One of the challenges when serving a large number of retail customers is communicating policy changes. And if the change involves withdrawing a convenience feature, there is all the more criticality involved. There is a good amount of chance that even if a mailer is sent to all customers, a significant percentage of customers will just ignore it.
A couple of years back, I was in discussion with a outlet manager for a telecom service provider. For some reason, the management had decided to stop accepting bill payments in cash. An insert announcing the same was put into the bills sent out in the previous month. The outlet was instructed not to accept any cash payment and accordingly on the given date the feature in the system was disabled.
The day this was implemented was a day of total chaos in the outlet. Every other customer was in queue to pay his bill by cash. On learning that this feature was withdrawn, they were very frustrated.
At this moment, the outlet manager came out with a solution. He instructed all the counter persons to swipe their own credit cards in lieu of payment of the bill. Whenever a card went over limit, he loaned his own card to the counter person. Thus, not a single customer was turned back.
The following day, he sent a person around to pay all the credit card outstanding by the cash collected the previous day. It took about 3 weeks for the scenario to stabilize and have almost all the customers pay in a non-cash mode.
But, atleast at this particular outlet, during the 3 weeks no customer had to return without payment of bill.
Wednesday, October 11, 2006
Friday, September 22, 2006
Vision to have a "VISION"
It is said leading a company is about being a visionary. In fact, top management are supposed to have "vision" on the future of the company. But in reality how many managers actually have vision.
When asked about his company's vision, a senior manager of an insurance company replied that he would be growing at "x" percent and will be selling "y" thousand policies. This sounds so text bookish. Is this supposed to be a vision or an exercise in mathematical extrapolation.
Five years down the line, will customer still be buying policies. Or will they be looking at solutions for risk mitigation, if not risk elimination. Why does one buy an insurance policy? To cover risk. (That was simple!)
Buying a risk cover is not the optimum solution. It is more like hedging. The optimum solution will be to eliminate the risk.
Let us take car insurance as an example. A visit to the BMW museum in Munich, Germany, will introduce one to the concept of intelligent cars. These are connected to a central system which tracks the path of every car on the road and guides it on the appropriate road. It also has a collision prevention module, which kicks in and slams the brake, if it senses the distance with another object too close. Now in this scenario, where the chances of a collision is negated, what would be my incentive to purchase a risk cover for my car?
I would rather invest in the sensor system to prevent collision. If such a system becomes mandatory in all cars, that much the better.
Now back to the insurance company. Will they still be selling insurance policies? If he does not move to providing risk aversion or risk mitigation solutions, this company will probably not be around in 5 years.
A couple of years back, I was consulting a telecom service provider on their CRM initiatives. While discussing with the COO, I was updating him on my discoveries and possible recommendations in the CRM processes at this company. When I finished, he stated that whatever I had to say was acceptable. But his concern was not that he cannot service his customer within the stated SLA. He wanted to know what should he do to be able to survive in future.
With convergence being round the corner, his concern was how should he look at the market and how should he package his products and services. How will the new technologies affect his business model?
Now that is vision. He was on the right path to establishing a vision. Yes, he did have a chart on the revenue figures and the bottom line. But when asked about vision, he admitted that he still needed to have one.
That was one person who had the vision to have a vision.
When asked about his company's vision, a senior manager of an insurance company replied that he would be growing at "x" percent and will be selling "y" thousand policies. This sounds so text bookish. Is this supposed to be a vision or an exercise in mathematical extrapolation.
Five years down the line, will customer still be buying policies. Or will they be looking at solutions for risk mitigation, if not risk elimination. Why does one buy an insurance policy? To cover risk. (That was simple!)
Buying a risk cover is not the optimum solution. It is more like hedging. The optimum solution will be to eliminate the risk.
Let us take car insurance as an example. A visit to the BMW museum in Munich, Germany, will introduce one to the concept of intelligent cars. These are connected to a central system which tracks the path of every car on the road and guides it on the appropriate road. It also has a collision prevention module, which kicks in and slams the brake, if it senses the distance with another object too close. Now in this scenario, where the chances of a collision is negated, what would be my incentive to purchase a risk cover for my car?
I would rather invest in the sensor system to prevent collision. If such a system becomes mandatory in all cars, that much the better.
Now back to the insurance company. Will they still be selling insurance policies? If he does not move to providing risk aversion or risk mitigation solutions, this company will probably not be around in 5 years.
