As You Like It
- 08 June, 2005 15:38
Consistency is not the hobgoblin of little minds; it is the essence of the multi-channel customer interface.
Little Britain, the cult British comedy series, features a character too many people have met in real life. It is the middle-ranking bank officer who produces, then enthuses over, marketing material selling a personal loan or a mortgage. However, when the banker inputs the would-be clients' details into the information system she turns and tells them: "The computer says no."
Thirty years ago it would not have been like that. The bank manager would have known you and your banking history intimately, he would have been able to make a value rather than arbitrary judgment. He would probably have said yes. That is customer service.
Delivering not only good but consistent customer service is easy to do when you live in a village where everyone knows one another. In the global village it is much harder. But it can and is being achieved by forward-thinking enterprises.
These are the enterprises that have realized their branch managers need technology to support (not replace) their decision making; that their organizations also interact with customers online, through call centres, via interactive voice response systems, at vending machines and through franchise operations. At each one of those points these smart enterprises know they need to delight the customer to keep them. They know that even if the customer is generally happy online, in the branch or speaking to a call centre operator one bad experience in voicemail hell and the customer may walk.
Delivering good customer service demands a rich, systemic approach to managing all the touch points between company and customer.
Jeffrey Rayport and Bernard Jaworski, founding members of consulting group Marketspace Global, are the authors of Best Face Forward, a book published in January that looks at how technology is both revolutionizing and humanizing service. However, they warn readers that this requires sensitive management.
"[The] cost and complexity of interface proliferation can create unmanageable collections of touch points for companies while resulting in confusion for customers. That's why we see this as an issue that must be subjected to systems thinking. Unless companies operate their interfaces as a system, the interfaces can become a liability," Rayport says. "Every interface, no matter how seemingly trivial, now represents the expression of the firm's brand and reputation. Managed well they allow companies to lower costs while increasing value to customers; managed poorly they can do the opposite a true double-edged sword."
The whole thing can topple as "an interface system is only as good as its weakest link". This is not a place to cut corners. Rayport says that most weak links seem to occur in the hand-offs from one type of interface to another human to machine, branch office to online, Web site to call centre. It is not so much a dodgy interactive voice response system that wrecks things but a failure to take a systemic view of the interface mesh. This throws up a challenge for CIOs who have to install and manage the technology infrastructure because IT cannot hope to secure a systemic vantage point on its own.
"The kind of changes we recommend to the way companies manage the customer experience requires an overall alignment of strategy and execution that touches all faces of the organization," Rayport says. "It's because it's so major that our sense is that it must be driven from the C-level across the entire firm not relegated to particular silos in the marketing and sales organization as is often the case in many organizations. Indeed considering all interfaces with customers as important empowers the entire organization to deliver at the highest quality and helps bring the culture together."
The ABC Goes Digital
Managing the web of interfaces and reviewing how customers and staff use them must be a cross-discipline task requiring cooperation of marketing, technology and human resources just for starters. It is not an issue that can be quarantined as something fixed either in the back office or in the front office. It requires a more holistic management approach.
It is something that the national broadcaster is tackling.
Colin Knowles is the ABC's executive director of technology and distribution. As such he has oversight of both the broadcast network and the IT network. It makes sense since the distinction is blurring as broadband technologies make their way into the IT space. A further blurring has occurred thanks to the recent launch of the ABC's digital television channel, ABC2, which has given the national broadcaster the opportunity to create new ways of communicating with the public, and to repackage existing content and distribute it in different ways. It is a model that Knowles expects will gather pace in the future.
So now with the digital channel, the ABC meets its customers in even more places through TV, the digital channel, radio, in its enterprise shops, online and through call centres. Once 3G telephones become widespread, expected from July this year when Telstra, Optus and Vodafone join the other company in this space, 3, to provide third-generation telephone services, there will likely be yet another interface to the ABC.
The "creatives" in each division are responsible for the look and feel of the different customer touch points; Knowles's job is to make sure that the technology can support them. Between them they create the customer experience. Forming a bridge between the creatives and Knowles's team are technology specialists in each business unit.
Rob Garnsey is one of those bridges, as head of systems new media and digital services for the ABC. He describes a very collaborative approach with weekly meetings between the creative teams and the IT team ensuring both know what they are up to. "We recently redeveloped the way people contact the ABC with questions or complaints," Garnsey says. "Our corporate affairs group worked with new media and IT to set up a Web form. Using that, people can send comments via e-mail, from where they are imported into a call management database," from where they are distributed to the most appropriate person in the ABC.
