Customer centricity is all the rage today. CEOs are talking about it; CCOs are looking for ways to measure its benefits. And for good reason: Organizations that employ strategies designed to build short- and long-term customer value build organizational value as a result. "Customers are the true source of all revenue," says Martha Rogers, Ph.D., founding partner of Peppers & Rogers Group. "Companies that outperform the competition are the ones that understand this, and therefore, deliberately build the value of the company the only way any company can: by building the value of their customer base."
Through our joint awards program, 1to1 Media and Gartner spotlight excellence among organizations that take a customer-centric approach to improving their business performance and have seen exceptional results from doing so. Even in the stories that follow, five winners of the 2011 Gartner & 1to1 CRM Excellence Awards reveal how focusing on customer experience and growth, creating efficiencies, and supporting their customer strategy with an enterprisewide CRM initiative drives profitable and superior business performance.
CEMEX USA Constructs a Concrete Competitive Advantage
The building materials company is cementing customer loyalty by offering convenient, consistent service.
Fast growth can be a double-edged sword. Building materials provider CEMEX knows this firsthand. After numerous back-to-back acquisitions, the company's U.S.-based operations rapidly grew to 14 cement plants, multiple distribution terminals, more than 100 quarries, and several hundred ready-mix concrete plants—and its services levels faltered due to the resulting disparate systems and disconnected customer touchpoints.
The building industry is not particularly customer-focused, so senior management saw an opportunity to stand out by improving the company's customer experience, says Juan Carlos Herrera, executive vice president of logistics. Having a customer-centric strategy allows the company to "provide a superior value proposition for our key customer segments," he says.
Target set, CEMEX created a new company mission: "to be the easiest partner to conduct business with for our customers, offering captivating experiences to drive long-term loyalty and deliver sustained growth for our shareholders." Senior leadership appointed a customer experience management (CEM) team to address the most critical customer experience issues, including standardizing service levels and improving the supply chain. The cross-functional team serves as the link between customers and all departments, including credit, customer care, logistics, operations, and technical services.
Prior to the initiative decentralized operations and non-integrated systems led to inconsistent service levels. The supply chain was fragmented, and there was no documented issue-resolution process. "The customer experience strategy has completely transformed the way CEMEX conducts business in many ways," Herrera says. "What began as an initiative to address specific customer pain points has completely redefined customer service benchmarks for our industry."
Using tools from SAP and Cisco, the company integrated touchpoints, creating a single point of contact for customer inquiries. This helped to standardize the levels of service being provided to customers, as well as to improve the visibility into and flow of the supply chain. All inbound requests, whether online or via phone, are directed to the customer care center. There, representatives take nationwide customer orders and requests, create cases, and channel phone calls to the right person within the organization. "Our services are provided 24/7 every day, and are manned with a live person to attend to the interaction," Herrera says. "A single point of contact enables us to deliver the intended experience in a repeatable way for customer satisfaction and loyalty."
The company also created the CEMEX Connect portal, where customers can access account information, financial documents, delivery tickets, and orders. For transactions, there's an online payment portal called SMART Pay where customers can schedule automated payments rather than mailing a check.
CEMEX also now tracks relevant information when customers contact the company. The CRM system attaches a customer account number to each call, and then tracks call durations and other information. In addition to the data collected from the call center, sales and credit managers assigned to the account add notes into the system, such as order information, load status, last orders placed, any open or closed cases, and details of recent interactions. "To complement our 360-degree view of the customer, we capture, index, and record details potentially relevant to anyone within the organization," Herrera says.
In addition, a supply chain monitor provides visibility into all shipments to customers and triggers alerts so CEMEX can manage exceptions proactively. "Prior to this deployment, we would only come to know of these issues if our customers called us to inquire on the status of their orders," Herrera says.
These improvements have led to 99.9 percent accuracy on order-entry transactions and a 99 percent cement delivery record with no service issues. In addition, the company touts an ROI of 30 percent based on efficiency improvements and incremental sales as a result of the initiative. On the cost side, the customer care center manages 29 percent more volume with the same headcount as prior to implementation.
