Today’s Business and IT Leaders on Market TrendsIn partnership with: Unleashing the Power of Customer Data Most companies are swamped by feedback from their clients. The real challenge is making good use of what they’re trying to tell you.T he idea that the customer is king is not new. It has served as a driving force of many companies for morethan a century. Marshall Field built hisChicago emporium in the late 19th cen-tury on the slogan, “Give the lady what survey published by independent research firm Forrester Research indicates that peo- ple who seek better service are far more loyal to a brand than those who just want the best price. “Service seekers will buy more,” says Bruce Temkin in his report. In another Forrester report, analyst Ellen Car- cords, Berry Gordy, is famous for saying, “It may be simple, but it’s not easy.” A survey for Qwest of some 258 senior business executives and senior IT manag- ers conducted earlier this year by Fortune and IDG Research found that just a third thought their companies were highly suc-she wants.” Companies like Nordstrom, ney estimates that customers will pay up to cessful at integrating customer data intoAmazon.com, and United Parcel Service a 50% premium when they perceive a pro- business decisions. And both groups ofhave earned stellar reputations for their vider delivers industry expertise, another executives agreed that, at best, they hadextraordinary efforts to meet the needs sign that better service pays off. However, an “adequate” understanding of theirof customers. as the legendary founder of Motown Re- customers’ needs and priorities. However, in the Information Age, build-ing a customer-centric company takes alot more than a philosophy. It requires adetermination to collect customer feed-back, analyze it rigorously, and, most im-portantly, change the way you do businessin response to what customers tell you.“Being customer-centric is a bit more fo-cused than ‘The customer is king,’” saysCindy Humphrey, vice president, businessmarketing Qwest Communications, a ma-jor provider of voice, data, and networkservices based in Denver. “It indicates thatyour entire business is focused on—andmeasures success in terms of—customers.” In a tough economic climate, makingcustomers happy should be a no-brainer.Get your clients to love doing business withyou, and chances are they’ll be loyalists. A
* ence. Yet, concedes Rosenberg, “We’re just beginning to investigate some innovativeJust one-third of IT executive management tools for organizing, analyz- ing, and sharing customer data.”indicate their companies are highly Asking the Right Questionssuccessful in integrating customer Companies are not ignorant of the benefitsdata into business decisions. from better use of the information they col- lect about their customers. More than two-* thirds of the participants in the survey agree Being Customer-centric that voice, data, and network technology Survery results show a desire to please outpaces knowledge about what clients want. can play a critical or important role in under- standing their customer needs and priori- Sources for understanding customer needs ties. More than half of IT managers and 44% of business executives said their companies Customer complaints 68% 70% were actively designing their voice and data 61% infrastructures with the goal of facilitating Customer Surveys/research 52% innovation and rapid response to customer Input from sales staff 53% demand. And six of 10 survey respondents 60% indicated they were monitoring the cus- Inbound sales calls 39% tomer experience in an effort to improve 40% their existing processes. But many say they Source: May 2009 survery by Fortune and IDG Research; IT Managers lack the resources to do that, even as they 209 respondent (109 IT execs; 99 business execs) Business Executives continue to collect information. “Time and staff,” says J. Mikel Reynolds, CEO of Richter Reynolds & Lapp Commercial,The Art of Rapid Response instant messaging and online chats to tap a commercial real estate firm in Dallas, ex-Humphrey is not surprised by these find- customer opinions. plained in a follow-up to the survey why hisings. Most companies use a hodgepodge of Pulling together customer data into firm isn’t more efficient at mining customertechnology to interact with their customers, something useful can get more complex data. There can also be some hesitation tofrom voicemail and e-mail to online chats, as companies add newer technologies like query customers. “So many of our custom-to newer technologies like social network- Web 2.0 and social networking services like ers are so independent that I don’t know ifing and instant messaging. Many firms Twitter. Neenah Paper, a specialty paper I could get them to sit down long enoughhaven’t extracted much useful information manufacturer in Alpharetta, Ga., is utiliz- to give us any information,” says Reynolds,from the flow of data from and about their ing many new technologies to reach its who describes many of his clients as smallcustomers. Two-thirds of survey participants customers. The company, a spinoff of Kim- entrepreneurial companies.said customer complaints were their pri- berly-Clark with revenues of $732 million Yet, his firm is on the cutting edge ofmary source for understanding customer in 2008, sends Twitter feeds to update cus- technology in other ways, serving up e-mailneeds, and more than half indicated they tomers about new products and upcoming newsletters and increasingly using digitaldepended on survey responses or their sales events. It has even created an Apple iPhone multimedia to distribute property informa-staff for feedback. Humphrey says this is application that enables graphic designers tion to potential customers. “We used to putgood, but more can be done. to take photos, test color choices, and or- out large books describing the investments Over 60% of survey participants said der samples directly from Neenah. and financing required for a large building,”that investing in technology was critically Steve Rosenberg, the company’s direc- says Reynolds. Now the company is postingimportant to understanding customer tor of business development, who partici- much of that information on servers online,needs and priorities. And similar majori- pated in the survey, is also interested in which customers can access and download.ties rated data, voice, and network ser- switching its videoconferencing system— Richter Reynolds employees also use a VoIPvices as keys to acquiring that understand- on which Neenah increasingly relies to system that sends messages to their Black-ing. They were less enthusiastic about reduce travel—to a more sophisticated sys- Berrys to tell them they have voicemail mes-using newer forms of technology like tem that provides a more realistic experi- sages pending. Multimedia presentations of
