October 27, 2005

The Antidote to Bad Customer Service

A few weeks ago I read a great post by David Carter called "Did eCommerce Kill Good Old Customer Service?" David's post was about a bad customer service experience and he had this to say:

"The thing that bugged me the most was that in the early days of ecommerce when people were predicting the demise of retail shopping to online I said that people like to shop. You know go out.. see the product.. ask questions. So I guess I was wrong."

I remember this debate. It was circa 1998. The promise of E-Commerce was the leveling of the playing field. If you were a "bricks and mortar" retailer you were under threat by newly minted online players. This forced the traditional retailers to innovate and improve.

Fast forward to 2001 and the dotcom crash halted innovation and investment in online B2C. Resources shifted to B2B and back-end supply chain automation. Fundamentally bricks and mortar retail is frozen in time in 2001. Oh sure their back end operations are state of the art but their customer relationship managment (CRM) tools have not kept up. By CRM I'm not just talking about CRM software, I'm talking about 1-800 #'s, contact centres, front line people...everything that's customer facing.

This can be seen in the case of Canada's oldest corporation - The Hudson's Bay Company (HBC). HBC is a traditional retailer with 500+ department stores that was incorporated in 1670 and employs 70,000 employees. It faces hyper competition from the likes of Walmart, Costco and Home Depot. As a result of poor performance the company is facing a hostile take over by its largest shareholder. This shareholder is eager to revitalize the company and regain its customer base.

For most people the biggest purchase they make is a house or a car. I drive a certain brand of car. I've owned their cars for 6 years, so I'm a repeat buyer. The vehicle is packed with the latest gadgets. It's an amazing drive. But what made me want to buy it is that scheduled maintenance is once per year or 24,000 kilometers. Trouble is I've had it in for service at least once every month. Not for major service but to replace burned out headlights or warning lights that shouldn't be on etc... Perhaps this has to do with product quality. But that's not why I'm highlighting this.

There was a time a few years ago when I'd call the dealer service department to book an appointment and the advisor would ask - "when do you want to come in Mr. Daniels?". If I answered that I wanted have the work done in an hour, that was ok. It was great. I could rely on consistent superior service. It was painless. Now, I can't even speak to a human when I call.

What's the missing link? What can my car dealer and your company do better?

The answer comes by looking at customer relationship "thought leaders". eBay, Google and Microsoft enable large scale online buying and selling through the deployment of innovation and technology. These businesses have excellent back offices but what makes them so successful is their astute focus on everything that's customer facing. For example they hardwire themselves directly to their customers to form truly open communcations via corporate blogging. This closeness with the client fosters higher levels of client retention and easy customer aquisition.

There is an excellent book about connecting with your customers -
The Cluetrain Manifesto. You'll want to add it to your reading list. And by the way if you work for my car dealer, you may want to consider launching a blog, that includes a web based appointment booking tool.

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  2. Customer Relationship Management is a business strategy designed to optimize Profitability, Revenue, Customer Retention and Satisfaction.It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success.

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