Wednesday, August 26, 2009

Getting To Know You! - Part I

Getting to know Customers and their preferences can be a daunting challenge for a Company that serves many, if not millions of Customers. The challenge lies in that because of the large number of Customers, the relationship between Company and Customers can be almost anonimous or impersonal.

Take the case of a mobile carrier, like AT&T (I chose AT&T for no other reason than they are my service provider and only to exemplify) with close to 50M subscribers or Customers: how does AT&T know that +14075551212 is a preferred Customer worth keeping?
Consider that I
  • use my mobile phone as my only phone
  • make many international calls, particularly to Latin American countries
  • am not a frequent text messaging user
  • rely heavily on e-mail for business
  • am not a surfer of the web on my phone
  • access the internet through the 3G data service.
Since data services (text messaging, internet access and e-mail) are more profitable than voice services (local and international calls), AT&T would like to explore how to entice me to increase my data usage. Also, AT&T would like to keep me as a Customer (I am guessing - my monthly phone bill is about $350) and make sure that upon contract expiration, I don't jump to T-Mobile or MetroPCS.

More importantly, AT&T would like to know how many subscribers with the same behaviour and profile (demographic) are there and how to obtain the same results for that group of Customers.

The answer lies in computer based tools. Some are referred to as Customer Relationship Management or CRM and others are known as Customer Behaviour Analytics (CBA). These tools rely on collecting and processing information about each customer. The information ranges from basic demographic info like address, preferences, payment method and history or place of employment to detailed information about the use of the product or products.

CRM allows for recording of interactions between the Customer and the company through the Customer service representatives, maintaining a history of purchases, returns, complaints and so forth. Everytime an Advantage American Airlines customer makes a reservation, American Airlines knows to assign an aisle seat or type of meal (in the olds days passengers used to get meals during flights - Ha!). For a description of CRM benefits and advantages I recommend the following article:

CBA tools, on the other hand, rely on massive amounts of transaction based data generated as result of a Customer transactions such as phone or credit card usage. Everytime a phone call is made, the network generates an electronic detailed record of that call: CDR. As result of usage, a company like AT&T using CBA tools can analyze and draw inferences on the behaviour of millions of subscribers, at the same time and with great confidence that the results will be accurate. A company can get a glimpse of how often a Customer uses the product, how and where. The company can also determine what similar services the Customer uses and is likely to use. For additional info on CBA try this link:

On my next blog I will discuss usage of CRM and CBA for small to medium companies: Getting To Know You! - Part II

Sunday, August 16, 2009

Know Your Customer?

Can we actually "know" the universe? My God, it's hard enough finding your way around in Chinatown. - Woody Allen

Among companies that operate under the Value Discipline of Customer Intimacy, knowing the Customer is a key factor of a successful sales strategy. The idea is that if a company becomes knowledgeable about its Customer's business, the company will become more effective at selling its products or services, even if they cost a little more. The Sales Person becomes or is expected to become, in effect, a consultative resource to the Customer by contributing industry knowledge and expertise in order to either:
- solve existing Customer problems
- advise on industry trends perhaps to foster innovation, and in general
- be the advocate of the Customer within the Sales Person's organization.
(Please refer to The Discipline of Market Leaders by Michael Treacy and Fred Wiersema)

Knowing the Customer requires an intimate relationship with the Customer. Intimate in the sense that there is frequent, constant and free exchange of information, in both directions, between Customer and the vendors' Sales Person. IBM was, without a doubt, the leader in practicing the Customer Intimacy value discipline. That is where I learned it during my training as a Sales Representative and where I practiced it in subsequent years as an IBM Sales Account Manager.

As an example, I was assigned, for a short time, the Department of Motor Vehicles for the State of Connecticut. At the first meeting with employees of the main office, they communicated to me their main concern: the public's perception that the DMV did not provide adequate service. The lines at the windows were long, the procedures were complex, tempers were short with the result that the DMV had the lowest public approval of all the agencies.

I called in for reinforcements. IBM made available, at no cost to the DMV, an industry specialist. She came down for a planning session and in a matter of hours helped determined the causes for long waits and delays. To make a long story short, the solution implemented at that time is now as common as Twitter but a Voice Response Unit (VRU) with prompts to provide the most basic information was in 1990 a clever idea.

The point being is that IBM had people who were knowledgeable on how to address problems in the customer service function. IBM knew an aspect of the DMV business and it knew how to improve it.
IBM knew and knows Customer Intimacy!

When the sales process is targeted at not just a single customer, like a major account, but rather targeted at thousands, if not millions, of Customers, two questions come to mind:
- Is it still necessary to know the Customers, as anonimous as they may be?, and if so,
- How do you get to know these many Customers?.

Most companies engage in an active process of getting to know their Customers:
- market research
- customer surveys
- focus groups and, in general,
- obtaining feedback from their Customers: their reactions to the product, how to make it better, and how to insure Customer loyalty to obtain return sales.

A main preocupation for companies that serve many, almost anonimous Customers, is to understand and predict their product usage behavior in order to preserve loyalty. In this environment companies make use of highly sophisticated tools that fall under the umbrella of analytics.

In the next blog I will discuss analytics as it applies to a particular sector of the economy and what kinds of results can be obtained from analytics. For now I want to leave you with the definition of the term Customer Behavior Analytics:
"CBA is a data-driven, customer-focused, analytics application that seeks to quantitatively understand when, why, where, what and how customers behave when they purchase or use a product or service".

The definition is from a document created by Mr. Jonjie Sena at Ventraq Inc. (

Sunday, August 2, 2009

The Worst Kind Of Customer.

I have set a goal of launching the website for The Gestalt of Sales for August 15th. I trust that you will take the time to review it and offer your suggestions for improvement.

You see, I've always believed that the worst kind of Customer is not the one who does not buy from you but the one who does not tell you why they won't buy from you. I believe that the most damaging Customer is the one who, behind a gesture of well intentioned politness, does not want to hurt your feelings and tell you how you could be better and how to improve your business. Please, do not be a bad Customer.

Now, I realize that most of you are not in the market for my map, my consulting or my training. It does not matter. It only means that you are an uninterested party, in the sense that you are not affected, positively or detrimentally, by the effect of the website. You will, however, have the satisfaction that your input was considered valuable, useful and well received.

That is why, I ask you, the anonimous or familiar visitor to to give your candid opinion. It will take you a couple of minutes to write me a note.

I can reciprocate in kind! (an attempt at humor!).

I will also accept, gladly, your comments to the concept of The Worst kind Of Customer.



P.D.: Customer with a capital "C" will be the standard of this blog.