Big Data is a big is a Big buzzword. Although it brings huge opportunities, the “hype talks” might miss lead you to wrong decision that Big Data is cure for all. The truth is pretty simple – Big Data can give those answers that are hidden within the analyzed data set.
Spring 2010, at a small Croatian town there is an unusual meeting going on in a factory that we will call PPP. The meeting room at the first floor of the administrative building, just next to the gray production halls, hosted a group of about 10 different people. Individuals in the room take part of a fiery debate about the presentation that’s been projected on the wall. The discussion of a group of people in white coats, most probably production and development engineers, is obviously driven by the two most active members, often arguing with conflicting views among each other. There is a few people dressed in suites. One would guess that those are consultants and the company’s management team. Part of that group is quiet; they are just listening, and nodding from time to time to show their mental presence in the debate. Two persons from the group in suites ask a lot of questions. Some other participants are very active as well. They draw on the board and answer the questions with lively gestures. Those are mostly members of the academic community that take part of one of the EU “cross-border cooperation” projects, which is actually the reason of this colorful meeting.
Let’s add sensors
In order to improve the efficiency of the production process and product quality, PPP initiated enrichment of certain phases of production by additional sensors, PLC and SCADA elements. By increasing the number of sensors from 12 to 35 per production machine, PPP started one of numerous initiatives around the world that contribute to the enormous global growth of machine generated data, the one we like to call Big Data. At one point, a temperamental professor with a French beard took stage. He passionately explains to the group recent results gathered from mining of the newly established data sets based on the increased number of sensors. No matter how colorful graphs were clear and despite the insight that was much above the previous findings, it was hard not to recognize the indifference on the faces of other participants in the meeting. Something is missing!
Data model or a Swiss cheese?
The whole initiative should provide, if not revolutionary, then at least usable insights. “We need to close the circle!”. All of a sudden, eyes of the participants were turned on the consultant who had been silent so far. “We need to close the information circle. You have all the parameters of the machine, but you really should start from the goals. You have to ensure traceability and link quality of the products with different stages of the production process and their parameters. Otherwise the new parameters won’t have much to say.” It is difficult to add IT tags to the hot metal castings that are being produced by the machines at PPP, so the data that was supposed to link the quality achieved and the level of waste with the 35 newly established parameters was simply missing.
Big Data: new methods, old constrains
Concluding superficially, Big Data might be perceived as a cure for everything: “now that we have so much information available, it is enough to develop mathematical algorithms and we will find all the answers.” But the truth is exactly the opposite. Today we have plenty of mathematical algorithms – from those that recognize your face, the tone of your voice or your fingerprint to those which understand the context of human speech, but the ways in which we traditionally collect data (processes) are not aligned with the technological capabilities of finding data patterns and filtering it through massive parallel processing (technology). More specifically, Big Data technologies will surely find patterns through a large amount of data, but those will not always propose answers to your problem or give you new relevant insights. In the same way, the data mining in PPP provided insight into the machine behavior such as stability patterns of certain parameters during the production cycles, including some insightful deviations. But it offered no answers about how those deviations and patterns affected the only thing that really mattered – the quality of the product. The answers must be included somewhere within the data set that we explore. They have to take part of the meta model of the entity that we analyze, or we must be able to deduct it from attributes of other entities that are similar enough to the one we study (i.e. the data on the quality of the product of hundreds of similar or identical machines worldwide, in case of PPP).
You can read more in the May 2013 issue of the Mreža magazine (Croatian language only), or later during the year translated to English at Alen’s Thing Place.
This work is Copyright of Alen Gojceta. You are not allowed to use the article, or any of its part in commercial or academic work without citing the author and this link.
Many people, including sellers, perceive sales job as filling the market demand. They forget that sales is the major value creation engine and that it has to engage most when the orders are not so abundant.
For many years I’ve been in different types of sales / marketing, business development and sales management roles. Throughout my career I heard plenty of times people showing their basic misunderstanding about the nature of a sales job. I must admit that I get irritated when I hear a sentence that should hurt every genuine sales person, and today I heard these words in three occasions: “Oh you’re very busy, that’s great, it means that you are doing very well”.