CEMEX plans to take its customer strategy further by developing a customer lifetime value program to provide even more customized service to different customer segments. Additionally, the CEM team is exploring the mobile and social channels as potential interaction platforms. The company also expects to use the new CRM tools to support expanding the role of customer care to provide outbound sales and service.
"We are most proud of the fact that we are innovating and providing industry-leading service in one of the most difficult economic eras in history," Herrera says. "While many companies are making hard decisions that often lead to cutbacks in quality and service, we are finding ways to leverage our technology, processes, and human capital to provide value-added services for our customers."
International Speedway Accelerates Its Marketing Performance
The organization's integrated marketing strategy fuels engaging fan experiences on and off the racetrack.
NASCAR fans are the most brand-loyal fans in professional sports. Their likelihood to share their passion for the sport with friends and family is three times greater than non-fans, according to International Speedway Corp. (ISC).
ISC wanted to tap into that evangelism to increase sales by engaging with fans in more targeted ways—but it faced a roadblock. Jim Cavedo, senior director of consumer marketing, says the organization lacked knowledge about how often it touched customers, and as a result was ineffective at driving purchase decisions. "Even though we had transactional data, merging the accounts together was impossible," Cavedo says.
Solving this required a consistent, consolidated view of its customers and a commitment from ISC to embark on an integrated marketing strategy that would transition the organization from delivering mass marketing to communicating with fans in targeted and relevant ways.
To move forward, ISC needed executive sponsorship and buy-in from all 12 business units (i.e., its 12 racetracks). After senior leadership green-lighted the project in 2008, ISC began working with Aprimo and Cognitive Data on everything from email and campaign management to database cleansing, ultimately creating a CRM system it calls fanMAX.
The first step revolved around data: collecting, cleansing, and analyzing it; dismantling data silos; and replacing inefficient data collection methodologies.
Next, the company applied information that it learned at the track level, and then added segmentation based on that data, including purchase history, value of purchases, relationship tenure, affinity toward a track or driver, and propensity to respond to specific channels.
The project has driven a new way of thinking throughout the organization. Today data is no longer an afterthought, but rather a part of every conversation involving the customer. "We're taking the technology and asking, 'How do people react to touchpoints and what is the message we're delivering to them?'"
Additionally, the new system has allowed ISC to function in a decentralized model while providing corporate strategy and operational support. The 12 business units now have the ability to create campaigns specific to their facilities and involve all touchpoints, including the call center, newsletter, email, and social media. When the Phoenix International Raceway, for example, conducts campaigns throughout the year, it sends 11 unique emails, ranging from targeted upsells to prospect nurturing, and applies segmentation, including fans' channel preference, past purchases, and whether fans are season ticket holders or non-ticket holders, to improve marketing performance.
The campaigns' effectiveness also relies on a continuous stream of data, including transactional, demographic, customer surveys, and market research, which feeds back into fanMAX. This data also drives the company's business and marketing decisions. "It's about understanding the data and understanding what makes customers tick," Cavedo says.
The new integrated strategy is getting ISC in gear. ISC created 1,500 unique segments in 2009 and 2,400 in 2010. In terms of prospect collection and purchase conversion, this helped ISC achieve 153 percent of its goal in 2010; email open rates and click-through rates improved by 2 percent year over year.
Enthusiastic from the success of its traditional marketing campaigns, ISC recently started experimenting with social and digital communications, including QR codes, to add to the customers' integrated marketing mix.
At a recent race at the Daytona International Speedway, for example, ISC introduced digital billboards embedded with the codes. Fans scanned their phones over the codes, which brought them to a link to sign up for the organization's newsletter. Additionally, a "social squad" of employees equipped with Samsung Galaxy Tabs roamed the concourses and asked fans to opt in to the ISC newsletter using the android tablets. Cavedo says 5,000 people opted in during that one race. "You have to be in every single digital channel…so that you're not missing an opportunity to engage with consumers," he says.
