A lesson in response management, not!

Recent issues of the New York Times and Wall Street Journal have been particularly rich in their commentaries of heretofore magnificent corporations who have fallen on hard times, American writers have particularly enjoyed commenting on Toyota’s problems. We look at Toyota and how it is responding to issues arising from its product recall, is the company doing enough to reassure its customers?

 

The Toyota Prius, official car of the 2010 Olympic games in Vancouver

 

Toyota

The financial impact on Toyota Motor Corp. from its global recall could total more than $5 billion over the next year, due to increased incentive campaigns, litigation costs and marketing efforts by the embattled car maker, analysts say.

The critical question facing the world’s leading car maker is how long the fallout from the recall will affect sales in North America, its largest market. After a slow start, Toyota is biting back at its critics and has launched an aggressive sales campaign in the U.S., featuring a 0% interest five-year loan offer, competitive lease prices and free maintenance across 80% of its vehicle line-up.

Despite the onslaught of negative media coverage from late January, Toyota’s market share in the U.S. only slipped to 12.7% in February from just above 14% the previous month. “”How much they can rebound and at what cost will be critical going forward.”

Toyota’s toughest mission is to continue to woo new customers to its brand, and to change the minds of those sitting on the fence. According to CNW Market Research, an automotive marketing research company, 7% of consumers previously intending to buy a Toyota will not do so now.

“It’s the people that are sitting on the fence that Toyota is trying to convince,” said Christopher Richter, autos analyst at CLSA Asia-Pacific Markets. “Toyota still has a significant core audience, but a smaller percentage of people are still moved by safety concerns.”

The company also has to continue its pace of sales to avoid an inventory build-up or idling its plants in the U.S. Toyota had been facing excess production capacity…even before the recall problem occurred. If its sales drop, this capacity problem will increase its fixed-costs.

The Japanese car maker has sweetened lease deals on many models by increasing the “residual values”—the projected value of the car at the end of the lease contract—and dropping finance rates. New Camrys are on sale for as little as $179 a month. The Lexus luxury division is promoting discounted lease offers as well, which vary by region and dealer. In China, Toyota is also offering a combination of sales incentives, including zero-percent loans, free insurance and fuel and roadside service.

With more than $29 billion in cash on its balance sheet and very low levels of borrowing, Toyota has a comfortable cushion to absorb the blows, and doesn’t stand out as a credit risk. Toyota and its president, Akio Toyoda, have embarked on a media offensive, after being criticized for its slow response to the burgeoning crisis. Mr. Toyoda last week aimed to rally the troops by speaking in front of thousands of Toyota dealers, suppliers and management.

 

From an American viewpoint James T.Berger comments “The temporary demise of Toyota is particularly interesting in that this company was the “poster child” of such techniques as “lean” production and state-of-the-art sourcing and procurement.  They took many of the key premises of the Japanese business culture and fashioned a global marketing superstar.  However, they might have taken a page out of the American business culture’s crisis management doctrine.

The fall of Toyota is not so much the fault of shoddy sourcing and quality control, it is the lame and inadequate response management has taken to the media barrage. Apparently, the Japanese culture doesn’t figure for the need for accountability to customers and regulatory agencies and the need to address problems honestly and quickly.

All of this will accrue to the benefit of Detroit.  Now that Toyota has a black eye people who want to buy cars will now give Chevrolet, Buick, Cadillac and GMC a chance.   They may discover that GM builds pretty darn good cars at extremely reasonable prices”. A patriot speaks of course!

 

Interestingly I visited a hushed Dublin Toyota dealership last week, customer service was poor and I had to go out of my way to get attention from a sales rep. Few new and second hand cars were evident in the showroom or outside, and the model I was interested in wasn’t available. 

Sources

Wiglaf Journal www.Wiglafjournal.com

Wall Street Journal www.wsj.com

 

Billy Linehan

Celtar business and management consultants

The right way to implement a CRM system

 

Wouldn’t it would be great if we could just buy a CRM (Customer Relationship Management) system, switch it on and find that it does everything that we wanted it to without changing any settings?