What stands in the very heart of each sales job is its scope or mission. In theory this mission is described as “fulfilling the gap between the market demand and supply”. And people often perceive it literally as it says: individuals in sales organizations walk around fulfilling orders and helping clients get what they need (filling the demand).
The more someone’s market position inclines to monopoly the more this statement is true. In every other case it is about a fundamentally wrong interpretation of the sales role. In saturated markets with high competition, sales force has to fight competitors, customer budgets, brand perceptions and many other things such as economic downturn and all of its consequences. Sellers have to be wise, competent, hard working value creators. They have to use the best marketing and sales tactics just to keep their heads above the water. And they will be lucky enough to be successful if, above all that effort, their organization is able to produce quality products within acceptable price ranges.
That’s why I get so amazed when I hear people so easily and unconditionally connecting “a lot of work” to success, over and over again. Indeed every seller can witness the fact that in sales, such as in so many areas of life, the level of work and creativity invested is in line with their achievement. From the other side, and that’s why I detest the “so you are doing well” statement, the nature of sales implies that the hardest work has to be done when the expected level of business is bad. Sellers have to invest most of their energy, time and wisdom when their sales results are below expectations, or perhaps below levels where an organization’s existence is under threat.
So my friends, next time you see me or anyone from my team being very busy, it will just mean that we are working hard to make things happen – in the way that every sales professional should.
This work is Copyright of Alen Gojceta. You might not use it or any of its part in commercial or academic work without citing the author and this link.
The three most read articles at www.gojceta.com during the past year
After more than a year of posting to www.gojceta.com, it seems that the most popular articles were those written with intention to be posted to Alen’s Think Place. In competition with English translations of my articles published in Croatian business and technology magazines during the past decade, the winners were the two posts created out of pure intellectual joy, reflecting my thoughts, without expectation for a financial reward.
The most read article on www.gojceta.com was the story of my experience at the first McCafe’ in Zagreb: “A coffee shop in the hamburger kingdom“. It explored the business model and the McCafe’ service in general.
The other most read article, missing only one visit to equal the McCafe’s score was the story about brand extension of Cedevita multivitamin drink to their line of tea. “Dad does it dissolve in water?” was doomed to be written the day when my son confirmed to me that my own confusion with the brand message goes beyond my own perception.
The third most accessed article was “The bdp triangle“ – my framework to managing successful proactive telephone campaigns described in an article in Croatian business magazine Lider. Despite the fact that the “triangle” was around 10% behind the two winners, I’m very proud of this concept and I believe that it has deserved the position.
I had the opportunity to host a CRM seminar for a great group of professionals. Here are the conclusions written in form of follow-up letter to the attendees. I’m sure you will find it interesting too…
Past Thursday I had an opportunity to host a seminar on CRM for a group of experienced professionals. I have announced the education in my recent post, describing challenges and uncertainties around the topic and the potential audience. This post is written in form of a follow-up letter to the seminar attendees, but it might be interesting to many of you who deal with CRM and who are interested in what were the major take-aways from the intensive 6 hours CRM education.
thank you for taking part of this seminar that showed to be very productive and interactive, due to contribution of all of you.
All of my concerns before the education about the homogeneity of the group vanished when I received the first list with your names, your companies and business functions. The group was very compact in terms of CRM understanding as well as your experience in managing customer relationship or implementing CRM systems. A bank, several telecommunication companies and two CRM vendors made a perfect audience for a focused and productive education.
I really enjoyed the experience and I hope you did as well.
There are ten points that I want to stress out and that I’d like you to keep in mind as points to take away from the lecture:
No one needs CRM because it is fancy (’cause others „have“ it too) unless they plan to waist time and money
CRM often doesn’t need „implementing CRM“. In many cases, I’d rather advice you to take a look at you core processes and make it fast, responsible and transparent.
Basics of a healthy customer relationship management lies in you customer focused corporate culture in opposite to the one that arises from product or process orientation (remember our first exercise?)
When you work on aligning your company’s agenda with that of your customers, don’t forget about different motivations of your departments as well as talents and motives of individual employees
Manage customer experience through managing their perception. Perception is often tightly related to expectations. Take care! Expectations are set by your organization’s „CRM processes“, your marketing communication, as well as by your competitors.