Cavedo plans to incorporate the social components introduced at Daytona to additional facilities this year. He also intends to start experimenting with leveraging social gaming as a marketing channel and expects to eventually integrate every channel into the CRM system. "We look at every single opportunity and if it makes economic sense, we'll work on it," Cavedo says. "We'll make it happen."
BCP Banks on Marketing Integration
Multichannel marketing has enabled Banco de Credito of Peru to tailor product and service offers, leading to a boost in sales.
As the largest bank in its country, Banco de Credito of Peru (BCP) needs to operate with marketing sophistication to maximize the relevance of its offers to customers.
However, until recently the bank's direct marketing business was fragmented, often failing to target the right customers due to a lack of analytical tools. With pressure to grow market share, BCP decided to launch a CRM initiative that would allow the organization to send relevant offers to help acquire and retain high-value customers, as well as to increase overall customer satisfaction, retention, and profitability.
The organization deployed Infor's CRM Epiphany suite to help plan, develop, execute, manage, and analyze the results of its multichannel marketing campaigns. The goal was to become better equipped at suggesting products and services for customers.
Today, with the new system and an improved analytics model, BCP can develop personalized campaigns based on customer attributes, demographics, customer behavior, and knowledge accumulated from previous campaign results. The company also applies clustering and logistic regression. This approach allows customers to receive offers on the products and services most relevant to them. "We automated the rules that were required for [creating] campaigns. Then we changed the business process. We refined what the bank has to do," says Benjamin Castro, CRM manager at BCP.
Additionally, each segment is now approached according to two dimensions: the offer and the delivery. On the delivery side, for example, affluent clients are contacted only by dedicated sales reps; the contact center serves mass-market customers.
One of the primary ways BCP measures marketing effectiveness is by tracking campaign response rates. For example, sales of credit cards in the call center as a result of marketing campaigns grew from 1,000 in 2008 to 5,000 in 2010, and credit card unit sales stemming from campaigns grew 170 percent. Additionally, BCP monitors its opt-out list and has found that opt-out rates have dropped. The bank now runs four to five monthly campaigns, which generated 40 percent of revenue in 2010, up from 15 percent in 2008. Campaign cycle times also have shrunk, now taking 22 days, down from two months; and sales that originated from marketing efforts increased from 15 percent to 40 percent. The increase in the volume and frequency has allowed the contact center to double in both size and revenues. "This methodology has proven highly effective in driving strong response rates from customers," Castro says.
Akbank's Customer-Centric Imperative
The Turkish bank's multichannel, multifunctional marketing strategy yields impressive sales results.
Akbank experienced substantial growth over the past few years. Turkey's largest financial institution, with more than 900 branches, now has one of the most expansive customer bases in the market. But that growth left a path of disparate service processes and inadequate customer communications in its wake.
Although first-generation CRM initiatives began in 2003 with data mining and campaign management, Akbank needed a next-generation platform to accommodate the proliferation of products and services it had added and to allow the bank to communicate with customers across the growing number of interaction channels.
In 2008 the organization developed a marketing strategy to achieve those objectives, as well as to improve the customer experience. "We wanted to increase customer service quality, meet customer needs, and keep our promises to the customer," says Attila Bayrak, Akbank's CRM senior vice president. "It is our goal to make sure customers are not bombarded with irrelevant information and are only offered the products and services that they need."
According to Bayrak, the bank chose to deploy a new technological infrastructure to optimize its planned customer experience improvements.
Management tapped the CRM business team to design and deploy a multichannel, multifunctional, event-triggered sales force and marketing system.
The organization had to restructure to make more efficient use of the new system. This reorganization included implementing segment-based portfolio management, and then aligning the product management and marketing teams with the new segments. The CRM department, for example, which previously only served the retail and SME segments, now works with all segments and product management teams.
Additionally, the bank introduced deeper analytical approaches to support its more customer-centric marketing. These include conducting value-based and behavioral clustering and predictive modeling to build cross-sell propensity models, building attrition models, deciphering channel preference and usage propensities, and creating customer lifetime value models. Having such a granular level of data helps Akbank interact with customers in a more targeted way, like aligning the appropriate relationship manager with the right customer segments.