The call management centre uses the same system so that there is a consistent "feel" about the interaction. This is useful for the ABC viewer or listener, but also provides prompt audience feedback. It can also be used to gauge patterns of interaction identifying how audiences shift between the ABC's different outlets such as TV, radio or online. Some of that feeds into the back-end information systems.
"We have audience response units where we capture the incoming call information, we capture all e-mails that come in and information from the Web site. So we capture various statistics about the audience and identify when we get a new unique customer. We have not got a fully-fledged CRM in place as they are too damn expensive. But we do have a system so that we know if Mr Smith called and it's his 430,000th time. He might tell us about a problem and we might be able to fix it," Knowles says.
The ABC's "CRM lite" is important but remains just one element of the mesh of technology and interfaces that delivers the entire ABC experience.
On the content and creative side of the relationship at the ABC is Lisa Mitchell, manager of marketing and communications for new media and digital services. She sees the development of the ABC's online systems as an opportunity to foster online communities. "We see this as an extension of the opportunity to engage with content," giving ABC's audience a greater opportunity to interact with program makers and to some extent steer them. Mitchell says this is important given that more than a third of the population is 25 or under and have changing needs. This group, she says, sees television as less important than the ability to multitask perhaps accessing information online or from their phone.
With ABC2, the digital channel, Mitchell says it will be possible to package content more flexibly so that you can have a half-hour show, content from which can be moulded into a one-minute broadband transmission. Great ideas but resource intensive.
As head of systems new media and digital services, Garnsey acknowledges there can be some tension in the marketing/IT mix. "It often comes down to a question of resources, in a situation where resources are not abundant," he says. "On the one hand the creative and imaginative people come up with new ideas, while on the other hand the technology providers are struggling to provide a service at a satisfactory level to support them. To an extent we're the ideas policeman."
The Buying Experience
Availability of resources will ultimately decree how much can be invested in anything. But the customer interface is not a place for parsimony. A cheap interactive voice response system that creates hurdles for customers will ultimately lose customers and that makes it a very expensive interactive voice system. Far better to invest in superior interface technology that customers enjoy using and continue using.
Francis Buttle is professor of marketing and CRM at Macquarie Graduate School of Management and he believes that as companies get larger and more remote from the markets they serve then the role of technology at all the touch points becomes much more important. "Technology is a function of size and remoteness," he says. Yet Buttle says not many traditional company marketing departments understand these things. "The notion of customer experience has only been around for four or five years."
Joe Pine and Jim Gilmore wrote their book The Experience Economy in 2000. It suggested that in a competitive world, consumers would make purchasing decisions based on not just what they were buying, but also the experience of buying it. The authors have now gone a step further and are promoting the notion of a new breed of C-level executive the so called CXO or Chief eXperience Officer.
Supporting the CXO will be the CIO, who will be called upon to create the infrastructure and manage the data. And the CIO will need to deliver not just sectoral best practice but cross-industry best practice, as Buttle believes that consumers will demand industry sectors to match one another. "Customers will begin to compare the experience in one industry to that in another," he says. "If I give a package to DHL I can then use the technology to find out where it is. Why can't other service providers do that? How come bags get lost on aeroplanes?"
The challenge will be compounded as companies expand the number of touch points. For example, a retailer might have a home shopping channel, with a call centre, and it might have an online presence and stores. Buttle confirms that, "consistency of the experience is phenomenally difficult to achieve, but if you create a good experience, which is consistent, then word of that will spread". In Australia, he says, there are some organizations that are cottoning on to the power of the experience. He nominates airline Virgin Blue with its "fun" approach and hardware chain Bunnings as the two obvious pioneers.
Virgin Blue declined to be interviewed for this article, and Bunnings's general manager of IT, Rodney Boys, while "flattered" that Buttle had selected the company, felt it was a bit premature to speak about the company's efforts. "We do have some initiatives and know where we'd like to end up." However, with those developments expected over the coming three years, Boys said he was not prepared to go into detail for another 18 months.
Nevertheless, Boys did say that the Bunnings culture of having a very customer-centric focus would be core to the new plans. It is not hard to imagine what might be on Bunnings's blueprint: it already hires tradespeople as salespeople in its stores. You can buy your products from someone who has used them professionally. What if they were supported with handheld computers that acted as a wireless catalogue detailing every product available, prices and stock levels? What if these computers could also be used to generate a printout about how to use the product while the customer was standing there?