Manage touch points. Those are the essential „places“ where customer experience occur. Try to use „Moments of truth“assessment in combination with customer expectations or even emotions as a powerful tool to manage total customer experience.
Customer data derive from customer oriented processes not vice versa
„Critical point of CRM implementation“ is the one where you know what do you want to achieve, why do you want it so much and what is the frame within you are able to do it
The message of the story tale „Wolf and the three piglets“ is that we have to build solid basis for a lasting survival (business) model. The same is with social media and their use in CRM ecosystem (sCRM): invest time, engage to get them engaged
…ah yes, segmentation. Some of you stated that you didn’t get enough. You asked for more. More of theory, more of tools, more of segmentation methods. It is homework for me and a great feedback from your side. Thank you.
When talking about segmentation, is not only about splitting customers into (more) manageable groups. And especially it is not just
about distinguishing them based on their spending (value based segmentation). It is about what does your offering or your organization mean for different customer groups (benefit segmentation). It is about events from the CRM ecosystem that create dynamic
segmentation attributes and micro segments. The segmentation is about the general approach to certain customer profiles, as well as small operational activities. This is in particular case for the segmentation of the CRM era where you are able to track in real time what your customers are doing, experiencing or even saying.
About trends of the future, remember that today’s products can become powerful interactive touch points. Use QR codes in combination with Web 2.0 tools.
I encourage you to try in your everyday work what you have learned. Think customer. Think expectations. Think experience at touch points. Think about service – the fast one, responsive and transparent.
Thank you for your active contribution and for sharing your time, energy and experience with all of us.
P.S. Feel free to comment about your experience or suggestions for further improvements.
Outbound telesales campaigns take part of many contemporary channel strategies. Those are often used to cover large customer base within sales models with simple transactions. There are plenty of arguments that support such approach, but there are some rules to respect as well. I have embedded these rules into the “bdp Triangle”…
Today’s organizations that operate in intensively competitive environments need to adopt comprehensive customer relationship management (CRM) strategies. These strategies are striving to integrate the one to one marketing principle. It fosters approach to each person, member of a large customer base, as an individual with his or her needs, characteristics and specific behaviors. This approach, among organizations embracing CRM, has brought customer interaction channels on top of the business agenda. In addition to traditional brick and mortar offices and ever present sales representatives, modern technologies brought new interaction channels that are by their very nature, more convenient to customers and more profitable to the organization. Besides the Internet, contact centers are the most important means of interaction with large customer base.
The power of telephone marketing
Development of management disciplines within call centers and increase of their complexity had impact on widening the area of their
applicability. Sharing knowledge among inexperienced agents, conversational scripts, intelligent call routing, education and quality assurance are just some of the challenges faced by management within call centers. However, pro-active calling activities have always been among their most challenging tasks. There are two different ways of such interaction: incoming (inbound) proactive activities and outgoing (outbound) calls.
An organization can proactively act upon incoming calls by anticipating needs of their customers by proposing products or services, in addition to fulfilling the original scope of the customer call. There are a number of processes, policies and technologies that support proactive proposals during incoming calls. Those will not be further discussed in this article. The following text will investigate the topic of outgoing telephone campaigns. Its multi-disciplinary and complex challenges have to balance contact center technologies with psychology, ethics, legislation, sales techniques and marketing know-how.
According to the recent data (2005) from Direct Marketing Association (DMA), in US, telephone marketing is ranked second with 47 billion dollars behind direct mail with 49.8 billion. These data are even more significant if one takes into account other studies sponsored by the same organization, which puts telephone marketing on the throne in terms of response rate with 5.78% and the rate of return on investment (ROI) with a significant 18.2%, higher than e-mail marketing with 16%. In year 2005, direct marketing will participate with as many as 10.3% in the United States’ GDP.
About 50% of today’s call centers in the United States use the functionality of outgoing telephone campaigns. About 45% of those use this functionality for telesales and telemarketing, and about 22% of them for market research.
