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Feature

posted 1 Sep 1999 in Volume 3 Issue 1

Meeting customer expectations

Knowledge management has historically maintained an inward focus, battling to help a company's employees relate to each other better with the help of diverse new technologies. But what about the customer? Mining their intangible assets is as important as nurturing the knowledge of an employee. Here, Angus Hearmon discusses an approach to integrating knowledge management techniques into the heart of customer service. 

What do you need to know to service your customers? A recent working session generated the following thoughts about what any individual who deals with customers might need to know in order to deliver value. There are two knowledge-intensive activities in your relationship with your customer:

Helping them to understand your business and what you can offer their business

Ability to ask about related products and services

Expert system to help new customers specify products

Activating, monitoring and intervening in the processes of supply

Ability to promise supply

Real-time payment status

Order tracking

Automatic Order placing - via S&OP

Understanding your customers business and each individual as a person

Personal/Business details of Caller

Latest headlines about customers business

History of interactions with customers.

Reduced time spent on the internal administration of customer complaints

Reduced time spent communicating with the customer on routine complaints progression issues

Increased effectiveness due to complete overview of all complaints

Customers locked into our internal processes

Easy integration of new customers into our systems.

Additional benefits to the customer as expectations are raised, included:

Greater visibility in the process of problem resolution; status updates, decisions taken

Increased control and participation; raising complaints and contributing to complaint process.

Case 2: Product formulations expertise (access to people)

This case study is taken from a business that sells not only its core products, but also its expertise in designing end-use formulations for its clients to use. These formulations contain many of its own products, but typically also include other ingredients from competitors and other suppliers. The formulation expertise is often a critical part of selling their product. However, formulation expertise is a valuable resource and is mostly accumulated through years of experience. The expert formulator was spending only about 10% of his time in high value-adding work for the customer. The rest was spent producing formulations that were only minor re-works of existing formulations. The business, and more critically the expert individual, wanted to get him out in front of the customer, doing more novel, high value work.

Through a process of knowledge elicitation a complex set of rules was identified which this expert was subconsciously using each time he went about the formulation creation process. These were previously unknown production rules, even to the expert. (It is worth mentioning as a cautionary tale, that this expert was a willing advocate from the start. Many experts feel threatened by this kind of approach, and if uncooperative, there is no elicitation method in the world that will extract their expertise.) By embedding these rules into a rule-based system containing extensive product data, an expert formulations system was created.

All the formulators in the team now use this system, enabling them to create feasible formulations for over 90% of requests. This has shared the experience around the organisation, using one expert to significantly develop the expertise of more inexperienced colleagues. It has also ensured that this expertise is kept within the organisation, so that should the expert or any other member of the team choose to leave the company, the capability would be maintained by the business. Most significantly, the key expert is now 100% customer-facing and undertaking complex work for which the basic production rules do not always apply.

The most fascinating story to evolve from this work was when the expert came to test the rule-base. By running a formulation search he uncovered a range of formulations which may work. One of these formulations was something he recognised - he had identified this formulation over twenty years ago in response to a fairly similar request, but had since forgotten it. By using his production rules, the system was able to remind him of an answer that he himself had forgotten. The expert is now the system's biggest fan.

Case 3: Online support for distribution network (access to process)

This case study is taken from a manufacturing business that relies on the use of distributors. They are able to serve a wider range of small customers than any large sales force could achieve. However, there are also challenges involved with the use of distribution partners. These distributors are one step removed from the business and therefore often less knowledgeable about the product range. They can also act as a distributor for many other companies and so in these cases, the supplier has to compete for a share of mind. The critical task for the supplier is to knowledge-enable the distributors so that selling their products is significantly easier and therefore more profitable for them. There are three key knowledge tasks that can help to inform distributors:

They may want an 'update' on the overall market, any organisational changes and company/competitor news.

They may have a specific product or formulation in mind and need to check out some particular type of information about it. For example, they may require safety information, a product code, or information about the other ingredients required in a particular formulation.

