Imagine a customer renting a car to move three short blocks in Brooklyn, N.Y. She calls on Zipcar, a membership-based car-sharing service—an alternative to buying or renting a car. After sweating in the July heat, hauling various household items up and down three flights of stairs, and making the same right-hand turns throughout several trips from one apartment to the next, her five-hour rental time has gone by in a flash. Suddenly, she finds herself nearing the rental deadline with not enough time to finish moving and return the car to the parking garage. Panicking, and checking her phone in disbelief at the time of day, she sees an SMS text from Zipcar, asking if she needs an extra 30 minutes. Elated, she texts back, a one-word affirmation and avoids a Benjamin-valued late fee and complete loss of her composure.
What Zipcar offers, an easy way to extend rental time, is nothing revolutionary. However, that simple proactive communication may be the difference between a consumer’s bad experience and a very good one.
Paul Greenberg, president and founder of CRM consultancy The 56 Group, makes the point that many companies are pushing toward building more positive interactions. However, Greenberg underscores a corporate truism: “Most companies don’t do anything but react, anyway,” he says.
Proactive CRM, as we are calling it, is a departure from traditional, reactive behavior and aims to take early action that facilitates a desired result. It could be giving consumers what they want before they have to ask for it. In some cases it involves monitoring products and customers to solve problems before they happen. In more cases, it’s arming customers with the tools and information they need to accomplish their goals. Each of these practices would undoubtedly create more positive customer experiences.
Southwest Airlines appears to be the poster child for proactive CRM—the airline has a branch of its company appropriately titled “Proactive Customer Service Communications.” Fred Taylor, given the nickname “Mr. Apology” in a New York Times profile, took charge of the team after being plucked from the company’s front lines in 2007. Taylor, who presented at the 2010 Net Promoter conference, says he writes around 240 letters a year to Southwest passengers, often apologizing for unforeseen problems on flights or with travel scheduling.
Chris Carfi, vice president at Edelman Digital and author of the blog, The Social Customer Manifesto, was a lucky recipient of a proactive memorandum from Southwest in June 2007. Carfi’s flight to Oakland was disrupted by an unexpected stop in Omaha. A few weeks following the unpleasant plane ride, Carfi found a note from Southwest in his mailbox, one explaining the reason for the unexpected landing, apologizing for the inconvenience, and offering a SWA voucher for his experience.
One might argue that because the letter arrived after the bad customer experience that it was more reactive than proactive. However, the voucher, when combined with the letter, is a proactive attempt to keep Carfi, and others, from taking their business elsewhere. “The fact that they reached out proactively and communicated information in a timely manner—I thought that was phenomenal,” Carfi remarks.
According to Taylor, 70 percent of Southwest customers who receive proactive communications return to the airline and bring others with them. “We create a wow factor…and a positive storytelling experience,” he said at the conference. “I am fortunate to work for a company that puts forth a lot of support and resources to make sure my team [can] accomplish our mission each and every day.”
But the fact of the matter is that not all companies have the culture that Southwest does. Some struggle with the reactive part of CRM.
Carfi sees advancements in the way organizations will incorporate social media information into their customer engagement strategies. This would yield communications based on a consumer’s stated interests or buying history. Amazon.com has been a pioneer in this area. Businesses like Netflix and Pandora also excel at proactively suggesting new movies or music based on past behaviors.
However, right now, suggestions and recommendations work well for companies with subjective products like music and movies. Despite a company’s knowledge of customers and an engine that can generate what they might want next, customers might not be ready for recommendations in certain sectors. While recommending movies or music is not likely to be perceived as stalker-like behavior, offering healthcare information would raise some eyebrows. Also, there’s always the possibility that companies can go too far. “The flipside is if the recommendations are too proactive, especially around things you might like,” Carfi says. “Knowing where to draw the line—Is this creepy or stalker-y?—is important.”
