CRM Section 05 - ICMI

Section 5

Relationship-Building Strategies

Customer Relationship Management


Call Center Customer Relationship Management Study Guide • Version 2 • Copyrighted to ICMI, Inc., 200

Contents

Establishing Effective Strategies

1. Establishing Customer Relationship Management Objectives........................................1

2. Common Organizationwide Objectives .........................................................................3

3. Supporting Call Center Objectives ................................................................................7

4. Components of an Organizationwide Customer Relationship Management Strategy

[Strategic] ....................................................................................................................13

5. Developing the Supporting Call Center Strategy [Strategic] ........................................18

6. Establishing a Supporting Operational Model ............................................................23

Aligning Resources

7. Aligning People, Processes and Technologies................................................................26

8. Organization Design Considerations ..........................................................................31

9. Building Executive Sponsorship and Support .............................................................36

Exercises............................................................................................................................40

Reference Bibliography .....................................................................................................44

Introduction to Relationship-Building Strategies


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Call Center Customer Relationship Management Study Guide • Version 2 • Copyrighted to ICMI, Inc., 2002 1

1. Establishing Customer Relationship Management Objectives

Key Points

• Two layers of customer relationship management objectives arenecessary:

1. Organizationwide objectives2. Objectives for specific organizational units or functions, which

support overall objectives and synchronize activities across theorganization

• In addition to deciding which objectives to establish, theorganization must also weed out those that may conflict with overalldirection.

Explanation

Customer relationship management is a business project, not a technologyproject, and requires involvement and support from people across theorganization. Objectives play a vital role in driving activities, priorities andexpectations. They should be developed with the customer’s viewpoint in mindand should be linked to the key components of the customer relationshipmanagement strategy, which, in turn, should support the organization’s vision.Customer relationship management objectives and measurements should enablethe organization to assess in measurable terms whether the organization isconsistently achieving successful strategy implementation.

An Ongoing Effort

Customer relationship management has been variously described by advocatesas “treating different customers differently” to “a strategy for increasing revenue,improving operational efficiencies and winning market share through a betterunderstanding of customers and their behaviors” to “building a common,organizationwide focus on customers.” So, how do customer relationshipmanagement objectives differ from traditional organizational objectives? Inorganizations that have had a strong customer-oriented focus in the past,customer relationship management objectives are likely to reflect more of anongoing evolution of what they’ve already been doing. But in organizationsthat have not had a unified, organizationwide focus on building customerrelationships, customer relationship management principles and objectives will


require a significant change from past practices and objectives.

Further, today’s realities include proliferating channels of contact withcustomers, distributed organizations, heightened customer expectations andcompetition that is just a click away. These variables are constantly evolvingand even organizations that have had a strong customer-focused history arefinding that customer relationship management is an ongoing developmentprocess. You can’t wish excellent customer care into existence or rest on pastsuccess. You need the tools, processes, skill sets and organizationwidecommitment appropriate for an ever-changing business environment.

Objectives on Two Levels

Customer relationship management objectives must be established on two levels. The first level consists of those objectives that represent anorganizationwide effort, e.g., improve customer satisfaction, increase customerretention, and build average profitability per customer (See CommonOrganizationwide Objectives, this section.) The second level includes objectivesthat apply to specific organizational units or functions to ensure that every areaof the organization is supporting overall objectives. In the call center, theseobjectives include such measures as first-call resolution, service level and callquality. (See Supporting Call Center Objectives, this section).

In addition to deciding what objectives to establish, the organization must alsotake inventory of current objectives and weed out those that may conflict withoverall direction. For example, standards that put a ceiling on average handlingtime may restrict agents’ ability to capture and record information that isnecessary for building relationships.

2 Call Center Customer Relationship Management Study Guide • Version 2 • Copyrighted to ICMI, Inc., 2002


2. Common Organizationwide Objectives

Key Points

• Common organizationwide customer relationship managementobjectives generally include:

• Customer satisfaction and loyalty• Customer value• Customer retention rate• Customer acquisition/market share• Overall revenue• Sales per customer (or revenue per customer)• Products or services per customer• Upsell and cross-sell ratios• Marketing costs and/or response rates• Quality of customer data gathered and maintained• Number or percentage of preferred customers• Employee satisfaction

Explanation

Two integrated layers of customer relationship management objectives must beestablished: those at the organizational level and those that apply to specificorganizational units or functions. Organizationwide objectives are commonlybased on the following:

• Customer satisfaction and loyalty: Customer satisfaction, simply stated,measures the percentage of all customers who felt satisfied. Studies havelinked customer satisfaction to customer loyalty, repeat purchase behaviorand word-of-mouth advertising. Customer satisfaction long has been apriority of customer-focused organizations. However, there is a trendtoday to go beyond satisfaction, to measure and improve customerloyalty. A prerequisite to accurately assessing satisfaction/loyalty is tocollect data on a representative sample of customer experiences andperceptions. Some organizations outsource the measurement ofcustomer satisfaction at the organization level, because employing anoutside organization avoids internal conflicts of interest and bias. (SeeThe Value of Customer Satisfaction and Loyalty, Section 3 and CustomerSatisfaction Measurement Principles, Section 4.)

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• Customer value: This is an estimate of the value (both tangible andintangible) to the organization of a customer over a future time period. Acustomer valuation model provides bottom line information about theorganization’s relationship with customers. Changes in customer valueshould be measured against strategic objectives. Rising average customervalue usually is the goal, but objectives may be targeted to specificcustomer segments rather than across-the-board measures. (See CustomerValuation Alternatives, Section 3.)

The term customer capital is often used to describe the value of thecustomer relationships that you have. This includes the depth andquality of those relationships, their ability to generate revenue, how longthose relationships last and how profitable they are.

• Customer retention rate: This is the percentage of a prior period’scustomers who are still customers in the current period (excluding newcustomers acquired). The hallmark of an effective customer relationshipmanagement program is greater retention of the organization’s bestcustomers. Implicit in that statement is the idea that greater turnoveramong the organization’s less-valuable customers may be acceptable, evendesirable. Customer retention rate results need to be measured againststrategic objectives.

A related metric would be “saves” or the number of customers whosebusiness was retained after they had indicated their intent to leave. Forexample, a customer calling to cancel an insurance policy who ends upnot canceling it as a result of the agent’s efforts on the phone would be asave. Measuring saves can be problematic, however, depending on (a) thedefinition of what constitutes intent to leave and (b) how long thecustomer must remain as a customer in order to qualify as a save (forexample, if the cancellation is delayed by one month, was it still a save?).But despite the challenges, these and related measures create a focus onthe important principle of retaining existing customers.

• Wallet share: Related to customer retention is wallet share, also calledshare of wallet. This refers to the amount of a customer’s total spendingthat goes to your organization. Instead of focusing on capturing apercentage of the market, as in market share, the focus is on maximizingthe amount of money spent by each customer. This is most oftenaccomplished by diversifying the organization’s products and servicessince, for most products and services, an individual customer will onlyneed or want so much of the same thing.



• Customer acquisition/market share: A core principle of customerrelationship management is to build relationships with, and therebyimprove satisfaction and loyalty among, current customers. However,most organizations also establish an important and – when treatedproperly – compatible objective of acquiring new customers, which, inturn, contributes to the organization’s market share.

Traditional efforts to attract new customers and grow market share oftenfocus on costly mass-market campaigns, and prices and incentives gearedtoward “making the sale.” In the context of customer relationshipmanagement, these objectives are achieved more through positive word-of-mouth, focused efforts to reach specific target markets, and cross-selling and upselling to existing customers.

• Overall revenue: The income produced by the organization is a tangiblemetric related to the effectiveness of customer relationship managementinitiatives. However, it may be difficult to quantify the degree to whichthese programs have actually made an impact separate from that of otherfactors (e.g., external market conditions). Overall revenue bearswatching, but it needs to be supported with other metrics, too.

