Public Relation Management ISMS ONGOING EXAM ANSWER SHEET PROVIDED WHATSAPP 91 9924764558
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Masters Program in Business Administration (MBA 4 SEM)
( Semester IV )
Specializations:- Public Relation Management
Note :-
a) Solve any 4 cases
b) Each case carries equal marks
Case 1 :-
Reaping the benefits of customer insight
During the late 1990s, companies invested millions in customer relationship management (CRM) systems such as sales force automation, campaign management and call centre systems. Given the importance to any business of establishing and building relationships with customers, this is not surprising. But despite this rush, many companies have been disappointed by the low return of investment from CRM. Being able to handle more calls per agent or run more marketing campaigns has been of limited value.
The real returns come when business intelligence software is used to drive these operational systems. This software opens up opportunities such as up- or cross-selling in the call centre, targeting campaigns at specific customer segments and increasing the relevance of the offer made and its value to the customer, thereby increasing response rates.
The ultimate aim is to combine CRM with business intelligence to produce a ‘closed loop’ systems in which business intelligence analyses customer behaviour and produces a list of targets for a specific product or service. The campaign is managed using the CRM software and the business intelligence systems and then assess the results to produce a more refined campaign.
However, few organisations have reached this level of sophistication. As Colin Shearer, vice president of customer analytics at SPSS, a supplier of predictive analytics software, says: ‘Most companies have always dealt with their customers en masse.’
According to Mr Shearer, business intelligence software is ideal for assessing the profitability of individual customer by matching the cost of serving each one against the revenue he or she generates. The organization can then develop marketing campaigns that target its more profitable customers. At the same time, unprofitable customers can be diverted towards lower cost channels, such as automated voice systems or a website.
‘You need to identify the small percentage of very high-value customers that are generating 80 to 90 per cent of value in the company,’ he says. ‘You also interested in the trends, such as customers who are dropping out of the top to become less valuable and take their business elsewhere.
The final stage of the process is to use data mining software to predict how individual customers behave. This software uses advanced mathematics algorithms to reveal hidden paterns and relationships in sales data. The results can be used in a number of ways: to group customers into different segments according to similar behavior and characteristics; to determine which products or services a customer is likely to buy; to identify which customers are most likely to defeat to another company; or to assess how much of a credit risk a potential customer poses.
David Bradshaw, a senior analyst at Ovum, explains that such assessments once required advanced mathematical knowledge to build and run data mining models. ‘You still need people with expertise to set up the business intelligence systems, ‘he says, ‘ but business users are increasingly being trained to build, analyse and exploit segments. You are “handling over the toys “ to the business people to do the analysis themselves.’
Vodafone, the mobile network operator, has a single contacts number for its call centre and routes each caller to the appropriate team of agents for his or her segment. According to Julian Moss, UK development manager: ‘Business intelligence enables our touch points to target the right groups of customers, to understand them and to have a close relationship with them.’
Spaarbelg, a Dutch subsidiary of Aegon, the life insurer, has a growth strategy based on expanding sales to its existing customer base, rather than on acquiring new clients. It uses SPSS real-time predictive software to suggest cross-sell opportunities to agents in its inbound call centre, which handles 1m calls a year from 1.6m customers. To avoid pestering them, its agents gathered enough information in just 180,000 calls to develop a targeted recommendation. In a third of these calls, the agent determined that the customer was respective enough to make the offer and sales worth $30m.
Business intelligence reporting is also ideal for managing performance in contact centres. It can help set and track targets and spot trends, and it can provide management dashboards that display key performance indicators, such as how many calls agents are handling and how many are closed within agreed service levels. The use of business intelligence is becoming increasingly important in the face of new legislation introduced to guard against unwanted e-mail and to allow individuals to bar cold telephone calling. Mr Shearer points out that with fewer opportunities for outbound marketing, organisations, must take advantage of cross-selling at service call centres.
As Mr Bradshaw explains: ‘You may only have one chance of approaching a customer. This is pushing people into micro-segmentation of their customers. Rather than having five or six major segments, they may have many thousands, each with 100 to 1000 customers. You analyse the behavior of the micro-segments so that you know what they want to buy, how they want to buy, how they want to buy it and how to approach them.’ ‘The problem with the business intelligence vendors’. He adds, ‘is that they have targeted the technical experts. They haven’t yet really got to use their marketing analytics. They are trying to do better, but [the CRM vendors, such as Unica Corporation, Siebel and E.piphany] have targeted people actually do the marketing.
It is clear that business intelligence is needed to drive CRM activities. However, the trick is to create a closed loop systems that combines customer profitability with data mining. Only then will an organization be able to concentrate on giving profitable customers the best and most relevant products and services.
Questions
1 What is the different between business intelligence (BI) and (analytical) CRM?
2 Do you agree with the following statement in the text: ‘The ultimate aim is to combine CRM with business intelligence’? Give detailed arguments why you do or do not agree.
Case 2 :-
Customer knowledge at Centre Parcs: a life-long holiday!
Introduction
Centre Parcs is a holiday resort with locations in several European countries, for example Germany, France and the Netherlands. Customer relationship management is one of its successes. The secret: ‘it is not about the value he or she wants.’
Richard Verhoeff, director of E-commerce at Center Parcs: ‘None of our customers is equal. The market and the customer do not exist for us. All that our guests have in common is the money and the time they spent with us. It is our challenge to get to know them better…. It was the objective of our yield management systems to optimize cottage rental, but nowadays we also want to actively offer services at different contact moments. Experience tells us that guests who participate in more activities are more likely to return. But before you can do this, you will have to answer questions such as: who are our guests? When do they come? What do they want? In other words: we need customer profiles. Of course, segmentation is nothing new. In most cases customer groups are distinct and differ in the value they represent for the organisation (customer value). Customer relationship management then simply means retaining the good customers and stimulating them to increase their expenditure, while in the meantime the bad customers can leave.
Profiling customers
BPK Acxiom, a database and CRM consulting firm, approached it from a different perspective and began by analysing the emotional and instrumental values of a stay Center Parcs. These values change with the life cycle of a customer. He comes as a little child with his parents, when he is older he brings his girlfriend, and again later his family. Each of these roles asks for different approach. Also, the value of the attractions differs for each customer, depending on his life cycle, the time of his stay and the people that accompany him. Verhoeff: ‘ The swimming pool on a Saturday morning has a completely different function from that on a Sunday afternoon, when there are a lot of small children around.’
To clarify this, BPK Acxiom developed life scenarios. Peter Severens, director at BPK Acxiom: ‘We write life stories. What are the motives that drive people? Where do they come from? What are the events in their life and in specific situations? And what goods and services are consumed during these events? We map people’s life cycles and store them in the database. ‘The scenarios have been tested and refined in panel research together with a market research agency, named Signicom. It resulted in the definition of a number of customer groups and a customer-value pyramid per customer group. The value pyramid contains suggestions for product development and communication. The tone-of- voice, the actual proposition and the sales arguments match the values and preferences of the segment.
CRM software
CRM Software plays an important role during the implementation of this customer group project. Center Parcs uses the forecasting software developed by DataDistilleries (now owned by SPSS) during direct and telemarketing actions. Relations are selected that have the best chance of booking during a specific period. But also, salespersons benefits from the software. Marcel Holsheimer, founder of DataDistillers: ‘Ours software helps to predict the interests of a person during a contact moment. ‘Specific phone scripts and offerings can be formulated. Verhoeff: ‘Some customer groups appreciate it if you give them a discount right from the start, others first asks for an explanation of your products and services and formats help, one should never forget that it remains people’s business.
