Customer-Centric Marketing
By Mike Freedman, CeM, CIMBS

In today's complex world customers want more than just service. Increasingly customers are asking for real help, management and leadership to not just serve immediate needs, but to help deal with sometimes complicated and competing needs and concerns.

The word "service" comes, according to http://www.Dictionary.com, from Middle English, from Old French, from Latin servitium, slavery, from servus, slave, while the word manage comes from [Italian maneggiare, from Vulgar Latin *manidi re, from Latin manus, hand. What today's online customers want is not mere service, but a helping hand to help find difficult solutions for complex challenges.

A 1999 report by Jupiter Research pointed to a "Customer Service Crisis" in online business: 42% of 125 major sites didn't answer e-mail in 5 days or list an e-mail contact. About 40% of e-tailers didn't even respond to e-mail order inquiries. Only about half of sites surveyed tried to cross-sell products.

More recent research indicates online businesses have made great strides in managing customer relationships in recent years.

A January 2002 Study by the Direct Marketing Association indicates "Online customer service has improved dramatically" based on results of a mystery shopping study that found that "the average number of clicks to checkout had decreased since Q4 2000, from 8.76 to 5.36. Fifty-four percent of sites now offer real-time inventory status, up from 42 percent a year ago, and 80 percent sent shipping confirmation by email, up from 54 percent. Ninety-nine percent of the sites studied now offer toll-free customer service numbers, 90 percent link to their privacy policy from their homepage, and 79 percent allow customers to check their order status online."

One study conducted in March of 2002 indicates online customer service actually scored higher than customer service offered by traditional retailers. In a survey conducted by the University of Michigan Business School Online customer service scored 77 on a 100-point scale, whereas offline retail customer service scored 74.8.

While e-commerce leaders have made significant strides in meeting customer demands there is still much room for improvement. Major innovations include personalization systems such as NetPerception Intelligence Manager (http://www.netperceptions.com/intro_netp7.php) and technology that allows new types of customer interactions, such as technologies offered by Liveperson technologies( http://www.liveperson.com).

The market for technologies that can help online businesses better manage customer experience is still growing, according to a February 2002 report by Jupiter MediaMetrix, which found that spending on customer relationship management (CRM) technology will reach USD16.5 billion by 2006. Driving this growth will be an increase in the percentage of customer contacts being made online from about 2 percent currently to 9 percent in 2006.

Why is so much being invested in CRM technologies? Consumers Who Use Customer Service Buy More - Nearly 4X More! A Q4 1999 study by e-Commerce Pulse found that users of customer services features spent an average of $232 compared with those who did not use such services, who spent an average of just $67 online.

Any business that fails to meet the needs of its customers, risks oblivion or worse, a slow grinding failure. Many customers who don't get what they want, never come back and often go directly to the competition. A study by Bizrate/NPD Group (1999) titled "What Shoppers Do After They Abandon Your Shopping Cart?" found that potential customers took these actions:

In creating interactive one-to-one relationships we should keep in mind the very perceptive premise of Cluetrain Manifesto that "markets are conversations." We see, more and more, that each venue, such as Pay Per Click advertising, Usenet Newsgroups and Opt-In E-mail, offers the opportunity for organizations to engage their customers in conversations and commerce.

Pay Per Click systems operated by Overture.com, Google.com, FindWhat.com and others blend this sense of markets as conversations with search based on free market bidding, where keywords could cost a few cents or many dollars, depending on the term involved. Smart business leaders will take an increasingly strategic focus in targeting markets and conversations based on their own cost-benefit analysis.

To effectively engage customers, we need to create online environments that present clear and useful choices and are easy to use. Writing is a key issue in developing this dialogue. Jakob Nielsen, in Designing Web Usability, described the most effective writing for web sites as "concise, scannable and objective."

Nick Usborne in the The Online Writers Manifesto (part of his excellent book Net Words) points out that "It's Words That make the sale." And "It's words that build relationships." It also helps users to offer detailed Frequently Asked Questions (FAQs). This can also reduce e-mails and calls, thus reducing customer maintenance costs.

It's also great to show that people are involved because this helps to build trust. Full contact information is also essential. Most online customers are very concerned about issues of trust, security and privacy. Statements and content that respond to these concerns - including detailed privacy statements - can help build trust.

"Two-thirds of online shoppers feel insecure about exchanging personal information over the Internet," reported Technographics Report, Forrester Research, Inc. (October 27, 1999). "Almost 90% of online consumers want the right to control how their personal information is used after it is collected."

Personalizing or segmenting customer service experiences without sounding stilted or robotic can be a big challenge. A great example of this can be found in The ClueTrain Manifesto, which discusses these two versions of a Y2K statement from Hart Scientific, Inc. (www.hartscientific.com):

1. "Noncompliance issues could arise if Hart Scientific manufactured products are combined with other manufacturer's products. Hart cannot test all possible system configurations in which Hart manufactured products could be incorporated. Our products currently test as being compliant and will continue to operate correctly after January 1, 2000. However, customers must test integrated systems to see if components work with Hart Scientific manufactured products. Hart makes no representation or warranty concerning non-Hart manufactured products."

2. "If you're using our equipment with someone else's gear, who the hell knows what's going to happen. We sure don't, so how can we promise you something specific, or even vague for that matter? We can't, so we won't. However, we love our customers and like always we'll do whatever is reasonable to solve whatever problems come up, if there are any."

The ClueTrain authors exposed the lunacy of corporate-speak: "There's an inherent pomposity in much of what passes for corporate communication today. Missing are the voice, humor, and simple sense of worth and honesty that characterize person-to-person conversation."

Today's online businesses need significant technical knowledge, a laser focus on managing the customer experience and the courage to humanize communication. Already, there is evidence that at least some pioneering web site businesses are taking steps to evolve from reactive customer service providers into true learning organizations that anticipate needs and manage experiences.