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Customers to the Core: Tactics for Successful Service (1 of 5)

Customer service and customer relationship management (CRM) are being touted as critical success factors for companies seeking to seriously compete and thrive into the next decade and beyond. Why? As technology and manufacturing fast become commodities, the customer relationship is the only area where real competitive advantage is still possible.

Ironically, there has never been a time when customer service has been more absent from our lives. When was the last time you walked into a store and were treated like an individual, with concern shown for your personal interests and needs? It was probably a long time ago. Recently McDonalds found itself in a customer service quagmire after having spent the last several years focusing more on efficiency than customers.

If customer service is poor in the bricks and mortar world, it's worse online. Even on sites that are well designed and usable, it's still hard to get quality customer service when you need it. If you send an e-mail request, do you get a quick and helpful reply? How easy is it to find a phone number to call? If you call the help line, do the customer service representatives answering the phone have any clue how you spent the last hour on their own Web site? To all of the above the answer is probably "no."

This combination of high potential advantage and low quality of service has created a great opportunity for those in the business of facilitating relationships between companies and customers. In fact the hoards of venture capitalists that were pouring money into online retailers in the last few years have now switched their bets to the companies building software that improves online customer service. According to a recent study by Jupiter Research, there are roughly 200 venture-backed startups now developing software to improve online customer service.

These investments are not unfounded. Technology analysts at eMarketer expect spending on CRM in general to increase to $10.4 billion in 2001, a 167% increase over $3.9 billion in 2000. This rapid growth comes despite the uncertain economic climate in the U.S. and abroad. More specifically, IDC predicts that the electronic customer relationship management (eCRM) market in North America will exceed $9 billion by 2003.

The technology market for customer service includes not only eCRM packages but also many other software categories like chat and personalization. That we're still seeing growth right now in this space is a sign that businesses recognize the value of customer satisfaction and see how it will drive revenues. By using technology that makes service more efficient, businesses will be able to reduce costs. With the right setup, call center employees will be able to process more calls per hour and businesses may not even have to hire new staff members as the total number of customers rises. The benefits are somewhat twofold: A more efficient support center means customers with questions will receive better service, which means they will be satisfied, which means they will be likely to do more business with the company.

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