• Sales per customer (or revenue per customer): In a sales-oriented callcenter (as opposed to a service center), sales results will likely already betracked closely. A customer-centric view of sales, however, may not befeasible prior to implementing a unified customer relationshipmanagement initiative. Sales per customer should reflect all productsand services the customer has with the organization (across alldepartments and product lines). Attention to the relationship eachcustomer has with the organization is usually expected to increase theamount of sales per customer (in a profit-making organization).

• Products or services per customer: A simpler variation of sales percustomer, products or services per customer can be a measure of cross-selling effectiveness. In general, increases in the average number ofproducts or services per customer are desirable and should increasecustomer value.

• Upsell and cross-sell ratios: This is the percentage of attempts to upsellor cross-sell that are successful. Upselling and cross-selling efforts shouldbe more successful when they are part of a coherent customer relation-ship management strategy.

• Marketing costs and/or response rates: Data collected through customerinteractions provides the basis for more effective marketing. Marketing



costs may be reduced as marketing efforts become more targeted throughincreased customer segmentation. The response rates to marketingcampaigns may increase for the same reason. Customer relationshipmanagement initiatives have the potential to affect these metrics, but itwill be up to the marketing department to utilize captured data to enablemore targeted or effective marketing (e.g., increase in conversion orresponse rate, decreased costs).

• Quality of customer data gathered and maintained: Call centers andother business units that have a role in customer interactions assumeimportant data collection roles. To encourage employees to take this roleseriously, metrics should be established. Otherwise, what does getmeasured will get attention instead. If it is important for agents to askquestions and record information during calls, then how well theyperform that task should be monitored and measured to indicate theimportance management places on it being done correctly.

• Number or percentage of preferred customers: Customer relationshipmanagement initiatives should help organizations identify and improvetheir relationships with their best customers. Tracking the number of“good” or “preferred” customers that a organization has, or measuringwhat percentage they are of all customers, is a direct gauge of customerrelationship management effectiveness. Obviously, the definition of“good customers” is important, but once determined, goals can beestablished and results measured.

• Employee satisfaction: Studies have demonstrated that customersatisfaction increases as agent job satisfaction increases. Further,retention, productivity and quality often have a definable, positivecorrelation to employee satisfaction. Consequently, employee satisfactionis an important objective to measure, track and improve.

As with any set of objectives, it is important to look at performance results incontext. No measure by itself tells a complete story. Together, however, theseobjectives and measurements both enable the organization to assess progressand serve as a framework for supporting objectives that must be establishedwithin specific organizational units or functions.



3. Supporting Call Center Objectives

Key Points

• Customer relationship management initiatives do not necessarilyrequire major changes to an organization’s traditional call center keyperformance indicators (KPIs). However, it is important to ensureall objectives support overall customer relationship managementinitiatives.

• Call center objectives should be established to support five key areas:• Quality• Accessibility• Efficiency• Cost performance• Strategic impact

Explanation

Customer relationship management initiatives do not necessarily require majorchanges to an organization’s traditional call center key performance indicators(KPIs). Much has recently been written and said about “traditional” call centermeasures – calls handled per agent, average handling time and abandoned calls– being scrapped in favor of new measures that better support overall customerrelationship management objectives. However, these so-called traditionalmeasures never have been sound objectives, and customer-focused call centersavoided or moved away from them long before the customer relationshipmanagement movement became prevalent. In that sense, labeling badmanagement practices and objectives as “traditional” is a misnomer.

Therefore, call center objectives and performance measures are evolving to meetthe demands of customer relationship management. In organizations that longhave had “the right” objectives, this process is more a matter of emphasis, alongwith ensuring that contradictory or counterproductive objectives don’t creepback into the mix. A thorough discussion of how to identify and applyperformance objectives is covered in ICMI’s Call Center Operations ManagementStudy Guide. These objectives are summarized here in the context of customerrelationship management initiatives.

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Objectives Related to Quality

Call (contact) quality: Call quality is an appropriate objective in allenvironments as both a high-level measurement (overall summary of the resultsof individual contacts) that is generally tracked monthly and as the basis forspecific objectives for agents and supervisors, contact by contact. The quality ofeach contact is essential to successful call center performance, and criteriashould reflect customer relationship management objectives; e.g., interpretingcustomer requirements correctly, entering accurate call coding, capturingneeded and useful information, appropriate upselling and cross-selling, etc.Specific criteria should be an inherent part of monitoring and coachingprocesses.

First-call resolution: This objective is an important driver of customersatisfaction and loyalty. Consequently, first-call resolution is appropriate in allenvironments as a high-level measure that supports overall customerrelationship management objectives. Components that lead to first-callresolution should also be built into specific quality objectives for agents. First-call resolution impacts costs significantly. (See Identifying Contributors toCustomer Satisfaction, Section 4.)

Errors and rework: Errors and rework – the percent (and types) of errors andrework that are occurring – negatively impacts both customer satisfaction andthe organization’s costs to provide services. Tracking and reducing it isappropriate in all environments. Specific components of errors and rework areoften built into quality objectives for agents. However, because not all errors arewithin their control, variables must be selected carefully.

Objectives Related to Accessibility

Service level and response time: Service level measures how quickly callersreach agents, while response time measures how long it takes the organizationto reply to contacts that can be handled at a later time; e.g., email or faxmessages. Accessibility directly impacts customer satisfaction, and theseobjectives are an important part of a customer relationship managementinitiative. Further, establishing concrete service level and response timeobjectives is a prerequisite to the solid planning necessary to ensure that theorganization is accessible through whatever channels customers prefer. (SeeMeasuring Accessibility Across Channels, Section 4.)

Average speed of answer (ASA): ASA comes from the same set of data asservice level and it is not necessary to have both service level and ASA



objectives. However, if service level data is not available, ASA can be asubstitute.

Abandoned and blocked calls: Abandoned and blocked calls are generallycaused by insufficient staffing or trunking resources, vis-à-vis the workload.They should be viewed as supporting information to service level and responsetime reports, but not as primary objectives.

Objectives Related to Efficiency

Forecasted call load vs. actual: This is the percent variance between theforecasted call load and the call load actually received, and is appropriate in allenvironments as a high-level objective. It is also used for ongoing tacticaladjustments. Forecasting the workload is a high-leverage activity that isfundamental to both managing a call center effectively and meeting customerexpectations. Underestimating demand will defeat all other efforts to providegood service, and overestimating demand results in waste.

Scheduled staff vs. actual: This objective compares the number of agentsscheduled to the number actually in the center. Having the “right staff in theright place at the right times” is a prerequisite to providing accessibility andquality services, and this is appropriate in all environments as a high-levelobjective for the center and for agent teams.

Adherence to schedule: This measure of how much time and when during theagents’ shifts they are taking or available to take calls. It is appropriate in allenvironments as a high-level objective and is also a common and recommendedobjective for individuals and teams. Adherence consists of time spent in talktime, after-call work, waiting for calls to arrive and placing necessary outboundcalls.

Average handling time (AHT): While AHT is appropriate in all environmentsfor high-level purposes and for ongoing tactical planning, it is generally notrecommended as a strict agent standard. In many centers, AHT is increasing ascontacts become more complex and as objectives focus on buildingrelationships and capturing needed and useful information. If qualitativemeasurements are refined enough to ensure that agents are spending theappropriate amount of time handling calls, then average handling timeobjectives are redundant and potentially counterproductive.

Occupancy and number of contacts handled: These figures are notappropriate objectives. Occupancy is a phenomenon of random call arrival andis heavily influenced by service level and group size. Setting objectives on



occupancy is likely to conflict with other objectives; e.g., when service levelgoes up, occupancy goes down and when schedule adherence improves,occupancy goes down. Avoid setting standards based on occupancy.

