Report finds 40% of surveyed companies do not respond to simple
customer requests
Despite massive investment in customer relationship management
systems, many leading UK firms are losing millions of pounds by
failing to respond to new business enquiries and convert leads into
sales, new research has revealed.
Analysts expect businesses worldwide to invest about £35bn a year
in CRM by 2005, and yet customer service is still poor among top UK
companies, according to the report carried out by auditing firm
RDMP and commissioned by Siebel and Microsoft.
The report surveyed 250 of the top 500 FTSE companies across the
retail finance, insurance, communication, utilities and
manufacturing sectors during the last quarter of 2002 and revealed
that UK firms - which spend £16.5bn a year on advertising - are
missing out on new customers by making elementary mistakes.
For example, 40% of companies failed to send requested information
to potential new customers after an initial telephone
enquiry.
In addition, 92% of respondents failed to attempt to recontact a
customer to advance an initial enquiry that was made over the web,
or by e-mail or telephone. The report also found that only 26% of
the companies responded to an e-mail sales enquiry and only 24%
responded to enquiries within 24 hours.
These figures show that getting the basics right is more important
than trying to innovate with CRM-related customer service projects,
business experts said.
"This study supports the proposition that most companies should
take the opportunity to improve the basics, such as responding to
and following up sales enquiries," said Professor Patrick Barwise
at the London Business School.
"Before worrying too much about difficult and risky business plans
such as brand repositioning or outside-the-box product innovation,
companies should check their employees are answering e-mails and
calls from customers."
There are simple steps companies can take to ensure their customer
responsiveness improves, said Robin Goad, managing analyst for CRM
at research firm Datamonitor.
"Organisations generally have lots of expertise in the call centre
but they do not route e-mail or web enquiries through it," he said.
"Companies have invested in lots of different customer systems
which make full integration complex and expensive, but this is not
needed to answer e-mails. All companies have to do is take
responsibility for e-mails away from the webmaster and give it to
the call centre."
Neil Morgan, vice president of European marketing at Siebel, agreed
that the lack of system integration is a major cause of poor
responsiveness to customers.
"In many cases it can be down to companies not integrating systems
across different channels," he said. "For example, Direct Line has
completely separate systems for e-mail and call centre
management."
Integrating systems to give companies a single view of the customer
has been the holy grail of CRM projects since the software first
appeared in the late 1990s, but UK firms have struggled to do
this.
Datamonitor estimates that only 9% of UK call centres are fully
integrated, largely because most CRM systems have not been
implemented properly.
"The lack of integration is often a legacy from rash investments
made three to five years ago," Goad said. "Companies can no longer
push money at the problem and in many cases the investment has been
written off."
However, improving customer service is not necessarily about
investing more in CRM systems, but about addressing change
management issues and aiming for best practice, Morgan said.
To this end, Siebel has launched its own free-of-charge "best
practice manual", which aims to help companies get the most out of
their CRM implementations.
"We want to use our experience in the area and share it with
customers to help them get to market quicker and increase
profitability," Morgan said.
"We also incorporate our customers' best practice in our products.
For example, BT, which has 20,000 Siebel users, had a heavy
influence over our e-communications product, ensuring it was
scalable enough to handle vast amounts of customer data."
The RDMP report will be published annually so the companies
involved - many of which did not believe the findings until they
were shown the full research - can track their progress, Morgan
said.
Siebel hopes the report will act as a wake-up call for CRM users,
but another negative survey could further dent IT directors'
confidence in the software.
Lack of faith from users combined with smaller IT budgets has
contributed to falling sales of CRM systems in the UK. Datamonitor
said the market dropped by 25% last year and estimated it would not
recover to 2001 levels for at least another four years.
"Suppliers are also suffering because they were happy to take those
investments three years ago," said Goad. "The trend now is for
small-scale investments made on a point-by-point basis."
However, all parties agreed that the question of whether CRM
investments are in thousands or millions of pounds is irrelevant,
what is important is that companies ensure the systems are being
used properly to respond to customer enquiries.
Study shows customer service failings
The RDMP research, which used the anonymous buyer model,
assessed the effectiveness of companies in the following
areas:
- Ease of contact and structure management of new business
enquiries
- Knowledge and responsiveness
- Individuality and quality
- Timeliness
- Post-enquiry follow-up/converting to revenue.
The report found that:
- Of the companies, 40% failed to respond to an initial telephone
enquiry from a potential new customer by sending the requested
information
- Following the initial enquiry, either by web, e-mail or
telephone, 92% failed to attempt to re-contact the customer to
advance the enquiry further through the sales process
- Only 68% of the companies gave customers the option to contact
them via the web - Of those, 66% of the companies failed to respond to the
customer's web-based questions or requests
- Only 26% responded to an e-mail sales enquiry
- Of those companies that provided information, 42% failed to
send a personalised letter
- Customers had to wait an average of 4.6 days to get a response
to their enquiries
- Only 24% responded to enquiries by the next day.