Telephone marketing and privacy threats
By implementing call centers with outbound functionalities and campaign management capabilities, organizations gain control over a powerful tool that can bring significant business savings as well as realize substantial added value through sales and marketing campaigns. This is a bright side of the coin. Unfortunately, telephone campaigns have their dark side too. Conducting telephone campaigns which are inconsistent with consumer’s expectations, their cultural habits or the current needs around company’s offerings, can lead to a complete disaster. The consequences can range from a complete collapse of a specific campaign to many insulted and forever lost customers.
Only a doorstep is perceived as more private property than a private phone number. Knocking on the door of someone?s home by a sales representative or a call to a private phone number is the event that can create or destroy customer’s good opinion about an organization.
Business phone numbers, as well as offices, are completely differently positioned in our minds. In order to perform work, purchasing decision-makers will be happy to listen to persons who represent their providers. Business phones are used precisely for this – to support business activities. Outgoing telephone campaigns in business environments are mostly used to create sales leads, and could be characterized as a combination of market research and sales initiatives. Already in 1989, the direct marketing department in Oracle Corporation used to sell their products using combination of a call center and internally developed application for campaign management. This fact is even more interesting when taking into consideration that they where selling databases worth several hundreds thousands dollars. Many were skeptical at the time about the strategy of the department which was headed by Tom Siebel, later founder of Siebel Systems. The strategy was confirmed by almost double the sales from the previous year.
Approach to consumers by means of telephone campaigns is different in many aspects. The consumer is more sensitive to privacy issues, he is protected by law, and cultural constraints may be of critical importance, especially in multi-cultural environments.
Consumers are hunters, not prey. Although the marketing industry has been targeting customers for decades, trying to arouse need and awareness about a product or service through various forms of marketing communications, at the end the customer had the opportunity to choose among various options. Growing awareness on consumer’s rights, increased share of the educated individuals within a population and the increased customer care by organizations in deregulated and competitive markets, made the average consumer less open to the traditional marketing manipulations around attitudes and nonexistent needs. Modern consumer gradually realizes that he is the “boss.” Outgoing telephone campaigns today are more complex and challenging for marketers than ever before.
The “bdp” triangle – first rules, then calls
Proactive outbound telephone campaigns should be run when combination of conditions that border by the “bdp triangle” are fulfilled. Its corner points are marked by: benefit, debt and permission.
bENEFIT implies a reason to call that brings true value to the customer through the so-called win-win relationship. The person who just bought an apartment will be satisfied if he or she gets the call from a sales representative from a company that deals with arranging documentation for property registration. In addition to the true value for the customer, calls may be considered acceptable when referred to “public good” such as humanitarian work or survey for market or social research. It is important to keep in mind that an organization whose existence depends on selling their products or services on the market, should not afford to make “dummy” outgoing calls. Each disturbance can instantly contribute to the negative positioning of the company’s brand in customer’s mind.
dEBT in the triangle indicates situations in which the customer is indebted to the organization. An example would be delay in bill settlement. Friendly warning or a reminder will not be taken for bad. For debt collection even telephone machines are often being used. However, the preferred form of the “debt angle” is the one in which the customer “feels obliged” towards the organization because of the high level of satisfaction with the experienced products or services.
pERMISSION implies customer’s consent to be contacted. The permission may contain the desired time frame of a call, possible reason (content) and the desired (permitted) communication channel. Permission based marketing, opt-in marketing or consensual marketing are among the terms that mark the only excuse that you can use to choose the content that you will communicate to your customers, as well as the how you will do it. Permission given by a customer is a passport to overcoming all the limitations put through legislative, cultural or professional boundaries to customer relationship.
How to get a permission? Strategic imperative of modern businesses is their capability to communicate directly with customers. In such communication, customers should be able, through various means, to opt for communication channels and content. Also, a customer should be empowered to change his or her mind at any time, to change the preferred way of communication or the type of content that will be delivered.
Obviously, for successful outbound telephone campaigns several criteria should be fulfilled: calls should be triggered at times that match the timing of a need incurred, and should target periods that will not be perceived as a threat of privacy.
The recipe for a successful implementation of outbound campaigns is called Marketing Optimization (MO). MO comprises a number of technological and organizational means that enable automated creation and communication of content that is suitable for a particular consumer. Comprehensive CRM systems often support MO as its integral functionality, providing technological support for managing processes and business relevant data.
