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July 2002
The way to better customer relations
Ever received someone else's mail despite repeatedly issuing "return to sender" notes?
Published in The Advertiser (12 July, 2002).
Click here
for full article.
June 2002
Firms failing to capture customer potential.
The customers may always be right, but firms dealing with them often get it terribly wrong.
Published in industry journals (Australian Banking and Finance, 2002).
Click here
for full article.
June 2002
Interact positioned as specialists in Customer Management
Interact has recently shed its generic "management consultant" tag and re-positioned its
name, logo and value proposition squarely in the Customer Management space. Our new logo,
InteractCM, was launched in May, along with our new website and other corporate livery.
Click here
for full article.
June 2002
OPSM focussed on unlocking customer potential
Leading national optical group OPSM has identified a wealth of information in its 2
million plus customer database as part of its CRM implementation. With a clear focus
on customer retention and growth, short-term non-IT initiatives using the information
already in-place, are yielding results.
Click here
for full article.
June 2002
International IT group profits from investment in CIQ
Investment in keeping customer information accurate and up-to-date can deliver a
10-fold return to the bottom line, according to a recent global study conducted by
a leading international IT group with the assistance of Interact.
Click here
for full article.
June 2002
Customer Masters are Information Masters!
"Less than 5% of the world's firms achieve the full potential
of their customer relationship initiatives" according to author and
academic, John McKean.
Click here
for full article.
June 2002
Converting Customer Information into Value
To successfully "unlock the true potential" from large customer bases,
organisations need to have clear visibility and explicitly understand the
detailed processes of how the organisation drives value from Customer Information.
Click here
for full article.
June 2002
Customer data - the raw material for customer knowledge!
Knowledge of your customers, their status with your organisation, their behaviour
and potential, is "manufactured" from the information you collect about them. In
your "knowledge factory", the same as any conventional factory, the quality and
usefulness of your knowledge is directly affected by the quality of the input raw
material.
Click here
for full article.
June 2002
The rise and rise of e-mail in Direct Marketing
According to a recent GartnerG2 study, commercial e-mail is quickly
displacing conventional direct mail in the US. It is said that direct
mail has peaked and will account for less than 50% of messages received by
households within three years (
http://www.gartnerg2.com).
Click here
for full article.
Top
July
2002
The way to better customer relations
Ever received someone else's mail despite repeatedly issuing "return
to sender" notes?
"Decaying" company databases were responsible, managing director of
Adelaide-based firm InteractCM said.
Mr Richards and InteractCM's 20-strong workforce
help major companies keep track of their valuable customer base - called customer
relationship management.
Established 17 years ago with Adelaide's Co-op Building Society and BankSA
as early clients, InteractCM now handles some of
Australia's largest databases including the Commonwealth Bank, Westpac, Optus
and the Federal Government.
Its New York-based client IBM will help double the company's multimillion-dollar
turnover this year - dealing with 46 business/client databases in 46 countries for the
IT giant.
"Our specialty is in very large companies. We only work with complex databases
above one million," Mr Richards said.
"The difference with the IBM business database is that businesses have many
contacts which keep changing at a 35 per cent rate of decay."
Mr Richards said large companies needed to track 108 elements of data about their
customers, from tracking address and name changes to finding what product they purchased
last, how they felt about the company and what were their personal preferences for products.
"It's more an attitude towards customers. It's about building a good
culture for the company," he said. "We have found in many cases that the
opportunity for improvement is vast with the possibility of increasing a firm's
profit contributions from high potential customers by up to 10 times." He said
banks in particular had recognised they could reduce costs but also increase income
from their existing customer bases with proper customer management.
"The key to this is developing strong customer relationships by enriching
the information that businesses have about their customers, knowing how to interpret
that information and ensuring staff can act on it," he said.
Top
June
2002
Firms failing to capture customer potential.
The customers may always be right, but firms dealing with them often get it
terribly wrong.
There are a host of ways to alienate a customer and many businesses make an
artform of it: calling people by the wrong title, not knowing what goods or
services may have already been sold to a particular customer, or continued
telesales calls when the customer has already indicated they don't like that
style of selling.
"Poor quality customer information such as this makes them ask 'how well
does this organisation know me'," says Trevor Richards, managing director of
leading customer management consulting firm InteractCM which specialises in
helping businesses to build greater customer value. The company is recognised
as a leader in customer management within Australia and overseas.
"Poor customer management, which is still much too prevalent, actually
weakens the bond with the customer and, along with it, the value of the
firm's whole customer franchise. It shows just how many Australian businesses
are failing to take advantage of one of their major assets - their customer
base," Mr Richards said.
