InformationWeek
Defining The Business Value Of Technology
January 25, 1999
 Print this story |
continued...page 3 of 3
 |
|
|
|
|
Knowing customers and their needs is another critical ingredient of customer/relationship management. At National Semiconductor Corp., for instance, the design engineer is king. These are the people who make such devices as phones, PCs, and Nintendo games, and who rely on chips from National Semiconductor to do their job. "Our goal in life is to do everything possible to save the design engineers time and make them more productive," says Phil Gibson, director of interactive marketing.
Extensive customer profiles revealed that design engineers are typically detail-oriented and introverted. They dislike meeting with salespeople and tend to work whenever the mood strikes them. As a result, the Web proved an ideal way to reach them. Indeed, today about a million design engineers come to the company's site each month to learn about, test, and buy new products from National Semiconductor.
The company has also connected its Web site to the rest of its business, providing all employees with a unified view of the customer. For example, if a design engineer from Compaq visits the site and checks out a new device, that information will be automatically routed to the appropriate salesperson via the company's contact-management software. Armed with this information, the salesperson can then go back to the engineer with a list of customers who have used and benefited from the device.
Another big cultural change at National Semiconductor is that incoming questions from customers now go directly to the employee who knows most about that subject, rather than to a generic technical-support person. Each day, fresh E-mail is captured in a database, filtered by keywords and automatically routed to one of 8,000 internal experts. Response time is typically less than 24 hours. "In the past, people used to complain that they just didn't see or hear customers enough," says Gibson. "Now we all feel more in touch and know a little better what the customer wants."
Cycle Of Resistance
But the changes haven't come easily. Gibson says everyone has a standard resistance cycle to change. First comes the rebellious phase, in which people think they don't have to do anything. Next comes the, "OK, I'll adapt as little as I have to, so I don't get fired" phase. Then they agree to try the new system, "just to see what happens." Finally, after some success, comes the adoption phase.
Gibson says when National Semiconductor was rolling out a new sales-force-automation system called OverQuota, from Relavis Corp., he had to visit every salesperson personally and go over all their concerns. The biggest resistance point was that salespeople wanted to hold on to their own data and not share it with anyone else. They thought that by sharing information, they were giving up their proprietary advantage. Gibson says it took a full 18 months for his salespeople to get comfortable with the system--and those who couldn't adapt and make the cultural transition eventually had to go.
Another potential benefit of knowing the customer is knowing which ones are most profitable. By actively seeking out customer information, tracking customer history, and receiving customer feedback, companies can really understand which customers are likely to make them the most money. A company then must segment its business accordingly, and decide priorities for those segments. Schwab, for instance, divides customers into four categories depending on how much money they have in their accounts and how often they make trades. The level of personalized service and support customers receive often depends on the category they fall into.
US West, too, has segmented its customers into two types: low-profit and high-profit. For its low-profit customers, it provides basic services more efficiently. For its high-profit customers, it provides higher-quality service and more-tailored offerings, such as Web-site hosting, in hope of building a better relationship that will ultimately translate into much higher revenue.
Placing emphasis on profitable customers may ultimately lead to a move that's anathema to most sales organizations: dropping customers who aren't profitable. But that's just another tough, cultural decision that all customer-focused companies need to make, says Bo Manning, head of consulting firm Deloitte & Touche's customer-relationship management practice. He adds that his own organization has passed up some million-dollar deals because there was no hope of a long-term relationship. "The deal feels good for the short run, but it may divert resources that could be used to build longer relationships," he says.
When it comes to traditional customer-service automation initiatives, organizations have a history of failure because they don't take the time to address cultural issues. The biggest stumbling block is that internal sales and service reps aren't technically proficient and often feel that technology is being shoved down their throats. By contrast, companies like Schwab, National Semiconductor, and FedEx--whose initiatives recognize and address the cultural shift that must accompany a technological one--have a much higher likelihood of success.
Still, nothing comes easy. "It's just a whipping to change things," says Botkin of Lennox Industries. But for those companies that take their lumps and still manage to adapt, success is one giant step closer.
return to page 1, 2
Illustration by Bob Scott
Back to This Week's Issue
Send Us Your Feedback
Top of the Page
