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Creating a Genuine Customer Relationship Management System
The Customer-Centric Paradigm of Interlink Business Solutions, Inc.
by Dino Kempis Ngo (Interlink)

The four aspects of a customer-centric organization

Our basic business premise is that customers are the financial lifeblood of every business organization, so that long-term customer satisfaction has to be the goal of all organizations. The focus of a relationship-based approach to doing business is an understanding of what the customer wants and needs and a view of the customer as a long-term asset who will provide a stream of earnings as long as his or her needs are satisfied.

To achieve this goal, we hold that all organizational activities must be centered around one thing - the customer and how to satisfy him. This customer-centric view of the organization can be described by 4 P's : Product, Process, Performance, People.

  • The first P customers see is the product - which refers to the essence of what the company offers its customer. We ask the company what is the product or service it is selling? What is its core competence?

  • The second P is the process - referring to processes that support the delivery of the core product. The core product puts our foot in the customer's door but it does not give us a competitive edge. The processes include estimation, quotation, delivery, billing, designing, and so on. These processes has to be provided to that the core product can be delivered efficiently and conveniently.

  • The third P is performance - essentially we ask ourselves the question "did we get the product right?" It is what Christian Grönroos refers to as living up to our promises to the customer. It is the quality and reliability of the product or service given to the customer.

  • Finally, we have to consider the people who work for our company. Customers encounter our employees on our premises, in their offices, over the telephone, and increasingly through the Internet. How is that interaction carried out? How do the customers view our employees? The interaction our employees can make or break a customer service situation. Many customers go back to a company again and again because of how they are treated by the employees.

With this in mind, Interlink believes that to be a true customer-relationship based management system, each aspect of the organization must be strengthened and organized to provide the most efficient service to the customer.

The first aspect is the product. We ask ourselves what is the core competence or the essence of the product or service being provided by the company. For example, a third-party logistics provider specializing in direct transportation services may define its product as delivery service. A printing press company may either define its product as labels or printed materials. Or they may even define their product as graphic services. A trading company or a distribution company may define its product as the items they are selling, although another way of looking at it is that they are not selling items but are providing distribution services to enable manufacturers to reach the final consumers.

Regardless of what the product or service is, the first and foremost concern is how do we supply the product (or service). Secondly, how do we make sure that the product or service is available when the customer wants or needs it.

(1) We ensure that the equipment used to create the product (or service) is up and running. For example, the printing equipment must be maintained properly. The trucks or delivery vans must also be maintained properly. The company must be able to monitor the proper maintenance of its equipment

(2) We ensure that the equipment are available for creating the goods or service. Print runs must be scheduled to properly to meet the customer deadline. Vans and delivery trucks must be available to trasport or distribute the goods. The company must be able to monitor the schedule of operation of the production equipment, whether manufacturing, printing or delivery and distribution

(3) We ensure that the operators of the equipment must know how to operate their equipment, whether machine operators or truck drivers, each handler must know how to handle their assigned equipment. The company must monitor the training programs undertaken by the operators and also make sure that standard operating procedures are available and made known to everybody and are infact being followed.

After ensuring that the service is made available, we put our sights on the processes that support the delivery of the service. They must be optimized, made efficient and fast.

(1) You make it easy for the customer to place his order by setting up an order entry system that can accomodate any type of communication with the customer (phone, fax, internet, etc.) Along with his order, what are his expectations? How quickly does he need it? What can we do to meet or even exceed his expectations?

(2) You make it easy for the customer to track his order (A communications system with the driver will be necessary and the means to convey this information to the customer)

(3) You make it convenient for the customer to pay for the service (Availability of different modes of payments, and perhaps direct depositing with banks or credit cards.)

(4) You make it easy for the customer to give you feedback to determine how they feel and what areas need improvement. How satisfied was the customer? What were his expectations? (A Customer help desk system will be invaluable, website, and after-delivery surveys).

The third aspect to consider is how well did we perform the service (or the Quality of the service). We define and then monitor the parameters that make a quality delivery. Offhand, we can cite promptness and punctuality, correctness in delivering the item and ensuring goods are in perfect condition. We must ask ourselves the following questions

(1) How do we ensure that service is performed quickly and on time?

(2) How do we ensure that the correct item is loaded and delivered?

(3) How do we make sure that the items are delivered without damage?

(4) Was the customer delighted in seeing the delivery people? Was it service with a smile? (or was it service with a scowl?)

(5) Is the product or service boringly predictable? Can customers rely on the company to consistently give the same level of service every time? (This is one instances when boring is good).

(6) Did we give ordinary servie level or did we give superior service? Or did we provide extra-ordinary service? (Did our planned spontaneity put that glow of happiness on the customer's face?)

The fourth aspect to consider is the people interaction.

(1) Did we handle customer complaints speedily and correctly? Were they resolved to the customers' satisfaction.?

(2) Did we answer all customer inquiries promptly and politely? Did the customers feel that they were attended to and not neglected? Did employees follow-up on them?

(3) What are the things we can do for the customer to create a positive experience for them? What are the things we can do to create value for the customer?

(4) Do we know what the customer really want?

It is our belief that attitudes and practices cascade down from the company to the customers. Satisfied employees produce satisfied customers. An employee-responsive HR department will create customer-responsive employees. Thus, we ask the parallel questions like:

(1) When employees ask about their leaves balances and availability, were they answered speedily? Was it convenient for the employees to interact with the HR dept.?