A couple of years back, I was consulting a telecom service provider on their CRM initiatives. While discussing with the COO, I was updating him on my discoveries and possible recommendations in the CRM processes at this company. When I finished, he stated that whatever I had to say was acceptable. But his concern was not that he cannot service his customer within the stated SLA. He wanted to know what should he do to be able to survive in future.
With convergence being round the corner, his concern was how should he look at the market and how should he package his products and services. How will the new technologies affect his business model?
Now that is vision. He was on the right path to establishing a vision. Yes, he did have a chart on the revenue figures and the bottom line. But when asked about vision, he admitted that he still needed to have one.
That was one person who had the vision to have a vision.
Thursday, July 06, 2006
The Power of Gold
A few months back I received a “gold” card from my bank. A letter accompanying this card mentioned that “…I am being accorded a gold customer status… this entitles me to a separate counter at the branches and faster service…” and a whole lot more (but we will not go into it since it is immaterial for this post).
The communiqué stated that I am being accorded the gold status since I have maintained an average balance of Rs. x (amount withheld on request ).
Thereafter, quite a few times, my balance has fallen below Rs. x. But I am going to cover this scenario in a future post.
I found out that anyone and everyone who has maintained an average balance of Rs. x was accorded the gold status. This is supposed to be a “loyalty” scheme.
Something just did not seem right here. There seemed to be no consideration of the behaviour of the customer. I earn around Rs. 5x. Most of the money is pulled out and put in investments not controlled by this bank. Consider, another person, who earns, say 2x and maintains it entirely with the bank.
Who is a more loyal customer of the bank?
My take in on this other person. He has a greater commitment towards the bank. In my case, the average amount crosses Rs. x since there is a delay between my salary getting credited to the bank and my identifying an investment opportunity to put it into.
The bank needs to have two different schemes in place. The current loyalty scheme of a “gold customer” is appropriate for this other person.
I would rather have the bank thinking on how to hold on to the Rs. 4x which I pull out of my account. In short, the bank needs to look at the percentage of earnings being maintained with the bank and accordingly launch a campaign attracting me to various offerings of the bank … including gold. That would be the power of gold.
The communiqué stated that I am being accorded the gold status since I have maintained an average balance of Rs. x (amount withheld on request ).
Thereafter, quite a few times, my balance has fallen below Rs. x. But I am going to cover this scenario in a future post.
I found out that anyone and everyone who has maintained an average balance of Rs. x was accorded the gold status. This is supposed to be a “loyalty” scheme.
Something just did not seem right here. There seemed to be no consideration of the behaviour of the customer. I earn around Rs. 5x. Most of the money is pulled out and put in investments not controlled by this bank. Consider, another person, who earns, say 2x and maintains it entirely with the bank.
Who is a more loyal customer of the bank?
My take in on this other person. He has a greater commitment towards the bank. In my case, the average amount crosses Rs. x since there is a delay between my salary getting credited to the bank and my identifying an investment opportunity to put it into.
The bank needs to have two different schemes in place. The current loyalty scheme of a “gold customer” is appropriate for this other person.
I would rather have the bank thinking on how to hold on to the Rs. 4x which I pull out of my account. In short, the bank needs to look at the percentage of earnings being maintained with the bank and accordingly launch a campaign attracting me to various offerings of the bank … including gold. That would be the power of gold.
Tuesday, June 27, 2006
Customer “Unit of Measure”
My wife has purchased a life insurance policy. The life assured is mine and the beneficiary is my daughter. Once, I had called up the insurance company to enquire about the policy unit value (since it is equity linked insurance scheme) and also to make some changes in contact details. The customer service representative performed the mandatory verification checks like asking a few questions. All questions were answered correctly by me. Finally, I was told that only my wife can get details of the policy and not me.
I was left thinking who the customer for this insurance provider is. All three of us – I, my wife and my daughter – have equal stake (or interest) in this policy. Should not all of us be considered as a customer of the company?
Often the person dealing with the company directly is considered as the customer. This is almost always never the case. We need to identify the ecology of this person to define what and who a customer is. A term used in ERP arena will fit in this scenario.
While setting up the material masters there are multiple options for the unit of measure. One of the options is for the unit to be defined as a “kit”. This implies the particular item is a collection of two or more other items. For example, take a tool-kit. It consists of various items such as the spanner, screw-driver, and so on. Each of these items is also individual items in the material master. Also, each individual component is tracked in its own identity.
So also, for the customer, it is imperative to define this “kit”. A customer is not just the one person.