Alternatively, they may have a specific customer enquiry that needs satisfying, such as whether the supplier can deliver a particular type of formulation effect.

In this case, information was traditionally passed to the distributors through a series of A4 lever arch folders. The annual re-print posed problems due to out-of-date information, and high re-print and distribution costs as well as version control. They were also complicated for the distributors to use since their tasks involved extensive use of indices and look-up tables to manage the information across seventeen folders! The business has since built an application for secure use with its distributor network, the latest version of which is extranet-based. The application combines product, formulations and market information built into a relational structure that is interrogated through a web interface. The information is owned and managed by a series of administrators, and physically resides in a wide range of formats throughout the business. These data sources are integrated through the use of ActiveServer and Lotus Notes Domino technology.

The power of the application, and the businesses' willingness to help its distributors have been felt through greater lock-in of the distributors and through increased sales through these distributors. However, the biggest hit has actually been in internal knowledge sharing and greater depth of product understanding - an unforeseen benefit of the work.

Case 4: Extranet for sharing marketing knowledge (access to process)

With increasing demands to market products globally and to reduce the costs of marketing and advertising activities, one of our businesses appointed a single marketing/advertising supplier for the business globally. Whilst doing this, the business wanted to bring down some of the barriers which often exist between external suppliers and internal capability. They recognised the need to network their internal marketing people and to bring these people together with external partners in the advertising agency. The turnover of employees in advertising agencies can be very high, and therefore the ability to develop some shared capability would help to leverage the investment in this contract.

The business used Notes Domino to develop a secure extranet application that could be accessed by the agency staff from their Macintosh machines over the web, and accessed internally on PC's through the Lotus Notes backbone. The application started with three functions:

A library of reference marketing materials (stills, materials layouts, video clips) created by the Agency.

A discussion forum to discuss key campaigns and share ideas for improvements.

A best practices forum for sharing marketing trends and techniques, corporate guidelines, market research and new product development ideas.

Benefits have been realised in a number of ways. Cost savings through the re-use of existing marketing materials have been achieved across the globe. Origination and production costs (marketing materials) have been reduced in a number of locations. The availability of global marketing information provides greater efficiency. The application allows marketing personnel to do more, to work better, to work faster, and at a lower cost.

Measurable improvements in customer service

These examples give real illustrations of our own clients' work, done to improve relationships with customers through the use of Knowledge Management. Perhaps the most significant example of customer-focusing KM is that of Buckman. Although the case is much touted, the "Effective Engagement of the Frontline" programme demonstrates the kind of thinking required to achieve step-change performance. Through his vision, Bob Buckman set about transforming the organisation from looking inward to being customer-facing. By the year 2000, they aimed to turn Buckman, quite literally, on its head. Through our work, we are enabling clients to push their best people into closer and closer contact with customers.

Knowledge Management is undoubtedly a broader topic than just Customer Relationship Management. It offers new ways to exploit product expertise, to generate continuous learning throughout your organisation, and to more effectively leverage investments in people, information resources and technology. But whatever business you're in, the value which can be delivered ultimately comes down to customers. Whether you sell shrink-wrapped products or tailored service provision (or a mixture of both), to a consumer on the street or in multi-million pound business-to-business sales, the factor that drives your business is the one which ultimately pays your bills. Helping them to know you better in terms of what you can do for them will enable you to increase sales rates whilst reducing sales effort. Developing slick, transparent processes for interacting with them, will ultimately help you to reduce spending whilst increasing service quality. Understanding how they work, and what makes them tick, enables both parties to extract greater and greater value from the relationship. And what's more, these knowledge links between different partners across the value chain are a competitive advantage which is increasingly difficult to replicate."

Angus Hearmon is a senior partner for the Knowledge Management Group, a project-based consulting organisation. The group brings together capabilities in information and communications technology, management of information content and the development of people, integrating them to deliver value. He can be contacted at: angus_hearmon@ici.com
For more information about how KMG can deliver business success for you, contact Phil Bevan on +44 (0) 1642 432357, or email: phil_bevan@ici.com