Words: Dan Matthews

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Broadly speaking, there are just three approaches to customer service: one is putting the customer at the heart of your business, the second is pretending to, but not really doing it, and the third is putting the customer last and celebrating the fact.

Oddly, the third of these scenarios is not packed with failed businesses; in fact it’s a growth industry. The “budget” sector – home to some of the world’s most successful airlines, supermarket chains and travel firms – offers customers the lowest possible level of service at the cheapest possible price.

In this brave new world, businesses are transparent about their limited service, and customers appreciate the opportunity to dip in and dip out without being offered a complimentary head massage or being asked to fill in a “How are we doing?” form.

Is the customer always right?

Self-styled “ultra-low cost” airline Ryanair is at the very core of this approach. As with all short-haul carriers, it has been affected by higher fuel costs and the eurozone crisis, but it still managed to pile up sales of €1.28bn (£1bn) in the second quarter of 2012.

This despite a string of baffling announcements from Ryanair’s senior management that seem to imply the customer is merely an inconvenient necessity. Take chief executive officer Michael O’Leary’s idea that passengers should stand on short trips to make room for more fare-payers, or his ill-fated plans to introduce on-the-spot charges for mid-air toilet use.

Then there are the regular complaints from customers about “hidden” charges in the booking process, and the firm’s latest plan to introduce planes with bigger doors so that passengers can be shepherded on and off in double-quick time.

But in businesses whose marketing collateral is awash with customer-centric language – where the customer is number one – the delivery often falls short of putting a smile on your face.

Take this real-life scenario as an example. A bank customer – let’s call her Elaine – finds that her credit card has stopped working, so she visits a branch to get the problem sorted out. The woman behind the counter says that diagnosing the problem will take a few hours, and she’ll call Elaine when the issue is identified.

When no call comes, Elaine phones the bank to ask how things are progressing. There is no record of her visit, so the call centre employee promises to ring back with news later that day. By the evening Elaine is getting angry. She accesses her account online to see if there’s any information. There is none.

So Elaine switches to her Twitter account and starts a 140-character rant. This would be a problem for the bank if it was any normal customer, but this particular Elaine is Elaine Fletcher, a partner in IBM GBS business analytics and optimisation department.

Fletcher’s job is to advise marketers on how they can use customer data to provide a better service, improved churn rates and ultimately higher profits. “A lot of organisations are still not joined up with their different channels and products, and they have a long way to go,” she says.

Communications agency Cogent Elliot’s head of CRM, brand and PR Alan Gilmour, a former head of marketing at Lloyds TSB, agrees. “Businesses will never say they don’t look after their customers, but ‘looking after customers’ is a woolly term with lots of different meanings,” he says.

According to Fujitsu UK and Ireland marketing director Simon Carter, “Customer-centricity was probably new in the 1980s, but not in 2012. Unfortunately, it is probably counter-culture to most businesses – hence why so few manage it.

“The offshoring of call centres in financial services, the disempowerment of retail managers, the drive towards standardisation – all of these things go against what a customer wants most: to be treated as an individual.”

Problems surface when you promise something that you don’t deliver. The customer feels let down at best and cheated at worst. Your board must decide whether the organisation is customer-centric or not. If it is, then learning about customers and catering for them as individuals must be your goal.

Theory into practice

Heathrow Airport marketing and insight director Nick Adderley, who will be speaking at the CIM Conference in October, focuses on passengers, not customers. Part of his job is to take the passenger-centricity concept and turn it into something that people passing through his airport can “feel”.

It’s tricky to accomplish this in a large and complex organisation where there are hard-to-achieve and often conflicting objectives. The answer, he says, is to create a unifying business-wide purpose that hones in on the people you serve.

“The most important thing is to have a clear, simple vision. In our case it’s about being Europe’s hub of choice and the UK’s gateway to the world which, from a passenger’s point of view, turns into a very simple mission statement which for us is ‘making every journey better’.

“We put an enormous amount of effort into making that come alive in everything we do. It’s on the bottom of every single document we produce. That unified central purpose makes all the difference; we have a whole set of measures and procedures to make sure our vision is being delivered.

“If you can’t really measure it, it’s hard to know why you are doing it or if anything is being achieved. We do a continual survey asking what people think about us and their experience of the airport. We use that as a yardstick to answer the question, ‘have we made people’s journeys better?’”

But the hardest part of becoming truly customer-centric is not the scale or complexity of your business, nor is it the software and manpower required to capture, process, assess and act on the information you draw from customers.

In large organisations, particularly, it is the problem of unifying your management team to a single, broad goal. Big businesses might have 10, 20 or 50 product lines, some performing much better than others.

Bundling some of these together, for example, to improve a purchaser’s experience might mean your hot-shot products are lumped in with ones that perform less well. Convincing the bestsellers’ product manager that they should forgo stellar status for the greater good will take some doing.

Organisations that manage this unification task successfully come up with a range of bonuses and incentives that promote teamwork without alienating or penalising top performers. It’s a tightrope walk, but negotiating this tricky process will create a better business in the long run.

Assuming the board has bought in, what lies ahead is a Herculean effort to discover not just customer trends, but individuals’ historical associations with your organisation. And once the data is available, you need to understand how to use it.

The tools of the trade

Fundamentally, there are three processes that are key to any successful customer-centric campaign, according to e-mail marketing business Silverpop product strategist Dave Walters.

“First, an intelligent and comprehensive database is required to track and record all details of customer interactions and behaviours. Second, you must have the tools and technology in place that will enable you to make sense of the data and maintain its accuracy,” he says.

“Finally there must be a process for the ongoing capture of up-to-date consumer data, behaviour and interactions. This data provides you with the required insight into the history of the customer’s interactions, relationship and behaviours that enables the marketer to successfully adapt and target their approach for each individual.”

Sounds simple enough, right? But the process is littered with complications and pitfalls that can cause businesses to do it half-heartedly, and to stop short of the thorough process that creates the fullest customer picture.

“You have to try to align all the bits of information you have about a customer, so the listening part is really pulling together all the facts,” says IBM’s Fletcher. “You need to understand everything they’ve ever done with you – their whole history – and bring that all together into one place, which we refer to as a single source of truth.

“That’s the listening part. We then move on to the ‘anticipate’ part, which is running analytics across the different sales segments, so you can say: given this is where the customer is now, what is the next best thing we can do to achieve better quality of service?

“It means projecting a customer’s lifetime value and coming up with the next best action, modelling their churn propensity, modelling their analytics – lots of things that help you predict what will happen long term and in the immediate future.

“The next step we call ‘act’, which is taking those insights and embedding them automatically into all the mainstream processes of your business. So every customer touchpoint in the future is informed with the insights and the information that you’ve built up.”

The final step, says Fletcher, is to knit together the customer’s interactions with all the channels within your business to create a perfect three-dimensional map of the when, where, what and how. You should have a crystal clear view of the customer’s life-cycle and be able to predict their needs in future.

But knowing this much about a customer can be a curse as well as a blessing. Use the information too readily – either to show off how much you know about people or to confront them at every turn with a new product or service – and you’ll scare them off.

Customers need to know you are collecting their data and should be comfortable that this is happening. According to Fletcher, you must “allow customers to fine-tune the different ways you’re working with their information – they should have control”.