(2) Do the HR people monitor the status of the employees? Do they follow-up on the employees?

(3) Do the HR people lavish attention and responsiveness to the employees? Do HR people have time to attend to the employee HR needs or are they bogged down with paperwork?

(4) Do the employees feel that the company is committed to them the same way that they are committed to the customers?

At the end of the day, employees must be empowered to be able to respond quickly, efficiently and respectfully to the customer

Meeting customer needs and wants

According to Maslow's Hierarchy will even consider his safety needs (home or shelter). After that comes the need for of Needs, a person's needs follow a certain order in terms of fulfillment from physiological to psychological. Meaning, physical needs (such as food and clothing) must first be met before anyone attachment or belonging (to a family). Only after all these needs are met would a person consider his need for self-esteem or self-actualization (his dreams, his ambitions, etc.)

It is our tenet that this concept finds a parallel in organizations and that any business transaction must meet the needs of the customer in a similar fashion.

The core product or service is the essence of what we offer. It fulfills the customers basic need, his "physiological" need.

The process (support services and systems) of the company caters to the customers' safety needs. The customer must feel secure that the products is supported by the company

The performance guarantee of the company shows the customer that the company cares about what happens to the customer. This basically meets the attachment and belongingness needs of the customer.

The people interaction skills of the company finally addresses the self-esteem needs of the customer. The company must show that it respects the customer enough to listen to him and respond to his needs.

With this in mind, we declare that the customer satisfaction can only be achieved when the company meets the self-esteem needs of the customer . Of course, this requires that the company must also meet the other three lower needs of the customer. Conceptually, we can show this as follows :

This implies that a true customer-centric organization will have to heavily develop their people delivery systems for ultimately, it is the people-to-people, emotional interactions that will create a satisfied customer.

You may have the best product, the best delivery systems and the highest quality product in the market but without the properly developed personnel, the pyramid will topple to the ground. The foundation of any customer-relationship management system is the people in the company.

Truly, it is the satisfied employee that creates satisfied customers.

Promoting Customer Satisfaction

To add value to customer interactions, we compiled a short but not necessarily comprehensive list of policies and practices which may be helpful in promoting customer satisfaction:

IncreaseAspectReduce
RespectPeopleConfusion
AppreciationFrustration
RecognitionDisappointment
FriendlinessNeglect
HelpfulnessMyopia
CourtesyRudeness
PromptnessPerformanceDelays
AccuracyStockouts
Access to InformationPerformance Waiting
Service guaranteesFailures
Delivery of productProcessesInflexibility
WarrantiesComplexity
Payment optionsRed tape
Longer hoursBureaucracy
Product featuresCore Product or ServicePrice
Quality
Differentiation

The genuine CRM System

Taking this into account, we declare that a true Customer Relationship Management System must encompass the total business organization. It is not confined to merely gathering data on present and prospective customers nor does a simple help-desk suffice. Rather, it is the sume of the different management practices initiated to improve efficiency, and quality supported by an information technology infrastructure. Practices such as quality circles, best practices, service-orientation, etc. The information technology infrastructure must embrace all these aspects, from production to sales to HR if the organization wishes to truly create customer satisfaction. In the end, the payback from increased customer satisfaction is their loyalty, ensuring a continouous revenue stream from them for years to come.

References:

  • Peter A. Dunne and James G. Barnes, "Internal Marketing: A Relationships, Value-Creation View", in Internal Marketing: Directions for Management, ed. Barbara R. Lewis and Richard J. Varey (London: Routledge, 2000)
  • James L. Heskett et al. "Putting the Service-Profit Chain to Work", Harvard Business Review (March-April 1994): 164-174
  • John Czepiel, "Service Encounters and Service Relationships : Implications for Research," Journal of Business Research 20 (1990): 13-21
  • Susan Fournier, Susan Dobscha, and David Glen Mick, "Preventing the Premature Death of Relationship Marketing," Harvard Business Review 76 (January-February 1998): 42-44, at 44
  • Deborah K. Unzicker, "The Psychology of Being Put on Hold: An Exploratory Study of Service Quality," Psychology and Marketing 16 (Jul 1999): 327-50
  • Roger Bennett, "Relationship Formation and Governance in Consumer Markets: Transactional Analysis versus the Behaviourist Approach," Journal of Marketing Management 12 (1996):417
  • John Forsyth et al., "A Segmentation You Can Act on", The McKinsey Quarterly, no. 3 (1999): 6-15;
  • Jos M. C. Schjins and Gaby J. Schröder, "Segment Selection by Relationship Strength", Journal of Direct Marketing 10(3) (Summer 1996): 69-79.
  • James G. Branes, Secrets of Customer Relationship Management, Mcgraw-Hill 2001
  • Simon Glynn, Simon Caulfield, and Jacques Cesar, "Making Customer Relationships Make Money," Mercer Management Journal, no. 9 (1997): 11-20
  • Cristopher Lovelock, Product Plus: How Product + Service = Competitive Advantage (New York: Mcgraw-Hill, 1994), 60-61
  • Leonard L. Berry, "Relationship Marketing," in Emerging Perspectives on Service Marketing, ed. Leonard L. Berry, G. Lynn Shostack, and Gregory D. Upah (Chicago: American Marketing Association, 1983), 25-28
  • Anthony J. Rucci, Steven P. Kim, and Richard T. Quinn, "The Employee-Customer-Profit Chain at Sears," Harvard Business Review 76 (January-February 1998): 82-97

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