Akbank has aligned updated KPIs with employees' yearly performance management to enforce ongoing use of the system. ATOM produces daily, weekly, and monthly usage reports and the bank compensates its sales force according to the metrics.
Today the customer experience is seamless across channels. For example, a customer can go to an ATM, see an offer, call the contact center about the offer by clicking on a chat button at the ATM, purchase the product, and receive an SMS confirmation for the purchase.
Such seamless customer experiences are yielding positive results. For example, within the first six months of the launch of the updated strategy and supporting CRM system, Akbank sold more than 500,000 new products. Additionally, the bank acquired 200,000 new customers and reported a €2.2 million gain in gross profit and a savings of €3.5 million in service costs.
Bayrak says that going forward the bank plans to conduct a number of additional projects, including using social media as a marketing channel, adding an optimization layer to its marketing application to enable the teams to send customers more targeted offers, and further aligning new technology initiatives with the overall CRM strategy.
Bayrak adds that aligning processes with customers' needs is essential to delivering the best experience possible for customers. "It all starts with knowing the customers and understanding their needs."
University of New England Earns an "A" for Customer Centricity
A holistic view of its students helps the college improve their experiences, as well as its enrollment and revenue.
Customer centricity takes many forms. In the case of the University of New England in Armidale, Australia, it centers on a positive, integrated experience for all types of students. The university created a student relationship management (SRM) strategy based on the needs of its diverse student population and the myriad departments that serve it.
The goal was to provide a 360-degree view of students to each of its 22 student-facing administrative offices and departments while enhancing the experience those students receive, says Patrick Tobin, project director. Adding to the complexity of the initiative was the school's unique nature—of its 18,000 students, more than 80 percent are distance learners. Only 3,500 students live on campus.
"We know that giving a student a great experience is a great differentiator," Tobin says. Many of the interactions students have with the university are with administrative departments, which he says were not very customer friendly. Long lines, multiple levels of bureaucracy, and decentralized information led to inefficiencies and poor service, despite the university's outstanding class experience. In addition, the university's marketing messages spoke to everyone as if they were traditional university students—on-campus, young, full-time students. In reality, a majority of students are older, in the workforce, and study part-time.
Working with RightNow Technologies, the university revamped its knowledgebase, CRM system, and interaction strategy to address the entire student lifecycle, from enrollment to retention to alumni relations. So far 20 departments are on board with the new system, which has senior-level sponsorship. The university now has a central repository for both its student data and its knowledgebase. Contacts are recorded into the system and can be accessed by each participating department. "This is an amazingly great advance," Tobin says. "Now we avoid giving students the runaround or giving them contradictory information." Students can access customer service through AskUNE, an online self-service, searchable knowledgebase, as well as through automated enrollment tools, live chat, email, and traditional phone and in-person channels. They can view their interaction history in the CRM system, as well.
The holistic view of its students allows the university to differentiate how it treats future, continuing, distance, and on-campus students; it also segments by interests and courses. For example, in 2009 it created a Future Students Team to focus specifically on interactions with prospective students. The team works on e-marketing and ad campaigns, responds to student inquiries, guides students through enrollment, and promotes the brand.
In 2010 the university turned its sights toward alumni and donors, a community of more than 100,000 former students. The goal is to segment alumni outreach based on area of study, region, interests, and other information in the system. With the alumni piece in place, "we're able to capture the complete history of a student, from initial enquiry to interactions outside the classroom during their time at UNE, through to graduation, postgraduate courses, and beyond," Tobin says.
The SRM program has been in place since 2007, with more departments being added every year. Tobin says the program has coincided with a 4 percent increase in student enrollment from 2009 to 2010. Additionally, the university saw its revenue grow by AUS$6 million from 2008 to 2010. During that time UNE also reduced inbound student phone calls by 23 percent and emails by 17 percent. AskUNE self-service usage grew by 165 percent and live chat increased by 1,589 percent from 2009 to 2010. Tobin says the university has calculated an overall 32 percent rate of return after three years of implementation.