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Where does CRM fall on the org chart in most organizations? At my company it is part of the IT department. Is this the norm or is CRM more prevalent as a re-engineered sales group or even part of operations? Where does CRM fit in for the long term?
Complex business-to-business relationships put a whole new level of demands on your customer service organization.
For the rest of the March 2001 issue of CRM magazine please click here

Whether your company sells primarily to other businesses, or to consumers, the role of your customer service is at least superficially the same: to take good care of the customer. But scratch the surface and the details can be quite divergent.

"The B2C world is essentially about spending time, it's about an experience," says Bob Chatham, principal analyst on the business application team at Forrester Research. "Look at Disney--the experience is the product," he says.

"It's exactly the opposite in B2B, it's about saving time. The ideal B2B supplier is completely invisible, its quality goes to infinity and price goes to zero. The stuff just shows up, a completely hands-free experience."

That difference is particularly clear in organizations that have both consumers and businesses as end customers. Consider Intel's WebOutfitter service, a program designed to capture and retain the interest of consumer Pentium III processor owners with fun online applications and diversions. Buyers of multi-CPU Pentium Xeon server systems are not treated to such time-killing whimsy.

Because there tends to be a wider spread in the size and sophistication of business customers, some service groups can more readily identify customer segments and the unique challenges they represent. Interestingly enough, at Dell, the small business customer can prove more needy than not only the end consumer, but the Fortune 500 client, as well.

"In a large customer, they're going to have resources there that can do much of the service, whereas a small company is not," says Bob Riazzi, director of services product management and marketing. "They're going to have to outsource most of that service and care. We find in those environments that the small business customer is going to require more handholding and services."

The M Word

Forrester Research projects more than a 400 percent annual growth rate in Web-based service requests for B2B organizations, which would push that channel's share of the action from 37 percent in 1999 to an incredible 87 percent in 2002. The reality of multichannel still holds, however, while voice would drop from 54 percent to just 13 percent of all incidents in such a scenario; that still reflects a 90 percent annual growth in overall phone volume. Just as the consumer retail industry learned in 1999 and 2000, no channel is safe to ignore.

"A company has a personality, and it used to be straightforward how you express that personality: You trained salespeople and field service people in the way you wanted them to present or represent the company," says Chatham. Think IBM and blue suits, and you get the idea.

Multichannel has thrown the traditional blue suits and 9-to-5 call centers down the chute. According to Chatham, business-to-business organizations have a tremendous advantage over their consumer-oriented kin. "The beauty of B2B relationships is that you usually know who you're dealing with; it's not anonymous like B2C." Service groups should be able to track the history of customer interaction across channels, but customers also realize that they are not anonymous--companies have no excuse for ignorance.

"The organizational complexities are true on both sides of a B2B relationship," says Paul Rodwick, vice president of product marketing for the San Mateo, Calif.-based E.piphany. "It's not only the purchasing manager and engineer and executive on the buying side; on the supplier side are complex relationships: the sales team and account managers." Contact permutations quickly become enormous, requiring dedication to careful tracking, not just of "when?" and "what?" but "with whom?"

Optimizing the exploding online channel is one of the keys to streamlining the overall support organization. In recent years, Cisco has moved to streamline its global ordering processes, moving customers from fax machines to Web-based configuration and ordering, offering training to customers if need be to work through the necessarily complex commerce site. At the same time, the company spent $15 million to build a self-service technical support site. "The money we've spent on customer service on the Web has more than paid for itself in satisfaction and savings for the company," says Sean Iverson, marketing manager for Cisco's Technical Assistance Center. "The fact that we've implemented an e-commerce solution has allowed us to scale upward our own internal team. They spend less time doing key entry and more time advocating on behalf of the customer."

It's also not just the channels, but where they are deployed. Michael Hearney, vice president of strategic marketing for Altitude Software of Milpitas, Calif., points to one Fortune 500 customer that had no true customer service organization for its supply chain partners. "Typically, the only point of contact is with someone in finance, to make sure the checks got written," he says. That company is now putting in a full-fledged service organization to address not only order status and purchase issues along the chain, but to provide technical support for the supply chain management application itself. "The supplier is just as important in helping them deliver the whole product. They feel the return is an even tighter relationship, eliminating bottlenecks on the distribution side to make sure they have the product to distribute to market on time."

Liz Shahnam, vice president of META Group's CRM:Infusion Program, agrees. "Where it gets really interesting is in the indirect model. People who embark on CRM initiatives are thinking of the end customer, or looking at their direct model," she says. "They need to offer incredible service in terms of supply chain, real-time business process integration and bill payment--it's not just about calling through to the service environment to get answers, it's about true business partnership, and they're just now starting to think about that as a customer service issue."

Business customers are also even more willing than consumers to use their newfound channels to sound off about their treatment and experience. Although Los Angeles-based BizRate.com's B2B ratings service enjoys roughly the same level of participation as the B2C version, businesses are more likely to fill out detailed comment sections, rather than simply navigate the checkboxes and pick lists. "They tend to be much more pointed about what they're looking for and much more focused on what they need," says Seth Geiger, vice president of professional services at BizRate.

