Welcome Guest | Sign In
ECTNews.com
Salesforce Industries Summit
E-Commerce Times TechNewsWorld CRM Buyer LinuxInsider

Cost Deflection Out, Customer Experience In, Part 2

By David Barrow CRM Buyer ECT News Network
Aug 31, 2006 4:00 AM PT

Companies that seek to automate the customer service process to cut costs often alienate customers instead, as Part 1 of this two-part series reveals. Some companies, though, are finding ways to incorporate informed, personal interactions into their customer service programs, and are treating every question a customer poses as a chance to build sales and customer loyalty.

Cost Deflection Out, Customer Experience In, Part 2

Even seemingly mundane queries are opportunities for customer retention. Banks, for example, know that a customer who is inquiring about the payoff amount on a mortgage is likely to be either in the market to sell or considering refinancing with another lender.

What if instead of simply answering the customer's question, agents were armed with special offers or scripts to respond to these queries? This request for the loan payoff amount, for example, should trigger the agent to engage in a dialogue to avoid missing an opportunity to keep the customer. Savvy businesses today are using customer experience solutions to leverage such retention offers at the point of contact.

Honing Customer Interactions

Tying this information together with analytics provides a rich understanding of customer needs and wants, down to a fine level of detail. For example, a wireless carrier recently discovered its customers were far more receptive to new offerings when engaged in a conversation.

By supporting its agents with timely and pertinent advice as such conversations progress, the company increased close rates from the traditional low response rates of direct mail to 58 percent -- and even up to 80 percent on Sundays when customers have more time to talk.

Preventing Post-Purchase Dissonance

It's important to look at the overall lifecycle of a customer -- from acquisition to development, to servicing, to retention. Understanding what the customer is going through at each stage brings added context to each interaction. For example, auto manufacturers know that when drivers buy their first vehicle, they often experience some level of regret, or post-purchase dissonance. To curb this anxiety, some manufacturers send welcome aboard letters and have the dealer make a follow-up call to answer any questions about the vehicle's operation and share tips on getting the best mileage.

One auto manufacturer has mastered the art of alleviating post-purchase dissonance, starting with its no-haggle policy designed to produce a buyer experience that's free from sales pressures. This philosophy is based on the recognition that buyers of lower-priced vehicles are highly mistrustful of car dealers. To avoid having customers leave the showroom worried that they didn't negotiate well enough to get the best deal, the auto manufacturer established a no-haggle policy. Upon arrival at the dealership, customers find prices clearly marked on the vehicles.

A customer who comes in to pick up a new car finds that the service team has made sure it's freshly cleaned, the gas tank is full, and the fluids are topped off -- all at no extra charge. The team makes a big fuss, taking the customer's picture and offering congratulations over the intercom. The sales rep introduces the customer to the service team, demonstrates how to check the fluids, and shows where the spare tire is located. The sales rep calls the customer a few days after the purchase to make sure everything is all right with the car. Every time the car is brought in for service, it is hand washed.

The company also hosts highly popular customer events, including tours of its plant and invitations to meet the people who build its vehicles. More than 36,000 owners showed up for the company's first customer event.

Missed Opportunities

This all may seem superfluous, but consider the alternative: You walk into a showroom excited to test drive that new car you've been reading about. After taking you for a quick spin around the block, the sales rep disappears into the back room to "negotiate" your price with the manager. Meanwhile, you wait endlessly. You finally nail down the price and plan to return the next day to pick up the car.

The next morning, you arrive promptly to get your car, but no one in the dealership is in any particular hurry or seems to care about this major purchase you just made. They page the sales rep and you again find yourself twiddling your thumbs while they leisurely get the car out of the back lot. You drive away with your car, fumbling with the new buttons, trying to figure out what's where. A week later, a dashboard maintenance light goes on. Concerned that something may be wrong, you call the dealership and, after running through its automated phone system, you eventually reach a service person, who tells you the light means your windshield washer fluid is low.

All of these simple interactions were opportunities for the dealer to make you feel good about your purchase. Companies need to carefully consider each stage in the sales process in order to develop successful techniques for reinforcing the customer's choice of their product. Smart businesses understand the psychology of the customer experience and learn where to interject activities at the right moment. This is what keeps customers coming back.

Making the Connection

Gaining customers' loyalty requires fulfilling their desires. To do so requires a keen understanding of not only factual information, such as existing products and previous history, but insight into their preferences as to how to engage with the company.

This gives organizations an unprecedented ability to resolve customer conflicts and more accurately target new offerings for far greater success rates. Businesses that truly connect with their customers are reaping the benefits -- gaining an average 25 percent more repeat business and generating between 30 and 50 percent higher net margins than traditional firms.

Cost Deflection Out, Customer Experience In, Part 1


David Barrow is vice president of vision, solutions and architecture at Chordiant Software.


How will the pandemic influence your holiday shopping habits this year?
I will shop online exclusively, for my own safety and to help limit the spread of the coronavirus.
I will do some shopping online, and some in-person because I want to support merchants in my area.
I will shop online definitely, and I will consider local retailers -- but only if they provide curbside service.
I will only shop in-person because the risks associated with e-commerce outweigh my chance of catching COVID-19.
I will not do any holiday shopping this year due to circumstances related to the pandemic.