CRM Analytics: Reaching the Heart of the CRM Process

CLICK WITH YOUR CUSTOMERS

As reported by Joel Enos, there was a time when a handshake worked miracles. Then came the Net.

The personal touch-remembering a customer's name, tossing in the occasional freebie, following up with a friendly phone call-went the way of doctors' house calls. The Web has reduced customer service to price and efficiency, qualities that serve up all the warmth of a cheap HMO. It's no wonder that most commercial sites find customer loyalty more elusive than ever.

Yet a handful of companies are proving that service across the Net can get personal-very personal. The results are showing up in their revenues and bottom lines. And whether they realize it or not, they're establishing the new rules for customer relationship management.

Take Amazon.com. Company representatives have never met face-to-face with any of their customers, but repeat buyers who experience delivery problems get immediate help from a high-level manager. Saks Fifth Avenue marks its big spenders and whisks them out of the customer service cattle call to the front of the help line.

Rule No. 1: Every customer has one mind, one purchasing history. Act accordingly.

Anyone who regularly shops on the Web eventually discovers that the many heads of a company's customer service department don't always communicate with one another. The phone rep can't access the e-mail messages you've sent. The central office has no record of your dealings with local outlets. Your faxes and postal complaints have disappeared. Efforts to resolve your problem require interrogations in which you must recount your entire purchasing history.

Consolidating customer records is the answer. Central access is key. And better companies include a customer's entire purchasing history in one place.

Travel site Expedia.com uses E.piphany's E.5 customer relationship management (CRM) package to consolidate all customer communication-whether by e-mail, fax, or phone-in one database. Amazon.com uses a homegrown system to keep tabs on customer preferences. Its 500 service reps can pull up a customer's history and know everything about that person's dealings with the company.

Integrating this information also provides new opportunities for building customer loyalty. For example, Walgreens combined its in-pharmacy database with Walgreens.com customer accounts. It instantly turned thousands of store customers into online shoppers, just by setting up accounts for them and inviting them in. When customers drop off prescriptions, pharmacists use their e-mail addresses to register them into the system. First-time customers automatically receive a message with a password inviting them to activate their online account, which includes their customer history.

"By synchronizing their channels, Walgreens is making sure that an online customer is not treated as a blank slate," says Elizabeth Boehm, an analyst at Forrester Research. It's a simple concept, but it works. Walgreens.com now takes in about 9,000 prescriptions a day, says Walgreens spokesman Michael Polzin. The number "definitely got a kick when we started this program," he says.

Rule No. 2: Listen, recommend, then listen some more.

"He behaves as you'd expect a human being to behave," says Bob Burgin, CEO of Finali, a CRM service provider that builds custom solutions from other companies' products. Burgin is describing his company's latest innovation -- a virtual sales assistant. In a beta test for Dell Computer, Finali's netSage virtual agent walked customers through a PC purchase, answering questions and making recommendations, such as suggesting more memory for a system with lots of multimedia extras.

"Dell discovered that people buying without help had a much higher return rate," says Burgin. "People bought cheaper systems, but they were less happy with them. When they bought from a live agent, they ended up spending more and returning less."

The virtual Willie Loman was a huge hit with test customers, Burgin says. They were twice as likely to add products to their shopping carts and three times more likely to give out personal information, and 20 to 40 percent more shoppers acted on product recommendations. The test was so successful that even though Dell has not yet officially opted to buy the technology, Finali has already incorporated it into its CRM package.

Rule No. 3: Grease the squeaky wheel first.

Every business has its cranks. You'll spare yourself and save money at the same time by moving disgruntled customers from the automated system to a live human -- by e-mail, phone, or chat -- as quickly as possible. Finali's solution uses Web cookies and E.piphany's software to record the pages customers have visited, where they were when they got stuck, and the content of e-mail queries or chat sessions.

"Basically, any time you automate a process you take that transaction from a $5 or $10 call to something like 25 cents," Burgin says. And if your CRM system already tracks customer behavior, it makes the call that much shorter and cheaper.

Likewise, Hewlett-Packard sends customer tracking information, along with a case number, via e-mail to both the customer and the customer service database. That way when a customer needs human help, the agent already knows what the client has been through.

But knowing where customers have been doesn't tell you anything about how they feel. "We don't get to see a lot of our customers face to face," explains Greg McKown, president and COO of Hostcentric, a Web hosting company. "We have to use technology to get their mood."

Hostcentric uses a script it developed to search client e-mail for keywords. If it finds someone who is agitated, angry, or downright irate, it bumps the person up in the help queue. After the customer has been assisted, Hostcentric sends out a follow-up message. "They get an e-mail message saying, 'Here's what we're doing' or 'here's what we've done,' " says McKown. "If they don't think it's enough, they can instantly click a link and reopen the case. We give them the ability to say, 'No, you're not done.' "

Rule No. 4: Reel in the winners.

