As companies grow, merge and acquire, it is common that they subdivide their marketing efforts into multiple compartments. For instance, a financial services company may have a retention unit in the credit card division and another in brokerage. A telecom provider may be trying to cross-sell its cable services, while the cable division is running its own special. Sound familiar? Its the more the merrier view of marketing, and if your company subscribes to it - think again. What might seem like harmless overlap is actually a custody fight for customers that results in disjointed messages, clouded ability to measure marketing efforts effectively and a source of endless annoyances to your customers. A cohesive vision, aided with technology, allows marketing, sales and service to share custody of clients leading to less waste, more profit and happier customers.
The customer custody challenge is the outgrowth of a tremendous increase in products, services and brands; fueled by deregulation (for some markets), innovation, and mergers and acquisitions. Financial institutions now offer everything from credit cards to wealth management services. Telcos provide an array of wireless, voice-over-Internet protocol (VoIP), data and video services. Retailers have multiple brands and multiple ways (in-store, catalog and Internet) for consumers to shop. But a companys most valued asset - its customer relationships - is often at risk as various business units struggle for ownership and face time with customers through various communication channels. Customer relationships are managed in a fragmented way out of separate departments and profit and loss centers. The departments might also engage separate agencies and employ different data resources in their decision-making.
This article explains how organizations came to fight over customers and what companies can do to end the custody battles and provide a unified message that will be cost-effective and pleasing to the customer.
Falling into the Customer Custody Trap
If your company is facing a customer custody challenge, its likely for one key reason - youve been successful. Youve successfully transitioned from an emphasis on acquiring customers to increasing customer value through retention, upsell and cross-selling offers. Youve acquired competitors, created new divisions, mastered Internet sales and segued away from product-centricity to a focus on the customer. Companies with these custody issues have likely successfully deployed customer resource management tools, managed large volumes of data on customer interaction and analyzed it. You have likely mastered some degree of personalized or targeted marketing. In other words, youve done a lot of things right. But the bar has been raised. Customers demand that the interactions with any business be a positive, hassle-free experience in every channel they use. They also anticipate being presented with options that are relevant to their needs and that those options will be presented at appropriate times. Customers expect that companies will provide service as a unified entity that understands all the relationships it has with them.
The Misery of the Mixed Message
Companies ability to deliver on customer expectations has not caught up. As companies grew, acquired and worked on customer-centric messaging, they inadvertently strayed from a cohesive message and ended up with a smorgasbord of misaligned messages. Multiple contacts with customers by different parts of the organization inevitably lead to revenue being counted more than once. Meanwhile, the disjointed messaging puzzles the consumer and erodes the relationship. Heres an experience weve heard from plenty of people: you call a provider to change a service or add a service, and you are quoted a price. While you are on hold, you hear the same service being quoted at a lower price. There are a number of possible reasons for this. A company might have segmented you as a less profitable customer and thus decided to charge more - in which case someone needed to tell the marketing group that created the on-hold message about the possible conflict. Or, the service division could have one price list, while a retention or cross-sell group creates and pushes messages with different prices. It doesnt matter what the reason is - the result is that you dont think very highly of the organization.
Customer custody issues can be just plain irritating to the overwhelmed consumer. High on the list of irritants are a constant stream of email or paper mail with offer after offer - each originating from divisions that have no idea who else is contacting the same customer and with what offers. How often have you ended up blocking email from a company with whom you enjoy doing business - and from whom you would like to get offers - because they simply sent too many?
Sometimes, this issue is not necessarily that the customer is receiving the same message from different groups. It is that he is getting radically different messages about what the company values and what its brand represents from the different groups. If youve contracted with a cell phone provider because their sales messaging focused on excellent service and the latest advanced services, it is confusing to get retention offers geared strictly to a bare-bones service offering. From the customers perspective, the confusion created by internal struggle does nothing to enhance the service experience.
If annoying the customer isnt enough of a reason to alter such behavior, then the financial ramifications should convince you. If a consumer is contacted by numerous channels acting independently and then signs up for a new service, there is a chance multiple groups will try to claim that revenue stream, leading to double- or triple-counting that makes everything from basic accounting to marketing campaign ROI measurement virtually impossible.
A Four-Step Solution for Ending Customer Custody Disputes
To resolve the customer custody challenge, companies must move away from separate or sequential ownership of a customer. They must embrace strategies that enable shared customer ownership and encourage collaboration. Companies need to present customers with unified communications and coordinated messaging.