 

Well unfortunately that just doesn’t happen in practice and you need to follow a process beforehand to firstly specify what you want and secondly to select a supplier who will get as close as possible to what you want.

 

A few hints and tips to get you going in the right direction.

 

Is There an Easy Way?

The answer is, of course, No.

 

 

1. Write down your requirements, ideally as a Request for Quotation

2. Send it out to get quotations

3. Select carefully from the responses, involve your key users

4. Create a short list of those that fit your written requirements

5. Invite to give demonstration

6. Make final selection

7. Contract

8. Implement!

 

So, are there any short cuts?

No there aren’t. In my opinion there is no short cut for writing down your requirements – if you don’t, can’t or won’t write down what you want your CRM system to do for your business, then you will only have yourself to blame if the chosen solution doesn’t do what you want.

 

So, having written your requirements down, are there any short cuts?

Absolutely not! If your business already has a Business Management solution of some sort, whether its Sage Financials or full blown ERP then ask your supplier if there is a CRM module, or a stand alone solution, which can easily be integrated with it. If there is, you will avoid the huge pitfall of having customer data in 2 systems and avoid the need for special code to integrate them. You must still confirm that it meets all the requirements you have written down (you have written them down now haven’t you?). If it does, then it should be a good fit for your business.

 

Are there any short cuts if you don’t have a Business management solution?

You’re persistent aren’t you? The real answer is No. However, if you want to learn more about CRM and are fairly technically minded you could try putting in an Open Source solution (e.g. vTiger or SugarCRM) which will have no licence fee but can be tricky to get running. You could also try a low cost hosted system (e.g. SugarCRM or TactileCRM), paying monthly, and making sure you can get out of the contract when you want to. Both these approaches will allow you to gain an understanding of CRM at a practical level before you write down your requirements. You may even be lucky and find it does all you need – but don’t bank on it.

 

Why should SMEs be using Customer Relationship Management?

Demand and interest in Customer Relationship Management (or CRM) has grown noticeably in the last 2 years. Until recently CRM was always the realm

of the large companies – so what has changed?

 

Background

There seem to be two main reasons for the increase in interest in CRM among our SME client. One is the rise of a huge range of low cost solutions, be they Open Source, web-based or server-based. Another is the increase in awareness being created by

IT solution providers, including Microsoft and Sage, who have conducted major marketing campaigns to promote their solutions.

I don’t believe that is all though – SMEs are canny and have started to realise that analysing and understanding their customer base, and using that knowledge for marketing is good for business. They are also realising that CRM can be used largely ‘Out of the Box’ or in minutes from the web.

 

So what are the business issues that are attracting SMEs to CRM?

Customer Analysis

First is the very simple concept of having one database of all customers in a single place, accessible by all staff, even if they are out of the office; a database that can be integrated directly to e-Commerce websites so there is an automatic record of who

bought what and when. This is a perfect vehicle for identifying groups of like-minded customers to target with, say, an e-mail marketing campaign – which the CRM solution can usually handle too.

Lots of companies miss out on the opportunity to sell more to existing customers and the ability to “segment” clients in your CRM allows you spot the opportunities much more quickly.

 

Contact-to-Contract

Second, for businesses who can’t sell their products or services directly from a website but need to find and respond to leads and enquiries is the capability to manage a lead from receipt to (hopefully!) order. CRM can give a view at any time of the status

of each and every lead whether it has just come in, or a quote is being put together, or you are waiting with bated breath for that huge new order.

For bigger businesses this ability to enforce’ a common sales process on a sales team is very important. It dramatically reduces the likelihood that opportunities will “fall between the gaps” because you can assign responsibility to specific people and check

whether they have done what they are supposed to.

 

Campaign Management

Third, if you are actively seeking new customers CRM can be used to manage that process too. You might buy a database of appropriate target customers, enter it into your CRM system and use it to manage the process of contacting everyone on the

list. You might use an initial telephone contact possibly using a call centre, then follow up with a brochure through the post and then an e-mail or phone call using the CRM so you know who has been contacted and the exact and current status of each

potential customer.

Web-based CRM systems, in particular, make it very easy to use contract or agency staff to manage the peaks of activity during campaigns. They can get access to systems via their internet browser and you can limit their access to just the information they need to do their job.