Proactive CRM can also give consumers the information they need to plan their day. Anyone who has ever waited around for a cable guy understands how frustrating it can be to plan an entire day around a service appointment. The best companies, Greenberg says, are the ones that now have developed sophisticated systems to carve out an hour time frame for arrival. “Those things are great because even if they have a problem, it’s not a four-hour problem that’s dragged it into the 6th or 7th hour,” Greenberg says. “They give you the information you need so you can make the judgments you need to make.”
Home furnisher Arhaus Furniture has taken that facet to the next level. John Roddy, senior vice president and senior logistics officer for the company, spearheaded an implementation of TOA Technologies a few years back to not only cut down on the time that its customers had to wait for furniture delivery, but to give them the ability to track the delivery trucks and even view a photo of the driver. “One of the biggest things we used to hear was that we didn’t communicate with customers enough [on] the day of the delivery,” Roddy says. With TOA’s ETA solution, Arhaus makes automated phone calls to customers to give them an exact idea of when to expect a delivery.
Changing the system has yielded fantastic customer satisfaction scores and feedback. Roddy reveals that about 90 percent of its furniture delivery recipients are females at home with children. “Making sure the right guy is coming to the house is pretty important so we let them see a picture of who is going to be arriving at the door,” Roddy says. “This is another step to reach the consumer and help them feel more at ease.”
TOA’s technology employs a predictive system that measures everything that happens in the field. Everything is reported and then the system takes a time stamp for every activity, via a real-time motion study. At the end of month, [TOA customers] create a performance profile for its [their] customers. That is then used that to estimate with a high degree of accuracy when a technician will arrive at a customer’s home.
For wireless music provider Sonos, being proactive means being pervasive. When Mike Carlino, senior director of customer service, came on board three years ago, about 85 percent of communications with customers occurred over the phone. Since then, the company has set up shop on social media sites, has developed a knowledge base for customer self-service, and has implemented online chat to assist customers.
Now only 40 percent of interactions are phone-based, according to Carlino. For every phone call, there are 15 page views of the online knowledge base. Carlino attributes the effectiveness of the solution to its consistent monitoring of issues that customers search. But still, Sonos puts a lot of emphasis on having a well-trained and friendly support team. “If you view tech support as a jet engine, where you suck ‘em in and spit ‘em out...you’re not going to fare well in the long run,” he says. Instead, Sonos focuses on longevity with customers and employees.
Proactive communication can mean a company reaching out about an issue that a customer might have, but it also could mean giving customers myriad ways to connect, based on her preference. Zipcar, for instance, encourages SMS correspondence, as well as mobile access of the site, and even unlocking the car with an iPhone.
Proactive Problem Solving
In April 2009, when two former rogue Domino’s Pizza employees posted a vulgar video of their unsanitary acts in the kitchen of a North Carolina franchise on YouTube, they created a public relations firestorm for the company. A few years ago, the typical corporate response might have been to merely pull the videos off the Internet and wait for the public relations storm to pass. However, as social media puts more pressure on companies to communicate and respond in real time, it requires organizations to change the way they conduct damage control. Domino’s promptly responded on YouTube with a message of its own, featuring a video from Patrick Doyle, president (now CEO) of Domino’s USA. While the response may not have fully restored the company’s brand, it’s far better than doing nothing.
Fortunately, thanks to social media monitoring tools and listening platforms, businesses can keep an eye on mentions of them in social networks, blogs, and forums. They can then respond or take action before the issue gets blown out of proportion as with Nestlé’s Facebook fall-out (see “Crashing the Community” in CRM’s June 2010 issue).
The problem with being proactive, as noted by Carfi, is that there’s a level of “let-go” required to make these things happen. “There’s definitely a connection between the proactive conversation and the general conversation around transparency,” Carfi says. “Being proactive you have to be transparent.”
Not surprisingly the companies mentioned here for their proactive efforts are cutting edge, less traditional organizations. Why? Shifting from reactive requires a culture change and it’s hard for a company that has deeply engrained processes to turn the ship around.
