Burn Your Contact Center Budget
That’s right, burn your contact center budget. Print it out. Hold it over a waste basket (preferably empty). Put a match to it. And make sure to let it go soon enough. Oh, and hurry up and delete the file it came from before the sprinklers let loose.
What was that all about? Simple. Getting back to ground zero. Starting with a blank piece of paper. Stepping back and starting over again. Getting a fresh perspective. Whatever. Just not tweaking your current budget, which is most likely cost-driven.
So now what?
Well, let’s take a revolutionary budget approach called “starting at the beginning.” What’s the purpose of a contact center? Answering customer questions. Resolving customer issues. Accepting customer orders. Even proactively selling goods and services to customers. A varied lot—but there’s one constant, c-u-s-t-o-m-e-r-s. That’s the beginning. Contact centers either add value to customers or customers subtract value from the company. But can you quantify either the addition or the subtraction? Not specifically or verifiably. Which is why contact center budget creators start at what should be the end of the budgeting process with something very tangible—costs. But how the hell can they determine appropriate cost levels without knowing the value contact centers deliver, or lose. They can’t. Which is why companies like Sprint treat their contact centers as cost centers and cut costs at all costs. Then lose big time as customers defect.
Caught between a rock and a hard place? You could say that. But you have an option. You can project potential added value and value lost by invoking what we call the “rule of reasonableness.” We use it all the time, not just in the contact center but for projecting overall CRM outcomes and other numbers immune to statistical discovery.
Here’s how it works. Start by defining what you do (or could) know: number of calls; breakdown by purpose; breakdown by calling segment; principle outcome possibilities. Then sort of define what you sort of know: customer LTV; customer turnover rate (as opposed to churn rate, which includes non-preventable loss); opportunity cost of not achieving higher share of wallet. Now incorporate all these variables into an equation for determining the financial impact of contact center operations, both good and bad.
But what about the gaps in the formula where you lack necessary data?
That’s where you invoke the rule of reasonableness. Use your intuition. What would be a reasonable percentage chance a customer will switch suppliers if X occurs at the contact center (and remember, you’ve already quantified X). For example, what’s a reasonable percentage chance you’d cancel your Sprint contract to go with another carrier after the contact center refused to credit a questionable invoice item? Or what are the odds you’d stay but not renew? Then do the same for the impact of call center issues on customer share, viral marketing (fancy way to say badmouthing), etc.
Hey, this may sound more than a little loosey, goosey, but consider the alternative. Total ignorance. At least this way, you’re using all the data you have, which allows you to roughly approximate changes in customer value triggered by specific contact center actions, which in turn allows you set a reasonable investment level for your contact center. A helluva lot better than cost-based budgeting that doesn’t take customer outcomes into account.
Try it. You just might like it.
It’s Time For “Trickle Up” Economics
Although mostly in hindsight, many in business recognize that the supply-demand vectors crossed over in the 1980s and ‘90s, with the aggregate demand line gradually topping supply. So ended decades of suppliers’ markets, and so began the new era of buyers’ markets.
Among the primary outcomes of this seismic transition is customer empowerment. Armed with expanded supplier choice and increased leverage over sellers battling for their business, customers are exercising more control over buyer-seller relationships. Companies accepting this new balance of power and adapting business models accordingly are reaping handsome rewards. However, those resisting change are paying steeper and steeper prices by the year—occasionally the ultimate price.
But creating marketplace winners and losers represents only a portion of the impact of the supply-demand cross-over. In fact, the entire hullabaloo about buyers’ markets, increased customer power and customers holding company fates in their hands has masked an even greater change affecting business and customers alike. Today, economists estimate that consumer spending drives an unprecedented 70% of U.S. economic growth—a direct outgrowth of switching from a supply-side to customer-side economy.
But just as consumers drive economic growth, they also drive economic slow downs or outright contraction—as we see in vitro today in the aftermath of the financial harm to consumers caused by customer-unfriendly mortgage lenders and nefarious other mortgage market participants. Now, I’m not forgetting caveat emptor. But when business plays the pied piper leading customers off a cliff, it does need to own up and accept responsibility.
When individual companies hurt consumers, they actually hurt the economy as a whole—if only by an imperceptible, infinitesimal amount. But when a whole industry hurts whole classes of consumers sufficiently, the economic damage starts showing. And when business inflicts egregious financial pain on a broad swath of consumers, the resulting economic damage nicks almost all of us. As we’re experiencing today.
