When used well Customer Relationship Management (CRM) can make a compelling business case as it directly touches your customers. CRM assumes customers to be the center of the enterprise and aims to win their trust and respect. It entails a high understanding of customers, envisages ways of interacting with them to make processes more efficient and provides feedback to improve services that can make the customer happy.

The CRM strategy of an enterprise encompasses business strategy, business applications, contact centers and IT infrastructure. Yet, over the years, organizations have been forced to acknowledge the importance of contact centers in the CRM strategy. While there has been a large shift in the contact-center market because of outsourcing, offshoring, convergence of self service, privacy and compliance regulations, contact centers continue to be the interface of a firm with its customers.

By and large CRM has not delivered on its promise with numerous instances of failed initiatives and abysmal satisfaction levels. Failure results from viewing the contact center as being a cost center, an inability to mine data effectively and gaps in systems and processes. Yet, organizations are entrenched in CRM strategy and continue to invest time and money to harvest its benefits. 

As with any business strategy, the CRM strategy of an enterprise needs to be dynamic. There is nothing like a perfect plan and each organization has to constantly tweak its strategy to suit its current and future needs. But the fundamentals of all business being the same, all businesses are impacted by the same factors at any point in time. So while specific initiatives may differ from industry to industry, the dominant thought pattern is likely to be the same in the CRM strategies of companies.

LINKING CONTACT CENTERS TO BUSINESS STRATEGY
 Despite the business case for a CRM strategy and the relevance of contact centers,   organizations continue to see contact centers as a necessary cost. Fifty-seven percent of  businesses view contact centers as cost centers in 2006 and only 12% view them as profit centers based on sales revenue taken through the contact center or converted leads generated through the contact center, according to Data Dimension’s Global Contact Center Benchmarking Report.  

The downside of the contact center being a cost center is that organizations simply concentrate on getting cost reduction and look at process efficiencies, largely neglecting the opportunity to actually connect with their customers. Savvy organizations view customer interaction at contact centers as a part of their overall brand experience and use it as an opportunity to offer more to customers. For instance, when customers call in to the contact centers, based on the customer profile, the agent could increase business by up-selling and cross-selling products and services — the measure of success being repeat business over time. This requires a unified view of all channels of customer interaction so that the agent is fully equipped to deal with the customer when the call comes in. Such technology decisions, however, require huge investments as technology has to be integrated with the organization’s infrastructure that may also have a few legacy applications. This is possible only when the business vision of the company is aligned to its contact-center strategy.

By and large, the telecom industry (37%) and travel and transportation industry (39%) align their customer-segmentation strategy with their contact centers, according to the Data Dimension report. At only 6.2%, customer segmentation in financial services is the least aligned with their contact centers. The immensely competitive scenario in telecom and the airlines industries has forced service providers to align their segmentation with contact centers. 

Financial-services companies have a more challenging job in clearly segmenting their customer base as their product portfolio is extremely diverse and complicated, often with overlaying needs of customers. Consequently, it has a telling effect on customer satisfaction. The Annual American Customer Satisfaction Index that summarizes customer satisfaction across industries, for instance, found that by the end of 2005 the customer satisfaction index for financial institutions dropped two percent to 73.4%, lower than many other industries in that survey.

   — Karina Majid, General Manager, Customer Interactive Solutions, Datacraft Asia

FROM CUSTOMER SATISFACTION TO CONSUMER INTENT
Contact centers are increasingly focusing on satisfying customer intent. This means going beyond the Key Performance Indicators (KPIs) and identifying elements that are beyond the scope of contact centers. “Often despite meeting KPIs, customer churn takes place. This baffles firms. I call it the ‘after call center effect’,” says Karina Majid, General Manager, Customer Interactive Solutions, Datacraft Asia.

“A customer calls in to inquire about something he has bought. The agent gives an update and satisfies the customer. But when the customer receives his delivery he finds it is not his purchase. Was that customer delight? No it was not,” explains Isher Kaila, Research Director, Gartner. “The call center successfully answered the customer’s query but could not satisfy the customer’s intent. However, the contact center delivered successfully on its KPI.”

Contact centers are therefore uniquely placed to satisfy the customer’s intent. The next call the customer makes to complain about the wrong delivery is the contact center. Although this is beyond the ambit of the contact center, it can play an important role in identifying the grievance of the customer. Contact centers, like Bangalore-based 24/7 Customer, deploy customer analytics to understand their customers. “Being at the customer touch points helps us to identify customer demands, analyze reasons for customer satisfaction or dissatisfaction as well as identify problems,” says V. Bharathwaj, VP, Global Marketing, 24/7 Customer.