"Many CEOs and board members have a gut feeling and a general recognition
that they have enormous untapped customer potential in their customer base,
but they are frustrated by management's inability to get at it.
"We have found in many cases that the opportunity for improvement is vast,
with the possibility of increasing a firm's profit contribution from high
potential customers by up to ten times," he said.
Mr Richards said companies that had recognised the value of their customer
base were creating key new senior management positions such as General Manager
Customer Management or Head of Customer Information.
"This reflects the increasing focus now being placed on the whole customer
management process."
He said there were risks, however, in the way the potential of customer
bases is handled. Many executives were under pressure to produce fast-fix
stellar results and were falling for the sales pitch of aggressive software
vendors.
"We have seen senior executives seduced by the quick-fix promises of
customer relationship management (CRM) technology, only to see costs exceeded
and promised benefits not realised.
"Most CRM initiatives are code for "sell even more products to our customers"
which can actually have the reverse effect, further alienating the customer base.
InteractCM's experience is that customers see this crude "product flog"
approach as a way for the organisation to actually avoid having a relationship
with them.
"The more sophisticated approach is to develop strong and enduring customer
relationships that, in due course, lead to an organisation providing more
relevant products and services to better meet its customers' explicit needs."
It's a simple equation; the better a business understands its customers'
needs, the better business it is likely to do with them.
"Banks, especially, have recognised that whilst they can continue to cut
costs to reduce their cost-to-income ratio, they can also improve the ratio
by increasing income from their existing customer bases," Mr Richards said.
"This can be achieved by increasing the number of products purchased by each
customer. The key to this is developing strong customer relationships by
enriching the information that businesses have about their customers, knowing
how to interpret that information, and ensuring staff can act on it.
Mr Richards invited companies to visit InteractCM's website at
www.InteractCM.com and try its on-line Customer Management Survey to see
how their organization measures up for their customers.
Top
June
2002
Interact positioned as specialists in Customer Management
Interact has recently shed its generic "management consultant" tag and
re-positioned its name, logo and value proposition squarely in the Customer
Management space. Our new logo, InteractCM, was launched in May, along with
our new website and other corporate livery.
From our perspective, Customer Management covers all aspects of the process
of converting customer information into business value - in our terms,
"unlocking the true potential" of the customer base. With our client base of
"blue chip" companies nationally and internationally, Interact has cemented
its position as the leader in this CM marketplace.
Our new website contains a wealth of information and ideas about Customer
Management. We invite you to try the quick on-line CM Survey
to see how your organisation measures up.
We are all excited about these developments at InteractCM, and we are looking
forward to the CM challenges and opportunities ahead.
Top
June
2002
OPSM focussed on unlocking customer potential
Investment in keeping customer information accurate and up-to-date can
deliver a 10-fold return to the bottom line, according to a recent global
study conducted by a leading international IT group with the assistance of Interact.
Commenting on the results of the study, the Team Leader said:"Accurate information
about our customers is essential if we are to communicate effectively with them and
offer products & services relevant to their needs. If we know who to contact, how to
personalise our messages and the offer to them is appropriate, our sales efforts tend
to be much more productive and the customer knows that we care".
"This study has shown that response to direct marketing campaigns is
significantly higher for those customer records which are up-to-date and enhanced
with more information about the interests and needs of the customer".
The ROI study was supported by a major international study of the rate
at which customer data decays. This decay study confirmed Dun & Bradstreet's
finding that B2B data deteriorates by 35-50% annually due to company name &
address changes, company mergers or closures, staff movements, duplication and errors.
This work endorses Interact's contention that Customer Information is one
of the organisation's core strategic assets, and as such, must be the focus of
continuing investment to maintain the integrity and value of the asset.
Top
June
2002
International IT group profits from investment in CIQ
Investment in keeping customer information accurate and up-to-date can deliver
a 10-fold return to the bottom line, according to a recent global study conducted
by a leading international IT group with the assistance of Interact.
Commenting on the results of the study, the Team Leader said:"Accurate information
about our customers is essential if we are to communicate effectively with them and
offer products & services relevant to their needs. If we know who to contact, how to
personalise our messages and the offer to them is appropriate, our sales efforts tend
to be much more productive and the customer knows that we care".
"This study has shown that response to direct marketing campaigns is significantly
higher for those customer records which are up-to-date and enhanced with more information
about the interests and needs of the customer".
