This time it's personal - Inside Knowledge

Feature

posted 1 Sep 2000 in Volume 4 Issue 1

This time it’s personal

How well do you know your clients? Terry Wilcox explains how to begin personalising customer contact, and how making the best use of customer knowledge can convert online browsers into buyers.

Do you feel as if the more customers you have, the less you know them? But no matter how many customers you have, you need to understand each one and treat them as special. Any less and you’ll lose them to your competition. It’s rare to have that personal relationship, especially with the volume of customers that online business can bring, but with today’s technology, it’s perfectly possible. It’s just a question of getting and using customer knowledge correctly to personalise all contact that you have with them.

Where to begin?

As with any major business decision, taking the long-term view on a knowledge management strategy will help you decide what’s really right for your company. There are many e-business vendors in the market selling solutions with all sorts of three letter acronyms that offer instant results. But technology is only half the equation.

A two-way process

The first thing to do is to concentrate on the most important part of your business – your customers. It’s easy to focus on initiatives and decisions that bring internal efficiencies like installing Interactive Voice Response systems or workflow systems. Both these technologies save money by speeding up the flow of work. But do they directly benefit the customer? For your company to truly succeed, you must take advantage of your customer and use the knowledge they have. So rather than simply managing the flow of knowledge internally, you need to ensure that the data you gather is used to improve external communications, which will directly affect the customer. This will help you understand your customer and be able to do business how and when they want. You can use the Internet as a base for gaining and sharing this information, helping you create this customer-centric view.

Breaking down barriers

The next step is to make sure that the view your company has of the customer is a complete one. To do this, you need to break down the internal barriers to the flow of information. In many companies, customer data is often not shared as it could be. How many times have you contacted a company repeatedly, only to find that the sales, service and accounts departments have separate databases and do not pass on their knowledge? So each time you contact them, they have to re-learn your history. Once again, you can share and leverage this customer data using the Internet. If information is available over a web browser to all customer-facing employees, this doubling of effort never happens. It also avoids the dreaded duplicated databases, since all databases are dynamically linked to a central one, meaning that any changes are automatically updated throughout the enterprise. This not only cuts the workload of some departments, it helps you to know your customer fully so you can offer them a better service.

You’ve also got to consider the level of information that you offer your online customers. Very often the detail given on products is sketchy or inconsistent. The flow of information from your company to its eventual publication on a website can be like a game of Chinese whispers. The more people there are, the less accurate the end result is. At the end of the day, the standard of information on your website has got to be the same as your printed material.

They’re the same customers

It’s easy to separate the online and offline businesses, treating the two as different parts. And it is easy to forget the lessons learned offline, meaning you have to learn them all over again. But whether you are doing business off- or online, you are dealing with the same customers. One good example of how not to treat online customers is to hit them immediately with a long form to fill in. You need to gain information on the customer, but you can’t be too aggressive about it. How many times have you gone into a shop to be handed a questionnaire immediately? Never. So why is this suddenly acceptable online? The answer is that it’s not. Far better to follow the example of The Gap, who have greeters that meet you at the door of each of their shops who can point you in the right direction. This lesson can be applied to the way you do business online. You can use a customer’s existing buying patterns or ask them where they want to go as soon as they step through the virtual door so that their journey through your site is personalised.

So using knowledge effectively is not just about technology. Firstly, it may involve a shift in your approach. When seen as part of a complete e-business strategy, the rewards are compelling.

Reaping the benefits

The most obvious reward is an increase in sales. If your sales department has access to each customer’s full history and buying habits, then their efforts will be a lot more successful. They will be able to cross- or up-sell, either through personal contact, or via an automatic email response. Because the information they provide is timely and relevant, customers will be more responsive. For example, if a customer has just bought a mobile phone, the order confirmation can be emailed with a note at the bottom suggesting a spare battery, a different cover or an alternative tariff rate.

This is a classic example of how information shared between departments, in this case the sales and service departments, can be used to good effect. The success can also extend to marketing. A precisely targeted marketing campaign is bound to be more successful than a scatter gun approach.

Filling the virtual trolley

Using customer knowledge correctly can also increase your sales by helping you to turn browsers into online buyers. There are three options – your company can lead customers to a frequently asked question (FAQ) area on the website, you can provide assistance virtually or you can offer contact with a customer service representative, in person. All of these options process information to provide real time help so that your customer makes the purchase they require.

