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Better BPM: Customer intimacy strategy highlights

With businesses moving to take advantage of new technologies such as cloud, mobile, social and big data, CIOs are turning to business process management principles to improve customer-facing processes. The concept of value disciplines -- first espoused by Michael Treacy and Fred Wiersema in a February 1993 Harvard Business Reviewarticle -- lays out a methodology for determining which business approach -- operational excellence, product leadership or customer intimacy strategy -- is most important to the business and then executing to reflect that value in business operations.

In this webcast presentation, Ken Lewis, ITIL consultant at PA Consulting Group, discusses customer intimacy strategy, identifying key processes for a company that prioritizes it above the others.

See other excerpts from this webcast presentation

Part 1: Value disciplines ; operational excellence

Part 2: Second value discipline: Product/service leadership

Part 4: Future trends and the role of technology

Editor's note: The following is a transcript of the third of four excerpts of Lewis' webcast presentation on business process management for business outcomes. It has been edited for clarity and length.

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Transcript - Better BPM: Customer intimacy strategy highlights

Ken Lewis: Customer intimacy [strategy] … is going to become more and more important. In this space, the customer has a strong need for assistance. They may know what they want, but sometimes they need help.

In some cases, they're looking for specialization of pricing, service levels and product customizations. That might lead us back to [principles for] product leadership. They might need help in that [regard]. … [These customers want to be] delighted by above-and-beyond service behavior [and are] looking for what I call the moment of truth.

[Consider a scenario] where people have … a credit card stolen or they're stuck in some far-off airport with no way of getting home. Loyalty is built by how well the firm responds to that customer's need on an emotional level at that time. So, trust and loyalty is earned by this continued value-enhanced engagement, especially at those moments of truth.

[In a company that prioritizes the customer intimacy model, the] business process is associated with the lifecycle. Your activities are automated, but they're monitored by customer representatives. [One company has a new product in the IT service management space that will allow a customer to ask for service.] Somebody at the service desk can watch the transaction going on in real time and … provide help and engage with the customer if they need any more assistance. The key here is that customers in the future [will] want to do as much as they can, but in the customer intimate space, you're trying to also add value by being there for them.

Key processes in the lifecycle [are] customer order intake, delivery, renewals and payment systems.

[Governance should] enable a customer-first culture. Do what's right for the customer first and then worry about the processes secondly. It's very important to capture those moments of truth. You may have to go above and beyond … to make sure that a customer is satisfied.

[In terms of] metrics and KPIs, service desk pickup rate, query-to-delivery response time … and customer satisfaction ratings are important. It's very much like IT-type elements. In a way, you might consider IT internal management as a customer branding issue about being intimate with your customers.

In this space, role holders have intense soft skill training and a high emotional quotient. I can tell you from experience: I had a particular leader of my help desk many years ago that had an intense means to calm the beast that [was] calling on the phone saying, "I can't get something done."

Within a few minutes, that person was feeling much better about what was going on, purely by the way that that customer service representative could talk to them, calm them and focus on what they're looking for and try to help them. So, these kinds of skills are very important [for companies that prioritize the customer intimacy strategy].

[In terms of] technology … social media delivery to target customer tiers [is important]. … Tracking of customer touches [is also key]. This was important to [a former] client that was trying to split out their business customer space. They wanted to track every time they talked to a customer. They wanted to keep track of what the customer was looking for the last time so when the customer called back, the customer service representative understood what was going on.

Engagement systems [are also important. Think of] online chat and video. Consider what's going on with Amazon these days, with their Fire. … If you have a problem [with a Fire tablet], a video chat will pop up … so you can talk to somebody and see somebody on the other end while you're trying to figure [the problem] out.

Also, engagement systems are club cards and mobile apps, like [those from] Subway or Panera Bread, for example, where they keep track of your purchases so the next time you come in they know your name and you've got something coming to you and they see this is your normal order. So, even in the storefront, brick-front space, you can use technology to emulate in a way the Web interface space.

[In terms of] process data, the business data that you [should be concerned] about in the customer-intimate proposition are churn and retention, issue feedback response time, product selection and recommendations. [One example is] Amazon, [which lets you] look at everybody else's comments and their likes and dislikes.

Some people have now been starting to say that these recommendations exploit the insights that you get from customer intimacy, but it's not just based on the individual's requirements or relationships. It may be also in multiple customers, such that you aggregate all these pieces of information, likes and dislikes and eventually with analytics, you can start to pull in what people might like or not like. So, this is what somebody is going to turn into collective intimacy. It's not just one customer, but a group of people.

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Does your company prioritize customer intimacy strategy above operational efficiency and product leadership? If so, why?
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I think we do. It's not explicitly stated like that, but the focus for the past two or three years has definitely been on the customer. The CEO spends a ton of time flying to visit clients on site and listen to any concerns, basically make them feel like special snowflakes :)

It's not a bad thing, really, but it's definitely difficult when other areas of of management are neglected. 
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