Objectives Related to Cost Performance

Cost per call (cost per contact): This is appropriate in all environments as ahigh-level objective (generally reported monthly or quarterly). However, it mustbe interpreted carefully; e.g., a climbing cost per call can be a good sign.Process improvements may result in more calls that are handled on firstattempt; consequently, fixed costs are allocated over fewer calls, driving up costper call. Customer relationship management initiatives often drive up cost percall because they focus on first-call resolution and they encourage the timenecessary to get the most value out of each contact.

Average call value: This is generally appropriate for revenue-generatingenvironments, such as reservation centers and catalog companies, in which callshave a measurable value. Average call value is tough to apply and generally notrecommended in call centers where the value of calls is difficult to measure; i.e.,customer service centers and help desks. It is important that average call valuebe viewed in the context of building relationships. For example, short-termgains can undermine long-term satisfaction if products or services provided donot meet customer needs and wants.

Revenue: As with average call value, this objective is appropriate in revenue-generating environments and can be reported quarterly, monthly, daily or forspecific time periods. Results are often correlated with other variables such ascall center costs, market conditions and revenues through other channels ofcontact (e.g., retail or direct sales force) to gauge the call center’s impact on theorganization’s profits.

Budgeted to actual expenditures: These budgetary variance measures areappropriate in all environments as high-level objectives, assuming they areconsidered within the context of changing workload variables and the callcenter’s responsibilities in building and maintaining customer relationships.They are generally produced both quarterly and annually, and are availablemonthly in some environments.

Objectives for outbound: These reports often include number or percentage ofattempted calls, connected calls, contacts, abandoned calls, contacts per hour,contact rate, cost per contact and cost per minute. They are appropriate inenvironments that include outbound contacts. Outbound contacts can be an



important part of building and maintaining customer relationships – assumingthey are the kinds of calls customers need and want.

Note: All objectives for outbound may not be good indicators of costperformance. For example, high outbound contact rates could be indicative ofcost problems, e.g., solutions are not handled during the customer’s inboundcontact so the agent has to call the customer back.

Objectives Related to Strategic Impact

Customer satisfaction: Studies have linked customer satisfaction to customerloyalty, repeat purchases and word-of-mouth advertising, and this call center-specific version of overall customer satisfaction assesses the percentage of allcustomers who were satisfied with the service they received from the call center.It is appropriate in all call center environments and has greatest value as arelative measure and in conjunction with other objectives (e.g., when policies,service level performance, system enhancements and other changes take place,what happens to customer satisfaction?) When analyzed by type of contact,customer satisfaction can be useful for improving cost effectiveness. (SeeCustomer Satisfaction Measurement Principles, Section 4.)

Employee satisfaction: This is appropriate in all call centers as a high-levelobjective. Studies have demonstrated that customer satisfaction usuallyincreases as agent job satisfaction increases. Results of surveys to gauge agentsatisfaction should be compared to job satisfaction levels in other parts of theorganization.

Employee turnover: Retention is an increasingly important objective as callcenters become more complex, and agent and management skill and experiencerequirements escalate. Reductions in turnover can typically be translated intofinancial savings for the organization and overall improvements in quality andproductivity.

Overall call center ROI: Objectives related to the call center’s overall return oninvestment (ROI) seek to identify, measure, track, improve and communicatethe call center’s impact on the organization. These objectives include:

• Customer satisfaction

• Improved quality and innovation

• Innovative products and services

• Highly leveraged marketing initiatives



• Efficient delivery of services

• Supporting self-service systems

• Revenue/sales (in commercial organizations)

ROI-related objectives are compatible with and necessary to support overallcustomer relationship management objectives. While revenue- and profit-related measures will not apply to non-commercial organizations (e.g.,government, nonprofits), the call center’s impact on things like innovation,quality, etc., can and should be measured through samples and analysis. (SeeThe Call Center’s Role in Customer Relationship Management, Section 3.)

Keeping Objectives Visible

Appropriate organizationwide and call center-specific objectives areprerequisites for the successful implementation of customer relationshipmanagement initiatives. Objectives should be realistic and measurable andclearly linked to the organization’s priorities.

Further, the unqualified support of the entire organization is vital to the successof these initiatives and employees should be supported with the resources andtools to consistently achieve their individual and team objectives. Keepingobjectives visible across the call center is a fundamental leadershipresponsibility. This involves:

• Consistently “championing” key objectives. (See Building ExecutiveSponsorship and Support, this section.)

• Ensuring that rewards and incentives are tied to key objectives.

• Provinding routine feedback and reports on progress/performance inmeeting objectives.

• Building teams and participation to address performance gaps.

• Communicating progress to other departments and ensuring that the callcenter is getting the support it requires.



4. Components of an Organizationwide Customer Relationship Management Strategy [Strategic]

Key Points

• As with objectives, strategy must be developed on two levels:• Organization’s overarching strategy• Supporting strategies in individual business units and

functional areas of the organization

• Customer relationship management strategy can be boiled down toseveral major initiatives:

• Make it easy for customers to do business with the organization• Capture and use key customer data• Create personal, customer-specific relationships

(personalization)

Explanation

What differentiates truly great organizations – and by extension, truly great callcenters – from those that are just “okay”? How can an organization createtangible advantages that make the whole greater than the sum of the parts?While there are many possible answers to these questions, an effective strategyclearly plays a key role.

Unfortunately, mention strategy and many managers justifiably conjure upimages of an overused business buzzword, the latest management trends or thelast conference session they sat through with too much fluff and not enoughsubstance. All the while, many organizations struggle to create viable,sustainable strategies. But developing effective strategy is not only possible; it’sa pervasive characteristic of organizations that create sustainable customerloyalty and marketplace value.

Customer relationship management philosophy asserts that effective strategiesrequire, first and foremost, a customer-centric, organizationwide approach.However, as organizations look deeper and begin to explore the vast number ofcustomer relationship management alternatives – in approach, objectives andtechnology – the options can be bewildering.

Before purchasing technology, before tactical implementation of strategy, beforethe publicity and fanfare, a unique organizational customer relationship

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management vision must be formulated. The vision will serve as a blueprintand a reality check to ensure that all ensuing decisions are in alignment withthe organization’s vision for the future.

Strategy follows vision. Organizationwide strategy can consist of many formsand initiatives. For the purpose of this guide, strategy is considered to be thecreation of an overall approach to accomplish the organization’s objectives.

As with objectives, strategy must be developed on two levels. The first level,consisting of the organization’s overarching strategy must be supported by thesecond level that consists of compatible strategies in individual business unitsand functional areas of the organization. In the call center, strategy isembodied in a customer access strategy. (See Developing the Supporting CallCenter Strategy, this section.)

Essential components of a sound organizationwide customer relationshipmanagement strategy, generally include:

• Segmenting customers sensibly.

• Determining the value of different types of customers and how toincrease their value.

• Providing customers with a range of self-service and agent-assistedchoices.

• Integrating all channels of sales and service delivery.

• Tracking, assessing and, as appropriate, acting on all customer contacts.

• Providing real-time information directly to sales and service agents.

• Restructuring processes to focus on customer requirements andexpectations.

• Training agents and programming systems to act on information ascontacts (events) occur.

• Establishing and adhering to a sound customer privacy policy.

• Measuring and continuously improving program effectiveness.

Major Customer Relationship Management Initiatives

These components can be boiled down to several major initiatives that exist asthe cornerstone of the organization’s relationship-building strategy – none ofwhich are mutually exclusive. These initiatives include a focus on making it



easy for customers to do business with the organization, capturing and usingkey customer data, and creating personal, customer-specific relationships.