To predict what Center Parcs’ customers are interested in, DataDistilleries can benefit from an enormous database with customer data that have been collected over the years. As early as 1984, Center Parcs started to store relationship and transaction data. However, through the years the organisation has been reactive in its use of these data. Erna ter Weele from BPK Acxiom: ‘Currently, changes are focusing on improving customer insight and exploiting this information in actions. ‘Since DataDistilleries’ software is user friendly, marketers no longer have to rely on IT specialists and can act faster. Verhoeff: ‘Time to market is very important. It you notice the occupancy rate of your park is not optimal for a particular weekend, you only have a few days to do something about it’
Results
Although Center Parcs is pleased with the results to date, Verhoeff is convinced the potential of the system is larger. ‘Additional positive result of $3 million is a beginning. We have 3.2 million customers a year and if they spend an additional 2 per cent, revenue will increase by several tens of millions. By making more active use of the call centre in outbound actions, by stimulating cross-selling in the call centre, via the Internet and during contact moments in the park itself, revenues have to grow.’
Questions
1 Consider the way Center Parcs and its consulting and research firms profile its customers. Apply the method, described by Peter Severijins, to yourself or someone who visited a holiday park once before. What kind of customer profile can you construct?
2 What are two advantages and two disadvantages of applying this customer profiling approach?
3 In what ways can Center Parcs differentiate its marketing for different customer groups?
Case 3 :-
Project Direct: testing e-mail marketing is effective
Direct writer Proteq Direct used e-mails in experiments to acquire new customers and the result is: although the response on a physical direct mailing is higher, the costs per order for an e-mailing are lower, and in combination with a direct mailing the conversion improves. Sending more than one mailing to the same address works, but is, however, expensive.
The pros of an e-mail marketing campaign – low costs, extending the market reach – will only become evident when the medium is applied in the right way. Only few companies, however, test before they send out the bulk mailing and are confronted with disappointing low response rates.
For direct writer Proteq this was the reason to organise, together with an e-mail marketing agency, a test case for a new car insurance campaign. Finding out how effective and appropriate e-mail actually is to acquire new customers was the motive for Proteq to initiate the test… The marketing manager at Proteq Direct: ‘In traditional direct marketing it is always a trade-off. On the one hand you want to make a sharp selection to increase your response, but on the other hand you want to reach many people. We wanted to learn if with e-mailing we can increase our market reach. Besides that, an e-mailing is a lot cheaper. The economic climate and the maturity level of the market are reasons for a decrease in reponse on traditional mailing. ‘Michael Bres, managing partner of the e-mail marketing agency E-Profile: ‘It is the challenge to come up with a targeted offering and in the meantime to maintain the size of the mailing list. E-mail marketing can also seriously reduce the costs of an order.’ Peter: ‘But first we wanted to see if this was true.’
‘The subject of the mailing was a new car insurance with a price that decreases when the customers’ driving experience increases and therefore has fewer accidents and a safer driving style. Not only will the customer have a higher no-claim, but also a lower contribution. Prospects were private drivers without lease cars in the age categories of 29 to 65, living in areas with a high penetration of older and smaller cars up to a purchase price of $20,000.’ These criteria were used by E-Profile to select addresses in the online databases of Jecomputerisjelot and Testnet. Five equal experimental groups have been formed with the help of Experian; in the online database the e-mail addresses were related to names and addresses for which segmentation profiles were available in the Experian database.
Different ways were used to approach prospects; in a one-step approach or a multi-step approach, with or without a message informing the prospect of the upcoming e-mailing and with or without a physical direct mailing followed up by an e-mail as reminder.
The proposition remained the same in all mailings. Also in all experiments the main mailing was sent out at the same time. Further, by clicking through the e-mailing prospects could, in an interactive way, directly calculate their premium. Peter: ‘E-mail allows you to make an offer directly when people show interest. Therefore a functional use of the medium is to be preferred.’ There were three ways for people who did not want any e-mail offerings in the future to get off the list. Bres: ‘You could chose to be removed from all mailings, to be removed from mailings of this advertiser, or to receive mailings on selected topics.’ The sender was clearly visible on the mailing to avoid complaints about spamming. Furthermore, an e-mail address will never be used more than once or twice a month for an e-mailing. And, of course, we only mail when we have something to tell. By following this approach, the agency achieved that only 1 per cent of the receivers state they want to be removed from the list.’
E-Profile selected five equal experimental groups of 5000 consumers. Addresses were selected based upon the drivers’ experience, the geographical spread, the purchase value of the car (when new) and the kilometer usage per year. Sex was not a selection criterion. Peter: ‘men have no significantly different claiming behavior from women. Therefore it is a not a criterion. Besides that, we do not think it is a relevant segmentation criterion.’ For previous Proteq Direct mailings profile analyses were made for the best responding addresses (Ideal Profiles). A part of the mailing list was formed by these ideal Profiles.
The quality of the e-mail addresses is good as only 1 per cent of the e-mails bounced.
Results
Mailing consumers more than once will have a positive impact on the response, but will also affect the costs. An increase in the share of e-mails in the campaign will reduce the costs per order. The Ideal Profile consumers responded best (37 per cent). The one-step approach with only the digital main mailing had the lowest response (index 41) but ranked seconds in costs. To measure what the results would be if not 5000 but 60,000 mailings were sent out, a new calculation was made in which economy of scale effects were incorporated. The Ideal Profile remains the most profitable group with an index of 89, but experimental group 4 becomes more lucrative with an index of 60 and test group 2 with only an e-mailing, will cost less than half the average cost per policy. It is the result of avoiding the physical print and postal costs.
Conclusion
Proteq is satisfied; e-mail appears to be an effective medium to acquire new customers. Although the response on a physical mailing is higher, e-mailings are cheaper and offer opportunities to reach a larger share of the target market. The combination of direct and e-mail has synergistic effects. Approaching consumers more than once has a positive impact on the conversion, but a negative one on the costs. Peter: ‘We will continue to develop and send out direct mailings and keep on learning in experiments. E-mail databases will be expanded and improved, profiles will be expanded and improved, profiles will be expanded and improved, profiles will be combined and for sure we will combine media in the future.’
Questions
1 What are the pros and cons of combining a physical direct mailing with an e-mailing?
2 Why can you increase the reach of your campaign with an e-mailing?
3 What is meant by the statement that e-mailings should be used functionally?
4 How do you evaluate the sampling in this test/experiments?
5 What is the reason that the outcomes in the entire population are different from those in the sample?
6 Can you think of two other relevant experiments that Proteq might initiate in the future?
Case 4 :-
Secrets of success for going mobile
The mobile Internet has been a huge success in Japan, but can it spread as explosively in the west? I believe that it can – in fact it can spread as fast as the fixed Internet in the 1990s and the GSM mobile standard has done in the past ten years. Achieving this will require mobile operators, equipment suppliers and content providers to learn from – but also to adapt from – the Japanese business model. The power of the fixed Internet derives from its ability to create highly connected ‘nodes’ – take, for example, the Amazon website, which links millions of prospective purchasers with the items they are seeking. In mobile telephony, by contrast, the core secret to success is in the way agreement is sought between the various players involved to ensure they all get their ‘cut’ from the value chain. This ‘agreement’ force was present in building NMT, the first generation mobile standard, and has been present in different mobile initiatives ever since. As I see it, these two forces are clashing in the mobile
Internet. I argue that the force of ‘agreement’ is losing power while the force of ‘highly connected nodes’ is still very much understand, at least in the west.
To explain, let’s have a look at how the Japanese mobile Internet has developed. In 1999 – in contrast to the situation in the west – most Japanese did not have fixed (PC) Internet access in their homes, so the concept of the mobile Internet fell on to fertile ground. The Japanese emphasized open access to the Internet, but also wanted to standardize the quality of access for the user, and this led to the practice known as ‘cut in five seconds’, in which the connection would be lost if the site failed to download in five seconds.
This virtually closed access to the existing World Wide Web of 1999, but the Japanese consumer did not notice, since the web at that time was a non-Japanese medium. NTT DoCoMo, the Japanese mobile operator best known for its competitors focused on creating Japanese content. In the beginning this was free (or almost free), which meant high access rates and the emergence of the type of highly connected nodes I mentioned above.
