Taking the Swift approach to CRM

Ronald S. Swift, assistant vice-president of customer knowledge solutions and data warehousing for NCR Corp. believes in customer relationship management.

Really, really believes.

“Right now,” Swift said, “AMR Research is quoting that CRM will be growing at 58 per cent compounded annual growth rate over the next three years. If you look at the technological industry — software, hardware, databases — I’ve never seen over 50 per cent compounded annual growth rate. Not even for PCs in 1981 to 1982.

“So this is not just hot. This is serious economics, where AMR estimates that by 2008 this CRM business –that’s the point tools, the databases, the infrastructures services, the consulting, the target marketing – will be $17 billion per year in North America. This is a big number.”

Swift is not only impressed by the number, but also impressed by what it means to clients who understand what CRM can mean for their businesses. Not only can CRM lead to knowing your customers better, it can also help in keeping them and making them happier and more profitable customers.

Swift said data warehouses, for example, should be used to contact customers who don’t do business with you.

“Why don’t you call the customer when he doesn’t fly with you or doesn’t make deposits or doesn’t shop in your retail store? I call that the lateral thinking – that’s a reverse way of thinking about the customer. Call the customer up and do some real customer care and say, ‘Okay Ron, last year you flew our airline every 17 to 20 days. How come you haven’t flown with us for 45 to 60 days. ‘

“Answer: ‘I hate your guts, you lost my bags, you left me sitting in Chicago. I’m not fooling with you flight attendants anymore, and you are a bad set of human beings.’

“Then the airline should turn around and ask, ‘How can we fix it?’ That is the question: ‘How can we help you? What do we want? What is it that we did to lose your business?’

According to Swift, that hypothetical model is already in place at British Airways, and has saved the company a lot of money. Swift claims that by simply calling up unsatisfied customers two days after they return from their trips, the airline’s retention rate has doubled from approximately 40 per cent to 80 per cent, thereby saving the company untold millions.

Besides expanding into proactive customer care, Swift suggested that businesses start to put more value on using CRM techniques to do householding.

That would mean the bank would refrain from sending Swift’s elderly mother a notice saying that from now on she is going to be charged a $25 monthly maintenance fee on her $300 savings account, since that would upset not only her, but her son, a valued customer with $100,000 in mutual funds.

“My account may not be tied to my mother’s, but I’m her son and pay all her bills and they ought to know that. And the bank manager does. That bank’s just not keeping a data warehouse.”

Swift feels it is necessary for business to understand that CRM and data warehousing are inherently and inextricably linked.

“CRM is the biggest, hottest thing going inside data warehousing…and the reverse is that the biggest thing to enable CRM is data warehousing. Data warehousing is a technical solution that brings together the operational data and the ERP data from all these systems into an analytical historical corporate memory of customer centric information. That’s a CRM data warehouse.

“If I knew three or five years of history on which of my customers are non-profitable, then I would do [something] to make them profitable – cross sell them, upsell them, try to enhance my relationship with them. Then if after doing that, I cannot over a period of time sway them to use my products and services, then I might use a different stimulus — charge them greater fees. And fees might cause them to become a zero profitability or a plus profitability customer or they might send them away.”