Make it easy for customers to do business with the organization: Anoverarching customer desire – regardless of type of business or economic sector– is to find it easy to do business with your organization. This means that youare simple to find and easy to get in touch with, that it is easy to get quickanswers and there are sufficient options in products, services and contactchannels. Examples of how organizations make themselves more accessible tocustomers include logical, integrated information sources (e.g., email, chat,telephone, in-person), short hold times, convenient hours of operation, a user-friendly IVR, quick responses to emails, a variety of payment and deliveryoptions, comprehensive Web-based services and consistency between retail,catalog and online channels.

Positioning your organization as convenient and easy to do business withshould be the centerpiece of relationship-building strategies because it is aneasy-to-identify differentiator for customers. In reality, design andimplementation can be a challenge, and requires the right people, processes andtechnologies working in sync. (See Aligning People, Processes andTechnologies, this section).

Capture and use key customer data: Using capable technology tools to gather,integrate and analyze customer data enables organizations to develop productsand services that match customer needs, to personalize customer interactionsand to capitalize on unique marketing and management opportunities. Aleading office supply company uses its system to track the kinds of productscustomers buy online compared with what they buy at retail stores or bycatalog, and stock merchandise accordingly. This approach requires a cleardefinition of what customer data should be captured, how and where it will becaptured (e.g., purchased lists, customer interaction records, buying patternsand history, surveys, etc.), what it will be used for (e.g., customer segmentation,product and service customization, marketing, outbound telemarketing, screenpops, upselling and cross-selling) and methods for compilation and analysis.

Using historical data as the foundation for tailoring the customer experiencethrough customization and personalization can provide strategic opportunitiesto create profitable customer loyalty and effectively manage business processes.A clear vision and defined objectives are key components of this approach. Forexample, if an organization takes the tact that more information is better – butdoes not link disparate customer information databases – an avalanche of



disconnected information may prove to be unusable for comprehensive analysis.(See Data Warehousing and Data Mining, Section 7.)

Creating personal, customer-specific relationships: The tenuous, fragilerelationship between organizations and their customers is affected by a widevariety of factors. The cost or perceived value of a product or service, thecustomer’s perception of the organization’s brand or image and their individualinteractions all factor into the customer’s decision to begin, maintain or endtheir relationship with the organization. Creating strong customer relationshipsis one of the most effective routes to maintaining customer loyalty.

The quality of customer service agents is key in this approach. Hiringcompetent, customer-oriented agents, organizing them into strategic teams andproviding them with the tools they need to manage customer interactions isimperative. (See Aligning Hiring and Training Initiatives, Section 7.)

Conducting a Gap Analysis

Developing strategy can initially be a confusing and frustrating process. Everyconsultant has a “CRM program.” Every technology supplier has a set of“CRM solutions.”

There are a number of questions an organization should ask to determine whereit is and where it wants to go. This is often called a gap analysis and is essentialto building a sound strategy. Key questions in this process include:

• How completely is the entire organization committed to embracingcustomer relationship management initiatives?

• How are you going to segment customers?

• What customer data/information do you currently have?

• What processes and systems are currently in place?

• What initiatives are currently in process?

• What human and financial resources are available?

• What sort of organizational structure best supports the customerrelationship management vision and objectives?

• How can the call center and other business functions help theorganization understand customers better?

• How will the organization’s customer relationship management vision becommunicated?



• How will the organization achieve buy-in?

• What is the skill and experience level of your agents? Your managers?Your IT staff?

• What are your customers’ primary expectations?

• What are your competitors doing? What are they planning to do?

You will need to assemble a cross-functional team that includes representationfrom marketing, customer sales and service areas, IT and other key functions.You can then begin defining customer relationship management objectives byassessing the market, studying cases, determining customer expectations andrequirements, and taking stock of the organization’s mission.

Once the team is assembled and initial objectives are defined, you can begindefining project alternatives and scope, identifying staff, budget and timerequirements, and begin approaching systems integrators and suppliers. Asmany managers who have been through this process will attest, customerrelationship management is an ongoing journey, not a one-time project.

The organizationwide commitment to relationship-building initiatives and theresources available for planning, implementation and ongoing managementaffect the scope and size of the organization’s relationship-building strategy.Common wisdom and experience dictate that it is better to choose a few keyinitiatives and perform them well, positively affecting customer satisfaction,than to attempt to take on too much too soon.


The Decision Framework

The decisions your company makes about strategic initiatives will require…

• Gaining Knowledge – about customers, technology, markets, people, resources, andmore.

• Research – into products and services – across the market, yours and your competitor’s,and those in different industries so you can add the right set to the TVP that makeoverall strategies work.

• Brainstorming – with colleagues (company personnel), customers, partners, suppliers,and others. You have to bounce ideas around if you want look “outside your box” for“success” features.

• Communication – with all stakeholders mentioned above. Let all know what yourcompany’s strengths are, what you know about the future, and your business intentions.Find out the same from them.



• Influence analysis – decide who the decision makers are, company and customers, anddevelop the best course of action to influence them on including and implementing“the right, smart” initiatives overall strategies require.

• “What if” analysis – testing out different TVP scenarios for different customers andmarket segments against economic and operational success for your customer and yourcompany.

• Risk analysis, "trigger" development, and mitigation plans – figure out what the risksare, not just to your company but to your customers as well, and identify the eventsthat could cause the risks to become reality. Plan your actions to minimize the impact.

• Benefits and Consequences Evaluation – a clear understanding of what will happen byimplementing the strategic initiative.

Excerpt from “The Essential Core Value: Do What You Can to Make Your CustomersSuccessful!” by Jonathan Narducci, 2001, www.narduccienterprises.com.


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5. Developing the Supporting Call Center Strategy [Strategic]

Key Points

• The customer access strategy is an extension of corporate strategy. Ifthe customer access strategy is shaped and focused appropriately,there is no need for an additional layer of customer relationshipmanagment strategy to be developed in the call center.

• Customer segmentation will drive every other component of acustomer access strategy, which includes:

• Customer segmentation• Major contact types• Access channels• Service level and response time objectives• Hours of operation• Routing methodology• Person/technology resources required by contact• Knowledge bases• Tracking and integration

• Developing strategy is not a once-and-done event; it’s an ongoingprocess.

Explanation

As with objectives, customer relationship management must be supported bycohesive strategy development on two levels: organizationwide, as well asstrategies in individual business units and functional areas of the organization,which must work together to support overall goals. Ensuring that strategies inbusiness units and functional areas work together to support the overallcustomer relationship management initiative is fundamental to success.

(continued, next page)



In the call center, strategy is embodied in a customer access strategy, whichdefines the means by which customers interact with the organization. Thecustomer access strategy is an extension of corporate strategy and links callcenter operations to the organization’s goals and objectives. While a soundcustomer access strategy is always necessary to ensure successful call centeroperations, it is also robust enough to support the organization’s customerrelationship management initiatives. In other words, if the customer accessstrategy is shaped and focused appropriately, there is no need for an additionallayer of customer relationship management strategy to be developed in the callcenter.

As with corporate strategy, the customer access strategy can take many differentforms. However, an effective customer access strategy will include and definethese components (presented here in the context of customer relationshipmanagement goals and objectives):

• Customer segmentation: How customers and prospective customers aresegmented; e.g., by geography, volume of business and uniquerequirements. Customer segmentation generally comes from theorganization’s marketing strategy and is a direct reflection of howcustomers are defined and segmented. Customer segmentation will driveeverything that follows. For example, access channels, service levels,hours of operation and agent groups will be designed to serve specificcustomers and customer segments to support overall objectives. (SeeCustomer Profile and Segmentation Strategies, Section 3.)

• Major contact types: This identifies the reasons for interaction betweenthe organization and customers. General categories include placingorders, changing orders, checking account status and problem resolution.Each type of interaction should be analyzed for opportunities to buildcustomer value and enhance customer satisfaction and loyalty.

• Access channels: Access channels include telephone, Web, fax, email,

• CorporateMission Statement Corporate Strategy

Customer Access Strategy



IVR, kiosk, handhelds, face-to-face service and postal mail, as well ascorresponding telephone numbers, Web URLs, email addresses, faxnumbers and postal addresses. The organization may choose to opendifferent access channels to different customers or customer segments.