This explains why the mobile Internet has become so popular in Japan. But can we do the same in the west – that is, create super-connected mobile nodes and introduce some form of quality criteria which in practice denies access to (or makes accessing) the ‘tradition’ web , less interesting?
I believe this can be done and already there are some initiatives (such as the ‘dotmob’ domain name that identifies specific Internet content for mobile devices, and price reductions of content) which are following this path. Free and highly interesting mobile content is one necessity along this path, which emphasizes the importance of creating ‘highly connected super nodes’ and disagrees with, or downplays, the traditional ‘Nordic agreement’ model.
Another reason for the success of the mobile internet in Japan was the ‘orchestration’ business model, which went beyond the traditional agreement model. NNT DoCoMo used its competence and market power to design and procure the handsets it wanted from Japanese suppliers and it also set the rules and price levels to content producers and suppliers.
This model, which I refer to as ‘orchestration’, has proved successful in Japan, where it was pioneered. But it has taken a long time for the west to understand the power of the Japanese model. Western players have learnt its value through a step-by-step approach of trial and error. Presently Vodafone live! and also the Nokia Ngage device might be regarded as attempts to orchestrate in the west. However, I do not believe that the ‘orchestration’ business model can be successful in the west. The next business model in the west might be based on some type of ‘cultivation’ of the market.
What is, however very clear is that the ‘Nordic force of agreement’ is losing ground. This is evident also by looking at the implication of Moore’s law on mobile business. Moore’s law implies that phones will increasingly become more like computers. This brings a completely new set of players into the market and thus simply because of the number of players in the value chain, agreement cannot be reached in the Nordic sense.
So, to spread with explosive speed the mobile Internet needs super-connected nodes and a ‘cultivating’ business model. But one can also ask if there is something that is presently slowing down the speed of introduction of the mobile Internet in the west? I would argue that SMS (text messaging) is doing this, for example, at how the Minitel slowed down the introduction of the Internet in France.
SMS is a barrier to the growth of the mobile Internet for several reasons. ‘Super-nodes’ are difficult and in some cases impossible to create with SMS. SMS value-added services are based on remembering numbers and people remember numbers rather poorly. SMS value-added services work on a national level only – it is a limit of the technology and no market (single country) in Europe, for example, is bigger than Japan, i.e. the individual size of the SMS markets limit the maximum size of the super-nodes. Third, SMS value-added services always have a price (transaction based) and thus would restrict the experimentation with free content that the creation of super-nodes would encourage.
I would like to emphasise, however, that not everything in the mobile Internet has to be super-connected or free. In fact, a lot of the content in Europe will be language-specific and thus limited in market size. The present content industry is focused on personalizing the user’s phone for a price – a lot of this industry might remain. A lot of the content will be peer-to peer in character (therefore free), but limited and unable to create highly connected nodes. But, I am arguing that super- connected nodes – as big as possible – are worth striving for and their existence is the catalyst of the fixed Internet, as it should be for the mobile Internet, too.
Interestingly the barrier SMS presents to the growth of the mobile Internet derives not only from value-added services, but might also reside in the SMS message itself. In Japan SMS has lost ground to e-mail via mobile phones for several reasons. I recognize that the Japanese did have some initial difficulties with e-mail, e.g. junk mail. However, the price of a single message bit in Japan is far below our current price level, and according to studies on communication patterns made in Japan, the way the Japanese use e-mail does not differ from the way SMS is used in the west.
It is actually also interesting to study how SMS is at the very core of the present western business models; so the barrier to a more Internet-based messaging and content culture is not necessarily a choice of the user, but something that is thoroughly embedded in western mobile operations’ business structures.
Questions
1 Analyse why the mobile Internet has become a huge success in Japan. Where do you agree or disagree with the author of this article?
2 How do you think the mobile Internet can become a success in your country? What can you learn from the Japanese best Practice case?
Case 5 :-
We have got a huge success on our hands
Cristina Zanchi, CRM director KLM
Despite difficulty market circumstances the number of KLM Flying Dutchmen (FD) members grew in a little less than six months by 20 per cent; the numbers tripled. This triumph was the reason for KLM winning the Gartner CRM Excellence Award 2004. CRM director Cristina Zanchi loves to show these glorious figures, especially to Air France. The two companies share the same CRM vision and that opens a window of opportunity for the future. ‘I am so impatient because I have the evidence of a huge success in my hands.’
Zanchi: ‘The award is a recognition for our team. I really pushed them. There are few airlines that are so focused on CRM – Continental, Lufthansa and Southwest Airlines make good progress – and there is certainly no airline that implemented CRM the way we did it. I wanted to leap forward; speed these days is as important as quality. And, yes, I am an impatient person.’ This personality trait of the Italian is her greatest strength. ‘If people think something is too complex, they slow down. Some people warned me of a mission impossible. Why would KLM pursue CRM while all fights are full? Well, then I learned to say: the chairs of Sabena and Swiss Air were also occupied, but see what happened. If you cannot enlarge your capacity you should think of another solution. You can increase the revenues per customer and that is something you achieve when you utilize your customer insight to improve the service. In interaction with customers you intensify the customer experience and therefore also the turnover.’
Delay
The reason why many airlines postpone CRM is clear to Cristina Zanchi. CRM requires large investments and the current margins in the airline industry are low. In the meantime the financial effects of CRM are vague. Several years ago KLM also withdrew a CRM initiative. ‘In 1997 KLM performed a very valuable CRM study, but the system never got implemented then. CRM software was much more expensive then and probably the organization was not up to it.’
But between 1997 and 2002 – the year the first building block of an integral CRM vision was constructed – the airline industry changed dramatically. Competition is heavy. ‘Internally, I had a good reason to sell CRM as a way to distinguish ourselves on emotional elements. We wanted to realize our positioning of reliability and comfort with a personal touch.’
The ambition of Zanchi to implement CRM quickly seems to contradict the opinion of many that CRM implementation above all requires a steady approach hard facts play a crucial role. Form the beginning she involved financial management and asked for frequent reports. Transparency is key to success and at KLM’s headquarters there is a panel the size of a man, showing all key indicators. Little planes mark the status and target. ‘To get an overview of CRM in one shot is impossible. It was my intention to split up our plan in pieces; a plan in three phases – change management, customer database and campaign management – with underlying steps. Phase one is ended and we far beyond the start of phase two now. Almost with one snap of my finger I can show you the total overview, the result we realized and the plans we have for 2005 and 2006.’
CRM targets are defined as a sort of acronyms: CARE, Customer acquisition, Activation, Retention and Extension. The entire KLM organization is organized around these objectives; everyone has his target. From August 2003 onwards KLM applied the first instruments of E.piphany’s CRM suite. The centralized customer database became operational in December 2003. The software company presented a solution that was as ingenious as it was simple: build a software layer above the current systems – ranging from booking, checking-in to customer complaint handling – and import the data you need to fill your virtual customer model. As a consequence employees will not only see the check-in data on their screen, but also directly get information about past customer behavior and preferences.
Zanchi: ‘The turnaround in airline marketing is that we do not sell flights any more, but processes. We sell lounges, gates, websites, seat environments… We need to understand our customers and their wishes. The database allows us to get a complete view, no matter if it is about the lounge or about onboard facilities – real time at the end of this year. A simple example. Among our Flying Dutchman members there are several people with of height of 1.95 – 2.05 meters. Every time they make a reservation they have to ask for a seat with additional space. Why can an airline not remember this? Or, why would you not reassure a customer with a bad luggage experience during check-in that his baggage has, been checked-in properly? KLM check-in stewards will get a signal on their screen that the customer previously had a problem and needs reassurance. The screen will give indications on the way to start a dialogue. Customer satisfaction has risen sharply since we give customers this type of attention.’
