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36
OPERATIONS

Turbocharging Customer Service
 

A look at how various companies are using technology to stay in touch with their customers.
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Do you know what's on your customers' minds? Here are some high-tech ways to find out and to act on what you learn

Yogurt maker Stonyfield Farm Inc. had hoped its new apricot-mango flavor would take off, but the company wasn't prepared for the accolade it received from one customer. So taken was the woman with the new product's color that she brought a container of the yogurt down to the local hardware store and asked a clerk to mix up a batch of like-colored paint for her bedroom. Now, presumably, a sea of apricot mango is the first and last thing she sees every day.

While that reaction may have been a little over the top, it's only one of thousands that Stonyfield CEO and president Gary Hirshberg can tell you about. That's because the Londonderry, N.H., company makes a point of soliciting and carefully tracking what consumers think about its yogurt. Thanks in large part to a friendly note on every container it sells -- a note that encourages consumers not only to write to the company but also to sponsor one of the local cows that contribute to the product -- about 150 calls and letters come in from customers each week. The gist of every message is entered into a database that Hirshberg and other Stonyfield managers pore over for opportunities to cement customer loyalty, spot promising new niches, and fine-tune the product line. "When you call Dannon, an operator reads to you from a script," says Hirshberg. "Here you speak to a yogurt maker."

Large companies have been using sophisticated systems to track customers and analyze consumer feedback for a long time. But now more and more small and midsize companies are enlisting technology to press what should be an inherent advantage in personalized service and focused marketing. The small-company emphasis on automating elements of customer service has arisen in part from the availability of cheap PC processing power and easy-to-use, easy-to-customize software well suited to the task of tracking customer responses. Furthermore, CEOs of growing companies are recognizing that staying on top of what ever-more-finicky customers are thinking, be it positive or negative, may be the best way to keep a company growing.

Just ask Larry Smith, founder and president of Boston-based bagel chain Finagle-A-Bagel. Or better still, call the 800 number Smith has set up to field customers' comments and suggestions. When marketing manager Heather Robertson answers, tell her you hate the wildberry bagel, and she'll send you a coupon for, among other things, a free half dozen of your favorite bagels or a free sandwich. Or tell her you refuse to eat another Finagle bagel without knowing exactly how many calories are in it, and she'll tell you that a jumbo plain bagel packs 350. Or tell her the person who waited on you in the Back Bay store was rude, and she'll have the store manager call you to make amends. In fact, there's a good chance Smith himself will write to add more weight to the apology.

Smith and Robertson used to keep track of the 15 or so weekly suggestion and complaint calls with Post-Its. But the $7-million company is rapidly expanding its retail operations by adding three new stores to the two it already runs in the Boston area. (Many of Finagle's 48,000 bagels a day currently go out to restaurants, colleges, and other institutions.) Concerned that the inevitable increase in caller volume would lead to some calls slipping between the cracks, Smith decided it was time for a customer-comment database.

Finagle is not a newcomer to information technology. The company has a part-time information-systems manager, Cosmo Nardella, and operates a fairly sophisticated software program designed for wholesale bakeries. Called Z-Bake and sold by Computron in Pasadena, Calif., the system tracks orders from wholesale customers and retail shops, and makes sure the commissary in South Boston has enough supplies to meet demand. That setup, along with PCs for his seven management employees, cost Smith some $50,000, and he considers it a smart investment. Now he's upgrading the program to include a point-of-sale component that will route real-time sales and inventory information from the stores to headquarters for analysis.

Nevertheless, Smith is leery of technological overkill. He still grumbles about the $45,000 dough mixer he recently bought, which he says can't keep up with the 40-year-old mixer he picked up a few years ago for $6,000. So Smith asked Nardella to keep the customer database as simple as possible. Nardella responded by building it in one hour using Microsoft Word, the word-processing program the company uses for its letters and memos. (Most high-end word-processing programs offer stripped-down database capabilities.)

Now every time a customer calls, Robertson records his or her name, phone number, and comments. The next time that customer calls -- and people who call once are likely to do so again, making them an invaluable source of feedback -- Robertson can retrieve the data and talk to the customer as though every detail of the last call were fresh in her mind. That sort of service can turn an angry customer into a fanatically loyal one, she says.