What if customers were provided a handheld device when they entered the store that allowed them to find items they wanted, and calculate how much they needed for their job, and even provided a list of all the tools and equipment they might need for a specific task? Bunnings's Web site is presently non-transactional, although it is loaded with information such as an index of local stores, DIY guidelines and a paint calculator that lets you work out how much paint you need for your rooms. What if customers were able to order online, or on the phone?
Bunnings is not alone in keeping its cards close to its chest. Retail giant Myer, which has been struggling to rebrand itself and ramp up sales, also has initiatives planned over the coming few months but is not prepared to announce them yet. In February, CIO Peter Mahler said that Myer, and parent Coles Myer, would be looking to better exploit its marketing database and the data from seven data warehouses that feeds it. But a spokesperson for the company was not prepared to go into more detail about its plans or the way the company would use technology to support service.
If Bunnings and Myer are not yet ready to talk, Taxis Combined will not ever talk. It runs the largest fleet of taxis in the southern hemisphere. It offers a range of customer touch points, from the online site to the call centre and in-cab, all of which are underpinned by interrelated information systems. The company says the information systems that it uses to support all its customer interactions are "pretty much the competitive edge, so we don't want to talk about them".
If Rayport and Jaworski, Buttle, and Pine and Gilmore are correct, such reticence may be wise. This could well be the new frontier of technology's ability to deliver competitive advantage.
Car rental company Europcar hopes that is the case. The company acknowledges that one of its greatest challenges is getting close to and then staying close to its customers.
General manger of operations Eoin Macneill has a wide range of customer interfaces to manage already. The company has an online site, booths at airports, major city rental offices and a call centre all relatively easy to navigate. Many car rental Web sites make you feel like you are clearing hurdles before being allowed to hire a car. Europcar's site feels more like being offered choices. Similarly when customers telephone into the call centre, after a couple of automated queries calls are rapidly directed to a human operator.
The back-end systems that support these front ends "remember" clients' details not just the details of people locked into particular rental programs. They appear more robust than those in the Little Britain bank and seem bent on keeping rather than losing customers.
Europcar, which is now embarking on a major push into Asia, is currently refreshing its systems in order to build on that base, creating an online reward program for both its customers and the travel agents that sell its services. The company is also working with Unisys to look at its customer demographics. "We are looking at where they live, where they rent cars, and so on. It allows us to more intelligently interact with our customers," Macneill says. "It's also useful for predictive modelling."
When Macneill better understands his customers he will be able to decide where to put new billboards or advertisements.
CIO Scott Allen joined the company in August 2004 after working as a consultant. He is firmly convinced that getting the customer interaction right is not just about having back-end data crunching systems but also the right look and feel. "That's incredibly important. In the past there had been a Europcar banner but not much more."
A seamless interaction was key. "It shouldn't matter which channel they contact, they should receive a similar reception and step through a very similar process, and you get that from a collection of CRM, Web front ends and store front systems," Allen says. Besides creating a strong booking experience, Allen wants to complement that with a complaints system, closing the feedback loop. Without that, it is not possible to view a true picture of a customer, he believes.
Allen believes that in this multi-interface environment the onus is on CIOs to really try to understand what the marketing people and general managers want to achieve. In return they should be prepared to learn from CIOs how new technology can be used to update processes.
"Today we do a lot of cardboard point of sale marketing, so I'm thinking: Well, how can I deliver that through the Web? How do I deliver that message from the call centre? You may end up with LCD panels on the walls of the sales offices. So if new offers are sent out by headquarters they can be displayed immediately.
"This is a very volatile environment, it's very easy for rates to change and we need to compete. You need a very dynamic point of sale," Allen says. "I see my role as providing the mechanism to get that out in the marketplace." He has a proposal in with his management team at present to develop a concept store of the future that will allow him and the marketing people to test his prototypes.
Besides acting as a vehicle for better marketing, Allen sees the information systems as a good way of imposing control and order on the Europcar franchise network. "We don't make the IT infrastructure optional. It brings us an element of control. I don't like using the word, but we do dictate the process."
In Europe the parent company has become the number one car rental company, Allen says. "The company saw customer service as their number one priority and technology as the key facilitator. It's a fairly strong example that their investment in technology is what has put them at number one."
In other words, Europcar recognized that to win they needed to be part of a world where "the computer says yes".
Where There's a Will There's a Customer
Be warned: pandering to the whim of the customer will only offer an enterprise benefit if the business itself is in good shape. Good relations with customers will not rescue an ailing company, but they can make a good company great.
Boston Consulting Group senior vice president George Stalk believes fancy marketing and coddling the customer can only benefit a business when it already has a sustainable competitive advantage. "The game being played in today's global marketplace is hardball. Companies that fail to recognize that fact or simply lack the requisite killer instinct will soon find themselves on the sidelines," Stalk says.