Incubation
KLM’s next step is to identify individual customers and customer wishes to introduce one-to-one marketing. Mass marketing through television has been replaced by focused ‘dialogue marketing’ in which use is made of customer profiles. Flying Dutchman members are categorized based upon age, customer profitability, recency (date of the last flight) and frequency of flying. For passengers who have not flown with KLM in the last twelve months a re-activation campaign has been developed; ‘ if you fly with us between now and the coming six months you can double your Flying Dutchman points’. Also campaigns are adapted to customers’ wishes and hobbies, such as golf and sailing.
Another objective is to win new FD members. ‘The Flying Dutchman programme is our starting point, we have to be able to identify our customer. A new customer, however, has no past. So we start with an incubation period; we start broad. If this new FD customer did not fly for a month, he will receive an e-mail with opportunities. If he does fly, he will receive different information after four weeks. We start a dialogue with the customer tailoring information to his segment, profitability and behaviour.’
In the past seven months the database with e-mail addresses tripled. ‘Of course, we strive towards online communication. The costs are lower and besides that the response is higher than offline; between 5 and 12 per cent.’
At the moment the customer experience is being improved. Flying Dutchman Platinum and Gold members are printed separately on the boarding lists and get a label ‘special and valuable’. Employees are trained in master classes to improve their services towards FD members even in future. Changing the mindset will take years, says Zanchi. It sounds uncommon for on airline with a cabin crew that has a service orientation by nature. ‘The difference is we enable our people with tools now.’ Besides that, additional attention is given to complaint handling.
‘Complaints are a gift. A complaining customer gives you another chance. We think we should respond to customers if in their eyes something goes wrong; within five working days we react. Letters are being signed by the CEO, Leo van Wijk. In doing so we give the customer the opportunity to give feedback and the new customer information.’ Within less than a year the number of FD customers increased by 20 per cent and the profit 5 per cent. The payback time of CRM tools was less than Zanchi expected initially. Under the current circumstances, with SARS, the war is Iraq, this is tremendous. Cristina Zanchi will miss no opportunity to present these results, especially to Air France. The partner shares the same vision and in some situations the same tools are applied or existing systems can be integrated. But the new alliance and the new decision procedures mean a slight delay for CRM. ‘I am so impatient because I have the proof of mega success in my hands. In the future the database will count twelve million customers. Twelve million. A world of opportunities.’
Next year she hopes to make her big bang, although she makes a correction to this statement. Maybe she is too fast. ‘First the training programme, the alliance with Air France and the culture changes. Then the opportunities are almost unlimited.’
Questions
1 If you were a member of the CRM Award Jury, what would be the reason(s) for you to choose Klm as the winning company of this global award?
2 Where do you criticize KLM’s CRM approach?
3 What are the major risks for KLM’s CRM future?
Case 6 :-
Life of novice call centre agent
These days, more and more young people entering the workforce are applying for jobs at call centres. Since Asia is at the heart of the growing call centre industry, the Philippines have become one of the biggest providers of this service, along with India and China. But how attractive is the job of a novice call centre agent.
Gracious accommodation. Pilipinas Teleserv Inc., the company that care of the NSO Helpline Plus and DFA Passport Direct Service, among others, was gracious enough to accommodate me. Malou Bermio, operations head and Hr and training manager, took charge of my training and job performance. Since a few hours of training would not sufficiently prepare me for the more difficult jobs, I was assigned to the order processing area for a food outlet.
Waking up early on Wednesday morning, I went to their headquarters in Quiapo. Taking the elevator to the fourth floor, I was greeted by the sight of a pool table. At least it’s not just all work and no play, I thought. And so my tutelage in the world of customer care began. Although training depends on the type of service the company offers, it usually covers four essential skills: phone ethics, phone skills or verbal communication, customer service and phonetics.
Your tone of voice must match the script to delivered, and you must learn how to project a professional telephone image. Trainees also learn the military alphabet, since spelling needs to be accurate. A good part of the training, at least in the order processing service, has to do with learning the company background. The history of the company, the pioneers of the company and the decisions that were crucial in making the company attain a certain competitive advantage are all taken up. I also had to study the food outlet’s menu.
Amazing system. When the battle officially began, I was led past the busier areas of a wide carpeted room, where every station had a customer care officer (CCO) catering to the needs of the customer. The least busy part of the room was where I found myself. But it was no reason to slack off. This was, after all, my first (and only) day on the job. After Malou led me to my station, I was introduced to their computer systems. As the CCO enters the customer’s particulars, the computer tells him whether the person is the new customer or not, and what branch will deliver his order. Then, the CCO simply uses the mouse to click on the customer’s order by scrolling down the menu, which is conveniently classified into sizes and flavours. The bill is also automatically displayed. It’s no wonder, then, that placing delivery calls now is much shorter and has less chance of getting the orders mixed up.
About an hour later, after learning the program options by heart, or so I thought, I was introduced to a pleasant girl by the name of Jasmin – my buddy for the day. While waiting for my turn at the headsets and watching Jasmin take calls. I decided to invent a name for myself (Tammy). In a way, this job is a bit like having another side of yourself show through.
First blooper. The first call came from a computer shop. Jasmin and I put on our headsets – she was assigned to listen in on the conversation in case I forgot something in the script. Noise filtered in from the caller’s background, so the speaker could not hear himself, or me for that matter, very well. My first blooper was rattling off the standard greetings: ‘Good afternoon, this is Tammy speaking, may I have your telephone number?’ without releasing the ‘mute’ button. But during the rest of the call, Delusional Me actually thought I did okay, taking the customer’s order, thanking him and even remembering to inform him of the new loyalty programme that started that day. I ended the call, feeling relieved and strangely accomplished, and turned to Jasmin for her verdict. She was laughing as she took off her headset. ‘You forget to recap the order!’ she said.
Rats. Well, so much for breaking the ice. And yet as the hours wore on, the calls became easier and the waiting time in between made me fidgety and impatient. Since distractions such as reading materials or music are prohibited to enable the CCOs to focus more on the job, just staying put was something I had to get used to. The waiting time between the first and second calls was a bit torturous for me, so the ringing of the phone was like the tinkling bell of an ice cream cart in the middle of summer.
Bad luck. From the noise in the background, I could tell this call was coming from a guy in a bowling alley. Another noisy call: I was getting anxious at the thought that this was a streak of bad luck. But I managed to finish the call. When working intensely on a task, you become more aware of the things you use the most. Here, I became conscious of how my throat felt dry after taking a call. I periodically needed to sip water and warm up my voice to make sure I could still speak. You also need hand-eye-voice coordination; the voice to keep talking to the customer, and the hands and eyes to enter all the information in the computer system. You need to break some habits when it comes to enter all the information in the computer system. You need to break some habits when it comes to the phone; I could never end up saying ‘Thank you for using [name of company] delivery service; please order with us again’ as a parting shot. Despite being glued to my station for most of the day, to say that the job was mind-numbering and sedentary is largely inaccurate. Flexibility is essential, especially in the mental aspect. You need to be alert all the time. Two other skills required are diplomacy and confidence, since the ability to interact with people is hard to fake when dealing with irate customers.
Although I don’t think anyone would recommend doing this job for a lifetime, it does address the big problem of employment in our country. Whether you are taking the job because you want a break before graduate studies, or you want earn to help your family or you’ve simply no idea what to do for now, working at the call centre may prove to be an enjoyable and fulfilling experience. Not only will it keep you in the workforce, you also get to help people with their needs.
At the end of the day, like most jobs out there, it’s good money for an honest day’s work.
Special thanks to Raffy David and Malou Bermio, Call Pilipinas Teleserv Inc.
Questions
1 What are the pros and cons of outsourcing call centre activities to countries such as the Philippines, India, etc.?
2 The quality of a contact depends to a large extent on the people working in the call centre (and, of course, on the resources they have). How will you evaluate the quality of the workforce here? Mention positive and negative aspects. What are your recommendations to improve the quality?