 

Summary

There has never been a better time to consider implementing your own CRM system. There are lots of providers offering a variety of ways of implementing systems out there to choose from. And, better still, all of this competition means that there is

loads of information to help you make your choice and have a successful implementation.

 

This straightforward description was written by  Steve Orriss, consultant at the UK National B2B Centre and CRM expert, for more information check out the very useful site www.nb2bc.co.uk

Marketing as a Seduction
Follow the Rules of Romance to Market Effectively

Ask yourself: What would you do to have a one-night stand with someone?
Now ask yourself: What would you do to have a long term relationship?

This is an excerpt from a presentation made to a group of lawyers in the US by the well known specialist adviser David Maister. It is a challenging piece for many business leaders and directors not only in Irish law firms, how to turn the business from being focused on their internal needs to becoming engaged and responsive to customers. It is a common theme of when working with our clients in Celtar, building relationships with customers brings longterm value. Read on.

“The answers would be completely different – you’d hang out in different
places, you’d dress differently,” said author David Maister of Boston. “Most law firms have built their marketing plans based on ‘how to get laid.’ A lot of you are acting as if you’re trying to do a one-off seduction.” Instead, law firms should market themselves to gain long-term relationships with clients. “These are very different ways of thinking what marketing is about.”

“Those law firms that take a relationship approach to all of their marketing
make a hell of a lot more money,” he said. “When your clients really trust
you, they subject you to fewer beauty contests. You’re much more likely to
get new work automatically. When your clients trust you and you take a
relationship-building approach to marketing, you also get higher fees.”

“Marketing is not about ‘how do I fool idiotic clients.’ Marketing
relationship is ‘how do I develop a long term trusted relationship with
somebody who’s doing exciting sexy things?’ Life is more than billing hours
to people that your barely tolerate. Life is too short to work for idiots.
Get your ass in gear and do everything you can to replace bad clients with
people you like, so you can give the finger to clients you don’t like,”
Maister said.

Getting Dream Business

“Marketing is not about volume, how much additional revenue you bring in.
The measure is whether you are getting the dream business from the dream clients. If you’re doing this, you’ll get paid more than if you’re doing
junk work for idiots,” Maister said.

He recalled the time when founder Ray Kroc was asked what was the secret to the success of the McDonalds hamburger chain. Kroc replied, “you must be able to see the beauty in a hamburger bun.” Maister asserted, “You must care passionately about what you do. If your view is that you do junk for idiots, you ain’t going to be as rich as Ray Kroc. The way you make money is do stuff you feel passionate about for people you care about.”

“Clients are just like us. When you look for a doctor, you want one who
listens, explains things, and doesn’t just say “Bend over. Next.” Would you
pay more for this doctor? Yes,” Maister said. Similarly, he said that
clients want lawyers who take a personal interest in them. The reason that
more clients are hiring law firms based on price is because they can’t find
lawyers who will take an interest, or at least act as if they care about the
client. “Any lawyer who comes into the market who shows an interest in the clients, will clean up.

Maister said that law firms should follow the rules of romance in their
marketing. “Marketing is about individuals, how to earn relationships,” he
said. “What works is what affects you in your life. Ask yourself – do you
have a great romantic relationship? If you do, you already know how it
works. He polled the audience to get the following rules:

The Rules of Romance – and Marketing

Honest communications. “Honesty is essential. The slightest transgression
takes you backwards a long way. You would never want to get caught in a real relationship with exaggerations, or inflated statements – yet you do that all the time in marketing. Maybe it gets you laid, but if you’re looking for a relationship, you just lost it.”

Shut up and really listen. “Spend your time asking clients about them. Seek first to understand and then to be understood. How much of your marketing plans is seeking to understand?”

Frequent communication, especially when not needed. Maister encouraged
partners to read the trade publication of their main clients. By doing so
your partner can call a client to say, “I was reading your trade magazine
and I see that your competitor’s factory burned down, is there anything
you’d like to do?” He added, “You can’t build somebody’s trust if you don’t
keep up with their interests,” he said.