Proper implementation of outbound pro-active telephone calls successfully combines ethical and cultural norms with the legal framework and detailed customer information such as profitability, demographics, past behavior and the behavior of consumers with similar characteristics. An organization that successfully manages to juggle these challenges by orchestrating their people, processes and technology, will be gaining significant advantages through marketing of relationships and cooperation.
If you will use this text for publishing or academic pursposes, be so kind to cite the author and source: Alen Gojceta, Liderpress, 11/2005. Thank you!
For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to their tea product line. Probably the idea would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions…
For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to the tea product line acquired from Pliva in 2001. Atlantic’s decision was to keep the teas within the Cedevita line of business and also to use this very popular brand of refreshing beverages to promote the teas. Cedevita was among the most popular drinks in former Yugoslavia. Today it is packed in plastic jars in form of granules that dissolve in water with an effervescent effect that create a fruit tasting refreshing multivitamin drink.
Probably the idea about the mentioned article would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions. Passing near the “city light” advertisement at one of the Zagreb tram stations, the child begins this unusual conversation:
Lovro: “Dad, will we buy this Cedevita tea?”.
Me: “But my son, we have it at home – an ordinary tea in filter bags.”
Lovro (enthusiastically): “Oh, it is kept in bags, you mix it with water, shake and drink?.”
I (taking a deep breath): “No, my son …”.
Yes, the tea is not an instant beverage in granules, and still it is called in the same way. How’s that possible?
Before of Atlantic’s re-branding, in consumer’s perception Cedevita meant only one thing: an instant vitamin drink. Time ago, when Pliva used to
pack Cedevita in medical jars, consumer perception recognized the drink as a serious diet supplement. Still today, the text on the package states that it is just about it and that the recommended daily dose should not be exceeded. The package itself, however, does not reflect such seriousness any more, and the same goes to the related consumer perception (and habits, I’d add).
We know that the perception of a brand is usually established early in childhood. If we consider that children are the main consumers of Cedevita instant beverage, and that for them Ce-de-vita means exactly this, the confusion when encountering teas with the same trademark does not surprise.
I believe that applying brand attributes of a recognized instant beverage to the tea product line, represents a negative shift in the strategy of such brand. The confusion is further increased by recent investments through package redesign and intensive advertising of Cedevita teas – by ads that, by large portion of our perception, actually promote vitamin instant beverage. Judging by the web pages of Cedevita teas, it seems that even Atlantic’s marketing experts weren’t able to detach from such perception. The pages that belong to the teas represent just a subset of the Cedevita site, therefore the new tea packages are surrounded by orange bubbles on the move, so characteristic for the instant drink sharing the same name.
In this discussion I will disregard the hypothesis that the people from Atlantic deliberately push the more profitable Cedevita instant beverage on the account of (supposing) less profitable tea product line. Knowing this private company by a decisive and pragmatic management, I believe that the line of former Pliva teas, would have been rather sold to competitors than kept to serve as advertising billboard for a more successful product line.
Returning to the Cedevita brand and its communication. Cedevita, comparing to natural tea satisfies a completely different need. Even when we drink it, somehow subconsciously we do not believe that we are doing something really healthy. Effervescent effect when preparing the drink, during which the glass becomes temporarily transformed into a test tube, and sugar as one of the basic ingredients, suggest that we are going to consume a refreshing vice, rather than a healthy beverage. What remains as consolation is that we get the necessary “power of seven vitamins” as a food supplement.
While the primary function of Cedevita is a cold drink for refreshment and thirst, the tea is a warm beverage of health and relaxation. It implies a natural herbal mixture, kept in a previously boiled water. Tea is aromatic. Cedevita is the freshness and the sound of the dissolving granules. The tea are leaves and dried fruit, while Cedevita is the powder with “natural fruit flavor”, as stated on the label.
