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By SmallBusinessComputing Staff | Posted November 01, 2000
by David J. Wallace

A 1997 USA Today poll reported that consumers hate taking their cars to be repaired more than any other chore. Most owners of car-repair companies probably read that poll and saw it as more bad news. Rick Davis, Lynn Graham, and Randy Vanstory saw a business opportunity.

Today, customers who drop off a car with the their company, Joeauto.com, can get free use of a Nextel cellular phone and so avoid phone tag with their auto technician. At its two locations near Houston and Phoenix, customers can watch repairs being done via Webcams in the service bays -- a feature that might put some other garages out of business. In future developments of the Web site, customers will be able to request e-mail notification of prices, parts that require repair, and the time when the vehicle will be ready. They can get a complete electronic file of estimates, work history, status reports, and personalized records for each of their vehicles.

Vanstory says establishing a relationship of trust with the customer -- and with suppliers or other business partners -- is what separates successful companies from the also-rans. Call it customer relationship management or just plain smart.

"The Webcam is the second-most-popular page after our homepage and people hang out there for a few minutes just because of the curiosity factor," Vanstory says. "We're applying technology in an old industry by using it to create solutions."

The first stage of Internet business was simple: The Web became a do-it-yourself form of order entry. But for many reasons, this idea of self-service customer service didn't fly. Now many service companies are working to find their own uses for the Web, ranging from teleconferencing to cut down on travel, whiteboard collaboration, and online appointments and scheduling that create an "electronic paper trail" that can be easily mined for precious customer data.

All these functions have been lumped into the clunky catchphrase "electronic customer relationship management"-- otherwise known as eCRM. It includes not only using the Internet to connect with customers, but also using technology to manage relationships both on line and off. "After all," Vanstory says, "you can't get a car fixed or a medical check-up on line."

What used to be discreet software components from several suppliers are being consolidated into complete systems from companies like Siebel Systems, Aspect Communications, Microsoft, and others. Some systems allow a company to track every client interaction by phone, e-mail, Web site, fax, or in-store visit and then use that data to analyze purchasing patterns, answer after-sale questions, or offer promotional items that are personalized and timely. Along with the information come concerns about data security, reliability, privacy, and other ramifications.

what's in a system?

Joeauto.com has a mission to eliminate "pain points," Vanstory says. That's why the company offers free pick-up or delivery of the vehicle from a home or office, provides hourly car rental for customers who want it, and has an Internet-linked PC in its customer waiting room. He sees technology and customer service as two keys that unlock a pleasant experience, and his company has adopted the mission statement, "Invented not to waste your time."

"It's built around being Web-enabled and all we're trying to do is increase the availability of information in a timely fashion," he says. The technology is used for the customer's benefit, not simply for the company employees' alone, Vanstory says. His company is under 100 employees but plans to expand nationwide.

Deciding what technology to use and what questions need answering can be the most difficult part of addressing the need for new software or hardware. Begin the process with setting goals: What do you want to know? How much are you willing to spend to learn it? What will you be able to do with the data once you collect it? Finally, will the system be able to handle the expected increase in business?

Some small companies can use a simple database or a contact manager to track their client histories. Others require relational databases that can be queried to produce reports on sales, number of days from initial contact to purchase, or countless other details. Integration tools from companies like Aspect Communications, Siebel Systems, SAP, or Microsoft allow companies to exchange information across different database and application platforms -- displaying inventory data from an Oracle system on a Windows-based network in an office thousands of miles away for example. Lower-cost outsourcing companies, application service providers or ASPs, offer software firepower once exclusively available to large corporations by employing a pay-per-use or monthly subscription model.

Instead of stitching together disparate databases purchased at various times, try stepping back to look at whether you have a platform that can grow with the company. That means purchasing capacity for the future if you can afford it and increasing the applications gradually -- adding in an e-mail response system, a database-mining or analysis package, an online appointment service, and time-tracking or expense software.

why crm?

Regardless of the parts you choose, the road to CRM is a rocky one, requiring months of preparation. It can also be circuitous: Questions get answered and create more questions, which require still more data. So know when to say, "Stop!"

Managing diverse contacts and collecting real-time, updated information about the customer and supplier audience is crucial, according to David Fowler, vice president of Kana Communications Inc., which specializes in the convergence of online business communications, now flowing freely via phone, fax, e-mail, Web chat, and even in-person contact.

