Response management is a skill vital to winning and nurturing customers. IT gives companies the chance to meet demand efficiently - or to demonstrate an ineptitude that leaves prospects dangling online. David Butcher reports.
A few weeks ago, I tried to get a second telephone line from British Telecom. I went to the web site, registered, found what I wanted and entered my details. The screen informed me that I had bought a second line for pounds 0.00, which seemed odd. Still, it also said I'd be contacted in due course about having my new line installed.
I'm still waiting to hear back. I haven't had a follow-up e-mail, a phone call or a letter. Either the web site didn't work that day or my request got lost in the system. Or maybe BT has decided that there are quite enough telephone lines around already and people should write letters more, like the old days. It's hard to know.
My experience is not unique. Recently, Siebel and Microsoft did a survey to see how well 250 large firms in different sectors responded to customer enquiries. Forty per cent of the firms they researched failed to send requested information following a phone query. Two-thirds of those whose web sites have an enquiry facility failed to respond to messages sent this way. Ninety-two per cent failed to follow up an initial query in an attempt to progress it.
Given the state of the economy at present, you'd expect the nation's sales directors to be leaving no stone unturned in pursuit of new business.
But you'd be wrong. When it comes to handling enquiries from potential customers - any one of whom could go on to spend big money, stay loyal for years and generate substantial revenue - an awful lot of companies, including some of the biggest, haven't got past first base.
Why is this kind of thing so hard? We have to assume that those who deal with this area aren't completely stupid. (No, we have to, otherwise it's too depressing.) But clearly, fielding calls from current or future customers, joining the dots to make sure they get a prompt and relevant response - or failing that, any response at all - is no walk in the park.
It doesn't help that this area of response management is one where several different operational bailiwicks overlap. The sales people should be the ones following up the lead. But the IT people have the data file with the list of enquiries generated from the web site. And the marketing people just ran a promotion and they want to sift the data too. And customer service may be involved - is it a complaint? If the process goes wrong, it's no wonder - there are plenty of cracks for one little e-mail to fall through.
Any of these people can easily take their eye off the ball. After all, they have jobs to do. 'Everyone is busy,' observes Patrick Barwise, professor of marketing and management at London Business School.
'Market orientation is not a natural human condition - customers are a bloody nuisance. The extreme case is architects, who have the reputation of hating and despising the client. But I think you get that mentality in a lot of organisations.'
How can you make sure it doesn't happen in your company? Be honest: if tomorrow a prospect calls your main phone number or requests a brochure on your web site, are you confident your people will follow the right steps to nurse them through to a sale? If so, congratulations, you can stop reading now. If not, your first impulse is probably to mumble some excuses about your computer system. That fancy Customer Relationship Management (CRM) package you talked the board into buying isn't up to expectations, one or two wrinkles still to be ironed out in the implementation.
Yes, yes. But it's no good blaming the technology. That just does what it's told. Or if it doesn't, then that's because you cut corners when you bought it, hired idiots to maintain it or didn't train your staff to use it. Or all three. In which case, you spent six figures buying everyone in the firm state-of-the-art screen savers.
We've all been on the line to a call centre agent who grumbles that 'the system's running slow today'. Immediately, our faith in that company takes a dent. It's worse still when you're on a web site and it crashes after you've filled out a registration form and jumped through a load of hoops.
That company just stole your time and won't be quickly forgiven. This happened to me yesterday on a site belonging to a firm I wanted to research for this article. When I hit 'submit', I got a blank 'page not found' screen. Game over. The company was a web site effectiveness consultancy.
They weren't the only culprits. For the sake of this piece, I did some mystery shopping on several high-profile web sites. So full marks to More Than for answering a fiddly query about car insurance with a quick, personal e-mail. Well done to Saab for getting me a brochure so promptly - well, they sent me two, but let that pass. A black spot for O2's business customer site, which never responded to a query I submitted online. And bottom of the class for ING Direct. I genuinely wanted to open a savings account with this bank, swayed by its pounds 15 million advertising campaign, the one with the lifebelts. On its web page, there's a big button that says: 'Open an ING Direct Savings Account NOW. Click here.' I've tried pressing that button several times over the past few weeks and every time it tells me the page is unavailable. But hey, they thought to themselves, let's not just have crap technology - let's spend pounds 15 million advertising the fact.
I wonder if anyone on the board at ING knows how much a dodgy web site is costing them? (A friend who tried the same site from his computer eventually got it to work, but the first page of the application form took five minutes to load.)
Alan Styler, marketing and strategy director at direct marketing agency EHS Brann, says there's just no excuse any more for slow or temperamental web sites. 'The honeymoon period for online technology is well and truly over,' he warns. 'It's down to the organisation saying: 'OK, how many people are going to use this? How are they going to use it? Right, here's the resource that we need to back that up.' You've got to get it right.
Can you imagine a retailer opening a new store and the front door's two feet wide? 'Oh, that's annoying, isn't it? Yeah, but they'll squeeze through.
The ones that really want to get in here will make the effort.' No, they bloody won't. They'll just stand on the pavement and say: 'Look, there's that stupid shop with a two-foot-wide door.' They're not interested in: 'Well, we've had terrible problems with our servers and do you know how many gig ...' - I don't give a stuff. You can either offer it or you can't.'
Doing what it takes to make the technology function is step one. It's a necessary condition for success. But it's not enough on its own. Buying a fancy CRM package, for instance, won't make bad salespeople magically good. 'All that CRM does is automate your process,' says Patrick Joyner, chief executive of the Institute of Sales & Marketing Management. 'If your processes are not good, then using CRM technology is just going to make you bad more quickly. Ultimately, it's about the people. Companies buy systems and think that the technology is going to solve all their problems, but selling is still an interaction between two people.'
