“Thank you for continuing to hold. We value your custom and look forward to speaking with you soon”, the saccharine recording repeated like the mantra of some demented yogi. However, far from the Zen-like assurance and calm their chant presumably intended to evoke, it had me reflecting more on the cliché that if they really valued my custom, they wouldn’t keep me on hold for so long. By the fifteenth minute the message had developed from a slightly patronising inconvenience to a sardonic mockery. “They should value my custom”, I retorted during one of the brief bursts of late-nineties ringtone that appeared to be punctuating her announcements, “I am a good customer: I deserve to be treated better than this”. Which made me think, in a world that so blatantly stratifies and discriminates, was the Marxist mystic at the other end of the phone right and private enterprises should value every one of their customers equally? Or should we carefully pander to selected favourites while leaving the rest to eat cake?
The first point to note is that typically customers are not actually treated equally – as anyone who has ever had to walk through the salubrious front of a plane to the cattle-hold in the rear will attest. However, even when formal attempts at price differentiation are ignored, customers generally will still be treated differently – especially when they have to deal with a human. Oftentimes, the decision on how to treat a customer is left, at least in part, to the agent, who may vary how accommodating they are based on how pleasant the customer has been, how close it is to the end of their shift or how hungover they are from the night before.
There is, however, nothing particularly untoward in being discriminating in the level of service we provide either – though it does need to be based on something a little more meaningful than the number of pints your agents consume on a Tuesday night. Business is all about allocating scarce resources in the most efficient manner to ensure the greatest return to the owners. Therefore any business action should have both its costs and benefits carefully analysed to allow for the optimum behaviour to be selected.
Of course the key here is having sufficient information – and using it – to make sure all these potential costs and benefits are taken into account. For example, one could naïvely assume that the “Premium Member” who pays $70pm to use a gym should always trump the “Basic Member” who pays a meagre $40pm. However, in actual fact, a given basic member may have a greater net value compared with a given premium one. This is because the former may prefer to sit at home eating nachos and watching “The Biggest Loser” instead working-out, while the premium member visits daily and constantly calls in to complain, raising the cost to serve him above the difference in his membership rate.
Even if crude measures are dumped in favour of something more sophisticated, businesses can still shoot themselves in the foot by being myopic. Just because a customer is of low value today doesn’t mean they won’t be valuable tomorrow. Obviously treating a customer well will make them more susceptible to your upsell attempts but this isn’t the only way their value can increase over time. Take students, for example, most of their assets are typically held in books and ramen – but yet banks scramble for their custom. This is not because they think instant noodles are the only safe store for capital in this turbulent economic climate but rather because they know students generally go on to become graduates who, in turn, get paid more money and subsequently generate more business for the bank.
Differentiation also runs the risk of incurring the greatest cost of all: the opportunity cost of getting it wrong and mistaking one of your best customers for an undesirable. This is why the process cannot be left up to humans. Even assuming the agent has the best interests of the business in mind, they cannot possibly conduct an accurate assessment of the customer’s current and future value then determine how they should be treated based on this while trying to keep their handling time down, cross-selling other products and remembering to tell them about your self-service website. It therefore must be built in to the CRM application.
For this to be successful it requires a number of factors. Firstly, the CRM software must constantly be capturing and updating accurate and timely information about the customer. It must then feed this data into an intelligent and evolving analytics engine to make predictions and assessments of value based on this data. Finally, it must be process-centric and use the output of the analysis throughout the application to ensure the agent employs the correct policy and disposition for the customer in question.
It goes without saying that we should always strive to provide a high minimum standard at the lowest possible cost to serve for all our customers. However, in this increasingly competitive international business environment we need to be smarter about how we use our resources – and subsequently how we decide what customers to develop, hold or divest. Better CRM is the key to both.
As for the business of trying to convince a customer they are important via the medium of recorded message, it seems that this may be beyond the scope of even the smartest CRM software. Perhaps the offshore agent that’s just picked up will do better with the script he is clumsily regurgitating to this “valued” customer…