In this whole discussion the potential synergy of the brand should be taken into account. Cedevita drink, Cedevita tea, Cedevita basketball team … When such unified brand has been stretched through consistent marketing communication at a wider region, then this approach carries a synergistic effect and significant savings. In the case of Cedevita, this region includes Croatia and its neighboring countries. Basketball club that plays in the regional league under the name of Cedevita and marketing campaigns that can be recycled in several markets with little intervention, reduce the cost and increase the synergy effect of a long-rooted brand. But it is exactly this “rootedness” to be the reason for confusion by the communication that places the instant beverage and the tea in same basket.
Cedevita teas and brand internationalization
If we consider the brand in terms of its internationalization and ignore the neighboring countries whose consumers grew up Cedevita, then we raise the question of purpose of a brand shared among instant drinks and teas. While in Croatia and the region, brand recognition can encourage a faster acceptance of Atlanic’s tea product line, this is not the case in other countries. Assuming that Atlantic plan to address a broader market with their teas, the arguments above seem to loose the ground. Even in a market that has never heard of Cedevita / instant drink, the question is how well will consumers associate that name to teas. The name itself evokes the C and D vitamins, or the life (Latin vita = life).
Successful global brands of tea are appealing to lifestyle, environmental production, originality. They try to give a breathe of colonial times and distant places to their products. The aroma of such teas evoke the smell of the wooden hulls of sailing ships, pollen, rain forests and the value that ingenious merchant achieved before the tiny amounts of crushed leaves ended up in our tea paper bags. Looking at the world’s most famous tea brands such as Lipton or Twinings, we can notice the above patterns, also successfully applied by Franck to their campaign for Gunpowder premium green tea. Gunpowder communicates exactly that – exclusivity of each peace of tea leave, for which Franck claims to be specifically cut, highlights its premium quality, appeals to inner peace, and evokes travel. Tin box in which the tea is sold and kept, returns us back to the times of our grandmothers and precious shipments from distant places.
Returning to Cedevita teas. What would be the brand that Atlantic could have had applied to their warm herbal drinks, which would ensure its fair share in the hearts and minds of their consumers? Atlantic have already separated brands of their line of functional teas from those intended for enjoying the warm pleasure. Functional teas are set apart under the brand Naturavita. My objection would be that these teas are also promoted under the umbrella brand of Cedevita (the web with bubbles).
Personally, I would be more inclined to place them under the umbrella of Atlantic’s Dietpharm line of business that covers dietary supplements. As for the rest of the tea line, I believe that some variations of Atlantic’s corporate brand carry the greatest potential for the purpose. My suggestion would be to use the Atlantic ocean as link of the New and Old World: “Atlantic genuine tea”, “Old Atlantic tea”, “Atlantic premium tea”, …
This article is not work of a professional brand manager, but an attempt of a consumer who is educated in marketing to share his thoughts about the confusion created in his perception, by a brand expansion to the “adjacent” product category.
There are many similar branding cases that confuse, such as Podravka‘s use of an extremely successful brand of baby food Čokolino [Chocolino] for its excellent chocolate spread, or even worst, the decision of the city of Zagreb to promote through an expensive ski world-cup race (Zagreb has a ski resort with a very limited capacity).
Although this article represents a critical review of a business decision, it is not supported by relevant research or market survey. I am personally convinced that, even in Cedevita’s “clothes”, Atlantic’s tea product line will have its success on the market, primarily due to excellent distribution and managing of sales channels, but also due to investments in other elements of marketing mix that make some product line successful, such as design, quality, pricing policy, promotion as well as management of costs of good sold.
And finally, I think that what happened to the former Pliva teas is the same that usually happens to user-oriented processes in companies with strong organizational silos. I believe that the experts from Atlantic started their considerations from their own organizational views when branding the line of teas, instead of stepping in the shoes of their consumers. I believe that the organizational view, in this case (as with every other silo), was narrow and was saying only one thing: “We are Cedevita organizational unit, and our teas are Cedevita teas”.
Notes to Text
Atlantic, Cedevita, Cedevita tea, Dietpharm are trademarks of Atlantic Group. Franck, Lipton and Twinings are trademarks of their respective owners. The text reflects personal conclusions of the author, and is by no way influenced by author’s current employer or any other third parties.
In case you use this text or its parts, please quote the author and the source (Alen Gojčeta, www.gojceta.com, June 2010).