Step 1: Solidify corporate and brand strategy
Take a step back, review your customer base and ask these questions: Who are the customers today? Who will they be in the future? What do customers get here that they cant get anywhere else?Are you the low-cost provider or the high-service provider? Are you a destination store or do you make your money from volume? By answering these questions, you can help determine what the company represents, what its core value propositions and differentiators are and the foundational attributes of its goods and services. This strategy should lead to the creation of cross-functional teams geared to delivering the optimal customer experience across every available touchpoint, with representation from each stakeholder group. There is no single right way to accomplish this, whether it involves the creation of a steering committee, a unit that owns the enterprises customer experience or another strategy.
Step 2: Define the Optimal Customer Experience
This is where data comes into play. Companies cant manage and analyze data in silos. There is no way to know how many times you are contacting a customer if the data is kept separately. At this stage, companies need to build bridges to existing data so that the different organizations can see and understand the customer - and understand how their efforts ultimately impact profit and sales. Consider this scenario: a company has a team whose job is to increase response rates to marketing efforts. Measurements indicate the marketing efforts get good response rates. But there is a problem. On the sales side of the company, close rates are not nearly as high. Its easy to assume that there must be a problem within sales. But what if the problem is that the response team is so focused on getting good responses that it doesnt deliver the type of customer that actually buys the product? You wouldnt sell wealth management services to minimum wage workers, but plenty of companies have created messages that bring in the wrong type of customer - one not likely to create revenue streams for the product or service being sold. Rather than focusing on promoting bonus points at different stages in the process, a company instead needs to begin speaking in terms of the optimal customer experience at different points and how to relate the activities and communications of one group to others. It is no longer about point-in-time ownership and handing off customers throughout a chain of custody; it is about shared custody.
Step 3: Choose and Implement
Once the data can be viewed throughout the organization, companies must determine how to analyze it through the lens of customer experience. This is the stage where narrow thinking needs to be eliminated in favor of a long-term view of customers and their value. Instead of running retention analysis to maximize the number of customers that renew their service, a company is better off looking at which customers will be most valuable over the lifecycle. It is at this stage that companies need to make key decisions about which customer-facing groups are going to handle specific tasks and interactions as well as determine how those people can be empowered with more data, as well as new processes and new technologies.
This is also the period where a company needs to survey what technology solutions and tools it has and determine gaps. The ultimate goal should be to create a platform that meets its decision-making needs and enhances the ability to create connections among the people and systems that create the customer experience - all at the lowest platform cost. At minimum, companies need an effective customer value optimization program that includes customer intelligence management and customer strategy optimization. These solutions should ensure that companies analyze customer profitability, successfully segment customers and create predictive models in a timely and effective manner. The key is to make sure employees throughout the organization can fully understand a customer at every touchpoint. A group specializing in up selling will know what retention efforts were tried and which offer succeeded, and then use this information as they plan their campaigns. This is one area where companies with otherwise successful customer relationship management (CRM) and other systems often fail. If you are a wireless carrier that sends advertisements to cell phones for ringtones and wallpaper, you might conclude that it is only worthwhile to send an ad to the phone of your subscribers under25 years old. Meanwhile, you are missing the 40+ subscribers who may have children with phones. Predictive modeling can locate those subscribers by looking at how many phones they have on their account and whether any of the users has bought a ringtone recently.
Step 4: Measure, refine and repeat
By this stage, a company has identified, re-evaluated and perhaps redefined its brand experience. It has created cross-discipline customer experience strategy teams and worked to develop a culture that gets the need for shared customer custody and seamless customer service. It has the tools and solutions in place to support the strategy. It rewards people for operating in a team. Now it needs to measure what its doing, refine and repeat.
For instance, if experience has shown that the optimum contact rate for a customer is two emails per month, and a business has 30 different campaigns running that month, the company can better define which emails are best to target to that customer. As a company tests the efficacy of its efforts by analyzing incremental effects, it continues to refine its tactics. The objective is to rapidly perform iterative analysis - much like organizations huddled in their silos are doing today. The difference is that the analysis in a shared custody company is guided by brand and customer experience objectives. You arent sending arbitrary messages hoping for a hit; instead, you are sending the best possible offer at the best possible time.
We cant tell you that it will be easy to create a shared custody philosophy at your company. Territorialism, after all, is a given at most companies. We can tell you that you cant afford to continue funding the customer custody battles. You cant afford to alienate customers, send duplicate messages or dispatch mixed messages. You cant afford to reward departments who are cannibalizing each others customers. The companies that learn to speak with one voice will survive and thrive much longer then competitors who cant.
For more information on the customer custody challenge, visit a recent Webcast on the topic.
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