Customer Management: The Key Differentiator

As the voice marketplace commoditizes and competition to wireline service from cable carriers, cellular providers and, particularly, cut-rate Internet-based services such as Skype, grows, voice carriers worldwide will be hard pressed to find the differentiation they will need to hold their customer base. New services may help in the short term, but any successful service, such as high speed Internet access, will quickly become commoditized itself as it is duplicated by the competition.

Experience in other industries shows that competition becomes focused on two areas: price and customer service. Price wars are devastating to all participants — witness the airline industry with its constant bankruptcies and the disappearance of long-established players. The losers disappear, and the winners end up surviving on razor-thin margins.

Managing Customers to Maximize Success
As the market commoditizes, therefore, customer service becomes a key differentiator, and can allow a competitor to survive and prosper against lower priced options. The voice carrier industry witnessed one of the strongest demonstrations of the importance of customer management earlier this decade when AT&T Wireless imploded after a custom-built customer relationship management (CRM) solution failed. For six months it bled customers, reducing it from a market leader to a second-tier player and acquisition candidate.

Ideally, every interaction with every client should be driven by corporate strategy and that customer's value to the organization. Every time a sales or service representative answers a client or prospect call, e-mail or IM, he should know into what tier — gold, silver or bronze — that client fits, what recent interactions that client has had with the enterprise, and why that customer may be calling.

This functionality is within the capabilities of the present generation of customer relationship management (CRM) products from industry leaders such as Siebel, SAP, and Oracle. However, according to BearingPoint, Inc. Managing Director Tom Johnson, several widespread problems have prevented these practices from becoming industry standards. Among these are:
• A lack of defined, repeatable customer experience scenarios based on customer lifetime value (CLV) or persona. This leads to a one-size-fits-all approach....

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