Less clutter, more customer
Milicron and Rockford Corp. find integration key to customer service goals
By Nancy Bartels, senior editor -- Manufacturing Business Technology, 4/1/2006 7:00:00 AM
In theory, business is about getting and keeping customers—knowing what products they want, when and how they want them delivered, and what will keep them coming back for more. In practice, manufacturers are focused on other things—optimizing processes, coping with compliance, or dealing with globalized supply chains, for example.
Yet customer centricity is more important than ever. Price and quality are no longer sufficient differentiators. Service—the way customers are treated before, during, and after the sale—is vital.
That requires what Boston-based Yankee Group analysts call strategic customer resources management, an integrated approach for identifying, acquiring, and retaining customers—and for presenting a unified face to them whenever they encounter the organization.
Leslie Ament, director of customer intelligence for Boston-based AberdeenGroup, says this is precisely where many manufacturers fail. "They optimize pushing out product, but don't connect informational silos very well," she says. "Some information is in [customer relationship management systems]; some in ERP and elsewhere. These disconnected information silos impede the flow of information and the ability to make good decisions."
Customer information often is captured, stored, managed, and maintained in several legacy systems—each accessed by different functions and used for different purposes, Ament adds. Furthermore, she says, effective application of analytics to the gathered customer data is just as important as integration—and that is still an "early adopter" initiative for even the best-performing companies. Most respondents to a 2005 Aberdeen survey said they lacked effective customer data analysis processes and were unable to establish meaningful performance metrics; yet this is where much of the value in CRM resides.
This lack of integration and analytics was hampering the call center at the Servtek division of Cincinnati-based plastics equipment manufacturer Milicron. Servtek has an inventory planning group, a warehouse center, and a shipping group—all dedicated to handling replacement and warranty parts orders.
With an in-house CRM application isolated from transaction systems, customer service agents were manually researching caller histories, leading to unacceptable wait times. "Throughout the '90s, we had a 15-percent call abandonment rate. We couldn't seem to get it under control," says Servtek Unit Manager Steve Hayden.
In 2000, Servtek went to Cincom for its Synchrony contact-center management software, which not only manages call volumes and the waiting queue, but also connects to back-office systems to give agents immediate access to customer information.
"We integrated Synchrony with our service-parts operating system," says Hayden. "We felt strongly about integration with legacy systems right from the beginning. It was painful, but that's where the real value is."
When customers call, Synchrony generates a "screen pop" that gives the service agent the customer's entire history, including product make, model, service history, warranty information, inventory availability, and shipping status. Time spent retrieving this information has gone from several minutes to a few seconds.
Synchrony also does skills-based routing, case management, and knowledge capture. "If certain people have unique skills [that can help a customer], we can route the calls directly to them," says Hayden. "If a customer is having specific problems with a part, we know that [from the customer history]. Sometimes we have unique requirements for parts, or the part is no longer available. There are engineering solutions to deal with those situations, and the system will show that information."
The system also can connect a caller with the agent he or she spoke with previously. "Typically, customers don't know who they spoke with," says Hayden. "In the past, we might have five or six people working on a problem because the caller has spoken with several agents. Now we can see that the customer talked with Joe, and we can turn the problem over to him."
The result of this integration of data sources has been a 73-percent improvement in response times.
But just as crucial as this improved customer service has been better analytics. "We also wanted to track how much product we were quoting that we weren't selling," says Hayden. "Typically, customers call first for a quote, and then call back to place an order. The system lets us identify who has called for a quote and whether that quote has been converted into a sale. That's powerful information."
Synchrony also will be integrated with Milicron's new ERP system when it is deployed, and Hayden hopes to get information from it for use in the call center. He'd also like more analytics to track customer buying behavior.