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Masters Program in Business Administration (MBA 4 SEM)
( Semester IV )
Specializations:- Public Relation Management
Note :-
a) Solve any 4 cases
b) Each case carries equal marks
Case 1 :-
Reaping the benefits of customer insight
During the late 1990s, companies invested millions in customer relationship management (CRM) systems such as sales force automation, campaign management and call centre systems. Given the importance to any business of establishing and building relationships with customers, this is not surprising. But despite this rush, many companies have been disappointed by the low return of investment from CRM. Being able to handle more calls per agent or run more marketing campaigns has been of limited value.
The real returns come when business intelligence software is used to drive these operational systems. This software opens up opportunities such as up- or cross-selling in the call centre, targeting campaigns at specific customer segments and increasing the relevance of the offer made and its value to the customer, thereby increasing response rates.
The ultimate aim is to combine CRM with business intelligence to produce a ‘closed loop’ systems in which business intelligence analyses customer behaviour and produces a list of targets for a specific product or service. The campaign is managed using the CRM software and the business intelligence systems and then assess the results to produce a more refined campaign.
However, few organisations have reached this level of sophistication. As Colin Shearer, vice president of customer analytics at SPSS, a supplier of predictive analytics software, says: ‘Most companies have always dealt with their customers en masse.’
According to Mr Shearer, business intelligence software is ideal for assessing the profitability of individual customer by matching the cost of serving each one against the revenue he or she generates. The organization can then develop marketing campaigns that target its more profitable customers. At the same time, unprofitable customers can be diverted towards lower cost channels, such as automated voice systems or a website.
‘You need to identify the small percentage of very high-value customers that are generating 80 to 90 per cent of value in the company,’ he says. ‘You also interested in the trends, such as customers who are dropping out of the top to become less valuable and take their business elsewhere.
The final stage of the process is to use data mining software to predict how individual customers behave. This software uses advanced mathematics algorithms to reveal hidden paterns and relationships in sales data. The results can be used in a number of ways: to group customers into different segments according to similar behavior and characteristics; to determine which products or services a customer is likely to buy; to identify which customers are most likely to defeat to another company; or to assess how much of a credit risk a potential customer poses.
David Bradshaw, a senior analyst at Ovum, explains that such assessments once required advanced mathematical knowledge to build and run data mining models. ‘You still need people with expertise to set up the business intelligence systems, ‘he says, ‘ but business users are increasingly being trained to build, analyse and exploit segments. You are “handling over the toys “ to the business people to do the analysis themselves.’
Vodafone, the mobile network operator, has a single contacts number for its call centre and routes each caller to the appropriate team of agents for his or her segment. According to Julian Moss, UK development manager: ‘Business intelligence enables our touch points to target the right groups of customers, to understand them and to have a close relationship with them.’
Spaarbelg, a Dutch subsidiary of Aegon, the life insurer, has a growth strategy based on expanding sales to its existing customer base, rather than on acquiring new clients. It uses SPSS real-time predictive software to suggest cross-sell opportunities to agents in its inbound call centre, which handles 1m calls a year from 1.6m customers. To avoid pestering them, its agents gathered enough information in just 180,000 calls to develop a targeted recommendation. In a third of these calls, the agent determined that the customer was respective enough to make the offer and sales worth $30m.
Business intelligence reporting is also ideal for managing performance in contact centres. It can help set and track targets and spot trends, and it can provide management dashboards that display key performance indicators, such as how many calls agents are handling and how many are closed within agreed service levels. The use of business intelligence is becoming increasingly important in the face of new legislation introduced to guard against unwanted e-mail and to allow individuals to bar cold telephone calling. Mr Shearer points out that with fewer opportunities for outbound marketing, organisations, must take advantage of cross-selling at service call centres.
As Mr Bradshaw explains: ‘You may only have one chance of approaching a customer. This is pushing people into micro-segmentation of their customers. Rather than having five or six major segments, they may have many thousands, each with 100 to 1000 customers. You analyse the behavior of the micro-segments so that you know what they want to buy, how they want to buy, how they want to buy it and how to approach them.’ ‘The problem with the business intelligence vendors’. He adds, ‘is that they have targeted the technical experts. They haven’t yet really got to use their marketing analytics. They are trying to do better, but [the CRM vendors, such as Unica Corporation, Siebel and E.piphany] have targeted people actually do the marketing.
It is clear that business intelligence is needed to drive CRM activities. However, the trick is to create a closed loop systems that combines customer profitability with data mining. Only then will an organization be able to concentrate on giving profitable customers the best and most relevant products and services.
Questions
1 What is the different between business intelligence (BI) and (analytical) CRM?
2 Do you agree with the following statement in the text: ‘The ultimate aim is to combine CRM with business intelligence’? Give detailed arguments why you do or do not agree.
Case 2 :-
Customer knowledge at Centre Parcs: a life-long holiday!
Introduction
Centre Parcs is a holiday resort with locations in several European countries, for example Germany, France and the Netherlands. Customer relationship management is one of its successes. The secret: ‘it is not about the value he or she wants.’
Richard Verhoeff, director of E-commerce at Center Parcs: ‘None of our customers is equal. The market and the customer do not exist for us. All that our guests have in common is the money and the time they spent with us. It is our challenge to get to know them better…. It was the objective of our yield management systems to optimize cottage rental, but nowadays we also want to actively offer services at different contact moments. Experience tells us that guests who participate in more activities are more likely to return. But before you can do this, you will have to answer questions such as: who are our guests? When do they come? What do they want? In other words: we need customer profiles. Of course, segmentation is nothing new. In most cases customer groups are distinct and differ in the value they represent for the organisation (customer value). Customer relationship management then simply means retaining the good customers and stimulating them to increase their expenditure, while in the meantime the bad customers can leave.
Profiling customers
BPK Acxiom, a database and CRM consulting firm, approached it from a different perspective and began by analysing the emotional and instrumental values of a stay Center Parcs. These values change with the life cycle of a customer. He comes as a little child with his parents, when he is older he brings his girlfriend, and again later his family. Each of these roles asks for different approach. Also, the value of the attractions differs for each customer, depending on his life cycle, the time of his stay and the people that accompany him. Verhoeff: ‘ The swimming pool on a Saturday morning has a completely different function from that on a Sunday afternoon, when there are a lot of small children around.’
To clarify this, BPK Acxiom developed life scenarios. Peter Severens, director at BPK Acxiom: ‘We write life stories. What are the motives that drive people? Where do they come from? What are the events in their life and in specific situations? And what goods and services are consumed during these events? We map people’s life cycles and store them in the database. ‘The scenarios have been tested and refined in panel research together with a market research agency, named Signicom. It resulted in the definition of a number of customer groups and a customer-value pyramid per customer group. The value pyramid contains suggestions for product development and communication. The tone-of- voice, the actual proposition and the sales arguments match the values and preferences of the segment.
CRM software
CRM Software plays an important role during the implementation of this customer group project. Center Parcs uses the forecasting software developed by DataDistilleries (now owned by SPSS) during direct and telemarketing actions. Relations are selected that have the best chance of booking during a specific period. But also, salespersons benefits from the software. Marcel Holsheimer, founder of DataDistillers: ‘Ours software helps to predict the interests of a person during a contact moment. ‘Specific phone scripts and offerings can be formulated. Verhoeff: ‘Some customer groups appreciate it if you give them a discount right from the start, others first asks for an explanation of your products and services and formats help, one should never forget that it remains people’s business.