Considering this dynamic, I would argue that a very symbiotic relationship has evolved between treatment of consumers and the state of the economy. When business offers consumers true value and helps them make appropriate decisions, consumers flourish—and then spend. When they spend, they not only boost the retail sector, but they help pump money up-line as well, right up to makers of machinery that makes the goods and to raw material suppliers. And I would argue the very same point on the B2B side. When sellers help their customers succeed, customers have more money to buy and more reason to, which similarly pumps money all the way up the supply chain.
So, if my argument is valid, how did we ever get to “trickle down” economics in the 1980s? Politics aside, in a sellers’ market with an overall imbalance of demand over supply, one could craft an economic rationale for trickle down. Building up the supply side helped increase production of goods that met waiting demand, which would create economic growth—in theory, at least. But today, our economy doesn’t need more supply. It needs cash-in-hand demand, which is especially lacking because the mortgage mess has left consumers with reduced discretionary income, which means much less money is trickling up. Without in any way discounting the importance of oil prices and monetary policy, a robust, “trickle up” economy is a must for repairing the damage done by customer-unfriendly lending practices and the resulting credit crunch. And that brings us right back to putting customers first.
Customer-centricity does feed individual seller bottom lines. But just as importantly, it creates upstream revenue flow that continues recirculating—and strengthening our economy. We just have to get used to thinking “trickle up”—with customers now the primary driver of a healthy economy.
Is Circuit City Getting Its Just Desserts - Or Is Best Buy Eating Its Lunch?
Circuit City is sliding faster and faster down the slippery slides of a porcelain bowl. Why? Two basic choices: 1.) Circuit City self-destructed from assuming customers are stooges who will put up with whatever stores dish out; or, 2.) Best Buy has eaten Circuit City’s lunch, every crumb of it, by meeting customers half-way.
Currently, Circuit City is trying to fend off an unwanted if not technically hostile takeover tender from Blockbuster. Venture capital firm HBK, with almost 10% ownership of CC, is pushing management to be more receptive. And HBK itself has said it might enter the fray in an attempt to take the chain private. But you know what? In traditional fashion, both parties are apparently viewing CC’s troubles as financial. Too bad financial suffering’s the symptom not the cause—the cause being either : treating customers so horribly that buyers gave CC the “rats leaving a sinking ship” treatment; or, suffering so badly in customer relations relative to BB that customers went where they could get more respect.
Hey, either way, customer relationships are the root cause, so who cares?
Potential buyers had better care. “Just” reversing bad customer relationships to become “above average” can be accomplished. BB itself proved that with a near miraculous recovery from being on customer black lists. But gaining parity with BB will require becoming well above “above average” with customers—and for potential acquirers wanting a relatively quick cash out on buying CC, that should be a big red flag. That would be a miraculous recovery, one requiring heavy investment in CC’s business.
No matter. Almost any entity that does the deal will have its nose stuck in spreadsheets, with the customer aspects of the business just a minor factor.
Know what? I hope whatever buyer “wins” CC gets fried for forgetting about customers. Which will happen.
SalesFORCE VS. MIGHTYsoft - Not Much To Choose From
Okay, I should have kept my powder dry. Better that I tested MIGHTYsoft’s new Dynamics 4.0 package, or tried to, before weighing in on SalesFORCE’s sales overkill. ‘Cause from the sales perspective, turns out the choice is between obnoxious and stone deaf.
I’ve already documented “obnoxious” on my previous SalesFORCE post this week, so let’s skip straight to deaf. I was headed for a Microsoft Dynamics 4.0 demo this morning, except I succumbed to whatever plague seems to have infected half the Twin Cities lately, so no go. But while working in my office, a client for whom we’re developing software requirements e-mailed to ask if Dynamics was a possibility. I replied back that Dynamics 3.0 has a design flaw that ruled it out, but I was, indeed, going to look at V4.0.
I was going to, and that’s about as far as I got.
I started by going up on MIGHTYsoft’s Launch home page. Signed myself up for access to the new Dynamics CRM Live, or so I thought. Only to get the dreaded, “A Microsoft representative will contact you.” Some day.
But I also wanted to see the thick client version, so I clicked on the Free 90-day trial” link. Most CRM vendors offer a free trial or free demo on desktop of their client-server apps, so I wasn’t expecting any difficulty. The link took me to a very poorly designed download site that offered—two flavors of a server-based product but none for a desktop (which is the way most of us test software, keeping it off the network initially). I downloaded the 32-bit server version regardless, in the hopes someone at MIGHTYsoft was well enough versed with customers and consultants to have created something that would run on XP. Low and behold, no executable in the download folder. Just zipped instructional files.
So I clicked on live chat to find out where to find the file. The chat rep said she was in sales, and I was asking a sales operations question. End of session. After trying the download again, with the same results, I decided to try chat again. This second rep obviously didn’t speak English, because she kept coming back to me saying that her station didn’t provide technical support. Technical support – to find a free download file?