Equally important, Robertson and other managers can sort through the database to identify problems and fix them. Store employees whose names turn up repeatedly in complaints can be retrained or disciplined, for example. Comments about bagels are studied carefully, too, of course. There was the man, for example, who kept complaining that the salt bagels weren't salty enough, even though a database search indicated the customer seemed to be alone in his sentiments. Robertson's solution: given 24 hours' notice, Finagle would have a dozen extra-salty bagels waiting for him at the nearest shop. "People can get very vocal about their bagels," Robertson says. "We have to let them know we're listening."

* * *

What do customers really want?
While Stonyfield CEO Hirshberg treasures offbeat calls like the one from the woman who wanted yogurt-colored walls, it was another kind of call that led him to automate customer service. Hirshberg had always paid careful attention to customers who called or wrote to comment on flavors or to request new ones. So his ears perked up when consumer-relations coordinator Christine Ahearn told him one day last year that yet another request for chocolate had come in.

Hmmm. Just how many people had asked for chocolate in the past few years, anyway? Hirshberg asked Ahearn. Ahearn couldn't tell him. She had always personally answered every customer call and read every letter, and followed up on each one. After all, Stonyfield's personal touch was its biggest edge over its far-larger competitors. But once she had addressed customers' concerns or passed their requests on to Hirshberg, she had no easy way of recalling them or sorting through them.

Hirshberg realized that the company might not be adequately capitalizing on a great source of new product ideas. Besides, the manual approach to customer service was wasting a lot of Ahearn's time. For example, customers frequently called to complain that certain flavors or sizes of yogurt weren't on their local grocers' shelves. For each complaint Ahearn had to go to the file cabinets and track down the name of the distributor so she could call to check out the problem. "I used to do the same thing over and over again," she says. It was time to computerize customer service, declared Hirshberg.

Stonyfield, a $29-million company, enlisted the services of local computer reseller Cocci Computers Inc., in Hooksett, N.H., which had long been maintaining Stonyfield's 50 computers. Cocci proposed a $10,000 system that would include a $1,500 Cocci computer, an IBM-compatible PC server running Windows, Microsoft Access database software for $200, and about $8,000 worth of Cocci's time to set up a custom database and create reports that could be pulled out of the database. Hirshberg gave the project a green light. "It was a no-brainer," he says.

Cocci's first order of business was to find out what Ahearn, who was to be the main user, or "owner," of the application, did all day. For the better part of a week, one of Cocci's engineers sat at Ahearn's side while she worked, observing her interactions with customers and asking her questions. How many calls did she get each day? What sorts of things did customers ask for? What sorts of information did she give them? Where did the information come from?

Once he was satisfied that he understood what Ahearn needed, Cocci set to work on the software. What he came up with was an electronic "form," much like a fill-in-the-blanks paper form, that appears on the screen every time Ahearn takes a call. In the blanks Ahearn types the customer's name, address, and phone number; his or her complaint, comment, or suggestion; and Stonyfield's response.

All the information can be sorted in any way that seems useful -- by region, by time period, or by type of complaint, for example -- and printed out as a report that can help Hirshberg make new product and other decisions. Eventually, the database will be networked into all the PCs in the company so that anyone can call up a report on-screen.

The software also includes an option labeled "distributor," which can pull up a list of distributors in any region of the country where Stonyfield sells its products. Another option lists all the stores where the products are sold. Together they allow Ahearn to follow up in seconds on reports of store shelves that don't have Stonyfield yogurt.

Early this year, soon after the new customer database was up and running, Hirshberg called up a computer-generated report that he hoped would address the question that got the database installed in the first place. The report stated that in one week alone, 11 people had called in to suggest chocolate yogurt. The new flavor will hit store shelves this summer.