To predict what Center Parcs’ customers are interested in, DataDistilleries can benefit from an enormous database with customer data that have been collected over the years. As early as 1984, Center Parcs started to store relationship and transaction data. However, through the years the organisation has been reactive in its use of these data. Erna ter Weele from BPK Acxiom: ‘Currently, changes are focusing on improving customer insight and exploiting this information in actions. ‘Since DataDistilleries’ software is user friendly, marketers no longer have to rely on IT specialists and can act faster. Verhoeff: ‘Time to market is very important. It you notice the occupancy rate of your park is not optimal for a particular weekend, you only have a few days to do something about it’
Results
Although Center Parcs is pleased with the results to date, Verhoeff is convinced the potential of the system is larger. ‘Additional positive result of $3 million is a beginning. We have 3.2 million customers a year and if they spend an additional 2 per cent, revenue will increase by several tens of millions. By making more active use of the call centre in outbound actions, by stimulating cross-selling in the call centre, via the Internet and during contact moments in the park itself, revenues have to grow.’
Questions
1 Consider the way Center Parcs and its consulting and research firms profile its customers. Apply the method, described by Peter Severijins, to yourself or someone who visited a holiday park once before. What kind of customer profile can you construct?
2 What are two advantages and two disadvantages of applying this customer profiling approach?
3 In what ways can Center Parcs differentiate its marketing for different customer groups?
Case 3 :-
Project Direct: testing e-mail marketing is effective
Direct writer Proteq Direct used e-mails in experiments to acquire new customers and the result is: although the response on a physical direct mailing is higher, the costs per order for an e-mailing are lower, and in combination with a direct mailing the conversion improves. Sending more than one mailing to the same address works, but is, however, expensive.
The pros of an e-mail marketing campaign – low costs, extending the market reach – will only become evident when the medium is applied in the right way. Only few companies, however, test before they send out the bulk mailing and are confronted with disappointing low response rates.
For direct writer Proteq this was the reason to organise, together with an e-mail marketing agency, a test case for a new car insurance campaign. Finding out how effective and appropriate e-mail actually is to acquire new customers was the motive for Proteq to initiate the test… The marketing manager at Proteq Direct: ‘In traditional direct marketing it is always a trade-off. On the one hand you want to make a sharp selection to increase your response, but on the other hand you want to reach many people. We wanted to learn if with e-mailing we can increase our market reach. Besides that, an e-mailing is a lot cheaper. The economic climate and the maturity level of the market are reasons for a decrease in reponse on traditional mailing. ‘Michael Bres, managing partner of the e-mail marketing agency E-Profile: ‘It is the challenge to come up with a targeted offering and in the meantime to maintain the size of the mailing list. E-mail marketing can also seriously reduce the costs of an order.’ Peter: ‘But first we wanted to see if this was true.’
‘The subject of the mailing was a new car insurance with a price that decreases when the customers’ driving experience increases and therefore has fewer accidents and a safer driving style. Not only will the customer have a higher no-claim, but also a lower contribution. Prospects were private drivers without lease cars in the age categories of 29 to 65, living in areas with a high penetration of older and smaller cars up to a purchase price of $20,000.’ These criteria were used by E-Profile to select addresses in the online databases of Jecomputerisjelot and Testnet. Five equal experimental groups have been formed with the help of Experian; in the online database the e-mail addresses were related to names and addresses for which segmentation profiles were available in the Experian database.
Different ways were used to approach prospects; in a one-step approach or a multi-step approach, with or without a message informing the prospect of the upcoming e-mailing and with or without a physical direct mailing followed up by an e-mail as reminder.
The proposition remained the same in all mailings. Also in all experiments the main mailing was sent out at the same time. Further, by clicking through the e-mailing prospects could, in an interactive way, directly calculate their premium. Peter: ‘E-mail allows you to make an offer directly when people show interest. Therefore a functional use of the medium is to be preferred.’ There were three ways for people who did not want any e-mail offerings in the future to get off the list. Bres: ‘You could chose to be removed from all mailings, to be removed from mailings of this advertiser, or to receive mailings on selected topics.’ The sender was clearly visible on the mailing to avoid complaints about spamming. Furthermore, an e-mail address will never be used more than once or twice a month for an e-mailing. And, of course, we only mail when we have something to tell. By following this approach, the agency achieved that only 1 per cent of the receivers state they want to be removed from the list.’
E-Profile selected five equal experimental groups of 5000 consumers. Addresses were selected based upon the drivers’ experience, the geographical spread, the purchase value of the car (when new) and the kilometer usage per year. Sex was not a selection criterion. Peter: ‘men have no significantly different claiming behavior from women. Therefore it is a not a criterion. Besides that, we do not think it is a relevant segmentation criterion.’ For previous Proteq Direct mailings profile analyses were made for the best responding addresses (Ideal Profiles). A part of the mailing list was formed by these ideal Profiles.
The quality of the e-mail addresses is good as only 1 per cent of the e-mails bounced.
Results
Mailing consumers more than once will have a positive impact on the response, but will also affect the costs. An increase in the share of e-mails in the campaign will reduce the costs per order. The Ideal Profile consumers responded best (37 per cent). The one-step approach with only the digital main mailing had the lowest response (index 41) but ranked seconds in costs. To measure what the results would be if not 5000 but 60,000 mailings were sent out, a new calculation was made in which economy of scale effects were incorporated. The Ideal Profile remains the most profitable group with an index of 89, but experimental group 4 becomes more lucrative with an index of 60 and test group 2 with only an e-mailing, will cost less than half the average cost per policy. It is the result of avoiding the physical print and postal costs.
Conclusion
Proteq is satisfied; e-mail appears to be an effective medium to acquire new customers. Although the response on a physical mailing is higher, e-mailings are cheaper and offer opportunities to reach a larger share of the target market. The combination of direct and e-mail has synergistic effects. Approaching consumers more than once has a positive impact on the conversion, but a negative one on the costs. Peter: ‘We will continue to develop and send out direct mailings and keep on learning in experiments. E-mail databases will be expanded and improved, profiles will be expanded and improved, profiles will be expanded and improved, profiles will be combined and for sure we will combine media in the future.’
Questions
1 What are the pros and cons of combining a physical direct mailing with an e-mailing?
2 Why can you increase the reach of your campaign with an e-mailing?
3 What is meant by the statement that e-mailings should be used functionally?
4 How do you evaluate the sampling in this test/experiments?
5 What is the reason that the outcomes in the entire population are different from those in the sample?
6 Can you think of two other relevant experiments that Proteq might initiate in the future?
Case 4 :-
Secrets of success for going mobile
The mobile Internet has been a huge success in Japan, but can it spread as explosively in the west? I believe that it can – in fact it can spread as fast as the fixed Internet in the 1990s and the GSM mobile standard has done in the past ten years. Achieving this will require mobile operators, equipment suppliers and content providers to learn from – but also to adapt from – the Japanese business model. The power of the fixed Internet derives from its ability to create highly connected ‘nodes’ – take, for example, the Amazon website, which links millions of prospective purchasers with the items they are seeking. In mobile telephony, by contrast, the core secret to success is in the way agreement is sought between the various players involved to ensure they all get their ‘cut’ from the value chain. This ‘agreement’ force was present in building NMT, the first generation mobile standard, and has been present in different mobile initiatives ever since. As I see it, these two forces are clashing in the mobile
Internet. I argue that the force of ‘agreement’ is losing power while the force of ‘highly connected nodes’ is still very much understand, at least in the west.
To explain, let’s have a look at how the Japanese mobile Internet has developed. In 1999 – in contrast to the situation in the west – most Japanese did not have fixed (PC) Internet access in their homes, so the concept of the mobile Internet fell on to fertile ground. The Japanese emphasized open access to the Internet, but also wanted to standardize the quality of access for the user, and this led to the practice known as ‘cut in five seconds’, in which the connection would be lost if the site failed to download in five seconds.
This virtually closed access to the existing World Wide Web of 1999, but the Japanese consumer did not notice, since the web at that time was a non-Japanese medium. NTT DoCoMo, the Japanese mobile operator best known for its competitors focused on creating Japanese content. In the beginning this was free (or almost free), which meant high access rates and the emergence of the type of highly connected nodes I mentioned above.