The ROI study was supported by a major international study of the rate at
which customer data decays. This decay study confirmed Dun & Bradstreet's finding
that B2B data deteriorates by 35-50% annually due to company name & address changes,
company mergers or closures, staff movements, duplication and errors.
This work endorses Interact's contention that Customer Information is one of
the organisation's core strategic assets, and as such, must be the focus of continuing
investment to maintain the integrity and value of the asset.
Top
June
2002
Customer Masters are Information Masters!
"Less than 5% of the world's firms achieve the full potential of their customer
relationship initiatives" according to author and academic, John McKean.
In his ground-breaking book entitled "Information Masters", McKean contends
that it is only through information mastery that organisations will win the race
to customer intimacy and profitable customer relationships.
McKean is Executive Director of the Center for Information Based Competition,
which advances the thinking on how firms in customer-intensive industries achieve
competitive advantage from applying customer information (
http://www.informationmasters.com ).
He defines information mastery in terms of seven dimensions:
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People |
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Processes |
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Organisation |
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Culture |
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Leadership |
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Information,
and |
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Technology |
Importantly, McKean's research has found that more than 80% of investment
by firms in information capability is in technology, whereas the other six non-technological
components are those that actually determine the firm's information competency.
His book presents a compelling, research-based argument that the most brilliant
marketing and customer loyalty strategies are doomed to failure when there is
insufficient and balanced investment across all seven information mastery factors.
Top
June
2002
Converting Customer Information into Value
To successfully "unlock the true potential" from large customer bases, organisations
need to have clear visibility and explicitly understand the detailed processes of how
the organisation drives value from Customer Information.
A good way for senior executives to get a view of how transparent these
process are in their organisations is to measure how well they are doing in
five key areas.
Interact has not only developed key metrics to help clients monitor the
status of these key processes in their organisation, but has also defined the
detailed processes and key impediments to their effective execution.
Rigorous and consistent application of these processes across the whole
organisation can deliver a 2- to 3-fold step improvement in the value unlocked
from a customer base.
Top
June
2002
Customer data - the raw material for customer knowledge!
Knowledge of your customers, their status with your organisation,
their behaviour and potential, is "manufactured" from the information
you collect about them. In your "knowledge factory", the same as any conventional
factory, the quality and usefulness of your knowledge is directly affected by the
quality of the input raw material. Unfortunately, in many organisations, the raw
material has been designed to suit administrative or billing purposes and is
typically not "fit for purpose" for relationship marketing.
The concepts of TQM (total quality management) are completely transferable
to the "knowledge factory". Do you operate with "inspectors" (clean team) fixing
up data errors? Is the data warehouse routinely supplied with "polluted" data which
requires cleaning before it can be used for marketing? Do staff adopt a "don't care"
attitude because management doesn't promote an information quality culture? Are people
frustrated because their tools (systems) make it difficult to maintain data integrity?
TQM is about building-in quality, getting it right first time. In a total customer
information quality (TCIQ) environment:
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Management
drives a culture of customer information quality |
|
There is
clear organisational responsibility for customer information quality |
|
Plans and
budgets are in-place for continuous investment in information quality |
|
Standards
are set for the type, content and quality of information |
|
Systems
and processes are built to maximise information quality and integrity |
|
Staff are
trained in information quality processes and are recognised for high
quality |
|
Metrics
are in-place to monitor deviations from standards and targets and
drive continuous improvement. |
TCIQ requires a "paradigm shift". Executives typically tolerate high levels of
"waste" and "rework" in their information factories because they are not aware of
the magnitude of the problem. The new environment requires that customer information
quality attains a far higher profile as people recognise and respect information as a
vital corporate asset.
Top
June
2002
The rise and rise of e-mail in Direct Marketing
According to a recent GartnerG2 study, commercial e-mail is quickly displacing
conventional direct mail in the US. It is said that direct mail has peaked and will
account for less than 50% of messages received by households within three years
(
http://www.gartnerg2.com).
The two main reasons for the switch to e-mail - it's faster and cheaper.
Interestingly, although average DM response rates are similar at around 1%,
the response time for direct e-mail is said to be three days compared with 6
weeks on average for a direct mail campaign.
What does this trend mean for customer information quality? Firstly,
it means that valid (current, correctly-formatted) e-mail addresses are required
for target customers. This may require that product application forms are re-designed
to capture e-mail addresses, that on-line transaction sites enable customers to
record/update their e-mail addresses, or that special e-mail address acquisition
programs be implemented. Secondly, it will be important to gain customer permission
to use this channel for direct marketing. And finally, processes analogous to
return mail processes will be needed to handle "bounce backs".
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