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Customer
Equity™ management demands an organizational structure
that is built around the creation of, and capitalization on,
customer affinity. This structure must focus, across functions,
on the imperatives of knowing customers and their value and
of managing acquisition, retention, and add-on selling in an
integrated way. Once in place, these structural elements will
receive the reinforcement they need from the appropriate management
processes and systems. Consider this example of how British
Airways handled a situation in which they needed to supply supporting
tools to employees who were measured and rewarded for Customer
Equity™ creation.
In the early 1990s, British Airways realized it needed to revamp
its approach to customer relations. Traditionally this department
played a defensive role; its job was to insulate the company
from unhappy customers. Customer relations employees investigated
consumer complaints and then assigned blame for those complaints
to other areas, which created an adversarial relationship between
the customer relations department and other functional areas.
Since customer relations employees were evaluated on their backlog
of work, but not on the quality of their customer service, it
only aggravated the situation. In this environment it took an
average of more than twelve weeks for the department to respond
to customer correspondence, and as a result the cost of compensating
customers was rising rapidly.
As a first step, British Airways directed its customer relations
employees to take ownership of the problems referred to them
by their customers. To support this process, British Airways
installed a computer system known as CARESS (Customer Analysis
and Retention System). This system profiled each customer's
case history and could be accessed by employees across all functional
areas. Whenever an employee interacted with or performed activities
that affected the customer, he or she could update the customer's
profile. Thus their needs could be understood and satisfied
more efficiently.
The customer profile database serves another important need.
As demonstrated in this example, it can act as an important
communication tool across or within a firm's functional units.
As each functional area learns more about the customer, the
entire company can learn more about them as well. |
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"The
customer profile database can act
as an important communication tool
across or within a
firm's functional units.
As each functional
area learns more
about the customer,
the entire company
can learn more
about them as well."
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