The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs
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Amazon showed us the way: “Welcome back, Arthur. If you’re not Arthur, click here.” This is wonderful one-to-one marketing. Many companies have copied this method. They are finding that it works. It is what the old corner grocer used to do. He stood at the entrance to his store and said, “Hello, Mrs. Williams. How’s your daughter taking to Radcliffe?”
Most large companies today are spending millions of dollars on customer service. Hundreds of CSRs are answering customers’ questions and selling products. Many of the CSRs’ functions can be performed by a good Web site. Look at the work of a CSR. She takes scores of incoming calls per day. She has a computer linked to the company’s main server. As customers ask her questions, she manipulates her mouse and her keyboard to get the answers on her screen. Then she reads the answers to the customers over the phone. She gives information, and she takes orders. A typical call to a CSR costs $6.50. In most cases, a really good Web site can replace a high percentage of the CSRs’ functions. The method is to give the customers the same access to the company server that the CSR has. Figure 11-2a shows what is happening now, and Figure 11-2b shows the new system.
With the new system, we have eliminated the CSR and the telephone call. Instead, customers using the Web site see the same information that the CSRs see. They place the same orders, using the same credit cards. One company was spending almost $50 million per year on CSR functions. It was fielding 6 percent of its queries on the Web. A consultant estimated that if the company could raise the percentage of its CSR work that was going to the Web site to 30 percent over a 3-year period, assuming a 15 percent annual growth rate, it could save more than $20 million per year in 3 years. That is the promise of the Web. These are numbers that go right to the bottom line.
Profits like this can come about only if customers will use the Web instead of calling a CSR. How can you get them to do that?
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The Web site has to be as good as or better than the services provided by a CSR. Study what your CSRs are doing and saying. Design your Web site to do the same thing, but then go one step further. Provide customers with lookup functions that are more sophisticated than anything that a CSR could do.
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The Web site has to be publicized so that your customers know about it.
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The Web site has to be personalized. It has to have the same friendly personal relationship that a good CSR has. Amazon doesn’t say, “Welcome back, Arthur” just because it is a neat thing to say. Amazon says it because it keeps Arthur coming back.
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The Web site has to have a live agent function. Studies show that 74 percent of Web shopping carts are abandoned at checkout. The reason is that at the last minute, people have questions that the Web site doesn’t answer. You have to put a button on your Web site that provides a text chat with a live agent. CSRs can handle four text chats at once. This software is provided by several companies, including www.liveperson.com.
Once your Web site is as good as a CSR, you can measure your success by the percentage of your customer service queries made and orders taken on the Web rather than by a live agent.
The Web is not a panacea. It will support but never replace direct mail, catalogs, retail stores, malls, brand names, TV, newspapers, magazines, radio, and books. It can be a very important channel, but only if the company already has other profitable channels for sales that the Web will supplement. You can profit from the Web, but you have to look in the right place.
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