Be supportive and understanding. Treat clients gently instead of critically.
“How do you tell the client he was wrong and have him thank you for it? Ask yourself, ‘how do I phrase this so that it comes across as supportive?’
There are few of us who find the right words instantaneously, but most of us have to think about it overnight. You might get caught off guard, and you’ll feel you need to prove you’re worth €250 per hour; but you must be more focused on the relationship than the present moment.”

You actually have to care about the relationship. “If your partners say, ‘do
I have to care?’ your reply should be, ‘if you do care, your life will get
better. If you don’t care, it’s going to be harder.’ What works in marketing
is actually caring. For example, see if you can you actually ask sensible
follow-up questions and keep a conversation going for 30 minutes?

Express appreciation. “A marriage will fall apart because you’re taking it
for granted. Bringing flowers and chocolates on a birthday will get you some brownie points. But the real brownie points come when you show up on a day with no significance and say, ‘I just wanted to tell you I love you.’ You should call your main clients and say, ‘I was just sitting here and
appreciate the opportunity to work with you. I have nothing to report but am looking forward to seeing you soon.’”

Becoming a Trusted Advisor
According to Maister, a lawyer’s goal is to become the trusted advisor of
his or her clients. He identified four characteristics that influence trust:

Credibility, which is not the same thing as competence. “You may be skilled
in your field but can you apply it to your client’s world? To see you as
credible, a client needs to feel not only that you’re a great lawyer – but
that you can bring your expertise into their world.”

Reliability. A large part of being trusted is that a person can be relied on
to act in a certain way. “Brilliant people who are unreliable lose my
trust,” Maister said. Part of getting trusted is about dependability,
consistency and reliability. A lawyer’s reputation is not how well he does
on a good day, it’s what he does on his worst day.

Intimacy. “You don’t need to know the names of your clients kids and send
them birthday cards. But you do have to know about your client’s
transactions. You also must understand that in all of your client
interactions, you’re dealing with a human being and that his emotions are
part of it. It’s about individuals.”

Self-orientation. “If the client believes you are only in it for yourself,
you won’t be trusted. To be trusted you must convince the other person that you will earn whatever you are paid. Somehow you have to make people believe you care about them,” Maister said.

According to Maister, most of us rate well on credibility and reliability.
“It’s the last two that are less well done; not many people would get high
points from their clients on being a person as opposed to a techno-nerd,” he said. “Clients fundamentally don’t trust lawyers because they think the
lawyer just wants billable hours. Whether that’s an unfair belief or not, it
causes them not to trust you and to watch you like a hawk.”

“Marketing works much better if you treat it as a moral point. You must know what your core principles are. Every time your core principles are tested, you have to answer the same way. At a big organisation, you must decide if your firm is going to have any principles, any laws; “this is who we are but we don’t do certain junk,” he said.

Partners must ask themselves if they want non-negotiable principles or
should we run it on expediency. Firms that have very clear principles, that
are in fact actually lived up to, make more money. Firms that don’t or who
have ones that are treated expediently make less money,” Maister said

Advice for Marketing Managers

Maister urged marketers to stop focusing on the firm, and instead start
focusing on individual partners. “The best revenue generator is to work with an individual lawyer. Every marketing manager must be a trusted advisor, and deal with the partners’ sensitive egos. That’s how you build your power base – one by one, you get a group of partners who say you were really helpful.

“Most of your lawyers resent their clients – they don’t like them, and they
don’t like the fee negotiations. They like the legal work. If you like your
clients, you don’t go cruising.

“Your job as a marketing manager is to work one-on-one with as partner and find out what he’d rather be doing than this. What part of his practice
would he get rid of? Most valuable thing a marketing partner can do is to
help people find their passion.

“Without the energy, passion desire, the command of marketing tactics is
useless.”

By Larry Bodine
This article originally appeared on the LawMarketing Portal,
www.LawMarketing.com, where law firms find out how to get more business.

A book of the same title was recommended to me by a colleague, so I picked  this interview by Guy Kawasaki with the author as an introduction. Customer service is a huge issue for all companies, Bill Price offers some valuable advice here. He identifies excellent self service websites,  one example I offer is a company I am close to Directski.com, the team there have strived continuously to improve the customer experience. 

