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Planes, Trains, and Automobiles
CRM can help transport companies to reach new heights, drive profits, and bring them closer to their customers. Here, the stories of three companies that use CRM to do all this and more.
For the rest of the February 2004 issue of CRM magazine please click here
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Whether a company is transporting legendary golfers, tons of lumber, or ladies who lunch, customer service is key. CRM in the transportation industry is as varied as what is being moved and who is moving it. But the bottom line is the same: CRM can help transport companies to reach new heights, drive profits, and bring them closer to their customers. Here, the stories of three companies that use CRM to do all this and more. Planes, Trains, & Automobiles In a market where competitive pricing is difficult, NetJets looked to CRM to help reduce overhead and increase its level of customer service. NetJets is a wholly owned subsidiary of Warren Buffet's Berkshire Hathaway, which provides fractional aircraft ownership. Customers buy a share of an airplane (which is sold in eighths). As partial owners their service expectations are extremely high. "The primary goal was to improve the service level to the customers," says Mike Midkiff, NetJets' CIO. "The reality behind the business is that these people pay a lot for the service and there is an expectation of a high level of service. We need to be good at managing relationships, since the vast majority of new sales come from referrals. We want [customers] to recommend us." To be successful NetJets must deliver an aircraft to an owner almost anywhere in the world within four hours of receiving a customer's call. If the company fails to send the right airplane and crew to the right place at the right time, it is forced to hire an expensive third-party charter company to fill its customer's needs. The company has a fleet of 512 business jets flown by 2,800 pilots making nearly 250,000 flights a year to more than 140 countries. Still, when many of the more than 3,000 customers are CEOs and high profile names like Arnold Schwarzenegger and Tiger Woods, it is imperative that all their preferences are met and their entire travel experience goes smoothly. NetJets tracks a huge amount of information, including passengers' preference for where they like to sit on an aircraft, what they like to drink, what foods they want to be served for each meal of the day (including snacks), what their dietary requirements and special foods are, what type of ground transportation they like when they are leaving the plane, and other details that could make a flight smoother and more enjoyable.
The problem, according to Midkiff, is that many of these owners have ever-changing schedules and NetJets needed to be able to react quickly to modifications. For example, if a New York business executive calls at 8 a.m. to change his 10 a.m. flight to Chicago to a 1 p.m. flight to Los Angeles, NetJets needs to prepare a different plane for the longer trip. Also, it needs to have a different pilot ready, to have the executive's favorite lunch, not breakfast, foods on board, and to adjust any previously scheduled ground transportation. A year ago NetJets put in a proprietary system that not only tracks customer preferences and information, but also includes sophisticated workflow that automatically triggers a sequence of events to happen based on actions or changes. Things like catering, ground transport, and aircraft operational information are automatically updated and requests are processed quickly. The new system, called Intellijet 2, replaced the company's previous system, which was also proprietary. Intellijet 2 uses Persistence Data Services architecture in the background to create real-time, scalable applications. The system remembers what data users need most and continuously updates the cache of data before the next use. "We quickly realized that developing a truly customer-centric system would pose three significant technical challenges: it would have to support a complex data model for customer profile and schedule data; it would have to run very fast; and it needed to scale cost-effectively to multiple locations," Midkiff says. He adds that NetJets did the work itself to develop the system, because it needed something that was aviation-specific to deal with reservations, as well as with the operational needs associated with a fleet of aircraft. The system also handles billing and invoices as well as contract administration. There are currently 1,000 users of Intellijet 2. Midkiff says customer retention rates are at a high of more than 90 percent. "Now if we lose a customer it's not because we haven't been doing something right, but mostly because of the economy. Some people can't afford it anymore," he says. NetJets is currently working to create an online portal for customers, where they could book and track flights, see their contracts, and change their preferences. The company is also working to make that information available to customers via fax, phone, email, SMS, and handheld devices. Additionally, NetJets is starting to use analytics to look at predictive and historical booking patterns, as well as geographic patterns, to help better prepare for demand. Planes, Trains, & Automobiles Riding the rails conjures up simpler times, but there is nothing simple about what it takes to run one of the largest railroad networks in North America. The Burlington Northern Santa Fe Railway (BNSF) covers 32,500 route miles in 28 states and two Canadian provinces. Based in Forth Worth, TX, the company moves one fourth of all U.S. freight. That includes enough grain to supply 900 million people with a year's worth of bread, enough coal to power one out of every 10 homes in the nation, and enough asphalt to lay a single-lane road four times around the equator. To ensure all of these products get to and from their appointed destinations, BNSF uses sophisticated technology, including Siebel 7 for its customer solutions and call center, sales and marketing departments, and finance and billing. "CRM is a priority with us," says Bonnie Henn-Pritchard, assistant vice president of technology services for the railroad. "It fits in with our five corporate strategies, one of which is the ease of doing business with us. This is a key priority and a business imperative for customer interaction. Our decision about technology is not to let things degrade and have to spend $100 million to stay up with the