Has this happened to you? You receive a letter in the mail describing a special promotion. You visit the Web site and notice the details are different. You visit the store and no one there knows anything about the vaunted promotion. Frustrated, you call the toll-free customer service number and the person who answers the phone is clueless, too.
Frustrated customers aren't happy campers. Here's what one sounds like. M. Wanzo wrote this rant in I-Branding, an Adventive ezine, on August 8, 2001:
The level of inefficiency at which large companies operate never ceases to amaze me. Companies are constantly trying to acquire new customers and market share all the while ignoring the faithful customers they have. And when they do try to "upsell" the existing customer, they send a bunch of non-targeted, non-personalized crap spit out by some multi-million dollar database technology.
"The left hand never knows what the right hand is doing. It is so inefficient it is amazing. You would think that with all the technology available, organizations would be able to better manage the customer acquisition, retention and loyalty building process."
Looking at customer relationship management (CRM) as a business process addresses those issues. Business process outsourcing providers today have built tools to rectify this situation. "Completing the loop is hard. It doesn't matter whether the company is large or small. Their marketing processes are flawed or inefficient," says Richard Muller, director of marketing for Knowledge Based Marketing (KBM), a CRM outsourcing provider based in Dallas, Texas. KBM provides data processing and database management services that support direct marketing and CRM activities.
The goal of this outsourced solution is to present a unified message to customers, whether they walk into a distribution center and talk to an agent or receive a call from collections. Typically, call centers, Webmasters and collection departments act independently. Companies must synchronize their inbound and outbound messages if they are to communicate consistently across all channels.
Tying Two Communication Types Together
The only way to do this is to be able to present all the relevant data so it's available to any customer service agent. "Bringing together all the data about one customer is one of the biggest challenges of CRM," says Don Hinman, InfoBase global group leader for Acxiom Corporation in Little Rock, Arkansas, a global customer data integration outsourcing provider.
For example, Hinman says he may tell the customer service agent at the call center his name is Don but the computer might have him listed as D.P. or Donald. "Customers today expect companies to know who I am," he reports. "CRM systems must integrate and create that single view of the customer."
Until recently, most marketing has been outbound. Companies contacted their potential prospects through email, the telephone or a postal letter.
However, according to Forrester Research, 80 percent of customer dialogues do not originate in the marketing department. The collections department calls the slow payers. Unhappy customers call the customer service representatives in the company's call center seeking help. "Customers and the company are more likely to talk when there's a problem," reports Gene Ferruzza, president of the outsourced CRM portal known as SpringBoard from Quaero LLC, a customer relationship management outsourcing provider in Charlotte, North Carolina. Quaero has developed a set of processes and tools to support the evaluation and execution of customers' communication programs and delivers them to clients through a dedicated portal.
Companies also make poor decisions simply because they don't have enough data. For example, magazine companies may send out five notices in succession to subscribers whose subscriptions are about to lapse. "They don't understand how these the customers use these notices in their decision to renew," says Muller.
BPO providers offer a new paradigm. The CRM vendor automates this process as well as provides analytical tools so the magazine's executives can evaluate every step in the process and learn as they go. For example, the statistics may show they receive few renewals after the third letter. By eliminating the last two letters, they can lower their cost without impacting their renewal rates, Muller explains. "This provides a higher end value to the organization," says the KBM executive.
Why Companies Outsource CRM
Most companies choose to outsource this process because they don't want to build such a complex system inhouse. "There's a high risk of failure and it costs a lot of money," Ferruzza says. CRM is a good process to outsource because "there are a lot of repeatable transactions," he adds.
"Our clients can buy these tools themselves," says Muller. "But they don't because they don't have to maintain the infrastructure for their database when they outsource." While the vendor is analyzing the data and the processes, the marketing department is free to develop strategies to market the company's products or services.
BPO providers offer an already proven infrastructure. "The decisions have already been made," Ferruzza points out. It's not uncommon for companies to take 12 months to make decisions when building this kind of program in house, he adds.
A hosted solution makes the outsourcing vendor's tools and processes available to the client along with any needed help in putting this technology to its best use. Outsourcing buyers have access to folks who are already experts in the technology. They have already been in the trenches, so they have experience in the marketplace and know how to optimize the solution, according to Ferruzza.
This BPO process is scalable. Companies who opt to synchronize their marketing channels by spending millions to build their own systems find the work "trickles in," reports Ferruzza. "Outsourcing allows a company to start with 10 units and scale to 500 or start with 500 and scale to 10," says the Quaero executive, something that is very difficult to do internally. Another benefit:buyers are only charged according to their activity level.
Outsourcing is also the best option if time to market is an issue. Quaero can give its buyers access to customer data in 30 days and have the buyer totally functional in 60 days.
"Now customers don't have to keep notes in a shoebox," says Muller. "More and more companies are beginning to understand the importance of connecting inbound and outbound marketing. Outsourcing is the best use of their people and their dollars."
Lessons from the Outsourcing Primer:
- Companies must synchronize their inbound and outbound marketing activities to provide good customer service.
- Understanding consumer behavior can change processes and produce savings.
- CRM is a good process to outsource because it has many repeatable transactions.
- Outsourcing CRM provides speed to market using a system that has already been tested by others.
- Outsourcing CRM allows the marketing department to focus on strategic issues while the supplier manages the database infrastructure.