"Our ideal customer service is not to have to offer any," says Bill Price, vice president of global customer service at Amazon.com. With the right application of technology, customers won't have to call for help. But that doesn't mean you should ignore them once they're problem free. It's the satisfied customers who do the most for your bottom line.

"Before you can offer loyalty rewards to your best customers, you have to figure out who your best customers are," says Mark Kanok, senior product marketing manager at E.piphany. The company's E.5 analysis engine gives you a snapshot by picking through your customer database and identifying patterns. For example, it could tell a telecommunications services provider which customers have been on a service plan for 11 months and are due for an annual renewal. Then it can instantly ping those customers with an offer for 100 free minutes or a discounted renewal coupon.

Saks Fifth Avenue prioritizes customer calls with a system from Aspect Communications. "It enables quicker ASA, or average speed of answer, for everyone who calls," says Lakshmi Bakshi, vice president of global analysis and public relations at Aspect. The software watches out for premier customers and makes sure they hold only for a specified number of minutes-or seconds. "It's not just that the best customers get moved to the top of the line, it's that all customers get routed to the most appropriate agent for their needs," says Bakshi.

Similarly, American Airlines was surprised to find that a small number of frequent business travelers account for most of its business, says John R. Samuel, vice president of customer technology. Now American focuses promotions and customer service on those travelers.

But not all companies want to identify only their best customers. Amazon keeps track of its worst customers too. If you call the e-tailer in a particularly foul mood, be warned -- it will go down on your permanent record.

"Our reps can see your entire purchase history, contact history, everything, all on the same screen in a software package we developed in-house," says Price. "The third version of our system, which we put into place last summer, includes a smiling or frowning face based on the type of contact the person has had in the past." Though Price doesn't say it, you can bet that the reps at Amazon are going to help customers who have happy faces first.

"Mainly frowns go to customers who contact us frequently to complain about refunds and delivery problems," Price says. "Of course, it could mean there's a problem with a carrier at that location -- but it may mean that [the customer is] not being up-front with us about the situation."

Rule No. 5: Predict the future.

Amazon has a four-part strategy for improving each customer's service experience. First, customer service and other managers can be blind-copied on responses to customer e-mail. In fact, Price says the practice "is used very actively" by most Amazon managers. Second, Amazon collects those messages weekly and compiles a report for central managers who compare them to last week, last month, or last year. Third, Price meets with CEO Jeff Bezos and other top execs once a week. Finally, the company collects and creates internal reports using customer e-mail, verbatim notes from conversations, and Jupiter Media Metrix numbers on site traffic. By tracking data from a variety of sources, Amazon anticipates trends.

Hostcentric goes a step further by trying to predict customers' needs before they arise. "We have customers getting Web hosting services for anywhere from $19.95 to $75,000 or higher a month," McKown explains. "We need to be able to keep companies as they progress to the next level of service needs." This serves a twofold purpose: Hostcentric not only takes care of its clients, it creates more business for itself.

"We can see if they have equipment that needs servicing, or maybe they need us to tell them, 'OK, you're growing. Maybe you need a box, or you need to think about moving to e-commerce capability,' " says McKown. "We can help them see what's next for them before they need it."

Joel Enos is a San Francisco-based technology and business writer.

Top 5 Ways to Personalize Customer Service

1. Skip the seven-page registration form. Walgreens notched thousands of new Web customers simply by gathering customer e-mail addresses at its pharmacies. Customers received messages inviting them into their online account.
2. Get rid of the canned sales pitch. In a trial run with Dell, customers were twice as likely to buy when they had the help of Finali's virtual sales rep. Why? It's interactive. Customers can ask questions and pursue multiple lines of inquiry. Tracking solutions keep service calls shorter and cheaper.
3. Test their mood. Tracing keywords in customer e-mail can tell you whether they're waiting patiently or ready to throttle someone. Help the antsy ones first.
4. Reward big spenders. Many companies make most of their money from a small number of regular customers. Keep them happy by stepping them up to the front of the customer service line and offering discounts and promotions.
5. Forecast the future. Web-hosting company Hostcentric keeps tabs on each of its customers and suggests moving to a higher-end solution when it sees a client outgrowing its server. The customer stays on track, and Hostcentric lands itself a more profitable account.

It's Not Spam if They Like It

Online travel service Expedia.com throws e-mail at its customers all the time. Every day, it sends them the newest special fares and promotions. Sound like spam? Maybe so, but customers are eating it up.

Expedia uses E.piphany to track which customers are watching specific flights using the Fare Tracker feature, or whether they've flown that route before. It then sends notices about special offers to only those people who have a strong chance of being interested. Compared to random mass mailings, customer response to the personalized promotions has been sky high.

"With targeted e-mail programs, we have seen up to a 600 percent incremental lift in response compared to untargeted mailings," says Tony Gonchar, Expedia's director of CRM. "And unsubscribes from the targeted mailings were 95 percent lower than before." An added bonus, says Gonchar, is that the customer doesn't have to provide any more information than needed for normal transactions.