*properties and investment opportunities,including music as background, have also Turning Into Clientscaught on with clients. “It’s creating a differ-entiator in the market for us,” Reynolds says. Extremely/very valuable methods of communication in understanding Serving customers better sometimes customer needs and prioritiesprovides unexpected dividends. ABX Air, atransportation and logistics company based Voice 81% 83%in Wilmington, Ohio, installed hand-helddevices that use custom software and cel- E-mail 73% 79%lular communications technology to better Online forms (Web) 44%track customer shipments and make last- 45%minute changes on the plane. “If a cus- Web-based self-help 38% 33%tomer calls and asks us to verify that theirproduct got on the plane in Osaka and left Paper forms 20% 35%*with the plane, we can do that,” says Grant 19% Online chat 12%Richardson, a senior director of IT systemsat the company, which has 11,000 employ- Instant Messaging (IM) 15% 19%ees and had annual revenues of $1.6 billion Fax 15%last year. “We can show them it was loaded, 21%we can show them the plane took off, and Bases: CIO: 137 respondents; Fortune: 121 respondents CIOthen we can follow it.” This feature is so *Denotes a statistically significant difference between the CIO and Fortune audiences. Fortunepopular with customers, says Richardson, *that some have asked to buy the technol-ogy from ABX. “Not only are we providingthe customer with the data that they need,we also have an application that the cus-tomer definitely wants to secure from us,” A Forrester report suggests thathe told researchers. The challenge for many companies, customers will pay up to a 50%says Qwest’s Humphrey, is collecting and premium when they perceive aanalyzing customer data from many differ-ent sources. “There’s just so much data out provider delivers industry expertise.there,” she says. “Without a converged net-work that allows you to pull that data intoa centralized organization and then analyze executives listed maintaining or increasing Qwest that connects 13 satellite locationsit and make changes, it can be overwhelm- top-line revenues as their No. 1 priority by around Colorado with its central facility.ing.” Qwest has technology that helps create a wide margin (57% to 45%). Both groups This has enabled physicians to do theira more perfect flow of information—a blow, agreed on the importance of lowering busi- rounds by video, and enabled specialists atsays Humphrey, against the “silos” that so ness expenses; but IT executives listed bring- the central location to consult with patientsoften leave one part of a company unaware ing new products or services to market as far at remote sites. The hospital also has someof customer issues in another department. more important (32%) than their business- 45 nurses that work from home who have These efforts can also be complicated side counterparts (23%). benefited from the high-speed network.by the differing views of line-of-business As digital medical records become moremanagers and IT executives. In the survey, Keeping Customers Loyal important under health-care reform, thethere were often differences between how Of course, happy customers require more hospital has seen the high-speed networkthe two sides perceive the abilities of their than data analysis. Dependable access to in- dramatically speed access to images, pre-organizations to make effective use of tech- formation can have a huge effect on qual- scription histories, and other informationnology to distill the data they collect from ity of service—and customer satisfaction. that formerly took up to a half-hour tocustomers. When asked to name the top In 2007, The Children’s Hospital in Denver download. “All these services that we havethree challenges to their companies, business installed a high-speed data network from to offer now have translated directly into
patient care, and improved patient care,” 800 number. Each customer is given an 800 says Todd Panella, IT manager for desktop number that rings back to that customer’s* and voice services at the hospital. “The home branch. “It has allowed us to really ability for them to get with the patient optimize that touch point with the cus- Gathering Data sooner after they chart, or during their tomer,” says Ian Patterson, Scottrade’s chief charting, is really important for the patient information officer. This has also enabledDoes your organization gather to have very quick service”—quick medi- the firm to efficiently manage customerinformation on customer needs cal service, obviously, as well as customer support: For more than two million custom-and experiences to inform service. Children’s Hospital has also cut its ers, says Patterson, the company has justbusiness decisions? data center costs by $80,000 per month, 120 telephone representatives. 82% according to Panella. Scottrade tracks customer satisfaction 80% CIO If time is money, then Scottrade has rea- on a quarterly basis, and employee bonuses Fortune son to want to make sure that its custom- in its branches are partially tied to those ers are happy. The St. Louis–based online ratings. Tying compensation to customer investing firm began offering online trad- satisfaction is rare, according to the sur- ing in 1996, and has focused its efforts on vey. Less than a quarter of respondents creating an exceptional customer experi- said their companies had taken such a step. 20% ence. For example, automated telephone More common measures include imple- 18% menus are one of the banes of modern life. menting technologies to present a con- Scottrade worked with Qwest to develop sistent face to customers;, doing primary Yes No a sophisticated phone system that directs customer research; and using customerBases: CIO 137 respondents; Fortune: 121 respondents its customers to a representative at one of forums, user groups, and social networks to 430 branch offices, even when they call an communicate with customers. The pursuit of happy customers through technology has new advocates inside com- panies. Once upon a time, IT pushed tech- nology while the business side resisted. But the survey indicates that—despite differ- ences of expectation in some areas—these roles have morphed. By 50% to 34%, senior business executives rated their companies more highly than their IT counterparts in their ability to integrate customer needs into business decisions. Humphrey says it’s a matter of perspective. “As a business execu- tive, you understand the business case and what technology can do for you,” she says. “The IT executive is responsible for mak- ing that world come true, with all the con- straints and concerns he or she deals with every day.” Where both sides agree is that better technology leads to better customer service, and that is good for business. For more information on Qwest products and solutions, visit Qwest.com/business.