Let’s consider Mr. John as the person who interacts with a financial company. Mr. John is the husband of Elaine. Both of them are parents of Julie and Stephan. By virtue of their children’s presence, they also take part in groups organizing children’s activities – like camping. John works for M/s ABC Corporation. John and his colleagues have formed the “9ers” who meet regularly at the local bowling alley. John also owns a private corner store vending items of daily needs.
In this scenario, we need to first define our “kit”. Based on the objective of contacting the customer, the necessary kits need to be defined. For example, if the company has a child’s education plan to be marketed. It will help to define a “kit” consisting of John, Elaine and their two children. Let’s call this “item” as “Family” in our material master.
Similarly, if the company wants to launch an adventure vacation finance plan, the “kit” would consist of John and his colleagues by virtue of their association with M/s ABC Corporation. This is the “Work club” item in the material master.
This forms the definition of the customer based on the unit of measure that is adopted. Once the kit is formed, it should be noted that each individual in the kit is an individual in their own right. Hence, it becomes critical for the customer service processes to be redesigned to treat each individual according to the kits they belong to.
Hence, in my case, all three of us should be treated as a “customer” kit for the policy. Maybe, its time, for this insurance provider to re-look and re-jig its customer database.
Just having a customer data base will not suffice. The human element of the individual needs to be built into the database. It will pay to have relationships configured and then grouped on the relevant unit of measure. All information will then need to be summarized based on the groupings.
I was left thinking who the customer for this insurance provider is. All three of us – I, my wife and my daughter – have equal stake (or interest) in this policy. Should not all of us be considered as a customer of the company?
Often the person dealing with the company directly is considered as the customer. This is almost always never the case. We need to identify the ecology of this person to define what and who a customer is. A term used in ERP arena will fit in this scenario.
“Unit of Measure”
While setting up the material masters there are multiple options for the unit of measure. One of the options is for the unit to be defined as a “kit”. This implies the particular item is a collection of two or more other items. For example, take a tool-kit. It consists of various items such as the spanner, screw-driver, and so on. Each of these items is also individual items in the material master. Also, each individual component is tracked in its own identity.
So also, for the customer, it is imperative to define this “kit”. A customer is not just the one person.
Let’s consider Mr. John as the person who interacts with a financial company. Mr. John is the husband of Elaine. Both of them are parents of Julie and Stephan. By virtue of their children’s presence, they also take part in groups organizing children’s activities – like camping. John works for M/s ABC Corporation. John and his colleagues have formed the “9ers” who meet regularly at the local bowling alley. John also owns a private corner store vending items of daily needs.
In this scenario, we need to first define our “kit”. Based on the objective of contacting the customer, the necessary kits need to be defined. For example, if the company has a child’s education plan to be marketed. It will help to define a “kit” consisting of John, Elaine and their two children. Let’s call this “item” as “Family” in our material master.
Similarly, if the company wants to launch an adventure vacation finance plan, the “kit” would consist of John and his colleagues by virtue of their association with M/s ABC Corporation. This is the “Work club” item in the material master.
This forms the definition of the customer based on the unit of measure that is adopted. Once the kit is formed, it should be noted that each individual in the kit is an individual in their own right. Hence, it becomes critical for the customer service processes to be redesigned to treat each individual according to the kits they belong to.
Hence, in my case, all three of us should be treated as a “customer” kit for the policy. Maybe, its time, for this insurance provider to re-look and re-jig its customer database.
Just having a customer data base will not suffice. The human element of the individual needs to be built into the database. It will pay to have relationships configured and then grouped on the relevant unit of measure. All information will then need to be summarized based on the groupings.
Sunday, June 25, 2006
Spare me the bill -- Spoil me please
Today I received the bill from my mobile service provider. As usual the envelope contained... well my bill obviously... and an envelope in which to put in my payment ... sigh. It did not stop there. There was also two insert on some scheme being promoted.
Now that set me thinking -- has my mobile service provider ever bothered understanding me. I have set an auto payment of the bill arrangement with my bank account. I have NEVER responded or subscribed to any schemes. Since I travel around a lot, often I have NEVER even seen my bill copy, since it is delivered to my office address. HEY MR. mobile operator... do you hear that "NEVER". And I have, as usual, ignored the inserts that came with today's bill.
Yet, every month without fail, I get my bill neatly couriered alongwith an envelope and atleast one insert.
I advise this operator to analyse my payment pattern. Avoid sending bills as well as any insert to a customer whose profile says -- automatic payment and NEVER respond to any insert. That will save you Rupees 15 to 20 per customer.
Sigh... i could get paid for this .....
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