I have decided to keep “Alen’s ThinkPlace” consistent by delivering consistent content to the consistent audience using a single language. Here is why…
I have decided to keep “Alen’s Think Place” consistent by delivering consistent content (marketing / mainly CRM, sales, management, leadership) to the consistent audience (CRM experts, marketers, business leaders) using a single language (English).
I gave up writing posts in Croatian language and I have cancelled the category “Better Croatia”. Therefore I’m in process of translating some of my already prepared work in Croatian language on marketing and CRM to English.
This concept transformation is the major “why” I haven’t post a word for some time.
I believe that this is a good decision because success of any source depends on how consistent its message is for the targeted audience.
If I’d ever decide to write in Croatian it will be on a separate web site / blog. If I’d ever decide to use my Twitter account for chatting with my friends, I’ll open an alternative account. If I’d ever decide to use Facebook for business, I’ll create an additional profile.
Us – the individuals appear in many forms: as professionals, friends, relatives, hobbyist, thinkers, artists… The many of ours become one among different appearances in front of different audiences – our bosses, partners, subordinates, parents…
The appearance of the one is always consistent, so shall be this web site.
The article elaborates the problem of a “CRM organization” – the one that behaves in a consistent way throughout all of its ways of operation, including different departments, people and processes. Author has put a special focus on “non CRM” departments, such as fraud detection and collections, because those often forget to take part of an integral CRM ecosystem…
CRM organization and its gaps
If you will use this text for publishing or academic pursposes, be so kind to cite the author and source: Alen Gojceta, Banka, 03/2003. Thank you!
The main target of Customer Relationship Management is to provide consistent, yet differentiated, service based on one-to-one principle in all interactions, all functional areas and over all organizational layers to your customers. CRM starts by putting the needs of individual customers at the very center of the overall business strategy.
Mature CRM organizations are those rare that manage to provide an experience of a genuine, consistent and personalized service, simulating one to one relationship with their customers. CRM organizations acquire this kind of “CRM maturity” by a sufficient quantity and quality of collected customer data. They possess information systems that support “intelligent” interaction with a large customer base throughout business systems. Mature CRM organizations gain true acceptance of the corresponding philosophy in all aspects of their business operations including people awareness and adapted processes design. CRM is often emphasized to be a strategy, a business philosophy, rather than an IT solution. However, personalized relationship with each individual from a large customer base is achievable only by use of modern IT solutions. On the other side, it is important to understand that IT is just a part of a successful CRM story.
An often and among the most dangerous mistrusts is that it is enough to purchase a CRM solution to enhance the customer relationship. Well that’s not the whole truth. Data collection is only feasible through a lengthy and carefully designed process. Consistency in managing customer relationships is a matter of internal organization and the degree of the maturity of the related business processes.
Gaps of a CRM organization are caused by lack in managing internal business processes and missing to create a corporate culture that makes CRM an integral part of the organizational ecosystem.
The most common CRM gaps are those coming from the inconsistency of the organization itself. Simply put, they occur when CRM is managed by a separate department or departments within the organization. In such cases there is often no true intrusion of a CRM strategy throughout the organization. The “CRM departments” are usually marketing, sales or a specialized customer relationship (customer care, customer intimacy) department. Relationship with customers is not “painful” in organizational segments that are oriented toward clients by their nature. Problems arise elsewhere.
The obscure guys in the CRM team
Modern organizations often have obscure departments similar to police cells whose job is to identify and sanction “non-complying” customers. Unfortunately, these departments often maintain tradition of methods known from the time of economic system that where common throughout the world, regardless of the political system – the monopoly. One supplier and one attitude towards customers shorten to the phrase “you need us, we possess you anyway.”
The most common business processes that are managed by “anti – CRM departments” are fraud management and collections (collecting accounts receivables). Both business functions often take an integral part of financial and telecommunications industries, known as strong acceptors CRM strategy. What makes the difference between collections and fraud detection processes during the economic monopoly and today, during the era of CRM (open markets), is the starting point of observation of the resulting problem (potential fraud or unpaid obligations). CRM organizations start from exploring reasons of a customer behavior. On the other side, organizations with recurrence of monopolistic behavior begin with the assumption that they are always right, and that customer is the sinner who should be sanctioned.
