iQ MAGAZINE

Many SMBs recognize that good customer experience can differentiate their businesses. They also recognize that technology can help. Strengthening customer relations and service was among the top three IT spending priorities in 2005 for U.S. companies with 100 to 999 employees, according to research by IDC. Those surveyed ranked it ahead of automating procurement, increasing storage capacity, and enhancing finance and accounting.

Happy Customers, Higher Profits

A strong emphasis on acquiring and retaining customers pays off. Reducing customer attrition by 10% can increase annual profits by as much as 75%, according to a study by the Wharton School of the University of Pennsylvania.

Among SMBs, the details of building a customer-responsiveness campaign depend on your organization's size, industry, and geographic region. Some examples include:

• Churchill Downs, Inc., hosts prestigious horse races at its six racetracks, including the Kentucky Derby. "We never forget that we have to compete for [our customers'] business with the many forms of entertainment that are available today," says Jay Rollins, vice president of IT. The 1200-employee company is installing an all-IP communications infrastructure to collect and integrate information from all of its interactions with customers. "We'll be able to track our top customers and give them a higher level of attention than ever before," Rollins says.
• IT training company Sunset Learning Institute uses integrated voice over IP (VoIP) with customer relationship management (CRM) software to build and maintain relationships with its students.
• In financial services, GreenStone Farm Credit Services uses call management and CRM software to improve service to its customers.

A Shift in Perspective

Better customer responsiveness often begins with a shift in attitude among top managers, according to Joe Outlaw, principal analyst at Current Analysis. Leading companies view spending on customer service not as costs to be minimized, but as investments that support strategic goals.

You should establish a firm and intelligent technology foundation before moving on to more sophisticated customer-service methods. Otherwise, you could end up irritating customers by:

• Dropping or misrouting phone calls
• Repeatedly asking for the same information
• Providing badly designed phone menus
• Unintentionally creating barriers to human contact

"There are many ways to move from basic service into differentiated service and, eventually, into proactive and personalized service," Outlaw says.

A basic platform for successful customer responsiveness is an IP-based call center, also known as a customer contact center. "We went to IP because it would simplify our customer-service applications," Rollins says. He says the IP upgrade will also save money in the following ways:

• Eliminate the cost of the PBX system
• Greatly reduce long-distance calling costs
• Reduce call-center labor by more efficiently distributing calls between its two call centers in Chicago and Louisville

"Our break-even point for the technology upgrade will be between 13 and 18 months," Rollins says.

Building on a Network Platform

Your first move toward upgrading to IP is likely to be engaging a service provider or reseller that specializes in IP communications, such as Louisville-based Boice.net, the Cisco Silver Certified and SMB Select Partner that works with Churchill Downs. After identifying business goals and objectives, the work begins with a design strategy that builds upon existing technology, explains Scott Klink, a senior consultant for Boice.net.

"We begin by assessing the customer's existing network and looking at what the customer wants to do in terms of numbers of users, expected performance, and so on," he says. "We first test the network to see if it can support end-to-end quality of service [QoS], because to run voice, you need routers and switches that are QoS-enabled."

Boice.net also investigates the company's physical infrastructure. Certain equipment, like new Power over Ethernet (PoE) switches, can draw more power and generate more heat than the older gear. Important, too, is bandwidth, particularly on the WAN.

"We look hard at any remote sites that communicate with headquarters over a WAN," Klink says. "Then we project the maximum number of simultaneous calls, and plan accordingly." Installing equipment and training users can take three months to a year, depending on the complexity of the project.

A complete upgrade of a 100-person company with a 10-agent call center could cost $100,000, according to Eddie Goff, an account executive at Boice.net. Upgrading a 600-person financial-services company with 100 call-center agents can range from $300,000 to $400,000, he says. But the rewards can be great. An IP communications system can produce a fast financial return and open countless new opportunities for building, and maintaining, strong customer relationships and customer loyalty.

About the Author

Jim Buchanan contributes to publications by BritishTelecom, SAP, and others on topics ranging from CRM to snowboards.

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iQ Magazine, Third Quarter 2006