* * *

Feedback-driven marketing
Keith Waldon, CEO of Earth Preserv, in Irving, Tex., wants to keep his customers happy. But he can't afford to do it one customer at a time. Though the company started up just last year with the idea of selling its environmentally correct personal-care products through health stores, it immediately undertook an ambitious national launch primed by a contract with JCPenney Co. Now the company is negotiating with other giant retailers, and Waldon is scrambling for ways to convince both buyers and consumers that his products are worth the 100% or so premium he charges over ordinary drugstore brands. Waldon's game plan: let consumers come up with marketing ideas.

Waldon's first move was to give his customers a reason to call. So he ordered labels for the company's soaps, shampoos, and bath gels, informing consumers that a portion of sales goes toward protecting the environment -- a contribution that qualifies purchasers for a membership card good for discounts at stores and hotels. All they have to do to get the card, along with an assortment of literature on the environment, is call an 800 number. The company now receives several hundred calls a week -- and the callers often have something to say about the products.

To handle this flood of information, Earth Preserv relies on Macola software, from Macola Inc., in Marion, Ohio, which it purchased as part of a $100,000 investment in networked PCs and software. Designed as an order-entry, accounting, and distribution program, Macola runs Earth Preserv's core applications. It also allows the five customer-service representatives to record customers' comments and the action the company takes in response. The reps also upload the comments into Microsoft Mail, from which they make their way electronically to the PC on Waldon's desk.

The reps handle many of the inquiries by calling up "frequently asked questions" files stored in electronic folders in Microsoft Mail. One caller, for example, is alarmed about a recent medical report linking Alzheimer's disease to aluminum. Are Earth Preserv's products, packaged in recyclable aluminum containers, safe to use? The rep clicks on an icon labeled "medical information." Among the notes that pop up is a copy of a memo explaining that the containers are lined and that, besides, new reports are calling the finding into question. "Would you like us to mail you copies?" the rep asks. Another caller simply wants to say thank you because Earth Preserv's products don't aggravate her rare skin condition. Yet another calls to say she loves the way the bath gel smells and feels -- and, by the way, she appreciates the fact that it doesn't leave a ring around the tub.

That last tidbit catches Waldon's attention when he reviews the file later in the day. "A light went on in my head," he explains. Within a few weeks, the no-bathtub-ring point is part of every pitch Earth Preserv makes to retailers; soon it will be incorporated into consumer ads. Sifting through customers' comments has led to other changes, too. Dozens of customers called to ask why Earth Preserv shampoo doesn't create as much lather as the mainstream brands do. And, asked some, how long do you leave hair vitalizer on before rinsing it out? To address the confusion, the company started hanging small instruction cards on the bottles.

The efforts have paid off. Earlier this year Earth Preserv landed CVS, a large chain of discount drugstores in the Northeast. Waldon has already made plans to double the number of phone reps and to increase the size and specificity of the "frequently asked questions" database. "We wouldn't be in business without the technology," he says.

* * *

How to never forget an order
Call a large mail-order operation like L. L. Bean or the Sharper Image, and you wouldn't be surprised to hear the phone rep tap a few keys and pull up a record of your last few orders. Call a tiny specialty cataloger for a repeat sale, and you might not be surprised that the company's one phone rep remembers you from the last call. What might be surprising, though, would be learning that the phone rep at the small company is cribbing from the same type of on-screen data that the giant mail-order firms rely on.

Precision Reloading Inc., in Stafford Springs, Conn., sells skeet-shooting equipment and supplies. Its target is the kind of offbeat, narrowly focused market that engenders a certain camaraderie among enthusiasts -- a bond that Precision nurtures. "Our customers love to talk and talk," says Cindy Maffei, vice-president of the nine-employee business.

Until three years ago, Cindy and her husband, Peter, the company president, filled out order forms on a typewriter, and Cindy kept the customer database in her head. She didn't do a bad job, either, claims Peter. But as sales rose toward the $1-million mark and the cost of PCs kept falling, the Maffeis decided to jump into technology with both feet. Forty thousand dollars later, Precision is relying on eight IBM PCs, including a network server, to manage its finances, process orders, track inventory, and design its catalog.

As part of the transformation, Cindy turned over her cerebral database to Q&A, a database-management software program from Symantec, in Cupertino, Calif. It's still up to Cindy to talk the customers up, but now the computer provides more than a little support. While the customer is schmoozing about clay pigeons, Cindy is looking at an on-screen report of the caller's history of purchases, returns, special requests, complaints, and any other details that bear tracking.