This explains why the mobile Internet has become so popular in Japan. But can we do the same in the west – that is, create super-connected mobile nodes and introduce some form of quality criteria which in practice denies access to (or makes accessing) the ‘tradition’ web , less interesting?
I believe this can be done and already there are some initiatives (such as the ‘dotmob’ domain name that identifies specific Internet content for mobile devices, and price reductions of content) which are following this path. Free and highly interesting mobile content is one necessity along this path, which emphasizes the importance of creating ‘highly connected super nodes’ and disagrees with, or downplays, the traditional ‘Nordic agreement’ model.
Another reason for the success of the mobile internet in Japan was the ‘orchestration’ business model, which went beyond the traditional agreement model. NNT DoCoMo used its competence and market power to design and procure the handsets it wanted from Japanese suppliers and it also set the rules and price levels to content producers and suppliers.
This model, which I refer to as ‘orchestration’, has proved successful in Japan, where it was pioneered. But it has taken a long time for the west to understand the power of the Japanese model. Western players have learnt its value through a step-by-step approach of trial and error. Presently Vodafone live! and also the Nokia Ngage device might be regarded as attempts to orchestrate in the west. However, I do not believe that the ‘orchestration’ business model can be successful in the west. The next business model in the west might be based on some type of ‘cultivation’ of the market.
What is, however very clear is that the ‘Nordic force of agreement’ is losing ground. This is evident also by looking at the implication of Moore’s law on mobile business. Moore’s law implies that phones will increasingly become more like computers. This brings a completely new set of players into the market and thus simply because of the number of players in the value chain, agreement cannot be reached in the Nordic sense.
So, to spread with explosive speed the mobile Internet needs super-connected nodes and a ‘cultivating’ business model. But one can also ask if there is something that is presently slowing down the speed of introduction of the mobile Internet in the west? I would argue that SMS (text messaging) is doing this, for example, at how the Minitel slowed down the introduction of the Internet in France.
SMS is a barrier to the growth of the mobile Internet for several reasons. ‘Super-nodes’ are difficult and in some cases impossible to create with SMS. SMS value-added services are based on remembering numbers and people remember numbers rather poorly. SMS value-added services work on a national level only – it is a limit of the technology and no market (single country) in Europe, for example, is bigger than Japan, i.e. the individual size of the SMS markets limit the maximum size of the super-nodes. Third, SMS value-added services always have a price (transaction based) and thus would restrict the experimentation with free content that the creation of super-nodes would encourage.
I would like to emphasise, however, that not everything in the mobile Internet has to be super-connected or free. In fact, a lot of the content in Europe will be language-specific and thus limited in market size. The present content industry is focused on personalizing the user’s phone for a price – a lot of this industry might remain. A lot of the content will be peer-to peer in character (therefore free), but limited and unable to create highly connected nodes. But, I am arguing that super- connected nodes – as big as possible – are worth striving for and their existence is the catalyst of the fixed Internet, as it should be for the mobile Internet, too.
Interestingly the barrier SMS presents to the growth of the mobile Internet derives not only from value-added services, but might also reside in the SMS message itself. In Japan SMS has lost ground to e-mail via mobile phones for several reasons. I recognize that the Japanese did have some initial difficulties with e-mail, e.g. junk mail. However, the price of a single message bit in Japan is far below our current price level, and according to studies on communication patterns made in Japan, the way the Japanese use e-mail does not differ from the way SMS is used in the west.
It is actually also interesting to study how SMS is at the very core of the present western business models; so the barrier to a more Internet-based messaging and content culture is not necessarily a choice of the user, but something that is thoroughly embedded in western mobile operations’ business structures.
Questions
1 Analyse why the mobile Internet has become a huge success in Japan. Where do you agree or disagree with the author of this article?
2 How do you think the mobile Internet can become a success in your country? What can you learn from the Japanese best Practice case?
Case 5 :-
We have got a huge success on our hands
Cristina Zanchi, CRM director KLM
Despite difficulty market circumstances the number of KLM Flying Dutchmen (FD) members grew in a little less than six months by 20 per cent; the numbers tripled. This triumph was the reason for KLM winning the Gartner CRM Excellence Award 2004. CRM director Cristina Zanchi loves to show these glorious figures, especially to Air France. The two companies share the same CRM vision and that opens a window of opportunity for the future. ‘I am so impatient because I have the evidence of a huge success in my hands.’
Zanchi: ‘The award is a recognition for our team. I really pushed them. There are few airlines that are so focused on CRM – Continental, Lufthansa and Southwest Airlines make good progress – and there is certainly no airline that implemented CRM the way we did it. I wanted to leap forward; speed these days is as important as quality. And, yes, I am an impatient person.’ This personality trait of the Italian is her greatest strength. ‘If people think something is too complex, they slow down. Some people warned me of a mission impossible. Why would KLM pursue CRM while all fights are full? Well, then I learned to say: the chairs of Sabena and Swiss Air were also occupied, but see what happened. If you cannot enlarge your capacity you should think of another solution. You can increase the revenues per customer and that is something you achieve when you utilize your customer insight to improve the service. In interaction with customers you intensify the customer experience and therefore also the turnover.’
Delay
The reason why many airlines postpone CRM is clear to Cristina Zanchi. CRM requires large investments and the current margins in the airline industry are low. In the meantime the financial effects of CRM are vague. Several years ago KLM also withdrew a CRM initiative. ‘In 1997 KLM performed a very valuable CRM study, but the system never got implemented then. CRM software was much more expensive then and probably the organization was not up to it.’
But between 1997 and 2002 – the year the first building block of an integral CRM vision was constructed – the airline industry changed dramatically. Competition is heavy. ‘Internally, I had a good reason to sell CRM as a way to distinguish ourselves on emotional elements. We wanted to realize our positioning of reliability and comfort with a personal touch.’
The ambition of Zanchi to implement CRM quickly seems to contradict the opinion of many that CRM implementation above all requires a steady approach hard facts play a crucial role. Form the beginning she involved financial management and asked for frequent reports. Transparency is key to success and at KLM’s headquarters there is a panel the size of a man, showing all key indicators. Little planes mark the status and target. ‘To get an overview of CRM in one shot is impossible. It was my intention to split up our plan in pieces; a plan in three phases – change management, customer database and campaign management – with underlying steps. Phase one is ended and we far beyond the start of phase two now. Almost with one snap of my finger I can show you the total overview, the result we realized and the plans we have for 2005 and 2006.’
CRM targets are defined as a sort of acronyms: CARE, Customer acquisition, Activation, Retention and Extension. The entire KLM organization is organized around these objectives; everyone has his target. From August 2003 onwards KLM applied the first instruments of E.piphany’s CRM suite. The centralized customer database became operational in December 2003. The software company presented a solution that was as ingenious as it was simple: build a software layer above the current systems – ranging from booking, checking-in to customer complaint handling – and import the data you need to fill your virtual customer model. As a consequence employees will not only see the check-in data on their screen, but also directly get information about past customer behavior and preferences.
Zanchi: ‘The turnaround in airline marketing is that we do not sell flights any more, but processes. We sell lounges, gates, websites, seat environments… We need to understand our customers and their wishes. The database allows us to get a complete view, no matter if it is about the lounge or about onboard facilities – real time at the end of this year. A simple example. Among our Flying Dutchman members there are several people with of height of 1.95 – 2.05 meters. Every time they make a reservation they have to ask for a seat with additional space. Why can an airline not remember this? Or, why would you not reassure a customer with a bad luggage experience during check-in that his baggage has, been checked-in properly? KLM check-in stewards will get a signal on their screen that the customer previously had a problem and needs reassurance. The screen will give indications on the way to start a dialogue. Customer satisfaction has risen sharply since we give customers this type of attention.’
