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CRM's Dysfunctional Relationship
Companies looking to boost loyalty are starting at the front lines.
For the rest of the November 2004 issue of CRM magazine please click here
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Wireless--the only industry I know of that births the very customer turnover it tries to prevent. Here's the scenario: Wireless telecom companies charge current customers more for handsets than they charge new customers. Their reasoning is that with new service activation and a contract they'll cover some of the cost of the handset. Well, why can't existing customers get a renewed contract, keep their phone numbers, and get the same handset price? A contract is a contract, after all.
Frustrated customers often jump to whoever has the best rate and best handset price du jour, and take their phone number along for the ride. So what if they're stuck for a year? By then there will be a new, cooler phone and off they'll go to the next company. Anyway you look at it loyal customers lose: To stay with their current provider, they're stuck with a handset they don't want, unless they want to pay full price; to get the phone they want at the best price, they have to change service providers when they might not want to. For example, I can pay $600 for a Treo 600 if I stay with T-Mobile. I'm a loyal customer, going on five years now. Or, I can move to AT&T and get the Treo for $350. When I asked about it T-Mobile offered me the Treo for $550. I say, thanks for nothing. It's no wonder wireless providers can't hold onto customers, and it's also no wonder that handset makers can't sell more phones. Are these companies just paying lip service to customer retention, or is there a wireless services provider out there that truly wants to retain its customers? Fortunately, plenty of organizations realize the true value of loyal customer relationships. The most progressive of these firms are proving it by appointing chief customer officers. These C-level executives have responsibility for representing the needs of the customer at the very highest level. In "CRM Claims the Corner Office" (page 28), we reveal the success strategies of three of these customer advocates. Other companies looking to boost loyalty are starting at the front lines. In "The Underrated Differentiators" (page 42), we discuss how some businesses are using their contact centers to create a competitive advantage. These companies are seeing huge customer loyalty, employee satisfaction, and productivity gains as a result.
As for wireless providers, it could be that their executives check their customer mind-set at the office door. As Lior Arussy explains in "The Disappearing Act" (Customer Centricity, page 22), executives--who are customers in every other aspect of their daily lives--forget what it's like to be a customer once in the office, so they often make their decisions without considering the consequences for the customer. If you're in charge of your company's CRM strategy, it's your job to help your colleagues keep their customer hat on. Doing so will pay dividends. **** This month we introduce a new look to Insight and a new section, Benchmark, which will highlight success stories and CRM best practices. Ginger Conlon Editor-in-Chief gconlon@destinationCRM.com
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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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