When first introduced, customer relationship management was viewed as a platform with two distinct yet mutually compatible goals: providing enterprises with actionable customer insights and pleasing the customers.
Many customers, however, report that dissatisfaction levels with vendors and suppliers have actually increased as a result of CRM initiatives. They complain that more and more time seems to be required to complete seemingly simple transactions, and that the economic cost of transaction processing has increasingly been shifted from the enterprise to the customer.
It is not a surprise, consequently, that some companies are starting to ban the use of the term ‘customer relationship management’ to describe customer-facing initiatives. After all, what CIO or senior executive wants to label a new project with an appellation that connotes increased customer pain and suffering?
Stripping time out of CRM transactions
The opportunity to deliver on the original promise of CRM and provide a balanced set of benefits to both the enterprise and the customer does, in fact, exist. The next frontier for CRM is rethinking all customer transactions with a single-minded focus on stripping time out of these transactions.
By “giving time back to customers”, enterprises can:
- Create value for their customers by reducing transaction time and costs.
- Capture benefits for themselves in the form of reduced labour costs, increased information availability, more rapid service recovery times, and enhanced customer insights.
Companies who ignore the criticality of “time rebates” will quickly find themselves at a competitive disadvantage.
This opportunity to give time back to customers will come from multiple sources:
New technologies, such as radio-frequency identification, biometrics, smart cards, and mobile communications, will allow enterprises to:
- Speed up the customer recognition process
- Speed up the payment process
- Automate the tracking of people and goods
- Untether transaction processing from fixed locations
- Anticipate and proactively resolve customer service issues.
Innovative value-chain partnerships will facilitate the achievement of these results through:
- Common standards
- Seamlessness/transparency across enterprise boundaries
- Shared technology investments
- Reduced investment thresholds
Shell Canada Tunes In To RFID Tags
Radio frequency identification (RFID) tags, for example, exemplify how new technologies create “time rebates” for customers. RFID tags, which can be attached to objects or people to transmit streams of data about them, are turning up in a diverse set of applications ranging from payment processing to baggage tracking. Even the times of runners in Quebec City’s Marathon Des Deux Rives (as well as more than 120 other Canadian road races) are now tracked using RFID technology.
Shell Canada’s easyPAY™ payment technology, first tested in the Calgary market in the fall of 2000 and subsequently rolled out in 2001 to other Shell retail sites in Vancouver, Edmonton, Toronto, Ottawa, and Montreal, embeds RFID technology in a tag that fits on a key ring. It communicates with a pump-mounted receiver to automatically bill fuel to a customer’s chosen credit card.
Shell conducted extensive research that revealed speed and convenience are becoming increasingly important factors for consumers purchasing gasoline. As a result, the company designed easyPAY™ to meet the needs of consumers who want to have a simple, quick and efficient experience when fuelling up.
Yet the customer is not the only beneficiary. Shell is now able to quickly gather information about when and where its customers purchase gasoline in much the same way the marathon and other races can track precisely when runners have crossed the various kilometre markers.
Value Chain Partnerships
Innovative value chain partnerships offer companies such as Shell the chance to increase the benefits of time-savings technologies even further. Like Exxon-Mobil has done with McDonald’s in the U.S., Shell Canada has the capability to lease “RFID space” to other retailers. By the same token, transportation carriers, such as Air Canada, will clearly have significant incentives to develop the infrastructure for tracking baggage across travel and hospitality modes.
RFID technology has also been implemented in other customer-facing applications, such as the Windsor Public Library, where the technology is expected to facilitate rapid patron self-checkout and improve overall materials handling time by over 75 per cent.
Other Technologies Create Time Rebates
RFID technology is just one example of a technology that will create time rebates for customers. Other examples include: Self-service/self-provisioning through the Web, phone, or kiosks (e.g., Air Canada’s award-winning Express Check-in); Biometric identification (e.g., the United States Immigration and Naturalization Services has a Passenger Accelerated Service System, INSPASS, currently available for Canadian citizens who travel to the U.S. three or more times per year; processing times of 15-20 seconds are typical, and times as low as 11 seconds have been observed at existing INSPASS kiosks); Smart cards (e.g., The Province of Ontario’s deliberations on the use of smart cards for accessing government services); Mobile/wireless ordering; ePayments; and Artificial intelligence for anticipatory customer service.
What This Means For CIOs
To avoid CRM initiatives that infuriate customers, CIOs need to:
1) Ensure that their ongoing scanning processes include a particular focus on technologies capable of “giving time back to customers.”
2) Understand processes and the associated economics from the customer perspective (even when those processes cross enterprise boundaries).
3) Determine how the various technologies can be applied to the customer-facing processes to eliminate redundant activities, reduce wait times, and expedite handoffs across organizational boundaries.
4) Analyze when it makes sense to go at it alone, rely on a third party, outsource, collaborate vertically with value-chain partners, and collaborate horizontally with competitors as part of an industry-wide consortium.
5) Assess how the exchange of information about customers and their behavior across organizational and country boundaries affects privacy considerations.
It is easy to conclude that the recent CRM backlash will drive enterprises to reduce the emphasis on CRM. We disagree. It is simply time to refocus on making sure that customers get back the time that they deserve.
Jonathan Copulsky and Mark Whitmore are Principals at global management consulting firm Deloitte Consulting. They play leadership roles in the firm’s North American CRM practice.