Incubation
KLM’s next step is to identify individual customers and customer wishes to introduce one-to-one marketing. Mass marketing through television has been replaced by focused ‘dialogue marketing’ in which use is made of customer profiles. Flying Dutchman members are categorized based upon age, customer profitability, recency (date of the last flight) and frequency of flying. For passengers who have not flown with KLM in the last twelve months a re-activation campaign has been developed; ‘ if you fly with us between now and the coming six months you can double your Flying Dutchman points’. Also campaigns are adapted to customers’ wishes and hobbies, such as golf and sailing.
Another objective is to win new FD members. ‘The Flying Dutchman programme is our starting point, we have to be able to identify our customer. A new customer, however, has no past. So we start with an incubation period; we start broad. If this new FD customer did not fly for a month, he will receive an e-mail with opportunities. If he does fly, he will receive different information after four weeks. We start a dialogue with the customer tailoring information to his segment, profitability and behaviour.’
In the past seven months the database with e-mail addresses tripled. ‘Of course, we strive towards online communication. The costs are lower and besides that the response is higher than offline; between 5 and 12 per cent.’
At the moment the customer experience is being improved. Flying Dutchman Platinum and Gold members are printed separately on the boarding lists and get a label ‘special and valuable’. Employees are trained in master classes to improve their services towards FD members even in future. Changing the mindset will take years, says Zanchi. It sounds uncommon for on airline with a cabin crew that has a service orientation by nature. ‘The difference is we enable our people with tools now.’ Besides that, additional attention is given to complaint handling.
‘Complaints are a gift. A complaining customer gives you another chance. We think we should respond to customers if in their eyes something goes wrong; within five working days we react. Letters are being signed by the CEO, Leo van Wijk. In doing so we give the customer the opportunity to give feedback and the new customer information.’ Within less than a year the number of FD customers increased by 20 per cent and the profit 5 per cent. The payback time of CRM tools was less than Zanchi expected initially. Under the current circumstances, with SARS, the war is Iraq, this is tremendous. Cristina Zanchi will miss no opportunity to present these results, especially to Air France. The partner shares the same vision and in some situations the same tools are applied or existing systems can be integrated. But the new alliance and the new decision procedures mean a slight delay for CRM. ‘I am so impatient because I have the proof of mega success in my hands. In the future the database will count twelve million customers. Twelve million. A world of opportunities.’
Next year she hopes to make her big bang, although she makes a correction to this statement. Maybe she is too fast. ‘First the training programme, the alliance with Air France and the culture changes. Then the opportunities are almost unlimited.’
Questions
1 If you were a member of the CRM Award Jury, what would be the reason(s) for you to choose Klm as the winning company of this global award?
2 Where do you criticize KLM’s CRM approach?
3 What are the major risks for KLM’s CRM future?
Case 6 :-
Life of novice call centre agent
These days, more and more young people entering the workforce are applying for jobs at call centres. Since Asia is at the heart of the growing call centre industry, the Philippines have become one of the biggest providers of this service, along with India and China. But how attractive is the job of a novice call centre agent.
Gracious accommodation. Pilipinas Teleserv Inc., the company that care of the NSO Helpline Plus and DFA Passport Direct Service, among others, was gracious enough to accommodate me. Malou Bermio, operations head and Hr and training manager, took charge of my training and job performance. Since a few hours of training would not sufficiently prepare me for the more difficult jobs, I was assigned to the order processing area for a food outlet.
Waking up early on Wednesday morning, I went to their headquarters in Quiapo. Taking the elevator to the fourth floor, I was greeted by the sight of a pool table. At least it’s not just all work and no play, I thought. And so my tutelage in the world of customer care began. Although training depends on the type of service the company offers, it usually covers four essential skills: phone ethics, phone skills or verbal communication, customer service and phonetics.
Your tone of voice must match the script to delivered, and you must learn how to project a professional telephone image. Trainees also learn the military alphabet, since spelling needs to be accurate. A good part of the training, at least in the order processing service, has to do with learning the company background. The history of the company, the pioneers of the company and the decisions that were crucial in making the company attain a certain competitive advantage are all taken up. I also had to study the food outlet’s menu.
Amazing system. When the battle officially began, I was led past the busier areas of a wide carpeted room, where every station had a customer care officer (CCO) catering to the needs of the customer. The least busy part of the room was where I found myself. But it was no reason to slack off. This was, after all, my first (and only) day on the job. After Malou led me to my station, I was introduced to their computer systems. As the CCO enters the customer’s particulars, the computer tells him whether the person is the new customer or not, and what branch will deliver his order. Then, the CCO simply uses the mouse to click on the customer’s order by scrolling down the menu, which is conveniently classified into sizes and flavours. The bill is also automatically displayed. It’s no wonder, then, that placing delivery calls now is much shorter and has less chance of getting the orders mixed up.
About an hour later, after learning the program options by heart, or so I thought, I was introduced to a pleasant girl by the name of Jasmin – my buddy for the day. While waiting for my turn at the headsets and watching Jasmin take calls. I decided to invent a name for myself (Tammy). In a way, this job is a bit like having another side of yourself show through.
First blooper. The first call came from a computer shop. Jasmin and I put on our headsets – she was assigned to listen in on the conversation in case I forgot something in the script. Noise filtered in from the caller’s background, so the speaker could not hear himself, or me for that matter, very well. My first blooper was rattling off the standard greetings: ‘Good afternoon, this is Tammy speaking, may I have your telephone number?’ without releasing the ‘mute’ button. But during the rest of the call, Delusional Me actually thought I did okay, taking the customer’s order, thanking him and even remembering to inform him of the new loyalty programme that started that day. I ended the call, feeling relieved and strangely accomplished, and turned to Jasmin for her verdict. She was laughing as she took off her headset. ‘You forget to recap the order!’ she said.
Rats. Well, so much for breaking the ice. And yet as the hours wore on, the calls became easier and the waiting time in between made me fidgety and impatient. Since distractions such as reading materials or music are prohibited to enable the CCOs to focus more on the job, just staying put was something I had to get used to. The waiting time between the first and second calls was a bit torturous for me, so the ringing of the phone was like the tinkling bell of an ice cream cart in the middle of summer.
Bad luck. From the noise in the background, I could tell this call was coming from a guy in a bowling alley. Another noisy call: I was getting anxious at the thought that this was a streak of bad luck. But I managed to finish the call. When working intensely on a task, you become more aware of the things you use the most. Here, I became conscious of how my throat felt dry after taking a call. I periodically needed to sip water and warm up my voice to make sure I could still speak. You also need hand-eye-voice coordination; the voice to keep talking to the customer, and the hands and eyes to enter all the information in the computer system. You need to break some habits when it comes to enter all the information in the computer system. You need to break some habits when it comes to the phone; I could never end up saying ‘Thank you for using [name of company] delivery service; please order with us again’ as a parting shot. Despite being glued to my station for most of the day, to say that the job was mind-numbering and sedentary is largely inaccurate. Flexibility is essential, especially in the mental aspect. You need to be alert all the time. Two other skills required are diplomacy and confidence, since the ability to interact with people is hard to fake when dealing with irate customers.
Although I don’t think anyone would recommend doing this job for a lifetime, it does address the big problem of employment in our country. Whether you are taking the job because you want a break before graduate studies, or you want earn to help your family or you’ve simply no idea what to do for now, working at the call centre may prove to be an enjoyable and fulfilling experience. Not only will it keep you in the workforce, you also get to help people with their needs.
At the end of the day, like most jobs out there, it’s good money for an honest day’s work.
Special thanks to Raffy David and Malou Bermio, Call Pilipinas Teleserv Inc.
Questions
1 What are the pros and cons of outsourcing call centre activities to countries such as the Philippines, India, etc.?
2 The quality of a contact depends to a large extent on the people working in the call centre (and, of course, on the resources they have). How will you evaluate the quality of the workforce here? Mention positive and negative aspects. What are your recommendations to improve the quality?
No comments:
Post a Comment