Besides helping Cindy give more personal service, the system helps cut down on bad risks by tracking, for example, COD order returns. And sometimes it even tells Cindy a little more than she can share. There was, for example, the man who asked that his order be shipped to his office so his wife wouldn't know about it -- unaware that his wife had called a few weeks earlier to place an order she wanted shipped to her office. "I'd never tell," says Cindy.

Clearly, it's better to know too much about your customers and keep quiet about it than it is to make it plain that you don't know enough.

* * *

Jennifer deJong (jdejong@mcimail.com) is a freelance writer based in Boston.


IMPROVING CUSTOMER SERVICE FOR THE CRUCIAL FEW

Law firms, consulting firms, and other professional-service firms often get the lion's share of their revenues from a handful of clients. In that situation, identifying and tracking customers' concerns aren't difficult. When such companies use information technology, they usually do it to add depth to their customer service.

That's what architectural-lighting firm Fisher Marantz Renfro Stone Inc. did. The 20-employee company was riding high in the mid- to late 1980s, when a booming economy led many organizations to undertake all sorts of construction and renovation projects. But when budget axes fell in the 1990s, the $3-million New York-based firm found it had to cut fees by as much as 25% to compete with low-cost one- and two-person shops.

To keep meeting and travel costs down and service up, Fisher Marantz has persuaded some of its clients to conduct business on-line. The company started with E-mail and then began sending electronic blueprints to customers' computers -- 35¢ and 20 seconds a blueprint, compared with about $25 and 24 hours for overnight delivery.

Now the company is introducing clients to a new level of linking up. While browsing through a magazine, partner Richard Renfro stumbled on an ad for a $249 software program called TALKShow, from Future Labs Inc., in Los Altos, Calif. The program lets clients dial into one of Fisher Marantz's PCs and call up designs on their own computer screen. Now instead of waiting for clients' responses to proposed designs, Fisher Marantz's employees can discuss works in progress over the phone with clients and make suggested changes while both parties are looking at the design on their screens.

Renfro notes that the new approach isn't intended to replace face-to-face time with clients. Rather, it offers them an opportunity to have real input into the design process. He says six clients have embraced the TALKShow program so far; he hasn't mentioned it to the rest yet, suspecting they might not be ready to make the technological leap. "They should be ready by now," he says. "But I want to break the news gently." After all, it isn't customer service if you have to ram it down their throats.


GETTING STARTED

First Things First: The first step in designing a customer-service database is to ask some basic questions. What kind of support are you going to offer? Are you sufficiently staffed to answer the phones? What kind of information will your phone reps need to respond to customer calls? Where is that information currently stored?

The Electronic Future: Make sure the technology you invest in will work with the computers and databases you already have. While you may not need to link all your computers today, in the long run it makes more sense to have information you need fed directly into your computer than to have your assistant furnish you with paper reports.

The Long-Range Plan: Your immediate need is to use technology to help you answer your customers' questions. The ultimate goal is to mine their comments for business intelligence: information you can analyze and use to grow your company.

The Low-Tech Touch: Remember that the best ways to make your customers happy are still low-tech and old-fashioned. Used wisely, technology can help you offer that personal touch. Don't go so high-tech that your customers feel alienated.

Resources
For most small and midsize companies, the best way to build a customer-service database is to have a local consultant or computer reseller customize a PC database. Expect to pay anywhere from $60 to $100 an hour for the service, and expect it to take from a dozen to a few hundred hours.

A handful of software vendors makes products dedicated to managing customer-service operations. Those programs -- from the Vantive Corp., in Mountain View, Calif. (800-582-6848) and Answer Systems Inc., in San JosÉ, Calif. (800-677-2679), among others -- do a sophisticated job of tracking, escalating, and responding to calls. More important, they are designed to analyze customer data and feed the data strategically throughout the company. To date, however, the programs are geared toward very large companies. Costs to get them up and running range from a low of $50,000 to a high of about $500,000.

Last updated: Jun 15, 1995




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