"We are a data driven company"
I bet you have heard the above sentences infinite number of times. The speakers often mean that they have processes instituted for decisions to be taken based on facts and hard data rather than pure intuition.
My job entails selling customer analytics solutions. Analytics is dependent on the richness of data available to be mined. The availability of data is often the toughest challenge. Since most transactions systems were designed for just easing the transactions, they only collect information necessary for completing the transactions. During the time of selecting transaction systems, analytics was nowhere in sight for the evaluation criteria. So it is no surprise that data needed for analytics are not available within a company.
But what often surprises me, or let me say amuses me, is the attempt by the clients to run the "best" analytics on the available data. I was shocked to hear from one senior executive the statement "but all we have is 3 fields on customer data". This executive wanted a solution which will work on the 3 fields and not demand additional data. He claimed that his customer did not give more data.
Now why should a customer part with any more information than is needed? Let me illustrate this by my personal experience with buying automobile insurance in USA and India. India has a standard rate card. So I am not enticed nor am interested in giving any more information than is mandated for the insurance cover. Whereas, in the USA, I know that certain information, like marriage and family will help me get a lower premium. So I am happy to part with that information. I asked the same question to this execution "What has the customer to gain by giving you additional information? Why should he give you additional information?".
The company could have provided additional or special privileges to the customer based on certain information. This would have enabled them to get more information from the customer. The cost of this information could have been justified by the richer analytics that could be run on the customer data.
Just stated that we have limited data is not an excuse. It reflect poor foresight of the company. You cannot let the limited data drive your future activities. You need to enrich your data collection to meet future business needs.
Monday, October 01, 2007
Tuesday, July 03, 2007
Who owns the company?
Hi, I know i promised to post regularly. I know I have not done so for a loooong time. I got a new job and have been very very busy fitting in. Lets hope things settle down soon. Now back to the post.
I was in the reception area of one of the banks. This bank has a very impressive building as its head office. I was watching as a middle aged lady walked in. She was followed by two other ladies and a kid in tow. She was coaxing them to follow her.
It was at that moment that the security head happen to notice this small group. They were admiring the massive interiors .. which also boasts a 3 floor water wall along its walls (now that should give away the identity of the bank). The security asked them what they were doing. The lady replied that they were visiting the bank's branch and starting walking towards the area where the entrance to the branch was located.
Now the building has a branch outlet on the ground floor. It has an entrance from the outside. As well as an entry from the reception area. The lady obviously knew about this internal area too. She wanted to show the lovely structure to her accomplices. And she was very proudly showing it off too. Just as a housewife likes to show off a new furniture in her house.
The security head refused to allow the group to continue and asked them to leave the building and enter the branch from the external entrance. Everyone seemed a bit upset over this.
I found it very annoying that me and others who were visitors (some business and some personal) were allowed to loiter in the reception area, but an obvious customer was not allowed to do the same.
Should not the customer feel she owns the company? Will this sense of ownership not increase the loyalty of the customer? Just imagine the proud feeling the lady would have accomplished, if she could have been allowed to complete her journey and show off "her bank" to her friends. Here is one bank which lost one lovely opportunity to give the customer a chance to feel proud of "her bank". Goes back to the old adage that customer relationship is not in process but in the heart and soul of each employee.
I was in the reception area of one of the banks. This bank has a very impressive building as its head office. I was watching as a middle aged lady walked in. She was followed by two other ladies and a kid in tow. She was coaxing them to follow her.
It was at that moment that the security head happen to notice this small group. They were admiring the massive interiors .. which also boasts a 3 floor water wall along its walls (now that should give away the identity of the bank). The security asked them what they were doing. The lady replied that they were visiting the bank's branch and starting walking towards the area where the entrance to the branch was located.
Now the building has a branch outlet on the ground floor. It has an entrance from the outside. As well as an entry from the reception area. The lady obviously knew about this internal area too. She wanted to show the lovely structure to her accomplices. And she was very proudly showing it off too. Just as a housewife likes to show off a new furniture in her house.
The security head refused to allow the group to continue and asked them to leave the building and enter the branch from the external entrance. Everyone seemed a bit upset over this.
I found it very annoying that me and others who were visitors (some business and some personal) were allowed to loiter in the reception area, but an obvious customer was not allowed to do the same.
Should not the customer feel she owns the company? Will this sense of ownership not increase the loyalty of the customer? Just imagine the proud feeling the lady would have accomplished, if she could have been allowed to complete her journey and show off "her bank" to her friends. Here is one bank which lost one lovely opportunity to give the customer a chance to feel proud of "her bank". Goes back to the old adage that customer relationship is not in process but in the heart and soul of each employee.
Wednesday, October 11, 2006
Credit the Customer
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.
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.
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.
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