Balancing Customer Needs and Channel Costs
Channel investment decisions are based on understanding two things: what value a channel offers to customers and at what cost. Channels must be evaluated in terms of their value proposition to customers and their costs to the company. Additionally, channel investments must be made with a strategic objective in mind, such as growing market share for a particular product or increasing overall revenue. Many managers have too quickly decided that a lower-cost channel must be more profitable and, therefore, all products are driven through that channel.
However, cost alone is a limited method of assessing channel strategy. A more thorough analysis should answer the following questions:
- Will the lower-cost channel effectively deliver value to customers?
- What type and proportion of customers will migrate to the lower-cost channel?
- Will the order or deal size be affected?
- How much will it cost to educate customers?
- Will the more expensive channel still be needed to serve some customers?
Enhancing the Customer Experience
Traditionally, companies operated under the assumption that building the best product was the key to gaining market leadership. However, with increasing product "commoditization" and increasing demands on customers' time, companies are realizing that how they market to, sell to, and provide service to customers is just as important as what they sell. Customers demand the ability to conduct business with an organization on their own terms, and they do not want to have their time wasted by inefficient company processes.
To meet customers' increasing demands, companies must take a couple of key steps toward enhanced customer satisfaction. First, they must provide customers with self-service options. Customers should be able to visit a company's Web site at any time to check the status of a service request, reorder a product, or resolve a billing inquiry. Providing this type of service not only increases customer satisfaction, but also lowers a company's customer support costs.
Second, companies need to ensure a seamless experience for customers across all channels. For instance, if a customer is trying to place an order online and encounters difficulties, the customer should be able to call a customer service representative and pick up the transaction where it was left off on the Web. A customer-centric organization will have this capability, while an organization that is not customer-centric might ask the customer to begin the transaction over again with the phone representative, wasting the customer's time and the company's money.
Well-Defined Business Processes
Automating an ill-defined or inefficient business process will only accelerate the pace at which an organization achieves poor results. A CRM strategy, therefore, must focus on redesigning customer-facing processes based on the perspectives and needs of the customer.
Each of these processes needs to be examined-not in isolation, but in terms of the way they are linked to other processes. Consider just three processes that are often poorly defined in the development of a CRM strategy: lead management, call routing, and service-ticket tracking.
Managing Leads
Lead management is the process of generating and or identifying a lead, qualifying that lead, and converting the lead into a sale. Within a multichannel system, leads may come into an organization from any number of sources: field sales, the call center, field service, a partner organization, or the Web. Given this complexity, organizations must clearly determine which person or department is ultimately responsible for closing leads, because this determines how leads should be routed. The organization also needs to determine how to define a qualified lead. Without a clear definition, leads of poor quality will be routed to the people responsible for closing them, resulting in frustration and lost sales productivity.
Call Routing
Many businesses-especially those organized by line of business-have not defined routing processes that can readily direct inbound callers to the most appropriate response person. The negative results include delays, frustrated customers, and abandoned calls. Therefore, before implementing CRM technology, organizations need to define optimal routing processes. Ultimately, a customer should be able to call into any point in the organization-from the front desk and the call center to the technical services department-and be routed to the appropriate person without being disconnected.
Service-Ticket Tracking
It is imperative that companies have clear business rules for managing inbound service requests. These rules should define exactly how resources will be dispatched to fix a customer's problem and how status updates will be shared as the issue is being addressed. In many organizations, call center representatives are unable to track the progress of work being done by field technicians. This makes it impossible for them to keep customers apprised of a service-ticket's status. The processes for sharing service request information should be clearly defined before automating those processes with CRM technology.
