Wednesday, January 23, 2008

Use of Customer Data to Set Service Strategies

I was pleased to see this round-table discussion on the newly revamped DM News website: Use data to handle the disgruntled

The article presents 4 slightly different takes on how to use customer information and customer preferences to maximize the customer experience. From prioritizing calls to customer service based on customer value, to knowing when (and when not) to offer price discounts as an incentive, the article provides good insight into the use of customer data to make service decisions.

The takeaways from the 4 authors:
  1. Use your CRM system to prioritize your customers according to their value.
  2. Freebies and discounts can backfire with customers willing to pay a premium.
  3. Data can help marketers turn unhappy customers into supporters.
  4. Empowered customers with communication choices are happy customers.

As a database marketer, I absolutely believe in using the power of the database to determine customer treatment. Just one word of caution--don't piss off your customers too much!

Remember a few months ago when Sprint 'fired' some of their most irritating customers? Remember the bad press that abounded? Looking back, I firmly believe that this 'firing' incident was just a bad idea, in terms of negative PR and harm to the Sprint brand.

Yet, from a database marketing perspective, AND according to today's article, Sprint did the right thing. They used customer value to determine customer service levels. In Sprint's case, they were unwilling to expend ANY effort on service to a few pesky customers and chose to fire them, instead of serving them at all. And, it backfired on them...

I guess the lesson learned--while it's very smart to vary treatment and service levels based on overall customer value, you need to remember not to go too far. Common sense needs to prevail so that your well-conceived strategies that look great on paper also work in the real world.

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