Friday - August 25, 2000

Multichannel Customer Service Increases Online Consumer Demand

Firms that manage customer relationships from within single channels are unable to deliver the consistent experience that is expected by Net-aware consumers. According to a new Report from Forrester Research, Inc., fragmented responses to empowered customers strain loyalty. To meet these expectations, firms must treat customer relationships as conversations versus campaigns.

"Online marketplaces position instant pricing information in the palm of consumers' hands -- dissolving the sales cycle, accelerating customer churn, and depressing profits," said Bob Chatham, principal analyst at Forrester Research. "By adopting a new relationship-focused strategy -- what Forrester calls "the customer conversation" -- firms have a chance of consistently meeting today's customers high expectations."

For the Report "The Customer Conversation" Forrester interviewed 60 executives at Global 2,500 companies -- 40 based in the US, 20 in Europe -- about their customer relationship management plans. Only 48% of firms know about a problem before a customer does; only 43% alter service based on a customer's profitability; only 42% would sell something during a service call; and only 37% know if they share a customer with another division.

The customer conversation is based on a mutually beneficial relationship that is proactive, informed, and continuous. First, to build loyalty, firms must internalize and support customers' plans and problems. Proactive sellers will lower the cost of sales and build loyalty by linking themselves to customers' product development and production processes and building product-related communities. They will also monitor inventory and provide appropriate substitutions when necessary, while notifying customers of outages and product revisions to prevent failures.

Next, informed sellers make the customer conversation relevant by tailoring actions to consumer profitability. Sellers encourage meaningful conversation when they answer questions knowledgeably during each encounter. They must provide guided selling tools, customer-specific history, and FAQs customized by context. To succeed, firms should also measure and manage quality, efficiency, and effectiveness across all channels -- switching from narrow measurements to broader report cards that span order fulfillment, email and call response times, and returns processing.

Finally, to create the corporate infrastructure that prepares firms for a conversational relationship, companies must transform long-standing processes, organizations, and technologies to selectively synchronize data. Sellers must demonstrate consistent behavior by creating a common reference set of business rules, pricing, and schedules that can be reused regardless of the point of contact.

Both business-to-consumer and business-to-business firms must engage in customer conversations, although approaches will vary. Market, company, and customer criteria will draw firms to either hands-free or hands-on conversations. Hands-free relationships focus on automating services to the point of invisibility, while hands-on relationships focus on delivering differentiation and value through interpersonal skills and knowledge.

"All firms must be conversational -- proactive, informed, and continuous -- but hands-free firms converse through technology, while hands-on firms emphasize touch," added Chatham. "Hands-free firms should integrate directly with business customer systems to deliver timely replenishment and reminders. Hands-on companies require that sellers target the customer experience, making it as pleasant as possible. Hybrids, with both hands-on and hands-free characteristics, should focus on efficiency."

FTC Sues Adult Sites for Wrongfull Billing
According to an AP article distributed to USA Today:

"Owners of scores of adult Web sites have been charged with billing thousands of Web users for supposedly free services, and billing other consumers who have never visited the Web sites at all, the Federal Trade Commission announced Wednesday.

Both the FTC and the New York attorney general's office filed suit in U.S. District Court seeking to halt the billing practices and have asked the court to freeze the defendants' assets in order to reimburse consumers..."

Click here for the full story. [Link no longer active]

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