Service Is the Long-Term Winner

A company can differentiate its products (or services) from those of the competition in the short term, but in the long term all products become commodities. Why? Product excellence can eventually be copied. Competitive products offered with excellent customer servicing, however, has become the most effective combination to differentiate products and services over the long term. Hence, CRM and the new customer service capabilities that it offers to an increasingly sophisticated and demanding customer base are becoming integral to companies using this product/customer service excellence strategy. Take, for example, one well-known global footwear and sports apparel manufacturer. As an active listener to its customers and to the marketplace, this company knows that its products are perceived to be among the very best. But executives there also realize that they need to improve their relationships with retailer distribution-channel partners. So the company's top management team has made CRM, particularly the service components of CRM, a key part of its long-term differentiation strategy. The manufacturer has launched significant self-service capabilities for the smaller retailers. They are now electronically linked to the company: They place their orders, confirm stock availability, make payments, and lock in delivery dates, all online. For the midsize retailers the company has opted to create multiple retailer segments, to build comprehensive customer profiles for each retailer segment, and to service each retail segment uniquely. For example, in one segment the manufacturer now uses wireless handheld devises to take stock, to automatically generate replenishment orders, and to confirm in real time dependable product delivery dates. For the largest retailers the company has created an impressive key account program. Each retailer account team has access to a common account profile, performs common account planning, and delivers and monitors on a daily basis negotiated service levels. Although it's too soon to give hard numbers, service differentiation via CRM is delivering positive results for this manufacturer. Another example is a financial services company that specializes in student loans. Despite its size, which means that its student loan rates are competitive at best, and its lack of brand recognition, executives at the lender have decided that its future depends on its ability to outservice the competition. So the company has turned to CRM to provide comprehensive customer profiles, to analyze windows of opportunity from leading borrowers, to implement aggressive direct marketing campaigns, and to link university financial-aid offices, parents, and students to the company's full suite of online student loan services. Fortunately, using CRM as a service differentiator is proving to be the winning card: Although its loan portfolio is small compared with lenders like Sallie Mae, Citibank, or Wells Fargo, this lender is taking market share away from these big players. Be it quicker service, more accurate service, or cost-effective self-service, companies increasingly are complementing their long-term commodity products with award winning CRM services as the most effective way to achieve differentiation and survival. How well has your company integrated CRM services into your long-term business strategy? Barton Goldenberg is president and founder of ISM Inc., a CRM and real-time enterprise consulting firm in Bethesda, MD. He is the author of CRM Automation, and the publisher of The Guide to CRM Automation. Contact him at bgoldenberg@ismguide.com