The Proactive Promise
So where’s the benefit in all of this? Being proactive cuts down on consumers’ time and efforts, thereby, improving the experience. David’s Bridal, for instance, the country’s largest retailer of wedding wear, has funds for random acts of kindness. Because the company closely listens to its social media mentions, it occasionally drops in and uses some funds to make a bride’s day.
One such act of kindness left a bride-to-be with more than just a warm, fuzzy feeling. She wrote about her situation—one riddled with loss, challenges, and poor health—in combination with her dress shopping experience at David’s. The blog was so touching to Scott Rogers, the company’s former director of strategic planning, that he asked for permission to reach out to the woman and offer up some goodwill on David’s behalf. Granted the means to do so, Rogers got in touch via Facebook and asked what his company could contribute that would be meaningful for that woman. She, of course shocked and a little confused by the gesture, said they could contribute flowers. Not only did Rogers coordinate the flowers for this customer’s wedding, but he rounded up the biggest wedding card he could find and got all of the corporate employees to sign it. For David’s Bridal and this one special customer, being proactive was incredibly powerful.
Although it’s not expected that companies should do such activities or even have the means to on a regular basis, a once-in-a-blue-moon proactive effort can boost employee morale and make a huge difference in the life of that customer.
- Opt-in SMS chat;
- Multi-channel contact;
- Social Media Monitoring and Response; and
- Random Acts of Kindness.
- Random offers;
- Push Marketing; and
- Damage Control.
5 Proactive Pointers
Being proactive requires more planning. However, in addition to decreasing support costs, anticipating customers’ needs can increase customer loyalty. Here are five ways to ignite a spark—and to keep it burning—with your customers.
- Allow customers to opt in—and once they do, know what to do. If your customers have opted in to your communications, they are putting their faith in your organization to provide them with relevant and useful information. Before troubling your customers for their email addresses, cell phone numbers, and social networking identities, figure out what you are going to say. Strive for consistent information that will save consumers the time and trouble of having to seek it out for themselves.
- Use proactive notifications. According a published report by Forrester Research Vice President and Principal Analyst Elizabeth Herrell, proactive customer communications have the ability to reduce costs for incoming calls. By letting customers opt in to messages—sent to their device of choice—companies can convey information that is important to customers, whether it be a new offer, an account-related issue, or a time-sensitive alert. Being relevant and respectful of consumers’ attention ensures that the tone of these messages remains informative rather than intrusive.
- See past the dollar signs. Consumers will figure out pretty quickly if your communications are only just ploys to get them to spend more money. Well targeted promotions are fine; just make sure they answer the ever-important question: “What’s in it for me?”. Every so often, why not say “Thank You” to customers before blasting them with your latest and greatest products and services. A little unexpected appreciation can go a long way.
- Do chat the right way. Forrester Analyst Diane Clarkson suggests that to make chat work, businesses must base invitations on a predefined set of visitor behavior metrics. In other words, you don’t want to chat up just anyone. [For more on chat, see feature “How Can I Help U?” on page TK.] Clarkson’s research indicates that 44 percent of online consumers say that having questions answered by a live person while in the middle of an online purchase is one of the most important features a Web site can offer. “A successful proactive chat implementation doesn’t end with a check mark next to the word ‘done,’” Clarkson writes. “Savvy eBusiness professionals understand that proactive chat success requires ongoing refinement of the business rules that will trigger chat invitations, staffing, and customer experience.” Another rule of thumb? Don’t annoy your customers.
- If you have to react, be proactive in the response. Sometimes, being proactive means assessing risk and implementing backup plans in case something goes terribly wrong. Gartner Research Vice President Jim Sinur writes in a recent blogpost about the concept of “proactive scenario planning.” Referencing the BP oil spill, Sinur states, “The mess in the Gulf could have been avoided with the right ingredients.” An appropriate remediation plan could have significantly minimized the environmental damage.