Customer Relationship & System

UNIT 2: ANALYSE AND IDENTIFY CUSTOMER’S NEED

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LEARNING OBJECTIVES
At the end of this unit, students should be able to:

o Describe ways to identify and connect with a customer

o Describe the impact of common customer need on organisation goals

o Outline the ways to determine customer need

o Describe importance of keeping customer information confidential

o Outline laws in Singapore regulating the use of confidential information and its impact

o Describe methods used to ensure the security of customer information

o Describe the types of customer data to be captured into CRM system

o Describe the benefits of keeping an updated customer database

o Describe the process of managing customer information using a CRM system

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2.1 WAYS TO IDENTIFY AND CONNECT WITH A CUSTOMER

a. Listen to Customers
Customers' needs are continually changing; hence, it is important to get constant
and regular feedback from them.

b. Ask Questions
Ask the customer questions to find out what is important to them. Some of the ways
to gather feedback are by surveys, customer focus group meetings and feedback
cards.

c. Observe Body Language

Another way of identifying the specific needs of the customers is by observing their
body language when conversing with them face-to-face.

2.2 IMPACT OF COMMON CUSTOMER NEED ON ORGANISATION GOALS

2.2.1 Product Needs

a. Functionality
Customers buy a product that will help them to solve their problem or desire. Hence,
it is important for an organisation to offer a product that delivers solutions and satisfy
customer needs. Otherwise, the product is deemed unsuccessful.

b. Price
Customers usually budget how much they can spend on a product. Hence,
organisations need to ensure that a product is priced reasonably in the market so
that target customers can afford to purchase the product.

c. Reliability
Reliability is the probability that a product, system or service will perform its intended
function without failure under stated conditions for a specified period of time. When
consumers purchase products, they have certain expectations as to how well those
products will perform and for how long. When an organisation delivers consistent
product quality and customer service, it means that customers can expect the same
level of excellence each time they interact with a company or its products. In turn,
consistency leads to reliability where consumers will continue to purchase products
from the organisation.

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2.2.2 Service Needs

a. Empathy
When customers get in touch with customer service, they want empathy and
understanding from the people assisting them. An organisation needs to provide
customer service training to its staff to ensure that customers are treated with
empathy. Also, the staff need to be well-trained to understand customer's needs to
provide excellent customer service effectively.

b. Fairness
From pricing to terms of service to contract length, customers expect fairness from
a company. Hence, organisations should demonstrate fairness in pricing their
products according to market pricing and not over-priced their products exorbitantly.
Organisations should also ensure that contract terms and length are reasonable for
a customer to accept.

c. Transparency
Customers expect transparency from a company they are doing business with;
therefore, companies should be open to their customers about company policies,
service outages or pricing changes. An organisation should take measures to
communicate such information through marketing collaterals or social media.

2.3 WAYS TO DETERMINE CUSTOMER NEEDS

a. Conduct Survey
There are many ways to determine customer needs. One of which is through survey
research.

Definition of Survey Research

Survey research is the collection of data attained by asking individuals questions
either in person, on paper, by phone or online. Survey research is used to gather the
opinions, beliefs and feelings of selected groups of individuals, often chosen for
demographic sampling (age, sex, income etc.).

Steps in Conducting a Survey Research

1. Define survey objective and problems
2. Determine the target audience and sample size

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3. Design survey
4. Test survey
5. Launch survey
6. Gather survey findings
7. Analyse survey data
8. Interpret and share survey results

b. Analyse Past Record

Most of the time, existing information are readily available in the company and there
is no point in funding an extensive and expensive research campaign if the data
needed is already available. Start with existing data such as reviewing past surveys,
customer interviews and customer-support call logs. Going through these past
records will help the company discover new sales opportunities or new ideas for
product innovations.

c. Direct Request
Service conversations serve as sources to help with an investigation of customer's
needs and expectations. By having a direct phone conversation with customers, they
may directly request for a recommendation of a product that will meet their needs.
Direct requests can also be made through social media means such as Facebook,
Twitter, emails or live chats.