The FAQ is perhaps the first example of using data to provide online customer self-service. When you have a query on a website, you can select the relevant FAQs to set yourself back on the right track. This may help in some situations, but often you can’t understand the answer, or it doesn’t fit your situation exactly. Doing business on the Internet is all very well, but sometimes you actually need assistance in narrowing down the choices, which can’t always be done via an FAQ.

Are you being served?

This is where technology can help customers, in the form of a virtual sales assistant. They can step in on request and ask you questions about what you want, so that they can direct you to the relevant products. They draw on the personalised information that your company holds on each customer to offer them informed advice. At each decision, they ask the customer the criteria involved in their choice, and present the possible solutions.

The technology behind this, developed using expertise from the MIT, is perhaps the most sophisticated use of knowledge management in an e-business environment. Using Trusted Advisor technology, customer information is sub-divided either demographically or physcographically into segments where similar buying preferences or lifestyle factors can be identified. A Bayesian engine can then estimate a ‘best product fit’ based on these microsegments. The engine then works to fit the request to certain product attributes, such as size or cost, to produce a relevant answer. Since this process is complex, the development process involves a learning curve of several months to ‘get up to speed’ with the company’s products and customer’s requests.

To see a virtual assistant in action, you can log on to Proflowers.com where Emily will help you choose flowers for a bouquet, or Compusa.com where Jill will help you choose a laptop. Jill is praised by customers, as she gives them timely, fair advice about what best suits their needs. In particular, customers feel that they receive personal advice, but are not ‘schmoozed’ into buying products that aren’t suitable.

Some customers will always rather deal with a real person. If you have a web-based call centre, you can offer them this option. Service representatives can view a customer’s progress in real time and direct them to the right product immediately.

Self service on the web

Sometimes assistance, whether virtual or not, just isn’t needed. If a customer doesn’t want any help but instead is offering or wanting to change information, why not let them do the job themselves? A recent survey by the Chartered Institute of Marketing shows that most customers prefer to drive a business relationship themselves, rather than being contacted by the company. The more your company hands over the reins to customers, the better the relationship. With an integrated e-business solution that stores information on the web and links databases to dynamically update them across your business, you can give your customers access to safe areas to update their own details. Giving customers the opportunity to serve themselves on the web like this both empowers them and cuts your call centre costs.

For example, if a customer wants to change their account details, they can simply log onto the website, access their account and change their address, tariff rate or service plan themselves. One example is Sprint PCS, a mobile phone provider in the US. Their research showed that a large number of their customer service calls were answering the question: ‘How much time have I left on my call plan this month?’ Answering these calls meant that Sprint was actually making a loss on many accounts. When Sprint PCS implemented a web-based e-business system, their customers could log onto the Internet and answer their own questions. The savings on not having to answer this question alone meant that the system paid for itself within three months.

Loyalty is the key

Perhaps one of the greatest benefits of using knowledge to personalise contact is that it reduces customer churn. The usual statistic is that it costs six or seven times more to sell to a new customer than to an existing one. If a customer has a bad experience with your company, then they are not likely to return. Conversely, a happy customer is usually a repeat buyer. If your customer feels known and valued, then they will remain loyal to your company, returning to buy again and again. It’s all about giving them a good experience.

This loyalty can open a few closed doors for your company. Permission marketing is a hot topic at the moment. Push technology means that you can send out emails to relevant customers, but many customers find this intrusive. Pushing sales information to them may end up losing you their business. But if your customers know that you will make sure that the information is personally relevant, they will be more likely to choose to receive those emails. Using the knowledge you gain from your customers to personalise contact can help you develop a relationship of trust like this that extends further than the usual merchant/customer interaction.

Looking to the future

Information is the currency of the new economy. Every time a customer approaches your company, there is an opportunity for you to learn a little more about them so that you can offer outstanding service. The Internet is not just another channel to market, it’s an invaluable business tool that has, and will continue to change the flow of knowledge. Your business must adapt to this and embrace it, otherwise you may find that your customers will start to look elsewhere. Perhaps now is a good time to reflect: How much do you know about your customers, are you using this knowledge fully to improve your service and how can you do better?

Terry Wilcox is marketing director EMEA at Kana Communications.
He can be contacted via:www.kana.com