customers is becoming critical. The Customer Management Paradigm – Same formulae don’t hold good anymore What’s a good Customer Management Designing customer management programs with clear program? business goals, right architecture and insight-driven marketing programs are becoming increasingly important. The society Best-in-class Customer Management programs should help at large is moving towards a need to try out new things you identify your best (most profitable customers); increase consistently. And there is a lot of choice out there in the the value of your low/medium value customers but who you marketplace. Attitude towards products or services - things believe have the potential to grow; and helps you reduce that one consumes or uses everyday or even people/friends marketing costs when it comes to your worst customers. It is whom we know and like - seem to be changing. People important to understand, how much Potential Value(PV) each change jobs, cities, homes, furniture, home appliances faster cluster has and can deliver, and what kind of an investment than ever before. This really is the challenge that lies ahead you should make in them. While you design such a program, for companies. the metrics have to be in place to continuously monitor the impact of the program on these customers. The metrics Just go back to your financial relationships in the recent past should also give you actionable marketing information to drive and see how many banks do you bank with? Now, most of individual campaigns for customers in different clusters. us have savings accounts with one or more banks, Demat accounts with another, a home loan with a third, plus two or three credit cards from banks we have never banked with earlier. © Copyright 2008 Cequity www.cequitysolutions.com 2

Think of your customers as your inventory Analytics & Communication makes all the difference Here’s a great quote that helps you appreciate and realize the importance of Customer Management: Surprisingly, the only communication that people receive is feedback surveys, complaint follow-ups, point statements for “ rewards programs, special offers and exclusive promotions! Suppose your company lost 0% Unless efforts are taken to understand and design better of your inventory last month, you prospect conversion programs, customer welcome programs, would panic. You’d get your staff features and usage education programs, migration to value- together, lock the doors and figure added products programs, predict customer behaviour and out exactly where that inventory communicate about new products or savings, customers will not see value. went. However, the same company can lose 0% of their customers ” What’s your ‘Customer Management glue’ - just loyalty points? without even noticing. - then be sure your communication will end as junk! Some key questions you should ask yourself, so that While retail outlets and your channel partners take great care customer management programs can seldom go wrong. to use technology to avoid pilferage (remember the machines that raise an alarm, if you leave the store without paying), • What behaviour do you think you can impact with a there is ‘customer pilferage’ in every company. There is a well designed customer management program – better competitor out there who is stealing away your customers. conversions, better customer on-boarding post a sale, better usage of features and therefore better chances What does it take to get your of retention etc. Ask yourself these questions? Customer Management program right. • What’s the value of that behaviour – by sales volume, In an article in the Harvard Business Review, “Do Rewards value, frequency of visits, referral or word-of-mouth etc.? Really Create Customer Loyalty?” May-June 995, by Louise • How will your customer management program get O’Brien and Charles Jones, identified the five dimensions of segmented across different types of customers? Customer Management. • What are your marketing plans for the next 2 or 3 years and how will your customer management program add value in your company’s objectives? Convenience • Is there a right balance of emotional and transactional Customer Mangement Program benefits in your customer management program? • Are you treating identifying and treating customers Value differently? • Have you established a link to track customers’ Aspirational Value lifecycle with your company and profitability? • Are there proactive activities to build a dialogue with your key customers? Choice • What differential experiences can you build for your customers? Relevance © Copyright 2008 Cequity www.cequitysolutions.com 3

Customer Management

by Cequity Solutions on Jan 20, 2009

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Customer Management — Document Transcript