 

Bill Price was Amazon’s first Global VP of Customer Service. Before Amazon, Bill was a senior consultant at McKinsey (working closely with Peters and Waterman as they wrote In Search of Excellence).  He recently co-authored a new book, The Best Service Is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs, with David Jaffe. (Mind you, I have had much hassle with Amazon.co.uk customer service in relation to their range of products available in Ireland but that’s another story).

 

In this interview he reveals the concept of “Best Service” and why it is important to small business.

From an interview with Guy Kawasaki for Sun Microsystems

1.             Question: Why is “the best service is no service”?

Answer: Customers don’t want to call their bank or email their online retailer if something’s confusing or if there’s an error–instead, everything should work perfectly in the first place. A recent survey cited 75% of CEOs proclaiming that their companies provide above average customer service, yet almost 60% of customers said that they were “somewhat to extremely dissatisfied” with their most recent customer service experience. Clearly, there’s a large gap.

We need to reduce the rate of contacts by eliminating dumb contacts entirely, offering engaging self-service and being proactive, delivering great customer experiences when things do break down, and only then to deliver great customer experiences.

2.             Question: Are companies stupid, lazy, or just don’t give a damn, so they don’t build things right from the very start?

Answer: All three, unfortunately! Some companies are stupid in not recognizing how much money and good will they are wasting, and letting bad measurement systems, processes, and Not Invented Here get in the way of what we call “Best Service.”

Some companies are lazy in that they think it’s too hard to fix service, and therefore better to “get by” and fix the symptoms than do the hard work on the root causes. And there are lots of “don’t give a damn” companies, too, particularly where a short-term profit motive dominates or they are fixated with an engineering culture.

3.             Question: Which companies can you hold up as good examples?UK and Flight Centre out of Australia are also on their way. Dell, once criticized, has done some outstanding aspects of Best Service like listening to their customers and offering Windows XP. Even the New York Department of Motor Vehicles mended its ways some time ago.

Answer: Amazon clearly gets it the most. Apple, eBay, Kingfisher Airlines, McDonald’s, and Vodaphone are trying hard to get it.

4.             Question: Which companies are in your hall of shame?

Answer: There are plenty of “bad cases” out there such as telecom companies and ISPs that are adding more contact centers and support agents as they add subscribers. Nearly every IT help desk and virtually every Internet banking customer care organization that has any care or tech support calls are on the list too. All you need to do is look for companies that hide their phone number on web sites.

5.             Question: Can it be that it’s “just math” in the sense that it may cost less to provide lousy products and deal with issues than to do things right, so the companies are doing the financially rational thing?

Answer: No, it’s the opposite case. Most companies actually haven’t done the math to deliver Best Service because Best Service is always cheaper–or they do the wrong math. It’s not just “cost of making bad or confusing product compared to a good product versus associated cost of service.”

The equation must also include repeat contacts–what we call “snowballs”–recalls, legal costs, and brand damage, etc. In many industries it’s also not about good or bad product. In financial services or telecom providers, for example, adding complexity to products is seen as good by marketing or product design–they believe that they are making better products–when in fact many customers just want something that is simple to use and easy to understand like the Apple iPhone or Amazon’s 1-click.

Plus, there are the costs of the service operations themselves–that is, the help desks, call centers, and back-office departments are clearly the biggest single cost category, often 5-10% of sales. At most major mobile carriers, insurance providers, and even some airlines the biggest workforces are in customer service. Then, as service issues occur, there are increased costs of complaints such as legal remedies or compliance.

Mobile phone companies don’t even want you to know what you are really paying and invented new math: “$200 free calls on your $50 a month plan”, but it’s much more complex even than that when you read the small print. On the other hand, MCI in the old days, and Telstra today, analyze call pattern and then call their customers to recommend a LOWER-rate plan. That’s we like: being proactive, a core part of Best Service.

6.             Question: What if the management says that they’d love to do the right thing, but they are in a cost-competitive market and would go broke doing so?