Consumer Habits, Business Expectations?

Employees are people, too, and it would be a mistake to assume that the lessons of B2C commerce have gone unnoticed by business buyers. Chatham believes that the overlap is significant. "The kinds of behaviors people learn in consumer outlets have translated into the B2B world--expectations about how they're going to be able to search, contact the company, what kind of response they're going to get to e-mail."

Dell's Riazzi says that business service requirements have not only matched consumer demands for rapid turnaround, but reinforcement of a positive experience is also more difficult to come by. "We have to make sure that all of the people that have power of purchase or of influencing the purchase understand the delight that the person has had with the Dell computer and Dell service," he says. Large Dell service contract accounts receive regular call resolution and quality reports. "You are continually providing metrics that demonstrate service delivery performance or total cost of ownership reduction. You don't have to do that necessarily with consumers."

As sellers scramble to understand and adjust the moment-to-moment profitability of each action taken and account served, they often try to nudge, cajole or force customers into lower-cost service mechanisms. But if an individual buys a printer from a discount dot com retailer selling at a loss and is only too happy to smile and pocket the savings, why should that individual not be 10,000 times more pleased to do the same thing to outfit an entire company with loss-leading printers, feeling no shame or remorse and, if anything, even more indignation at being shunted out of the channel of his or her choice?

Stephanie Langenfeld, product-marketing manager of B2B solutions at E.piphany, believes in empathy. "I think [businesses] understand that business interactions need to be profitable more than a consumer understands that they need to be a profitable consumer," she says.

While fine-grained divisional profit and loss accounting may look good on the balance sheet, independent divisions within a larger organization may want to look beyond their four walls when deciding how to treat a client. "With a large enterprise like Boeing that has multiple divisions, you may have multiple relationships with all of the divisions, and the overall relationship value may be very high even if the individual [division] relationship value is not that high," says Rick Fitz, director of CRM product management for Remedy of Mountain View, Calif.

Perhaps even more important than being careful with how profitability-driven service measures are presented to customers, is how they are presented to employees. In a February 2000 Forrester report, Chatham writes, "Uncoached line employees with access to raw profitability data may adopt a new--and potentially demeaning--attitude toward less rewarding customers." It's no fault of their own if they simply want to defend what the company has identified as its best interests, but as has been seen time and time again, such measures are not effective when wielded as sticks. Forrester recommends a system of "upgrade credits," varied by the overall impact a customer has on the business. Better customers get better service perks when problems arise, rather than inflicting punishment on long-standing customers who may, through no fault of their own, be consuming a low-margin slate of products and services at the moment.

Tapping a New Source

What some perceive as a long-standing barrier against outsourcing important B2B customer service functions may finally be coming down. Paul Kowal, president of Boston, Mass. contact center consulting firm Kowal Associates, points to a chain of events that have made B2B service outsourcing more palatable, even desirable. "Companies found that large tickets can be sold by phone--that people will make $20,000 or $100,000 purchases by phone and maybe Internet contact," he says. As a result, the prestige of inside sales and service has improved, providing better quality personnel and the motivation to invest more heavily in training to handle more complex relationships and requirements.

High-speed connectivity and CRM integration have in turn paved the way for that new breed of service representative to do their job-from anywhere. "Technology has allowed outsourcers to link into information in a way you only could have, or wanted to have, in-house centers link to [in the past,]" says Kowal. "They now have the information to be successful when representing you on the phone."

Teleservices outsourcer Ron Weber and Associates had negligible business-to-business volume from its 1980 inception. Over the past six years, however, B2B clients have flocked to outsourcing and now make up 75 percent of the business for RWA's agents. "Business did not think the level of individual was high enough in service agencies, or as high as they had, and could, develop," says Ron Weber, president. Weber also cites "paranoia of management"--the fear that every outsourced head was a layoff waiting to happen.

Weber acknowledges that businesses were at least correct in recognizing that they had more sophisticated problems than some B2C outsourcers were accustomed to fielding. "There's a lot more management and growth development [of agents] than in consumer, one-shot calling," he says. "People have to be taught relationship management, and you have to train reps to become personal with the customer."

According to Weber, the demands of B2B service have blurred the traditional outsourcing relationships. It's not unusual for one of RWA's clients to bring contracted service representatives on factory tours or sales call ride-alongs to better indoctrinate their policies and culture, and Weber says the effect is significant. "Most of the time we have a hard time convincing [representatives] that they work for us, and that's a good thing. Our people are really their people."

No matter the customer segment, service organizations are charged with the mission of keeping their doors as open as possible to provide the maximum future revenue-building satisfaction at a minimum price. The pressure--both to juggle complex relationships in an increasingly multichannel environment and to keep up with lofty B2C standards--is mounting. Serving the needs of enterprise under these conditions will take equal parts dedication, flexibility and willingness to smile in the face of adversity and the ever-present knowledge that there is hardly a supplier around that cannot be replaced. Thank you for calling.

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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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