Down the line

What is it that makes you pick a particular tour company to book a winter break, or reach for one catalogue instead of another when you purchase by mail order?

Developing a winning customer relationship strategy may be the holy grail of marketing, but many companies which invest heavily in customer analysis fail to transfer their hard-earned knowledge to people that have most contact with clients – the front line telephone staff.

Although software that claims to put the entire knowledge base of a business at the disposal of front line staff has been around for a few years, its implementation varies dramatically from sector to sector. Phone the reservations desk of any major hotel and the receptionist will have details of your last visit, what room you had, your dietary requirements and even if you used the health club. But call the order-line of a major catalogue retailer, and you may be surprised to discover the agent has no record of your previous purchases, even though you are responding to a mailshot targeted specifically at “valued” customers.

However, the blame for bungled customer contact can hardly be pinned on a lack of enabling technology. In technologically optim-ised call centres, sophisticated call routing systems, linked to automatic screen prompts, allow agents to anticipate customers’ requirements before a word has been spoken. In practice, however, very few companies deliver this level of performance.

According to a recent benchmarking survey conducted by The Merchants Group, about 35 per cent of call centres have invested in some form of computer telephony integration (CTI). But only 18 per cent had integrated the capability into their business in a way which contributes to the ultimate goal of the company – effective customer-value management.

The modern call centre handles more customer contacts than any other part of the business, and logically, is the single most important channel for developing and retaining profitable customers. In reality, few call centres can demonstrate they contribute to these objectives. Only 42 per cent track customer retention, according to the Merchant Group’s survey. Only one third measure either lifetime customer value, annual customer value or customer profitability.

With the price of call centre software falling and the number of applications on the market multiplying by the minute, more companies are investing in call centre solutions – but often without the strategic vision that guided the purchasing decisions of the early adopters. While many companies buy the necessary technology, only a few possess the skills necessary to realise the benefit of their investment.

“A small elite of businesses have started to practise customer value management”, says Max McKeown, managing director of the Customer Contact Company and author of a new FT report, Call Centre Strategies For Financial Services.

“The rest simply lack a clear view of how to match the mix of technology, people, processes and products to the long-term brand strategy of the organisation.” But why should this be?

A common point of weakness is poor integration between the operational side of the company, to which most call centres report, and marketing. “The fact that operations and marketing share so few objectives and metrics is a big problem,” says Connie O’Hare, vice-president of Mercer Management Consulting. O’Hare believes that until this is addressed companies can’t hope to benefit from sophisticated call centre technology, as the call centre manager and the marketing team lack a common view on how to manage the customer.

The competitive advantages of investing in IT are often grossly overplayed. But there is no doubt companies which combine advanced call centre technologies – such as caller identification, voice recognition and queue monitoring – in support of a clear business strategy, are better equipped than rivals to manage customer relationships profitably.

UK phone service provider Orange is a good example of a company which uses its call centre to optimise profitability. For non-revenue generating transactions, such as checking an account balance, Orange offers a 24-hour self-service option operated by interactive voice response (IVR). Other calls are handled by agents equipped to greet each caller by name. Operators are equipped with the details of the customer’s spending pattern.

During busy periods, Orange gives priority routing to the top five per cent of its customers. The company uses the intelligence in its IT systems to route highly profitable customers to the most experienced agents.

“CTI helps companies understand the economics of individual customers and to reflect this in the way that they handle people – by doing things such as offering a discounted upgrade to a high-value client,” says Andrew Glover, group director of customer services at Orange.

Companies which fail to integrate the call centre with the rest of the organisation are also compromising their ability to keep pace with changing customer requirements. “The information you need to develop a winning customer relationship strategy is already pouring into your organisation,” says Mercer’s O’Hare.

Yet most orga-nisations dissipate the valuable intelligence which streams down the telephone line, because they lack both the systems for capturing feedback, and the will to convert unstructured comments into a basis for action.

Some companies do things differently, of course. The pioneering telephone bank, First Direct, routinely logs suggestions or queries raised by callers. This leads directly to service changes.

Vantive Europe, an international vendor of call centre software, uses a semi-automated process to capture client feedback and to bring it to the attention of the relevant parts of the organisation. When a product is modified, the company has an electronic record of every client who commented on the feature, and writes to thank them for having contributed to the product’s redesign.

Advances in speech recognition could soon enable a fully automated process for sifting through valuable customer feedback, but the real challenge is not the smart technology. “Well-designed screen prompts and input fields can take the pain out of capturing customers’ ideas and feedback,” says director of international marketing at Vantive Europe Tamelyn Holter. “The clever bit is rethinking the way in which different parts of the organisation communicate with each other and with customers – the technology just helps it to happen.”

Much has been made of the potential for a Web-enabled call centre to promote real-time interaction between companies and their customers. However, most companies, even the early adopters, are probably a year or two away from enabling agents and callers to view and discuss material simultaneously on a web page. Steve Smith, technology director of Tele-Connect Systems, says in the interim “businesses can extend their ability to interact with clients by taking advantage of analytical tools which operate in real-time”.

The major US phone companies have made real-time analysis a major feature of their win-back campaigns. With the support of scripted screen prompts, agents routinely call profitable former customers to probe for information on their current calling patterns. As the agent keys in the replies, an application computes an expected value for the account and prompts the agent on what level of discount to offer, to induce the customer to come back. As yet, very few companies in the UK analyse customer data in real-time, but the technique is clearly a logical development for companies that have embraced the principle of differential marketing.

“Companies which can assimilate new data instantaneously and tailor an offer on the spot, will have a tremendous advantage over companies that depend on historical data,” says Smith.

Telemarketing in the UK has not reached the level of sophistication seen in the US. Most companies could probably derive a great deal of business benefit by employing basic capabilities more imaginatively. Predictive diallers are a case in point. Debt collection agencies have used predictive dialling for the best part of a decade, but marketers are just beginning to perceive the value of integrating the tool into customer relationship campaigns. BT, for example, uses predictive dialling to systematically contact customers who would benefit from its call discount plans. Orange has gone a step further by harnessing a predictive dialler to a new churn prediction tool, which is generating the targets for an outbound calling campaign it will launch in March.

“The technology is not the critical part,” says Mark Billington, head of BT’s connections in business division. “The important issue is possessing an integrated customer relationship strategy, to which enabling technologies can be added as appropriate.”

CTI is no longer a new technology, the market is expanding rapidly, and solutions are becoming standardised rather than bespoke. IT research company Datamonitor predicts that by 2002, UK call centres will spend over 300m a year on computer telephony, compared with less than 200m in 1998. However, if past performance is anything to go by, much of this investment will fail to generate its expected payback.

The new-model call centre is technologically equipped to build customer loyalty and value. But this potential can only be realised within the context of an integrated customer relationship strategy, and that demands the commitment, imagination and accountability of both marketing and operational managers.

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