Answer: We have yet to find a company that couldn’t improve service and cut costs at the same time. There is a mistaken mindset that Best Service is more expensive, but poor service is a killer since you end up needing more of it for the wrong customers in the wrong situations.

7.             Question: What web sites would you consider good examples of self-service?

Answer: Alaska Airlines, Amazon, CheckFree, Citibank Card eBay, First Direct, USAA, and Zappos are all doing a fine job in web-based self-service–what we like to call “engaging self-service” This requires that (a) customers don’t have to call or email or open a chat session to finish their order or ask about something; and (b) the companies listens to the customer’s requests and, if possible, eliminates the needs entirely. Also Directski.com

8.             Question: What analog companies such as stores and restaurants are good examples of self service?

Answer: Pizza Hut enabled SMS ordering: simple for the customer and easier for them, a two-way SMS exchange so that customers can check and confirm and all those things you’d do over the phone.

Nordstrom has been legendary for its service, including two of the seven principles of Best Service: make it really easy to contact your company, and listen and act. The Palomino restaurant chain takes reservations on its web site, cutting maitre-de time to answer calls, and eliminating frustration to the diner. And many corner shops, dentist practices, and dry cleaners practice Best Service because they know that it’s essential to ensure repeat business.

9.             Question: What’s an example of “proactive” service?

Answer: The German Autobahn is a 30+ year old case: if there’s congestion ahead, a radio signal turns on or interrupts car radios with a warning message, enabling the driver to seek alternative routes or at least understand why there’s a problem. Being proactive means connecting a “why” trigger with information or choices, and companies such as XM practiced it superbly after an outage last year. Amazon used to send “missed promises” email messages to customers so that they could cancel the order and shop elsewhere. Few did cancel, and those that did were very appreciative.

10.         Question: What are the tangible steps for a company to take to fix a service problem?

Answer: There are seven steps, or principles, based on the foundation understanding the nature of service requests–that is, to really understand the demand for service and “challenge” why customers need to contact companies for service. Each principle includes sample frameworks and a series of questions to see if you’re on the path to Best Service, or headed the other way:

1.                    Eliminate dumb or avoidable contacts to free up capacity and slash costs.

2.                    Build self-service that works to free up even more capacity and cut costs even more.

3.                    Find ways to be proactive rather than reactive because it is often cheaper than waiting.

4.                    Engage the real “owners” of customer problems to work with the customer service team to fix the problems

5.                    Make it really easy to contact your business.

6.                    Use the contacts you get to listen closely to the customer, and act upon WOCAS (What Our Customers Are Saying)

7.                    Fix reporting metrics, processes, and the staffing side to deliver great experiences for customer contacts.

 

11.         Question: How should a company measure customer satisfaction?

Answer: The rate of customer-initiated contacts that require personal support is the best measure of satisfaction. This is expressed as “CPX,” or “contacts per X,” where “C” equals calls + email messages + chat sessions, and “X” equals transactions or installations or invoices sent. Measured and shared weekly, companies achieving Best Service see 20-40% per year reductions in CPX and as a result much happier customers and lower costs too.

Our second killer metric is the rate of repeat contacts, or “snowballs.” Just like the snowball rolling down the hill, getting bigger and menacing skiers, repeat contacts are clear “customer dissatifiers” that need to be stopped–or melted–before they ruin the company’s reputation. CheckFree is a great example here: over the past five years their transactions have quintupled while customer support headcount is down 20%, at the same time that customer satisfaction rose by 20%.

12.         Question: Has all the CRM (customer relationship management) software in the world improved the situation at all?

Answer: CRM software only helps when something else has changed. If CRM is used to create an organization that aligns with the way customers want to deal with the business, then good; if it’s been used to understand how customers want to deal with the company, and surface and circulate WOCAS, then good; if it’s been used to drive proactive service, then good; if it’s been used to turn three contacts into one, then good.

But if it’s just been used by marketing to drive offers and cross-selling, or to divide service into complex skill-based models that are hard to manage and deliver, or to segment service in a way that’s impossible to manage, then it hurts! Unfortunately, most CRM software has not really been used to improve service at all.

 

www.sun.com/solutions/smb