The bane of organizations today is their inability to identify problems with customers. “Businesses have a problem when customers do not complain. They simply move business to somebody else,” says Majid. Only when the problem is identified can organizations fix that.

Hence business analytics is an area that organizations are investing heavily in. “There is mounds of data available with contact centers that remains useless unless it is mined, and trends about customer demand, problem areas and vital clues about competitive advantage identified,” says Vineet Kalucha, Director Sales, APAC, Talisma, a Customer Interaction Management solutions provider.

Although contact centers have excellent processes, these are often disconnected with business reality. That is why 62.5% organizations in the Data Dimension study reported to have found good traction when there is process re-design based on feedback by the contact center.

MEASURE ROI ON CUSTOMER INTERACTION
While the case for offshoring and lower cost is well made, organizations have begun to measure its outcome in terms of business returns. “No longer will a particular process be offshored simply because of lower cost. Often organizations prefer to retain high-value customers onshore or in-house to keep them satisfied,” says Amit Shankardass, SVP, Global Marketing, Sitel. Losing high-value customers in a bid to save costs proves costly for organizations in the long run, considering customer acquisition costs and erosion of brand value.

One of the most high-profile instances of pulling back offshore operations was Dell’s call-center operations serving enterprise customers. It was not so much the offshore agents’ inability to handle calls as much as Dell’s failure to streamline internal processes for escalation, an issue that could have hampered operations even onshore. However, Dell panicked amidst rising anti-offshoring sentiment and took back helpdesks for enterprise customers.

Last year, AT&T announced that they would pull back 2,000 customer-service positions as they were losing too many customers in a highly competitive DSL broadband consumer market — an indication that organizations should look beyond the benefits of labor arbitrage and consider the business benefits of offshore.

Although globalization of contact centers is fairly established, globalization sentiments have been tempered by a new phenomenon called internationlization. This seeks to serve customers on a regional basis as opposed to a global framework, mostly driven by a need to serve a multilingual population. Understanding the context of serving a profile of customers is important in achieving organizational goals, made easier by geographical and cultural proximity. A toy company is said to have recalled services from India as agents could not understand its products, arguably because entertainment is very culture and context specific.

SELF SERVICE IS KEY
There is an increasing drive to send customers to the Web and deploy voice-automation tools. Organizations are seeing value in enabling customers to help themselves, with a high 54% of organizations already having a strategy for online self service, according to the Data Dimension report. A number of factors is driving the use of the Web: For enterprises, it reduces manpower costs; for customers, it is easier to surf and find information and decide at leisure, and sometimes access the same information again and again. 

Voice automation as a tool has been experimented for some time but has not been very successful because of sloppy deployment. With experience and hindsight, voice automation is making a strong comeback with 27% contact centers planning to upgrade their Interactive Voice Response (IVR) platforms, 25% planning to install speech recognition, 19% planning to install text to speech solutions and 12.5% intending to implement voice authentication and verification solutions, according to a recently released contact-center benchmarking report.

Organizations need to be sensitive when deploying automation in processes. For instance, going against the norm, Prudential Financial announced some years ago that they would move back from voice automation to servicing customers with agents ostensibly because their customer base, which comprised a large base of elderly and retired people, would like to interact with agents when discussing their lifetime investments — a sound logic helped by the fact that they moved customer support to India and could leverage on labor arbitrage.
IVR works best for routine customer inquiries or for mundane tasks like selecting movies on demand. For instance, West  Corp. worked out a solution with DirectTV to create and manage its IVR over the last decade or so. West helped DirectTV to migrate from an all touch-tone systems to a speech-based capability where callers can choose more than fifty pay per view movies at any given point in time through natural language speech recognition.

TOWARD MULTIPLE CHANNEL INTEGRATION
Organizations are focusing on the next generation of customers who are tech savvy and comfortable with new methods of communication such as chat e-mail and text messaging. “The average first-time mobile user in the U.S. is eight years old while in India he is 16 years. Organizations are targeting this profile of customers whose behavior pattern is not yet known,” says Datacraft’s Majid.

Organizations in their eagerness to engage such customers have sought to deploy multichannel communication. Thirty-five percent contact centers have developed a multichannel strategy with a high 53% planning to have a strategy in place, according to the Data Dimension study.

Customer service through the phone is still the dominant method of communication at 68.4%, followed by self service through IVR at 10.5 % and Web chat at a distant 0.3%. However, e-mail management (at 27%) and Web chat (at 20%) figure high amongst planned activities of contact centers. 

BEST PRACTICES