• Service level and response time objectives: This part of strategydefinition essentially determines how fast the organization intends torespond to customer contacts. Different objectives may be appropriatefor different customer segments. (See Measuring Accessibility AcrossChannels, Section 4.)

• Hours of operation: The days and hours the call center will be open forbusiness. This, too, can vary for different customer segments.

• Routing methodology: How, by customer, type of contact and accesschannel, each contact will be routed and distributed. Call routing mayvary by type of customer if the call center establishes agent groups forunique customer segments. Call routing may also apply to outboundcontacts; e.g., specifying the agent group or system through whichcontacts will be made to customers.

• Person/technology resources required by contact: The resources,including people, technologies and databases, required to provide callerswith the information and assistance they need and the organization withthe information it requires to track and manage customers and services.This aspect of strategy also guides hiring, training, technologydeployment, database development and many other aspects ofoperations.

• Knowledge bases: The information systems used to capture, store andprocess information on customers, products and services.

• Tracking and integration: The methods/systems required to captureinformation on each customer interaction and define how that data willbe used to strengthen customer profiles, identify trends and improveproducts and services. This is an essential component of an effectivecustomer relationship management strategy and defines how data will beused to focus marketing campaigns, build customer-specific products andservices, and provide customer services geared toward customer needsand wants. (See Data Warehousing and Data Mining, Section 7.)

In short, a well-crafted customer access strategy defines how the call center willsupport the organization’s overall strategy, including its customer relationshipmanagement initiatives. Developing a sound customer access strategy requires



leadership, persistence and cross-functional collaboration and cooperation. It isnot something that can be developed in a vacuum; call center strategy cannotdevelop independent of broader corporate strategy.

From the customer’s perspective, an effective customer access strategy will resultin simplified access, ease of use and services geared toward his or her uniqueneeds and requirements. From the organization’s perspective, a sound customeraccess strategy provides a blueprint for call center operations that supports andfurthers the organization’s objectives. Developing strategy is not a once-and-done event; it’s an ongoing process.


1 2 3Ready?


Key Points

• The operation model is the totality of how the organization willfulfill strategic objectives.

• Given the many aspects of strategy and supporting operationalmodels, there are literally hundreds of ways to categorize, define andlabel general approaches to strategy and operational models.

• The key to building a successful operational model is to begin withthe end in mind – what are your objectives? – then build a structureand approach that best enables your organization to meet thoseobjectives.

Explanation

An operational model, as defined by the CIAC, is how an organization willfulfill strategic objectives. The operational model should stem from thecustomer access strategy. (See Developing the Supporting Call Center Strategy,this section.)

The call center operational model should enable the maximum valuecontribution of the call center. Areas that call centers typically provide value tothe organization include:

• Supporting the strategies of other business units

• Maximizing customer satisfaction and loyalty

• Increasing quality and innovation through customer feedback

• Enabling effective marketing strategies

• Improving products and services through customer intelligence

• Providing the efficient delivery of customer service

• Encouraging the appropriate use of self-service systems

• Increasing revenue when appropriate

(For more information on the call center’s value proposition, see ICMI’s CallCenter Leadership and Business Management Study Guide.)

1 2 31 2 36. Establishing a Supporting Operational Model



Components of the Operational Model

Key components of the operational model include:

• Performance objectives (See Establishing Customer RelationshipManagement Objectives, Common Organization-Wide Objectives, andSupporting Call Center Objectives, this section.)

• Organizational design (See Organization Design Considerations, thissection.)

• Customer profile and segmentation strategies (See Customer Profile andSegmentation Strategies and The Call Center’s Role in CustomerSegmentation, Section 3.)

• Accessibility (See Measuring Accessibility Across Channels, Section 4.)

• Communications plans (See Communicating the Value of CustomerRelationships Across the Organization, Establishing Essential CrossFunctional Networks of People and Support, Communicating the Valueof the Call Center to the Organization and Disseminating BusinessIntelligence to Appropriate Stakeholders, Section 6.)

• Supporting technologies (See Customer Relationship ManagementTechnologies, Section 7.)

• Delivering on customer promises (See Fulfilling Promises to Customers,Section 7.)

• Key processes (See Planning and Management Processes, Section 7.)

• Equipping people to support strategic objectives (See Aligning Hiringand Training Initiatives and Empowering People to Build CustomerRelationships, Section 7.)

• Cross-functional teams (See Cross-Functional Teams andAccountabilities, Section 7.)

In short, the operational model is the totality of how the organization willfulfill strategic objectives.

Example Operational Models

Given the many aspects of strategy and supporting operational models, thereare literally hundreds of ways to categorize, define and label general approachesto strategy and operational models. One paradigm that you need to be familiarwith is offered by consultants Michael Treacy and Fred Wiersema in The



Discipline of Market Leaders (Perseus Publishing, 1996). The authors' thesis isthat successful organizations excel at delivering one type of value to theirchosen customers:

• Providing the best total cost (through a combination of quality, price andease of access), the result of “operational excellence”

• Providing the best product, by focusing on “product leadership”

• Providing what loyal customers need and want, by focusing on “customerintimacy”

The key, say Treacy and Wiersema, is focus. Market leaders choose a singlefocus then build their organization around it. Each discipline demands adistinct organizational model with its own structure, processes, informationsystems, management systems, and culture. Choosing one discipline to masterdoes not mean ignoring the other two; however, resources and energy only goso far and one area should be emphasized in order to achieve a competitiveadvantage.

The Impact of Customer Relationship Management

Customer relationship management has provided a perspective with which toview these and other operational models. For example, given the three choices– operational excellence, product leadership, and customer intimacy – theprinciples of customer relationship management best align with customerintimacy.

In short, there are many models, labels, paradigms and strategies to choosefrom. The key to building a successful operational model is to begin with theend in mind – what are your objectives? – then build a structure and approachthat best enables your organization to meet those objectives.


1 2 3Ready?


Key Points

• In today’s environment, virtually all developments impact people,processes and technologies. None of these components can beconsidered in a vacuum.

• A cross-functional development team that includes representationfrom the call center, IT, HR, marketing, training, finance and otherkey areas is necessary to direct strategic initiatives and ensurenecessary developments related to people, processes and technologiesare rolled out in sync.

• Aligning people, processes and technologies with the organization’scustomer relationship management initiatives requires ongoing effort.

Explanation

Without a system or approach for ongoing development, plans quickly becomeout-of-date and ineffectual – even if the organization has the right vision andsupporting strategy. Not only have management activities multiplied, theinterrelated nature of decisions has implications for existing organizationalstructures and personnel responsibilities, as well as on the allocation ofresources, human and otherwise.

Consider a simple example: adding text-chat to a Web site so customers candialog with agents while using Web services. This seemingly simpledevelopment impacts:

• Employee selection criteria: For example, finding agents proficient inreal-time written communication

• Forecasting and scheduling processes: Chat both adds to and changesexisting workload patterns.

• Technology requirements: How does the agent desktop need to change?How do routing and distribution priorities need to change?

• Organizational structure: Will chat sessions be sent to the same agentswho handle telephone calls? Should a new skill group be created? Or is itbest to outsource this activity?

1 2 37. Aligning People, Processes and Technologies 1 2 3



People, processes and technologies must be viewed in terms of their impact oneach other and on overall results and direction. In short, they must be aligned.

Changes that Impact People, Processes and Technologies

What came first, the chicken or the egg? That’s the same sort of unanswerableriddle managers must grapple with when it comes to aligning people, processesand technologies in order to meet customer relationship managementobjectives.