"I'd like to understand more of what our customer requirements are—not just what they quote," says Hayden. "Say a customer has 25 molding machines. I know he should be buying a lot of specific parts from me, but I'm only getting those calls when he can't get them somewhere else at a better price. I know we could be doing more business with him, but I don't know what or where it is, and I don't have a database for tracking that."
Market changes
Changes in the CRM market are making this integration between systems simpler. Oracle's acquisition of Siebel brings the largest independent CRM vendor into the fold of the database and enterprise applications giant. ERP market leader SAP, Oracle's biggest rival, offers its own CRM system, connected to its other systems via the NetWeaver platform, while Microsoft's CRM 3.0 offers connectivity to its entire Office suite.
Mini Peiris, VP of product management for enterprise software vendor NetSuite, which offers both CRM and ERP solutions, says CRM is evolving from a stand-alone solution into just one more module in larger enterprise systems, simplifying integration even more. "The tide is shifting away from best-of-breed to a broader offering that can encompass all business operations," she says. "Users want one vendor they can hold accountable."
Ralf VonSosen, SAP VP of marketing, adds, "The concept of CRM will never go away, but from a technology solution standpoint, it will change substantially. It's going to be a lot more about very actionable pieces. Users get the call-center piece if they need to optimize the call center. Or they'll buy the piece they need for deal structuring. The needs of vertical industries also will define the value of packages offered by CRM suppliers."
According to Greg Gianforte, CEO of RightNow, a CRM solutions vendor, those pushing for system integration and analytics have a point, but they are taking it to an extreme. Instead, he argues, manufacturers should go for "the low-hanging fruit"; that is, modular and incremental deployment of solutions that directly affect the customer experience.
"You don't need to integrate all the systems first," says Gianforte. "It may be useful, but it's not necessarily the first thing you do. What should be driving CRM is not integration, but customer experience. How does the customer want to touch you? Is his experience consistent across channels? Is the information consistent?"
RightNow's customer, Tempe, Ariz.-based Rockford Corp., makes audio equipment and parts for both the OEM and consumer markets. It has eight brands in the mobile, professional, and home theater markets, and a very targeted customer base—the 16- to 24-year-old male driver, who also tends to be very Web-savvy.
Rockford's problem wasn't integration, but that its Web site didn't convey sufficient product information. As a result, the customer service department was receiving 200 to 250 emails a week, requesting answers to product questions. Its system required a one-on-one response to every email, and agents couldn't keep up, taking up to 48 hours to respond to a customer inquiry.
Eric Russell, Rockford's Webmaster, says, "Since we use a representative and reseller model, it was a challenge to provide support direct to consumers. Because car audio is subjective, you could have 10 variations on a product. Customers were looking for opinions about which products to use."
To solve the problem, Rockford implemented the RightNow's customer service solution to capture and dispense data across all communication channels—phone, email, Web site, and chat rooms—in one application. Feeding to Rockford's Web site, the application offers a "Top 20 FAQs," self-service for ordering and information gathering, and an improved search function.
Within weeks of installation, the self-service section of Rockford's Web site was answering between 200 and 250 questions a week. Only 5 percent of inquiries escalated into requests to the support staff. Email response times were slashed from 48 hours to four hours, and Rockford avoided a 50-percent increase in customer service head count.
While it is a boon to online customers, the RightNow system also supports Rockford's relationship with its dealers.
"The system takes owner's manuals, transforms them into tech briefs, and loads them into a knowledge base where they show up on the Web," explains Russell. This ensures that tech support and dealers are using the same information. RightNow also improved Rockford's dealer locator function on the Web, further enhancing the relationship with its distributor base.
RightNow Service is not integrated to back-office systems, but that doesn't mean it's not useful in supporting larger company initiatives.
In 2004, Rockford completely redesigned its product line.
"We used the RightNow metrics survey tool to tally our customers," explains Russell. "From that feedback, we got validation of the realignment of our products, which turned out to be the best product launch in company history. We used the survey to validate our plans and respond to customer feedback—some of which was brutally honest."
