"CRM is four-letter word," says Greg Gianforte, CEO of RightNow Technologies. "Everyone has had a failed CRM project. If you just apply traditional CRM all you're going to do is speed up your internal processes and annoy your customers more quickly."
It is not a good sales pitch for RightNow either, he argues. "Everyone associates CRM with sales automation. If you go into a company and say you do CRM, then the business manager will say, 'Oh, we tried that, it didn't work'."
So if CRM doesn't work, what does?
Customer experience, that's what. "The customer experience imperative is essential," says Gianforte, citing research from Harris Interactive which found that 84% of UK customers claim they would be prepared to pay 5% over the odds for a superior customer experience, while 62% would pay 10% more, 25% would pay 15% more and 11% would pay 25% more.
Gianforte is among the ranks of these willing overpayers. "We had a beautiful experience at Heathrow this week with people who were selling Heathrow Express tickets in the arrival hall," he says. "They swiped my card and in five seconds I had my tickets and didn't have to queue up. I could get on an earlier train. That's a good experience. I would have paid more for that ticket because of the good experience."
But the bad experiences are never far away - and have become personal in the Gianforte household. "My son shipped home his computer from college for the summer, but by the time it arrived we were on vacation," he says. "So it was returned to the college of course and he wasn't there. It was also damaged. My wife took this up as a challenge and called every week to find out about this. Every week they didn't know who she was or what the call was about. There is no excuse for not having continuity of conversations."
One company cited as an example of best practice by Gianforte is PhotoBox, a winner of the Gartner and 1to1 Media CRM Excellence Award in the category of customer experience.
PhotoBox wanted to engage with and listen to customers and learn to be accountable to them, with a secondary goal of reducing costs and upping revenues. There were a number of specific goals, which included reducing the numbers of inbound contacts and balancing those to the order ratio. A "Voice of the customer" programme was put in place to identify customers' likes and dislikes to drive better and more rationalised business decisions.
"We needed to become customer obsessed," says Stuart Lipinski, group CS systems manager at PhotoBox. "We realised we had the power to use information. Every change in PhotoBox is customer information driven. Every week we look at the data. Without that we'd be making decisions blindly. Someone crunches the numbers every week and compares that information to the contacts we had last week and the same week last year. Our contacts are growing so we need to have a view of what the trends are. These are discussed by all the departments."
These changes can have immediate impacts. "Customers told us that they would like to be able to change their orders, so we introduced a cooling-off period," says Lipinski. "With some orders, if you book by 4pm we have target to dispatch the same day, so we had to work within small window of opportunity. The marketing team was a little scared that people would cancel an order and not replace it. But we actually had a 50% reduction in order amendment contacts.
The biggest benefit of using RightNow's LiveChat capabilities wasn't, in fact, sales conversion, but the provision of insights into how customers wanted to use the firm's services. This enabled PhotoBox to re-focus and prioritise resources. The firm also found that the re-order rate for customer interactions via LiveChat is more than 10% higher than for e-mail interactions.
The firm is launching a social community called Chatterbox to help with service and support. This is seen as a priority as PhotoBox has 26,000 Facebook fans and 3,000 Twitter followers.
"It isn't the first time we've had a forum," says Lipinski. "We had the Insiders Channel, which we launched last year, which was a mix of our advocates and repeat users. We invited people to be Insiders and they'd get first look at new products.
"It was good up to a point, but it wasn't scalable and it was a totally separate solutions. We wanted to use forums in a much more integrated way and not just with a select group of people. We went with RightNow's offering because it is integrated with what we already have.
"We do already have a Facebook fan page and that has a huge base of people getting involved. When we launched that it was a mix of commentary and questions, but there were people going there who wanted more support and were getting lost in the mix. When we launched ChatterBox there were some questions about what do we use Facebook for and what do we use Chatterbox for?" he says.
"The risk of cannibalisation is the danger of having more and more channels. You have Facebook over there and Twitter over here and then there's LinkedIn and now there's this," he concludes. "You think you are multi-channel and then you find there are more channels out there. We are getting there, but it's definitely a challenge."
Stuart Lauchlan will be chairing The Business Cloud Summit 2010 on 30 November at the Novotel London West, Hammersmith. The Business Cloud Summit promises top-level insight from industry experts, representing many leading organisations from Siemens to the Cabinet Office. For a full conference agenda, visit www.businesscloud9.com/summit.
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