2.4 IMPORTANCE OF KEEPING CUSTOMER INFORMATION CONFIDENTIAL

Definition of Confidential Information

"Confidential Information" generally means information, which is unknown to the public,
or in the public domain, but is private to the company or individual who possesses that
confidential information.

From the commercial perspective, confidential information can include details of a

company's financial affairs, business operations or customer engagements.

Importance of Keeping Customer Information Confidential

A person who has access to confidential information is generally obliged under the law
to keep the information confidential and cannot disclose the information to third parties.

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Failure to protect and secure confidential information may not only lead to the loss of
business or clients, but it also unlocks the danger of confidential information being
misused to commit illegal activity such as fraud.

Therefore, if one does disclose the information, one is said to have breached the
obligations of confidentiality and is liable to legal action.

2.5 SINGAPORE LAWS REGULATING THE USE OF CONFIDENTIAL INFORMATION

AND ITS IMPACT ON ORGANISATIONS AND EMPLOYEES

Definition of Personal Data

Personal data is defined in the Personal Data Protection Act 2012 (PDPA) as "data,
whether true or not, about an individual who can be identified:

a) from that data; or

b) from that data and other information to which the organisation has or is likely to
have access".

Personal data in Singapore is protected under the Personal Data Protection Act 2012
(PDPA).

Purpose of Personal Data Protection Act 2012 (PDPA)

"The purpose of this Act is to govern the collection, use and disclosure of personal data
by organisations in a manner that recognises both the right of individuals to protect their
personal data and the need of organisations to collect, use or disclose personal data for
purposes that a reasonable person would consider appropriate in the circumstances."
By regulating the flow of personal data among organisations, the PDPA also aims to:
x strengthen and entrench Singapore’s competitiveness
x position Singapore as a trusted, world-class hub for businesses.

The PDPA also provides for the establishment of a national Do Not Call (DNC) Registry.
The DNC Registry allows individuals to register their Singapore telephone numbers to
opt-out of receiving marketing phone calls, mobile text messages such as SMS or MMS,
and faxes from organisations.

Impact of Personal Data Protection Act (PDPA) on Organisations / Employees

Any organisation, employee or individual must perform the following duties to ensure
compliance of the data protection provisions in the PDPA:
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x Duty to check the DNC Registers

Before a person sends a telemarketing message to a Singapore telephone
number, the person must check with the DNC Registers established by the
Personal Data Protection Commission (PDPC) under the Act to confirm that the
number is not listed on a DNC Register. Otherwise, the person has to obtain clear
and unambiguous consent, in evidential form, from the user or subscriber of the
number (section 43 of the Act) before proceeding.

x Duty to identify the sender of a message

When sending a specified message to a Singapore telephone number, the
person must:
i. include information identifying the sender and how the recipient can
contact the sender (section 44 of the Act);
ii. for voice calls, not conceal or withhold from the recipient the sender’s
calling line identity (section 45 of the Act).

How does Personal Data Protection Act (PDPA) benefit business?

The following are ways by which businesses can benefit from PDPA:

x Strengthen Singapore's overall economic competitiveness and enhance

Singapore's status as a trusted hub and choice location for global data
management and processing services.

x Provide greater clarity on the rules and liabilities for businesses hosting personal
data in Singapore. This will complement Singapore's existing strengths, such as
geographical location, reliability and advanced telecommunications
infrastructure, to create a conducive environment for the fast-growing global data
management and data processing industries, such as cloud computing, to thrive
in Singapore.

x Put in place safeguards to protect data sets, which will help facilitate the smooth
transfer of data to and from jurisdictions that have enacted data protection laws,
many of which place obligations on organisations to ensure sufficient protection
for transfer of data overseas.

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x Serve as an attractive draw for cloud computing and business analytics activities
to be located in Singapore.
x Sends a positive message and builds trust and credibility with consumers.
Organisations will be able to assure their customers that their personal data will
be sufficiently protected.