The basic assumption to the selective and intelligent approach to the potential customer “sins” would be the use of information technologies that are an integral part of modern CRM system. In such scenarios, business intelligence tools can recognize potential fraud or debt. Given the user’s position within the CRM segmentation model, campaign management tools generate different messages (research or warning) or trigger different background processes (e.g. block account). The campaigns are carried by the interactive part of the CRM system, usually contact centers, and the results are forwarded to other departments such as finance or fraud management.
A mature CRM organization will, before marking a customer as a defaulter, check whether it is possible that there is a mistake made by them. They would check whether customer’s transactions where properly processed within the systems. When this is done, they would contact the customer to hear his side of the story, without anticipating the final result. Only after the verification call, the CRM organization will put the “carrot” aside and start threatening with “sticks” in form of activation of different methods of pressure or forced collection. Even when the user is actually “guilty”, CRM organization shall, before starting the “mechanism of force”, try to collaborate with the customer to negotiate a solution of mutual interest.
Comparing advanced CRM organizations that have succeeded in merging CRM philosophy with its own corporate culture and some unsuccessful companies in this regard, significant differences in the resulting relationships with customers can be noticed.
There are two most common reasons: (1) inconsistency in customer relations through the whole organizational structure and (2) the process mismatch.
A bitter experience
Everyday life is full of examples of how the experience in doing business with organizations that invest considerable effort in building advanced customer relationships can turn into a nightmare.
Recently my colleague from a neighbor country described his experience with one of their mobile operators. After he got married, his wife moved to the capitol, where he worked for some time already. When moving she required her bills to be sent to the new address. She notified the operator about her new family name. The change procedure was simple. She could have chosen between different channels of communication: Internet, fax, mail or telephone. She decided to use the Internet option, so she filled the form from the mobile operator’s portal. After a short time, she got a call from the contact center agent who wanted to verify the entries. The changed data appeared on the protected area of the internet portal.
The process was simple and perfectly comfortable. Her mobile operator was gaining credit. Everything was fine until the time when the first bill should have arrived to her new address. It was just not coming to the new destination. After ten days from the standard bill date, the woman decided to take the initiative. She sent an e-mail complaining to the customer care department. Right after, she received an answer that the bill will be sent soon to the new address. In the meantime, she began to receive SMS alerts. The new bill was not coming. After an additional 10 days, she noticed an envelope with the logo of her mobile operator put aside of the mail boxes in her building. She took a look at it, and there was her maiden name which was not located on her new family mailbox. She paid the bill with almost 30 days of delay, when she already started receiving severe threats of service termination. The next month the data was correct. On the envelope was her new family name, but her new account balance was showing properly accrued interest for the “delay” from the previous month.
Us or the client?
It is obvious that the young woman’s mobile operator, despite all the investment in modern infrastructure, was unsuccessful in aligning back-end processes. Collection and the customer service departments where simply not in sync. Detailed insight into such CRM implementation can reveal its false side. All processes that are important to support the CRM strategy arise from the needs of the mobile operator, rather than the needs of its clients. Besides a good contact center application and a convenient customer facing processes, in essence the mobile operator has cared only about itself. As a service provider their major concern was to force the customer to pay. They did not care about finding out who was to blame of the payment mistake, nor they shown effort to connect the logic of user complaints about the bill with the errors in the address directory and the penalty interest. The colleague’s wife remained faithful to the mobile operator despite the sad episode, but not without bitterness.
There are dozens of such examples on the market: a bank that accommodate their clients in leather armchairs at its branches while, on the other hand, they require travelling hundreds of miles from province to the nearest town to raise a loan; or the authorized car service with perfect kindness and state of the art customer processes with employees that forget to mention tax and cost of labor when proposing a service.
If you want to survive in today’s market by being desirable to your customers, then you need CRM, a business strategy which originates from the very top of the organization, merges all departments, and integrates with all channels of customer interaction. It’s a way of thinking embedded in all the pores of an organization, in all of its processes, including knowledge management and human resources, supply chain, partner relationships, as well as “customer punishing” processes such as fraud management and collections.