Next I decided to use the “Run” option on the download instead of “Save,” which I really don’t like doing. Finally, I did get the executable. Not wired for XP. So I can’t test it.
Fortunately, I have good relationships with several MIGHTYsoft partners who will review the app with me, despite not yet having any skin in the game. But here we go again. Another CRM software seller without a clue about CRM. No effort to align with customers. Pushing product instead of building customer relationships. And especially putting up a distribution wall that forces customers (and consultants) to engage partners long before they’re ready, so that customers will get the same damn sales pressure SalesFORCE exerts. All this for an application that’s a very likely non-starter for my client.
You know, there are days I’d like to stick a lit cherry-bomb in the ears of every MIGHTYsoft exec I can find. Couldn’t do any damage. They can’t hear anyway.
All this reminds me of the long-running Visio issue. Umpteen releases after MIGHTYsoft bought Visio, it still can’t print to Word, which is a terribly important function for us heavy flowcharters. Corel’s iGrafx has done it for years. SmartDraw does it. But Microsoft is so deaf to customers that customer input goes in one ear and out the other. All the cherry-bombs will do is increase the throughput.
But don’t get me started.
It’s Sales*F*O*R*C*E*.com, Thank You Very Much
The title’s a dead giveaway to my frequent readers that something sarcastic is about to happen. You won’t be disappointed. However, rather than prejudicing the case against dear old SalesFORCE, I’m going to first give a straight recitation of the facts without once “slipping it to them.”
A client with whom I’m working on a long-term CRM project asked me to find an interim automation package for the contact center—one that would hold them over until an enterprise-wide shift towards customer-centricity that’s a year to eighteen months away I looked at eight or ten possible packages, focusing on SaaS systems not requiring extensive implementation time/expense. SalesFORCE was one. However, because we typically recommend CRM systems with specific strengths to clients, as opposed to “well-rounded” apps, I needed a SalesFORCE refresher.
Now the fun begins. I went to the SalesFORCE website, which offers a free trial download. Of course I had to complete a form with sales follow-up information to pass “go,” and even then SalesFORCE.com’s free trial system requires direct contact with me before I could download. To give SalesFORCE credit, an inside sales rep called me within minutes. He was happy to oblige with the download info—as long as I would give him sufficient information about the client to assign a sales rep to me plus reveal my client company’s name. We went around in circles for a while, with me declining to divulge information that would set up my client to receive sales calls ad nauseum. Finally, I told the bloke that if really needed this information, than I really needed to focus my investigation elsewhere. He cracked and sent me the download code.
Since then I’ve been virtually attacked by some nameless, faceless, inside sales rep he assigned to me plus another SalesFORCE person invited to the party. Until, that is, I e-mailed them all one of my Dick-o-grams making it painfully clear I expected not to hear from them again. Oh yeah, I also told them we’d already decided to narrow the search to industry verticals that are contact-centric whereas SalesFORCE is company-centric—to the point of shutting off access to any record with a contact name but not company name by anyone but the user entering the record. No point doing workarounds or asking for code changes when the application is essentially a throw-away.
End of story.
SalesFORCE wound up bugging the crap out of me from beginning to end because they want to deal directly with end-user companies, not intervening consultants. Why, when software sellers we frequently work with value our services because we keep the out of competitions they can’t win? In a word, “control.” SalesFORCE is an old school company that believes that effective marketing and sales means forcing its product into as many openings as possible, even wher it doesn’t fit. Typical of this genre of sellers, SalesFORCE also believes in “controlling” customer decisions rather than consultative selling. Hey, looks like Marc Benioff is “out-Siebeling” Tom, or at least the Tom of old.
So what was the endgame here?
First, I found two very obliging vendors willing to work with us on a gap analysis between their out-of-the-box systems and my client’s basic needs—and one of the two could morph into the permanent solution.
Second, I re-remembered why I don’t like trying to do business with SalesFORCE.
Third, SalesFORCE embarrassed itself by once again revealing it doesn’t practice what it sells. There’s a world of difference between building customer relationships, a la CRM, and high-pressure sales tactics. Excuse me, but whatever happened to selling at the customer’s pace? How about selling the way customers want to be sold? Not to mention matching your selling process to the customer buying process? SalesFORCE may fanaticize it has “space age” services. But it’s definitely missing the reality that it has “dark ages” selling process.
And I, for one, am getting tired and cranky over CRM sellers who don’t have a clue about CRM. Five years ago this might have just been “my gripe,” today I’m only one of a growing chorus of complainers. SalesFORCE ought to watch its step.