Last October he and co-author Rob Lachenauer published their book Hardball, which says that companies need to remain obsessed with making their company successful where success is measured in profits, growth and market share. While customer service is an important part of achieving growth it cannot in isolation deliver the goods.
Stephen Brown, professor of marketing research at the University of Ulster, agrees. In a recent interview published in Boss magazine, Brown noted that while marketing executives were happy to "chant the mantra" about being customer-centric, if everyone did it then there would be no competitive edge.
While companies such as Bunnings, Myer and Taxis Combined believe there is competitive edge in being one of the first to adopt this customer-focused approach, Brown is not sure that alone is enough or, perhaps, even too much of a supposedly good thing. Long term he wondered whether customers might actually get sick of being too close to their vendors. "The traditional marketing approach advocates servility, pandering, abasement, oily obsequiousness and what have you. We're creeps basically," he stated.
"We peddle an unattractive mix of pseudo empathy, pretend intimacy and fake friendship. I suspect most customers yearn for the days when purchasing a bar of soap didn't mean entering into a lifetime value relationship."
When Remo's bricks and mortar store collapsed, the company reached out to its loyal customers online - and is now reaping the benefits
Sydney-based retailer Remo has been one long adventure in customer interfaces. The concept store was set up on Sydney's busy Oxford Street by Remo Giuffre in 1988, and until 1995 was very much a bricks and mortar business supplemented by a catalogue.
Although it was a traditional retail model, Giuffre tweaked it even then. The products were high quality, but often quirky. The catalogue was even quirkier, and quickly became a must-have item. Giuffre fostered interaction between the store and customers, placing suggestion boxes and feedback forms in store and catalogue. Even then he was "trying to create a customer community". Formerly a lawyer with Baker & McKenzie, Giuffre had studied for an MBA at Colombia University before returning to Australia in 1987 and finding a derelict store ripe for a makeover. From then on, he says, "I became an accidental strategist, and I approached retailing as communications".
Giuffre says when he met Randy Komisar, one of the authors of The Monk and the Riddle: the education of a Silicon Valley entrepreneur, and explained the Remo concept, Komisar said: "It sounds like Remo was an online brand before there was an online."
By the time there was an online Remo, the store was in financial trouble, Giuffre admits. "It closed in 1995. It grew too fast. There was too much ying and not enough yang. There was a dearth of information systems and [we] had a succession of general managers that put in new systems," none of which delivered what was needed.
Giuffre headed overseas where he worked as a brand consultant until 2001; but in the back of his mind remained a notion. "If you create a network of customers then the customers buy into the brand and become increasingly loyal to the brand. When that happens you arm them with tools to spread that and evangelize the brand," he says.
The Internet facilitated it.
The bricks and mortar store had already generated a loyal customer base addicted to Remo products. When Giuffre raised enough angel seed money to create a Web site it was to offer a non-transactional site for the "orphan customers" to register interest and say which of the Remo products they wanted back first. He started off with 90 e-mail addresses.
Today there are 12,000 Remo customers who access the Web site. It became transactional in July 2003 when the first of those requested items went on sale. But it is still a small business, and with turnover of less than $1 million, Giuffre says, it is "marginally profitable".
While the technology is crucial, Giuffre himself is more interested in the philosophy than the technology, hiring developers to work with him on an ad hoc basis when he needs to update the system. Not surprisingly, he believes his approach is the right one. "I know it's possible. Look at Amazon and eBay, the ones that understand the community. I'm not interested in anonymous relationships with people that buy from me."
It is not well understood by traditional retailers though, he says. "DJ's [retailer David Jones] greatest asset is their untapped reservoir of customers. Their staff come and go, but the customers are still there. To see the Internet as just another sales channel is to miss the point.
"Yes it's low cost, but it's more about the interactivity in a relatively frictionless way and retailers that understand that will win. It's scary to managers because it sounds disempowering, but it's not. It's not as anarchic or democratic as it seems; you can lead people.
"For example, we sell a fringed beach towel. We asked which colours should we add to the range and a high proportion of people voted. Based on the votes, we chose the five colours to do, and then closed the feedback loop telling customers what we've done. That, he says, generates a loyalty and customers reward that by buying the fringed towel in "their" colour. Besides building loyalty, Giuffre says it dramatically reduces development expenses because you have already got customers telling you what they want.
"This is a different model. Your primary source of new customers is via your existing delighted customers. In a way it's a very old fashioned approach of making the experience great and then giving them one-click ways to tell their friends."