How will Personal Data Protection Act (PDPA) impact business costs?

The provisions of the PDPA were formulated, keeping in mind the need to keep
compliance costs manageable for businesses. A transition period was provided to allow
organisations sufficient time to phase in the necessary measures to comply with the
data protection regime.

x There may be some costs associated with complying with the PDPA, especially
for businesses that have not adopted any data protection practices.

x Those that already have adequate data protection measures in place should not
incur high incremental costs to comply with the new law.

x The impact on Small and Medium Enterprises (SMEs) should also be minimal if
they do not collect, process or hold on to large amounts of personal data.

x The costs should be viewed against the benefits of having such a law.

2.6 METHODS TO ENSURE SECURITY OF CUSTOMER INFORMATION

a. Methods to ensure that customer information are secured on Server Storage
1. Make sure a firewall is used.
2. Monitor web traffic for unusual activity.
3. Use private networks for internal server traffic.
4. Use encryption when appropriate.
5. Conduct password audits.

b. Methods to ensure that customer information are secured on Cloud Storage

1. Backup data locally.

2. Avoid storing sensitive information.
3. Use cloud services that encrypt data.
4. Install anti-virus software.

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5. Make passwords stronger.

c. Methods to ensure that customer information are secured on Soft Copy (USB
drives, flash drives etc.)

1. Back up early and often.

2. Use file-level and share-level security.
3. Password-protect documents.
4. Use EFS (Encrypting File System) encryption.
5. Use disk encryption - to encrypt removable USB drives, flash drives.

d. Methods to ensure that customer information are secured on Hard Copy

(printed)

1. Lock the hard copy files in a fireproof file cabinet.

2. Use a digitally locked file cabinet to monitor access.
3. Limit access – restrict access to documents and create user profiles to allow
certain people access to certain drawers.
4. Create a retention plan that complies with any industry laws and regulations and
dispose records that are not needed on a regular basis.
5. Install surveillance in the records or control room.

2.7 TYPES OF CUSTOMER DATA TO BE CAPTURED INTO CUSTOMER

RELATIONSHIP MANAGEMENT (CRM) SYSTEM

Customer data is important and can provide insights that may lead to business
opportunities. Generally, customer data are categorised based on four types:

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Type 1: Identity Data

This includes any information, which enables an individual to be uniquely identified and
includes:

x Name Information – Title, First Name (Forename), Last Name (Surname), etc.

x Person Information – Date of Birth, Gender, etc.

x Postal Address Information – Building Number, Building Name, Address Lines,

Country, Postal/Zip Code, etc.

x Telephone Information – Home Telephone Number, Work Telephone Number,

Mobile Number, etc.

x Email Address Information – Personal Email Address, Work Email Address, etc.

x Social Network Information – Facebook Identifier, Twitter Address, LinkedIn

identifier, etc.

x Account Information – Details of your customer’s account ids or user ids.

x Job Information – Company Name, Department Name, Job Title, etc.

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Type 2. Quantitative Data

This includes any information, which describes activity completed between the customer
and a business:

x Transactional Information (Online and Offline) – Number of products purchased,

actual products purchased, Order/Subscription Value, Order/Renewal dates,
product abandonments (abandoned baskets), Product Returns, etc.

x Communication Information (inbound and outbound) – Communication date,

communication channel, Opens, Click-through, etc.

x Online Activity – Website visits, product views, online registrations etc.

x Social Network Activity – Facebook likes, Twitter interactions etc.

x Customer Services Information – Complaint details, customer query details etc.

Type 3. Descriptive Data

Being able to gain a fuller perspective of a customer’s additional profile information is
crucial. This provides additional information about a customer, beyond the identity and
quantitative details, covering:

x Family Details – Marital status, number of children, age of children etc.

x Lifestyle Details – Property type, car type, how often they travel for leisure etc.
x Career Details – Profession, Education level etc.