times. Instead, we try and keep the technology current." More than 630 of the company's 37,000 workers use the solution, which internally is called Zephyr. One hundred Zephyr users are in finance, operations, and other departments; there are 530 users in marketing, sales, and customer service. According to Henn-Pritchard, BNSF was looking for a solution that would enable it to have one source for all of its customer data. BNSF's sales force is already benefiting from this. Previously sales reps had to spend a lot of time culling information like traditional destinations, history with the railroad, and customer service records. Now, sales reps can get all the information from Zephyr. The company is also using CRM to expand its use of the metrics it tracks. Each day the company issues a 50-page performance review, but wants to be able to examine trend data and drill down to find out about changes in markets over time. Currently, BNSF's CRM system works with the company's iPower tools, which allows customers to plan, order, track, trace, ship, and pay for shipments. Russ Smitley, assistant vice president of customer solutions, says customers like the Web applications. "In the rail industry BNSF is the standard," he says. "Users are raving about the [Web tools]." Smitley says he believes that customer service has been the first step in cataloging customer pain points. "Other cultural things changed how we communicated with the customers. In the past service was individual; now it seems more corporate," Smitley says. "Now it's really effective." So effective is it that BNSF customer service workers are more efficient and effective and customers are getting better service, Henn-Pritchard says. "We have increased the number of customers' calls that come in, but not increased staff, and we have decreased the time spent on these calls," she says. Planes, Trains, & Automobiles When it comes to the automotive industry, there has typically been one type of CRM solution for the automakers and another for auto dealers--and the two solutions were rarely linked to each other in any meaningful way. Mercedes-Benz Canada was not satisfied with that method of doing business, and was looking to have a national CRM system at the wholesale level to help the high-end vehicle maker get closer to its customers. "We lost sight of the customer quickly in terms of accurate information," says John Westcott, chief information officer and director of information technology. "The closer you can get to the customer, the more likely data is to be accurate." Mercedes began looking for a solution in early 2002. The Toronto-based automaker partially deployed a solution, but according to Westcott, it was too rigid and there was very little buy-in from the people who would need to use it. The company then turned to Strategic Connections for its Napoleon product. Mercedes had spoken with the CRM-solution provider in the past and liked its product, but questioned the small company's ability to support a national rollout. However, since that time Strategic Connections has formed partnerships with PwC to provide training and support, and IBM to handle hosting of the Web-based applications. "That gave us the comfort level we needed to work with them," Westcott says. Mercedes was looking for a solution that would help increase loyalty through personalized service and targeted marketing campaigns. Although the company historically enjoyed a high loyalty rate, the landscape was continuing to get more competitive. "You can't just rely on customer loyalty. You have to make sure to reach out to those customers," he says. For example, using the information gathered from its network of 55 dealers Mercedes Canada is able to determine which customers purchased earlier diesel vehicles and send those buyers information about the new E Class diesel vehicle the automaker is about to introduce. "Diesel is an acquired taste, and it makes sense to market directly to those people," Westcott notes. There are approximately 90 people using the CRM system today; Mercedes Canada plans to double that figure by the middle of 2004. The company is also planning to implement the product's service and support modules over the next 12 months, to help with customer service and Mercedes' roadside assistance program. Prior to implementing its new system dealers provided data to the automaker on an ad hoc basis. Despite a standing mandate to provide basic data, Mercedes rarely enforced that rule and the process of tracking which dealers reported information was cumbersome, Westcott says. "That really limited our ability to keep accurate data. There were no real checks and balances. And there was no real incentive for dealers to share information with us," he says. Now the incentive is that Mercedes' marketing muscle is behind campaigns that drive potential customers into dealerships, thus increasing dealer sales. In addition, salespeople at the dealerships can help customers create personalized brochures of vehicles. So if the customer does not purchase on her first visit, she can walk away with the leasing, finance, and product specifications of the car she's interested in. That information is then stored and available on Mercedes' Web site for the prospective customers to refer to. Also, the system uses alarms that can be set to remind a salesperson to follow up with a potential customer in a set number of days or weeks. Westcott says that the system is still too new to have hard ROI numbers, but that anecdotal evidence and feedback from the dealers suggests the chance of closing a sale increases dramatically when a customer is given a follow-up call, email, or letter. "It's hard to convince a salesperson that this system will help them in a year's time; they want to sell a car in the next hour," Westcott says. "But if you can show them that they can eliminate many of the tedious administrative functions, they will use the tools." Other geographic areas of Mercedes-Benz have contacted Westcott and expressed interest in the system. "I think the key thing is that using Strategic Connections' Napoleon product we've built a system that is good for a range of dealership sizes as well as for the automaker," Westcott says. "That lets us measure success at all levels, making the line between national and local dealership more open and more productive." Contact Senior Editor Lisa Picarille at lpicarille@destinationCRM.com
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To contact the editors, please email editor@destinationCRM.com
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