Given that customer relationship management has often been presented as atechnology solution, it is all too easy to underestimate the importance of peoplein these initiatives. In contrast to the perception of call center agents as beingin low-pay, entry-level positions, today’s environment requires increasinglydemanding skills sets, at every level. For example, agents have to:

• Deal with increasingly well-informed and diverse customers

• Adjust to rapid changes in products, services and technologies

• Operate in a time-sensitive, multimedia environment

• Communicate quickly and accurately and in both verbal and writtenform

• Understand Web- and IVR-based applications and help customers usethose alternatives

Similarly, the responsibilities of supervisors will increase as they become moreinvolved in data analysis, process improvements and interdepartmentalcoordination, all of which shape the overall performance of their teams. Theability to assess and improve performance across proliferating contact channelsis a central responsibility – and a significant challenge.

Call center directors find themselves on a path similar to the one CIOs traveledsome 20 years ago. Just as IT became the organization’s life-blood, call center

Build Skills,Knowledgeand Leaders

EstablishEnabling

Technologies

ImplementOperational Plans

and Processes

▼

▼

▼



directors now answer to higher levels of management and are increasinglyinvolved in shaping customer relationship management strategies to leverage thecall center into an improved marketplace position.

With demands on all personnel levels within the call center snowballing,recruitment and hiring practices need to be updated; e.g., to screen for bothwritten and verbal communications abilities. Further, it’s critical to finds ways toattract and retain the required talent and to develop relevant and meaningful skilland career paths. Effective ongoing training is more important than ever. (SeeAligning Hiring and Training Initiatives, Section 7.)

Along with finding and keeping the required talent, you also need to establishsupporting operational plans and processes. There are hundreds of processes in acall center that can be grouped under five overarching operational responsibilities,each of which is in transition. (These are discussed in detail in Planning andManagement Processes, Section 7.)

• Resource planning and management

• Content provisioning

• Reporting/communication

• Organizational structure and design

• Quality improvement

A solid technology infrastructure is an important and challenging aspect ofbuilding a call center that furthers customer relationship management. The rolesof traditional system components have blurred. Functionality that once existed inproprietary PBX and ACD systems – routing, queuing, distribution, reportingand telephone set features – has moved into software/LAN environments, andemerging technologies such as IP telephony and wireless Internet services must beconsidered. Adding to the confusion is the cacophony of competing suppliers,products and claims in the emerging ecommerce, CRM, ASP and outsourcingspace.

Important steps to ensuring that technology initiatives support customerrelationship management requirements include:

• Ensure that current and prospective suppliers understand yourorganization’s customer relationship management vision and direction.

• Establish an environment where vendors are responsible for bringingintegrated solutions – along with commensurate partnerships – to the table.

• Create contracts that guarantee ongoing commitments to supporting the



solutions that come from those partnerships.

• Prepare the call center to fulfill the role of a help desk. While it makessense to encourage customers to be as self-sufficient as possible, they’llneed help. Equipping agents to “cross-sell” other channels of access andpreparing them to assist customers with basic Web, IVR and email usagequestions will accelerate this process.

• Investigate outsourcing and application service provider (ASP)alternatives. In the past, many call center outsourcers built theirbusinesses by handling volume-heavy, routine transactions at low cost.Today, a new breed of outsource companies are providing customerrelationship management-oriented services.

• Most importantly, build technology requirements in the context of theorganization’s overall customer relationship management direction. Callcenter technologies must be part of an integrated, collaborative effort toequip the organization with the tools and capabilities it needs to fulfillcustomer relationship management objectives. (See Creating aTechnology Migration Plan, Section 7.)

An Alignment Process

Essential steps in aligning people, processes and technologies include:

1. Build a cross-functional development team that includes representationfrom the call center, IT, HR, marketing, training, finance and other keyareas to direct strategic initiatives and ensure necessary developmentsrelated to people, processes and technologies are rolled out in sync.

2. Ensure major developments are approved and supported by the cross-functional team.

3. Avoid bureaucracy and red tape. Ensure the collaborative team has anorientation toward supporting and furthering sensible developments. Theteam should meet often enough to minimize delay in considering andaddressing initiatives.

4. Publish guidelines that help managers think through the impact ofdevelopments on people, processes and technologies. For example, asimple checklist of questions can help facilitate project proposals thatconsider and address overall impact.

Customer relationship management is a work in progress. Workflows, businessrules, screen designs, scripts, Web pages, menus and reports all constantlyevolve. Information is constantly created and analyzed, leading to more



changes. Capabilities and databases may roll out to other parts of theorganization. Systems, processes and tools must enable rapid response tochanging business needs.

Surveys show that up to 65 percent of customer relationship managementinitiatives fail to live up to expectations. In many cases, the failure is due toinsufficient efforts to align people, processes and technologies with theobjectives. Aligning people, processes and technology with the organization’svision and strategy requires ongoing effort. It is hard work. But it is essentialto success.

The Balanced Scorecard Approach

As companies around the world transform themselves for competition that is based oninformation, their ability to exploit intangible assets has become far more decisive thantheir ability to invest in and manage physical assets. Several years ago, in recognition ofthis change, we introduced a concept we called the balanced scorecard. The balancedscorecard supplemented traditional financial measures with criteria that measuredperformance from three additional perspectives – those of customer, internal businessprocesses, and learning and growth. It therefore enabled companies to track financialresults while simultaneously monitoring progress in building the capabilities andacquiring the intangible assets they would need for future growth. The scorecard wasn’t areplacement for financial measures; it was their complement.

Recently, we have seen some companies move beyond our early vision for the scorecard todiscover its value as the cornerstone of a new strategic management system. Used thisway, the scorecard addresses a serious deficiency in traditional management systems: theirinability to link a company’s long-term strategy with its short-term actions.

Most companies’ operational and management control systems are built around financialmeasures and targets, which bear little relation to the company’s progress in achievinglong-term strategic objectives. Thus the emphasis most companies place on short-termfinancial measures leaves a gap between the development of a strategy and itsimplementation.

Managers using the balanced scorecard do not have to rely on short-term financialmeasures as the sole indicators of the company’s performance. The scorecard lets themintroduce four management processes that, separately and in combination, contribute tolinking long-term strategic objectives with short-term actions.

The first process – translating the vision – helps managers build a consensus around theorganization’s vision and strategy.

The second process – communication and linking – lets managers communicate theirstrategy up and down the organization and link it to departmental and individualobjectives.

The third process – business planning – enables companies to integrate their business andfinancial plans.

The fourth process – feedback and learning – gives companies the capacity for what wecall strategic learning.

Excerpt from “Using the Balanced Scorecard as a Strategic Management System” byRobert S. Kaplan and David P. Norton, Harvard Business Review, January-February 1996.


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Key Points

• Organizational design principles that are particularly pertinent forcustomer relationship management include:

• The organization’s mission and strategy drive the structure• Agent groups form the foundation of call center structure• Support positions are enablers• The structure facilitates branding

• Customer-oriented organizational design fits well with customerrelationship management. In fact, customer relationshipmanagement objectives are superimposing a customer-oriented focuson organizations in general – and call centers specifically – regardlessof the underlying structures.

• Process-oriented structures often develop as a logical outgrowth offocusing on customer needs. By working backward from customerexpectations and building effective and efficient processes to achievethem, the focus on the customer molds the organizational design.

Explanation

Customer relationship management initiatives require re-evaluation oforganizational structures. The principles of organizational design, and how theyapply to call centers, are covered extensively in ICMI’s Call Center PeopleManagement Study Guide. This section will briefly summarize those principlesas they relate to customer relationship management.

Principles of Organizational Design

To design an effective call center structure, you must consider:

1. The strategic purpose of the organization

2. The mission, vision and values of the organization

3. Customer segmentation and requirements

4. The culture and environment of the organization

1 2 31 2 31 2 38. Organization Design Considerations



Although the knowledge, skills and abilities of existing workers are obviouslyimportant for the implementation of a structure, they should not dictate theideal design. Rather, the vision of where the organization is going should bethe primary driver of structure.