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Type 4. Qualitative Data

This final type of data provides a further description of a customer and his/her potential
behaviour, which is usually supplied by questionnaire type of information where an
attitude, motivation and opinion is provided:

x Attitudinal information – How do you rate our customer service, how do you rate
the value of the product, how likely are you to purchase our product again etc.?

x Opinion – What is your favourite colour, where is your favourite holiday destination
etc.
x Motivational – Why was the product purchased (personal use, gift for someone,
etc.), what was the key reason for purchasing our product (locality, price, quality)
etc.

An example of Qualitative Data Why Consumers Shop Online

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These four types of customer data will provide a better understanding of the customer
and also information critical to the core success of an organisation.

2.8 BENEFITS OF MAINTAINING AN UPDATED CUSTOMER DATABASE

1. Improve Customer Connections

Happy customers equal to good business. Having an updated customer database
allows an organisation to develop a stronger relationship with its customers.
Organisations which gather information on buying behaviour, post-purchase
feedback, and reviews will enable businesses to take a consumer-centric approach
to customer service. Keeping up to date with the wants of customers allows an
organisation to personalise communication and make better connections with their
customers.

2. Identify Customer Loyalty

A customer database allows a business to identify the most loyal and profitable
customers. An effective way to reach these customers is by email marketing that
takes the preferences of the customer into account. Such form of marketing engages
customers, building further brand loyalty for the organisation, and can inspire them
to share their preferred brand/products with friends and family, thus building loyalty
among customers.

3. Identify Opportunities for Repeat Business

An updated customer database is a collection of actual customers that have
purchased from an organisation in the past. This group of verified customers are
already interested in the organisation’s product or service and hence, the desire to
repurchase is high and therefore, provides an opportunity for repeat sales or
business.

4. Provide Customised Services

Updated data such as past purchasing behaviours can help an organisation market
to customers in more personalised ways. For example, an organisation can create
tailored marketing campaigns based on specific products that customers need or are
interested in buying.

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2.9 PROCESS OF MANAGING CUSTOMER INFORMATION USING A CRM SYSTEM

Obtain Information

Collate Results

Check Data for

Completeness

Input Data into System

Interpret Data to Form

Meaningful Information

CRM system records and organises customers' data such as email, contact number,
website, social media profile, and many more in one place. It aims to provide the
organisation with a complete view and understanding of their clients' profile while
surfacing the information required to maintain a better relationship with them.

To manage customer information in a CRM system involves several steps. It includes

collecting information about customers and processing it, using that information to
improve customers' experience as well as arranging these data in a meaningful way.

1. Obtain Information
CRM systems gather and compile customer information across different channels or
points of contact, between the customer and the company such as the company's
website, telephone, live chat, direct mail, marketing materials and social media. CRM
systems can also give customer-facing staff detailed information on customers'
personal information, purchase history, buying preferences and concerns.

2. Collate Results
Collating results aim to help companies to assess marketing effort effectiveness and
through this, manage customer information and understand customer needs. An

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instance will be the tracking of data results from email marketing (total and unique
clicks, unsubscribes, email bounces, etc.).

3. Check Data for Completeness

Bad data such as duplicated data, incomplete records, and stale data result in lost
revenue, missing insights, and reputational damage. Hence, data completeness is
vital to business growth. The input of the data quality allows CRM systems to
generate accurate reports and sift out customer information. As such, businesses
can get things done efficiently and accurately target prospects.

4. Input into System

CRM systems can import mass data records at any one time (Import Data Wizard).
The CRM system provides a simple interface, which automates the import process
as well as allowing one to specify the configuration parameters, data sources, field
mappings, etc. The system will then churn and interpret the data.

5. Interpret Data to Form Meaningful Information

It is best to present data in a visual display using CRM system such as dashboards
and charts, which not only provide a quick overview of the big picture but a visual
display of trends and key metrics as well. It is also able to show multiple chart types
on a single dashboard page layout, creating a powerful visual display for one to
interpret data to form meaningful information out of it.

Practical

Refer to User Guide for ‘Usage of a CRM System’

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