Policies and Procedures – Page 100 – IS Survivor Publishing

How good service pays off

When Communications Systems reported to me, we divided our data business into four areas: Networking equipment, servers, desktop equipment, and desktop support.

Our first two server vendors just didn’t work out — when asked why they delivered a server with no cable to connect the disk drive and controller, the sales rep from the first vender answered, “That’s how you ordered it.” The second vendor was even worse.

Each time our preferred provider messed up, we called the sales rep for our desktop vendor, who got us up and running on both occasions. So I called a staff meeting and asked, “Is there any reason to re-compete this business?” Nobody saw any reason to go through the effort to make another guess at who might support us well when we already had the proof from a vendor we already knew.

I mention this because of last week’s column about First CEM Bank, which wouldn’t accept just some business from a mid-sized retailer. It needed to start with a “deep relationship” or it wasn’t interested. Unlike FCB, our desktop vendor understood that deep relationships are earned. Fortunately, it isn’t the only one.

So I got off the plane, took the shuttle to Enterprise Rent-a-car (that week’s lowest rate on Travelocity) and approached the desk. The young lady behind the counter finished in roughly a quarter the time I usually spend at a car rental counter and pointed me to where I was to pick up my car. As I walked up, a man with a clipboard greeted me: Enterprise located its printers where the cars are, not behind the desk, so everything printed while I walked, not while I waited. Smart.

The man with the clipboard showed me my car, reviewed it with me for damage, and asked if I traveled much. When I told him I did he provided a card with a telephone number so I could arrange for a corporate discount.

Hmm. Less waiting, personal attention, and they actually asked for my business. Very smart. Also unique. So long as their rates are competitive (not necessarily lowest, but competitive) they have it.

So I bought a Minolta/QMS magicolor 2300 DL printer. It printed great, but I couldn’t reach it through my network. I called tech support, and after a very short wait spoke with a guy who recognized the problem and immediately escalated my call, without my having to ask. The technician he reached told me to buy a cheap hub to sit between my router and the printer. If that fixed the problem, he told me, Minolta would send me a toner cartridge to keep me whole financially.

Two days later he called me … that’s right, he called me … to make sure everything was working right. Two days after that the toner cartridge arrived on my doorstep.

So I recently bought a new laptop computer — a Compaq Presario 2500 — from Best Buy. It worked fine, except the internal wireless adapter wouldn’t connect to my D-Link wireless access point. After two hours on the telephone with one of Compaq’s support technicians — a personable and knowledgeable woman — we agreed the Presario’s 802.11g card must have a subtle incompatibility with the D-Link. Since I’d bought the system from a retailer, she suggested I work with them, rather than having to ship the laptop to Compaq for service. Good idea. Thanks for a great effort.

But first I contacted D-Link. Two other wireless adapters connected to their wireless access point just fine, I explained — any ideas about what to try with my Compaq? D-Link’s e-mail tech support, unlike that of some other companies I could name, is provided by actual human beings, who suggested three possible avenues to try, even though it really wasn’t their problem. None worked, but they tried. Very much appreciated.

Which brought me to Best Buy’s Geek Squad. I explained the situation to one of their technicians, who unboxed a new 802.11b wireless access point, hooked it up to one of their computers, and demonstrated to our mutual satisfaction that my system’s wireless adapter was working just fine — the problem was, in fact, an incompatibility between it and my D-Link unit. “That’s what I expected,” I told him. “So here’s my question: Whose problem is this — mine or Best Buy’s?”

He promptly called over a manager and explained the situation. The manager then asked me how I’d prefer he solve it. “If you’ll give me a wireless adapter to plug into the PC Card slot, I’ll be happy as can be,” I answered. Which he did.

Every one the companies mentioned in this column has made a conscious decision to provide a great customer experience, figuring it will pay off both in direct additional business and word-of-mouth marketing. Does the strategy work?

I guess it does: They have my business, and you just read this column.

CEM yet again

I’m not in the mood to write a new column this week. So you get to enjoy a re-run, this time one inspired by my father, who first coined the term “Customer Elimination Management” among many other great turns of phrase.

Dad, this one’s for you.

– Bob

* * *

Ready for some Customer Elimination Management (CEM) — the term coined by soon-to-be Direct Marketing Hall of Fame inductee (and father of yours truly … congratulations, Dad!) Herschell Gordon Lewis to describe Customer Relationship Management’s evil twin? Have I got a story for you. It’s about a growing, privately-held retailer dealing with, as the retailer’s controller put it to me, “one of the nation’s largest bank systems, soon to be shrinking if this continues.” Call it First CEM Bank (FCB).

The retailer was expanding into a new market where its primary bank couldn’t provide deposit services. FCB could, and another FCB branch had previously contacted the retailer expressing strong interest in providing a different service, so the controller called them to make the arrangements. FCB responded by asking for a great deal of financial information. None was relevant to a depository relationship (the retailer wasn’t, after all, requesting a line of credit) and all was inappropriate for a privately held company to disclose unnecessarily. When the controller declined to provide the information, FCB declined his business.

The retailer’s business could have been significant, as its primary bank’s reach is incomplete. The controller, wanting to be fair, and also incredulous, pursued the discussion to make sure there was no misunderstanding. Here’s the response — paraphrased to disguise identities at the request of the retailer’s controller:

“I am pleased to respond to your query, as you’re asking legitimate questions. When we spoke you informed me your company was unwilling to provide financial statements. We like to establish deep comprehensive relationships. Providing us financial information about your company is a prerequisite to opening a dialog. I suggest you work with another bank, which should be able to handle your request.”

The controller told me that yes, another other bank was very happy to talk to him, and they are now discussing the possibility of expanding their relationship beyond the original services and market.

Ready for the best part? FCB has received a lot of ink over the past several years for its advanced and innovative implementation of Customer Relationship Management.

You knew that was coming, didn’t you?

How can this kind of corporate stupidity coincide with a strategic focus on CRM? It’s easy. All that’s needed is leadership that holds employees accountable to a system of well-defined metrics, and a clearly stated set of corporate policies designed to drive the metrics forward.

All that’s needed, in other words, is to follow what most management consultants consider best practice for well-run companies.

Here’s how I’m guessing it worked at FCB. CRM focuses on a measure called “Customer Lifetime Value” (CLV) (sometimes called “Lifetime Value” or LTV). It’s an estimate of the discounted value of all future cash flows expected from an average customer or class of customers. I’d bet FCB’s focus is on increasing CLV, its strategies for increasing CLV are based on one-to-one marketing that requires extensive customer knowledge, and its corporate policies require that knowledge early in a business relationship, figuring no knowledge leads to no marketing leads to no increase in CLV.

Which is to say, FCB started with the right idea and promptly forgot that good customer relationships aren’t built on marketing and customer coercion. They’re built on earned mutual trust, with an emphasis on “earned.” Marketing becomes communication, which includes listening alongside the personalized sales messages. The numbers? They follow as a natural consequence. As is so often the case, trying too hard to move the measure results in damage to the business.

As head of IT, you’re going to be in the middle of your company’s CRM implementation. And you’ll be tempted to encourage an emphasis on those aspects of customer relationship management that center on information technology. That’s fine, to a point. It’s easy, however, to tell when you’ve gone past that point.

It’s when the numbers and information technology take precedence over your company’s customers.