There are about as many unique organizational structures as there areorganizations, but there are also solid, consistent principles behind any effectivedesign. The following are particularly pertinent for customer relationshipmanagement.

• The organization’s mission and strategy drive the structure: It cannot beover-emphasized that customer relationship management is a way ofdoing business and organizational structures exist to support and enablethe desired way of doing business.

• Agent groups form the foundation of call center structure: The callcenter should be built from agent groups upward. The structure of agentgroups should be determined based on customer segmentationrequirements (e.g., how easily customer calls can be routed by topic, ifcommon problems are encountered by different customer segments, andif cross-selling makes sense across product lines).

• Support positions are enablers: Creating better processes, facilitatingcollaboration and, in general, supporting and enabling the call center’shighest values are support responsibilities that will contribute to overallsuccess. Customer relationship management requires significant levels ofsupport to be effective.

• The structure facilitates branding: Divisions, groups and responsibilitiesshould further, rather than hinder, branding objectives.

Forms of Organizational Structures

There is no one ideal organizational structure for customer relationshipmanagement initiatives to succeed. All classifications of structures have pros andcons as they apply to customer relationship management. While a focus oncustomer relationship management may result in a change in organizational



Description Advantages for CRM Disadvantages for CRM

Bureaucratic Structures

Traditional, hierarchical

Flat Structures

Few layers of management

Team-Oriented Structures

Built around small groups of people working toward common objectives

Matrix Structures

Structures with a combination of vertical and horizontal authority

• Higher degree of self-management, empowerment,trust and participation

• Collaborative decision makingwhich encourages buy-in

• A high degree of initiative andinnovation (the result ofcollaboration and input)

• Individuals with a broad baseof skills and knowledge

• Coordination andcommunication requireconstant effort

• Less rigid boundaries betweenjobs and units can result inunclear policies and procedures

• The pooling of knowledge andskills can result in a higherquality output

• The diversity of teamsencourages innovation

• Individuals build a broad baseof skills and knowledge

• Encourages empowerment anda participative environment

• In some cases, individualaccountability may decrease

• Team members must betrained in team process skills

• Overbearing or dominatingparticipants can lead to “groupthink”

• Project leaders have access topeople across the organization

• Specialists from across theorganization can be broughtinto projects as needed

• Individuals develop a broadbase of skills and experiences

• Not very practical in call center environments due toagent group structurerequirements

• Counterproductive politics canhamper customer relationshipmanagement efforts

• Competition for resources mayimpair primary objectives

• At odds with a culture ofempowerment and participa-tive management

• Inconsistent with manyemployees’ values and partici-pative spirit

• Requires significant coordina-tion between business units;“silos” often become barriers

• Is increasingly cumbersomeand unwieldy in the informa-tion-based economy

• Policies and procedures thatguide work processes

• Consistent rules across theorganization



structure, more often than not, call centers managers must instead adaptcurrent organizational structures to the new objectives.

Customer relationship management fits well with customer-orientedorganizational design. One alternative is to create a structure that enables afocus on key accounts that offer high current or future potential. Another is tofocus on general customer groups; e.g., consumer, industrial, government, smallbusiness, large business, etc.

Description Advantages for CRM Disadvantages for CRM

Product- or Service-Oriented Structures

Structures built around the organization’s products and services

Geographic-Oriented Structures

Structures dictated by geographic areas that the organization serves

Customer-Oriented Structures

Structures built around customer segments

• The organization is close (inorientation) to the customer

• May result in faster responsetimes to serve customer needs

• Leverages localized knowledgeand/or languages

• Enables efficient service whenlaws or customs vary

• Can create inefficiencies andduplication of services

• Finding required skills andknowledge for each division canbe challenging

• Internal communications andcoordination across divisionscan be challenging

• Can encourage fundingimbalances among divisions

• Places the customer at thecenter of organizational efforts

• May enable an increase inmarket penetration

• May increase cross-sell andupsell opportunities

• Can enable ongoing input andfeedback from customers

• Can facilitate improved marketand competitive research

• May result in redundancy inproduct development or otherfunctions due to specializedneeds or poor communication

• Customized products forspecific segments can be costly

• Policies and procedures areoften less consistent (the resultof specific services developedfor unique customer segments)

• High degree of focus andexpertise on specific productsand services

• Can lead to increased productdevelopment

• Often results in quickresponses to rapidly changingmarket demands

• Can create internal competitionbetween the organization’sdivisions

• Narrow focus can hamperorganizationwide customerrelationship management efforts

• Specific groups may resistnecessary change, such aseliminating product lines



Another variation on the customer-oriented design is process-oriented design.Process-oriented structures often develop as a logical outgrowth of focusing oncustomer needs. By working backward from customer expectations andbuilding effective and efficient processes to achieve them, the focus on thecustomer molds the organizational design.

In a sense, the trend toward customer relationship management issuperimposing a customer-oriented focus on organizations in general – and callcenters specifically – regardless of the underlying structures. This trendunderscores a key point: There is an infinite number of iterations andcombinations of organizational structures that are possible.


1 2 3Ready?


1 2 3

Key Points

• A primary responsibility of the executive team is to set the tone andvision for the organization’s customer relationship managementstrategy and objectives.

• Key characteristics of customer relationship management executivechampions include:

• Customer relationship management savvy• Able to articulate the vision• Champion the call center • Publicize customer relationship-building efforts• Willing to commit necessary resources• Demand cooperation and accountability from business units

Explanation

Since a customer relationship management strategy has broad implications thattouch every business unit, it requires the support of top-level management. Tocreate and implement a sustainable long-term strategy, the buy-in andcooperation of the entire organization is required. Further, the vital role of thecall center in driving customer satisfaction must be acknowledged by eachgroup (not an easy task for teams who are used to making customer decisionswithout consulting other business units). Finally, the financial and humanresources must be unequivocally committed.

A primary responsibility of the executive team is to set the tone and vision forthe organization’s strategy and objectives. Customer relationship managementinitiatives are often cost- and resource-intensive. They must be initiated andsupported by all executives and managers throughout the organization to avoiddiluting the vision of the entire organization and to eliminate conflictingorganizational objectives. For example, if the CEO and vice president ofcustomer service are committed to the organization’s renewed focus oncustomer relationships, but the CFO is focused on cutting costs to theexclusion of all other priorities, then the vision, strategy and objectives arethreatened. Corporate sponsorship should be offered from all business units,and clearly and definitively communicated as a key priority.

1 2 31 2 31 2 39. Building Executive Sponsorship and Support



Key Characteristics of Executive Champions

Key characteristics of customer relationship management executive championsinclude:

• Customer relationship management savvy: The executives understandand are committed to the principles of customer relationshipmanagement and have a clear vision of how those principles can beapplied in the organization. These leaders can look past the hype thatsurrounds the term “CRM” and see the real value that sound customerrelationship-building initiatives can bring to the organization. In someorganizations, the primary focus on customer relationship managementinitiatives rests with the call center, and the call center manager isresponsible for educating and maintaining the interest and focus of themanagement team on these initiatives.

• Able to articulate the vision: The executive team must be able toarticulate the benefits of customer relationship management initiativesand the importance of the organization’s commitment to this vision.They must be willing to act as cheerleaders and go against the grainwhen necessary to spread the message.

• Champion the call center: Once relegated to the periphery of anorganization’s business strategy, the call center is now at the heart of it.This shift is difficult for some employees to recognize. The call centerneeds leaders who recognize its vital role as the heart of the organization’scustomer acquisition, satisfaction and retention efforts.

• Publicize customer relationship-building efforts: To sustain the long-term focus of a vision and strategy geared toward customer relationships,sponsoring executives need to take advantage of every opportunity toeducate internal employees, vendors and partners, customers and themedia about the positive effects of customer relationship managementefforts. In addition, public praise and recognition of achievement ofobjectives will keep employees and teams motivated and committed tothe vision.