"It's about a commitment -- you may start with customer service only via e-mail, then extend it to the phones and then into self-service where your company is taking pro-active steps to create a database that offers valuable information," Fowler says. "In reality, it's about how you combine services and allow the customer to interact with you the way they choose. The more you can do to make their lives easier, the greater likelihood that they won't leave you."

That's the theory, anyway. But just having customers isn't enough. If they're not profitable or if you're unhappy with the time they require, the effects can be worse than if you let them go. The real challenge is keeping your most profitable clients and making sure the relationship remains beneficial for both sides. Customers come in three basic flavors: Learn, buy, or service. Companies often lose a sale by failing to recognize those traits. A hard-sell approach to someone who is merely doing research may sour the prospect on a future transaction.

Dissatisfied customers tell between 6 and 12 other people about their experiences, says Rod Lehman, vice president at CustomerCast, a Mountain View, Calif. company that surveys customers about e-commerce transactions. He says small companies that can't afford to put a salesperson on a plane when there's not a pending order should find ways to supplement occasional in-person meetings.

"Our studies have shown that if you ask for customer feedback and then don't do anything with it, customer satisfaction is lower than if you never asked for it at all," he adds. "A lot of small e-commerce companies may have never had face-to-face communications with their clients. They may have a CRM system to process a service request better, faster, and easier, but 40 percent of the time, an issue that is marked 'resolved' may not be settled in the customer's mind."

Looking at transaction data alone can be misleading because it doesn't explain why the sale was completed or if there were unanswered questions left among customers who clicked off to another site. There's a fundamental "perception gap" between the company and its customers.

a shaggy dog story

To overcome it, employees at all levels need to treat a customer's time as if it's even more valuable than their own, advises Geoffrey Bock, senior analyst at The Patricia Seybold Group in Boston. That includes the folks making decisions about Web strategy and those designing the site. Instead of viewing the Web as an order entry or appointment-setting tool, companies need to encourage interactivity with customers to get their opinions. The Web is quickly evolving into a supplemental channel for sales and service -- not a primary method like phone or in-person service.

"In an e-business environment, you want to let customers help themselves and do their jobs by getting them the information they need," Bock says. Things like quality, effectiveness, and satisfaction can't adequately be measured in the online interaction, he notes, so it's important to get that information directly from the consumer. This kind of responsiveness has always been the specialty of small companies, and now even the smallest companies have a chance to expand onto the Web and extend their knowledge about the business. What's more surprising is that many of them are traditional service-based businesses.

For instance, appointment scheduling software services such as Xtime.com and Jacknabbit.com give businesses an easy way to automate an important function, track how their business is doing, and make changes to improve it.

After only a month of using online reservations at Downtown Dogs, a dog daycare and play center in San Jose, Calif., co-owner Kelly Helsing found her business was better than expected. She and her husband opened the center in 1998 and recently expanded it to accept as many as 50 dogs daily. Using Xtime, customers can reserve a spot for Spot on line or cancel at any hour, enabling greater flexibility for the Helsings and their clients.

"Here in Silicon Valley, we see a lot of people who work in high-tech so this is right up their alley," she says. "We require reservations so we can schedule staff and arrange breaks, and we operate on a first come-first served basis. People can check on line and tell instantly if there's been a last-minute cancellation. We open at 7 a.m. and we used to not answer the phone until then."

Downtown Dogs also offers training services and is hoping to expand into grooming, so having the scheduling tools will help ensure that there is enough business to hire new workers or use outside contractors for other services. Other companies might use similar information to set seasonal discounts or surcharges that service businesses often employ (for example, some accountants offer lower rates to tax-preparation clients in February than in early April). Using the results of an everyday interaction as valuable decision-making data is, in the end, what CRM is all about.

Any company can look at its daily business activity and identify pricing strategies to increase profitability. Downtown Dogs learned that Wednesday is the most popular day for people to bring their pets in for a one-day getaway. Using data from its scheduler, it can also look at less-busy days and find ways to increase traffic. On slower days, employees can do the interviews for admitting new dogs as clients and seeing if they play well with others. In other words, the company spends less time figuring out what its customers want -- and more time giving it to them.

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