|
Close Encounters of the New Kind
 By
C.
Kim Wilkes
Senior Vice President
Many companies are rushing into customer relationship
management (CRM). CRM links and validates customer information across
multiple operations and databases in order to deliver a single, accurate
view of each customer’s activity—in real time. This provides a
complete picture of each customer’s history. Does this customer data
integration help to build a relationship with a customer or does it help
to optimize a customer encounter?
Most, if not all, financial services organizations would
argue that they have relationships with their customers, when in fact
they have only encounters. What’s the difference? A relationship is
built on the principle that the customer will have contact with the same
service provider each time and that both parties expect to continue to
do business together. An encounter, by contrast, is based on the
principle that service providers and customers are interchangeable and
that the customer has contact with whichever service provider is
available.
Barbara Gutek in her book "The Brave New Service
Strategy" defines an encounter business as having the following
characteristics:
 |
High volume of customers served |
|
Standardization of procedures and services to
customers |
|
Efficiency of labor |
|
Limited and defined set of tasks performed by the
provider of service, usually for low pay |
|
Potentially high profits for owners |
We can list stockbrokers, optometrists, insurance
agents, bankers and even doctors in managed care organizations as
classic service relationship-based positions that are quickly evolving
into encounter-based positions.
A company should understand this fundamental shift and
honestly appraise its customer service strategy. A strategy focused on
relationships with processes geared to encounters is doomed to end in
poor results and low customer satisfaction. Once a company realizes its
service strategy must be encounter-driven, it can focus on what
customers want—quick and convenient low-cost service with consistent
processes. The company can then plan strategies that enhance and
optimize each encounter. Understanding the encounter concept should help
companies better comprehend the strategy and the design of customer
relationship management. For most service companies, in fact, CRM should
probably be termed CEM—Customer Encounter Management. |