It sounds obvious, but it's a point worth repeating. Any system is only as effective as the people inputting data or acting on the leads it feeds them. If your people are undermotivated or undertrained, your customers may just be able to sense it, however cool your software is. 'If you've got somebody sensible on the end of the phone who knows about the product range and has some common sense, that's half the battle,' says Richard Downes, customer marketing manager for BMW. 'Keep it simple and do the basics right. It's about making sure a customer is sent the right brochure; if someone wants a price, making sure that's available; having a web site that's easy to navigate and has the right information. It's the old Keep It Simple, Stupid. All the hype about CRM misses the point that customers just want to be treated well. So get some very good people to answer your telephone enquiries. We look for the best people around and we train them and we hang on to them. That human touch is very important, especially with a high-value item like a car.'
BMW GB installed a brand-new CRM system a couple of months ago based on the Clarify package but modified by BMW itself, and it has made the lead-tracking process much smoother for its dealers. But in developing it, Downes and his colleagues had to keep pulling the process back to the way people actually work. 'The technologists and consultants got very carried away and we had to keep giving them a reality check,' he says. 'Just because you can do something doesn't mean you should. It's so easy to become systems-led rather than business-led. 'Hey, we can put together an accessory configurator for every car over the last 20 years!' It seems like a great idea but in practice, there's no point.'
To spot these potential red herrings, you need to be looking at everything through customer-tinted spectacles. 'People think of customer focus as being about focusing on your customers,' says Joyner, 'but the best customer focus is not staring at them more closely, it's seeing things from their side of the transaction.' Virgin Mobile, for instance, gets its own staff to submit e-mails or write letters or make call-centre queries, to make sure the response process is working as it should. And it employs students to trawl online chatrooms and report back on any complaints circulating there.
It's part of a culture that has won Virgin Mobile several awards, including last year's MT/Unisys Service Excellence award. Andrew Ralston, customer relationship director, believes an important element of that culture is empowering staff to take decisions off their own bat - say, to compensate a customer with a credit on their bill. 'It's about making sure they know that if they make decisions, the company's there to back them up. Too often, people take a decision out of fear of getting it wrong. We make it clear a customer service agent can give a credit to the customer. They'll have to escalate that if it's a significant credit, but they have the backing of the company if they feel it's necessary.'
But supposing the customer who's contacting you is part of the chunk of your customer base on which you lose money? How can you tailor your response accordingly? It can be an acute problem for banks, for whom the profit they make from the top 20% or so of customers is generally the same as their total net profit. The middling customers on whom they make a small profit cover the losses they make on the quite large number of unprofitable clients.
Barclays Business Banking deals with this using a system it calls value-aligned performance management. This gives customer- facing staff information and prompts on their screens relating to a particular customer's circumstances, so the gist might be: shave a bit off the interest rate - this customer's worth buttering up. 'It allows us to identify where profit comes from, and consequently it allows us to tailor lending, and to tailor prices,' says Barclays' Alistair Smith. 'It gives our staff the information they need for when they're having negotiations with customers.
'At the simplest level, if you want me to reduce the price of something that I sell you, and I can put that in and see what it means for continuing value, then that's an extremely useful tool.'
This was always the promise of CRM technology: that it would enable salespeople to move from being hunter-gatherers to being farmers. Instead of casting around for new kills, they would nurture their livestock, lavishing attention on loyal, profitable custom- ers and increasing their value. It's beginning to happen at the most advanced companies. When it does, we can look forward to a level of service based on our value to the company. Firms will no longer devote time and effort to pursuing unpromising leads or handling complaints from time-wasters, because the call-centre agent will have a prompt on his screen that tells him to end the call fast.
From a customer's point of view, this is a gloomy prospect. It's fine if a car-hire firm gives me a big discount because I use it every week, but when insurance companies start turning down my business because of where I live, it's a worry. LBS's Barwise sees a sinister trend. 'The dark side of it is that if companies do have a better idea of customer lifetime value, then it will tend to be the older and poorer customers who have negative LTV. So there'll be more of an underclass, and service organisations will not want to work with them. Once the reality catches up with all the rhetoric of segmentation and lifetime value, who's going to look after all those folks who the market doesn't make money out of?'
< BE A LUCRATIVE LISTENER How to avoid losing leads in the web 1. Replying to customer enquiries is an opportunity, not a chore. Reward staff for doing it. 2. Don't assume that real customers will always use the phone. Every unanswered e-mail or neglected web response form is a sales prospect that you've just handed to your competition. 3. Mystery shop your own site and systems regularly. It's the best way to find out what it feels like to be one of your customers. 4. If you've got a CRM system, make it sweat. Too many companies invest big money in new technology only to see it gathering dust a few months later. Make sure your team is trained in what the system can do for them and give them a solid incentive to use it. 5. Good salespeople want to be helpful. Are your business processes making that difficult? Give them the autonomy they need to do the job you want done. 6. Soft-pedal the hard sell. When cutting a deal, there's a time to stop talking and listen. Make sure your team spends time on 'receive' as well 'transmit'. 7. Make a service commitment and deliver on it. Replying to enquiries promptly and well is the best possible start to a customer relationship. WE'LL GET BACK TO YOU Responsiveness to initial sales enquiries: By telephone 60% By web site response form 44% By e-mail 26% Of those who responded: Average response time 4.6 days Personalised letter sent 53% Post-response telephone call 8% Base: 250 UK companies in the insurance, retail finance, communications, utilities, and manufacturing sectors SOURCE: SIEBEL SYSTEMS/MICROSOFT/RDMP SURVEY, JUNE 2003