• Willing to commit necessary resources: A customer relationshipmanagement strategy is a significant undertaking, which requires often-scarce supporting resources (financial and human). This is an impossibletask without executive sponsorship and support. The organization needsa commitment to these long-term strategies that require investments intime and money before they positively affect revenue and retention.



• Demand cooperation and accountability from business units: Everyonein the organization – from the CEO to the mailroom staff – needs to bein alignment with customer relationship management objectives. Insome cases, this will demand pressure for business units to commitpreviously assigned resources and realign their objectives. Strongleadership throughout the executive management team is required toensure that the responsibility and accountability is clearly defined.

Anchoring the Culture with Service and Customer Experience

“A chance to serve others.” “A chance to make a difference.” “A chance to leave apersonal legacy that is meaningful.” These are some of the comments that are repeatedand repeated in our employee opinion surveys. These statements reinforce the rationalmodels of Maslow and Rogers on human development. We need food and shelter, wewant love and acceptance, we want to find and express our individual gifts, andultimately, we want to leave the earth with the knowledge that others are better off for ourhaving been here. Aside from the academic verification of these giants of psychology,direct experience tells us that helping others and knowing that we are helping others is agreat joy in life. At Schwab, it is actively encouraged.

Let me tell you a brief story to make the point. In 1998, at one of its Midwesternbranches, the phone rang late on a Thursday evening. The representative answered thephone to hear what sounded like an elderly lady telling her that she needed to check aparticular trust account to make sure that it was funded. It seemed that her husband wasdying and it was important to make sure that the loose ends had been sewn up.

The representative checked the account, and found that although it was open, the balancewas not nearly what the customer had expected it to be. The lady told our representativethat her husband had intended to fund the account with some stock in a largecommunications company. Having worked for the company in New York, he hadaccumulated the shares before he retired, which was before the company merged withanother larger company. She was sure that he had kept the original stock certificates, buthe was in a coma and she didn’t know what the shares looked like.

Our rep realized that the tax implications could be substantial. She called the company inNew York and found that, indeed, certificates had been issued to the customer’s husband.She then called back and described the certificates to the woman, asked a few morequestions about the family and, with the lady’s permission, phoned the couple’s adultchildren and told them the problem. The children instituted a full-scale search for thecertificates.

Late Friday, one of the children arrived at the branch with some certificates that they hadfound in a box. They turned out to be only copies of the originals, but now at least thefamily knew what they were looking for. Our representative gave them her home phone.Saturday morning, they called to say they had found the originals in the back of thefamily’s grandfather clock. The rep took the necessary paperwork to their house andcompleted the transfer of assets into the account.

The gentleman died early Sunday morning.



The representative’s involvement and attention made a six-figure difference to the family.As a result of the extraordinary service, they transferred several million dollars to otherSchwab accounts. But the significance to the representative, and to everyone who hearsthis story, was not the added revenue to the company. The significance was the effect ofher action on this family; she felt enormous personal satisfaction – as did the rest of us,vicariously.

Telling this story and others like it is an integral part of what we do to sustain the culture.Will people always serve for no compensation? No, except for the very rich and thesaints. But given a level of compensation that seems fair, which gives people a chance forfinancial security, most of us will opt to serve others for a living. We often refer to it as“doing well while doing good,” and it is the linchpin of our company. It connects ouremployees with our customers and benefits both groups immensely.

Excerpt from Clicks and Mortar: Passion-Driven Growth in an Internet-Driven World byDavid S. Pottruck and Terry Pearce, Jossey-Bass, 2000.


1 2 3Ready?


Exercises

Common Organizationwide Objectives

1. Match the following terms with the related statement on the right. You willuse each statement only once.

______Customer acquisition/market share

______Customer retention rate

______Customer satisfaction and loyalty

______Customer value

______Marketing costs

______Marketing response rates


a. An estimate of the value (both tangible andintangible) to the organization of a customerover a future time period.

b. May be reduced as marketing effortsbecome more targeted through increasedcustomer segmentation.

c. May increase as marketing efforts becomemore targeted through increased customersegmentation.

d. Measures the percentage of all customerswho felt satisfied.

e. The percentage of a prior period’s customersthat are still customers in the current period(excluding new customers acquired).

f. These objectives are achieved throughpositive word of mouth, focused efforts toreach specific target markets, and cross-sellingand upselling to existing customers.



Supporting Call Center Objectives

2. Select the most appropriate answer to each question.

Which of the following drives customer satisfaction?

I. Average handling time

II. Average call value

III. First-call resolution

IV. Number of contacts handled

a. I and II only

b. I and IV only

c. II and III only

d. III only

If available, which measure is the preferred accessibility measurement?

a. Abandoned calls

b. Average speed of answer

c. Blocked calls

d. Service level

Which of the following is the best efficiency objective to measure agentperformance?

a. Adherence to schedule

b. Average handling time

c. Number of contacts handled

d. Occupancy

Which of the following statements does NOT reflect the impact of customerrelationship management initiatives?

a. Average call value must be viewed carefully since short-term gains canundermine long-term satisfaction.

b. Customer relationship management initiatives often drive down cost per call.

c. Customer satisfaction usually increases as agent job satisfaction increases.

d. Employee retention is an increasingly important objective in the context ofcustomer relationship management.



Developing The Supporting Call Center Strategy [Strategic]

3. Which component of a customer access strategy drives every othercomponent?

Aligning People, Processes and Technologies

4. Fill in the blanks with the appropriate word or phrase to complete theessential steps in aligning people, processes and technologies.

Build a _________________ development team.

Ensure major developments are _________________ and_________________ by the development team.

Avoid _________________ and red tape.

Publish guidelines that help managers think through the _________________of developments on people, processes and technologies.

Organization Design Considerations

5. Match the following organization design structures with the related customerrelationship management disadvantage on the right. You will use eachdisadvantage statement only once.

______Bureaucratic

______Customer-Oriented

______Flat

______Geographic-Oriented

______Matrix

______Product- or Service-Oriented

______Team-Oriented

a. At odds with a culture of empowerment andparticipative management.

b. Customized products for specific customersegments can be costly.

c. Finding required skills and knowledge foreach division can be challenging.

d. In some cases, individual accountability maydecrease.

e. Less rigid boundaries between jobs and unitscan result in unclear policies and procedures.

f. Not very practical in call center environmentsdue to agent group structure requirements.

g. Specific groups may resist necessary change,such as eliminating product lines.



Answers to these exercises are in Section 10.

Note: These exercises are intended to help you retain the material learned.While not the exact questions as on the CIAC Certification assessment, thematerial in this study guide fully addresses the content on which you will beassessed. For a formal practice test, please contact the CIAC directly by visitingwww.ciac-cert.org.


1 2 3Ready?


1 2 3

Related Articles from Call Center Management Review(See Section 9)

Effective CRM Strategy Involves Consistent Service Across Channels

CRM Has Evolved the Traditional Call Center Measures

For Further Study

Books/Studies

Pottruck, David S. and Terry Pearce. Clicks and Mortar: Passion-Driven Growthin an Internet-Driven World. Jossey-Bass, 2000.

Articles

Cleveland, Brad. “How Key Performance Indicators (KPIs) Are Evolving.”Call Center Management Review, April 2000.

Grimm, Cynthia J. “Creating Balanced Measures in a Multichannel World.”Call Center Management Review, March 2001.

Kaplan, Robert S. and David P. Norton. “Using the Balanced Scorecard as aStrategic Management System.” Harvard Business Review, January-February1996.

Seminars

Effective Leadership and Strategy for Senior Call Center Managers public seminar,presented by Incoming Calls Management Institute.

Relationship-Building StrategiesReference Bibliography

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CRM Section 05 - ICMI

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