InformationWeek
Defining The Business Value Of Technology
January 25, 1999
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IT can improve customer service only so much. The rest has to come from your company's culture.
By Tom Stein and Jeff Sweat
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n today's fast-paced, hyper-efficient business environment, customer service and, more important, customer loyalty are quickly emerging as key competitive advantages. Companies no longer simply pay lip service to the notion that the customer is No. 1. They now tout the importance of stellar customer satisfaction--even above their quest for more market share and greater profitability. This behavior isn't spurred by altruism: Closer relationships with satisfied, highly profitable customers translate into greater revenue from them. But while the customer is always right, plenty can go wrong for companies that try to master the art of customer service.The biggest challenge is cultural. To become truly customer-centric, most companies must radically modify the way they do business. That means fundamentally changing the way they interact with customers, sell their products, even treat their employees. It also means revamping internal processes so fiefdoms that once divided a business--such as sales, product development, and finance--are torn down, letting information flow freely.
Driving the customer-service focus is a new breed of technology, including database tools that let companies gather information about their customers like never before, sales-force-automation applications that let them deliver better service, and Web technologies that let them establish more personalized relationships with customers--and let customers help themselves.
But technology alone is never enough. To become a customer-service powerhouse, companies must also focus on the cultural changes that go with it. "The transition to a technology-enabled, customer-focused company is never easy," says David Shoenfeld, senior VP of worldwide marketing at $13.3 billion package delivery company Federal Express Corp. "But it's a lot easier if you start out as customer-focused and then enhance that with technology."
Industry watchers agree. "Some guys never get it," says Christopher Lochhead, chief marketing officer at Scient Corp. in San Francisco, which provides consulting services to companies interested in implementing customer-management systems. "They can install all the software they want, but if it's the wrong culture, their customers will never get that warm, fuzzy feeling."
In other words, customer service must be more than words on a mission statement; it must be part of the vision, values, and attitude of every employee, from the CEO down to the mailroom clerk. That might even entail changing employees' job descriptions, making sure the new role is covered in hiring profiles and performance reviews. Otherwise, it doesn't matter how many millions you invest in technology; your customer will still feel ignored.
More than almost any other company, FedEx gets that point. For example, the company has a program that lets managers reward their people on the spot with $100 in movie tickets, meals, and so on. The rewards can be handed out frequently to any employee who "goes above and beyond the call of duty" to satisfy customers, without the manager's having to justify it every time. The goal is to reinforce a desired behavior so that everyone becomes customer-focused.
Technology backs up the program in the form of Finders-Keepers, a system and database for sales leads and customer-relationship management. For example, if a courier delivers a package to a business that's not a regular customer, the courier is encouraged to ask the customer if he or she would like to learn more about FedEx. If the customer says yes, the courier inputs the information into the Finders-Keepers system. Within three days, a support representative will follow up with the customer--and the courier will be rewarded, too. The program encourages FedEx employees not only to use the company's technology systems, but also to enhance and strengthen its customer relations.
Technology's Larger Role
But Shoenfeld admits that culture and attitude can get a company only so far. "That's when you need technology to play a larger role," he says. FedEx has excelled in this area. It was one of the first companies to put the power of technology in its customers' hands, letting them track the exact location of their packages at any time and from any place, as well as prepare all shipping documents online and get instant notification when a package has been delivered.
FedEx continues to invest in cutting-edge applications that promise to further enhance the customer experience. For example, the company is testing a Java application that helps customers easily identify packages that don't get delivered. These packages usually end up in one of several lost-and-found warehouses, where the contents are removed and their descriptions are entered into a system. If a customer calls looking for a lost package, a service agent can enter descriptive information--say, a 15-inch vase--into the system. Cameras in the warehouses then locate items that match the description and give the agent a live picture on screen. A once frustrating, nerve-racking, and time-consuming problem can now be resolved quickly.
Of course, stellar customer service doesn't come cheap. FedEx invests tens of millions of dollars annually in both cultural and technological projects designed to foster unbeatable customer satisfaction. "There are some who say all this takes too much time and too much money," admits Shoenfeld. "But I submit that it costs more not to do this in terms of lost opportunity and customer loyalty. Those who understand this will win big, and so will their customers."
So what does it take to become a truly customer-centric organization, especially for companies that haven't made customer satisfaction a top priority until now? "We're talking about a fundamental shift in the corporation--from a culture of operational efficiency to one that's focused on the customer relationship," says Dennison DeGregor, VP of relationship marketing at telecommunications carrier company US West. "The mechanism of competition is really becoming customer relationships."
continued...page 2, 3
Illustration by Bob Scott
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