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October 5, 1998

The Service Imperative

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Illustration by David Wink

Chlor-Alkali & Derivatives' efforts were recognized last month by the International Customer Service Association, which bestowed its Award of Excellence on the organization, in part because of its inventory-management initiative. The PPG unit isn't stopping there. In January, it will begin tracking inventory automatically with ultrasonic sensors that use telemetry to report tank levels to the system. "This ties us closer to our customers," says Piciacchio. "We're helping out customers by taking over order placement and inventory management."

Go With The Flow

New Pig Corp., a $70 million maker of absorbent products for industry, says improvements in its distribution process are making a difference with customers. In April, the Tipton, Pa., vendor introduced an extra step to its product-shipping procedure that has cut the number of returned packages--those that don't arrive at their intended destination--from 5% to less than 1%. New Pig compares its data on an outgoing order with the shippers' data prior to actually releasing a package, cutting down on errors that can cause shippers to reject packages.

Here's how the improved process works: Shipping data is entered into New Pig's Unix-based host computer, then loaded into a program that forwards it to the shipper's computer. If some element of the data clashes with the shipper's database, the shipping bill bounces back to New Pig for correction. An added benefit is that New Pig can ship packages later in the day and still get them to their destinations on time. What's more, service reps can go online and get answers to customer queries about a shipment within minutes.

The new system works. "We've seen an increase in the number of orders and the number of shipments that go out the door every day without adding people or paying more over time," says Tony Deely, New Pig's director of distribution.

As shown by New Pig's success, improved customer service is often related to changes in a company's internal processes, which can lead to greater efficiency and cost savings for the service provider. But those paybacks are secondary. Indeed, when it comes to return on investment in customer-management technology, only 41% of respondents to the InformationWeek Research survey consider ROI to be "very significant." IT managers say improved customer satisfaction and quicker response to customer inquiries are the top two benefits of investing in customer-management tools. (For more survey results, see Behind the Numbers)

Innovation In IT
Others are applying IT in unique ways to keep customers coming back. Mobil is installing a new wireless application, called Speedpass, in gas stations across the country to reduce the time customers spend at the pump. The app automatically reads information from a customer ID tag located on a windshield or key chain. "There is no thinking required to use this," says Joe Giordano, manager of marketing technology for Mobil. "We want to bring customers back to the super-simple good old days, where you can wave and say, 'Hey, Eddy, just put it on my account.'"

The first company to widely adopt pay-at-the-pump technology in the mid-1980s, Mobil implemented Speedpass after a survey showed speed of service was important to its customers. The point-of-sale system links via satellite to a data center, where the gas purchase is charged to the customer's account. Mobil estimates Speedpass can cut 45 seconds from a 3.5-minute gasoline purchase. Surveys indicate more than 90% of users are "highly satisfied" with the offering, according to Mobil.

Staples, the $5 billion office-supply chain, is installing a point-of-sale system that, in addition to expediting sales, could be used by cashiers to make sure customers aren't forgetting something they need. Using a database of a customer's purchase history, the system would make it possible to present a screen of customer-specific data at the point of purchase, letting cashiers remind shoppers of something they may have overlooked, says James Ray, VP of corporate systems and strategy. Staples has yet to decide if it will actually use the system in this way--it's just one idea the company is considering to make shopping more convenient and to bolster sales. "Customers want the product, they want someone to be available to help them, and then they want to get out," says Lynne Broderick, manager of customer-service development for Staples.

Self Service On The Web
The Web is also emerging as a customer-service platform. Virtual Vineyards, which made its name selling wine over the Internet, is trying to distinguish itself with follow-up and support services. The Palo Alto, Calif., company ships packages via Federal Express or United Parcel Service and uses an automated system to check the shipping status of orders once an hour. If a customer calls to check an order's status, the customer-service rep can instantly provide that information. Once the shipper notifies Virtual Vineyard that a package has been delivered, the company automatically generates an E-mail message to the customer conveying that information.

Virtual Vineyards would like to improve service further. One possibility: deploying artificial intelligence-based search engines to answer E-mail queries in the off hours. "People are coming up with questions at 10 at night, and they're ready to buy at that point," says chief operating officer Robert Olson.