Customer Relationship & System

UNIT 6: LEVERAGE ON CRM TO PROVIDE VALUE-ADDED SERVICES

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

o Define value-added service and its purpose in customer service

o Describe the key characteristics of value-added service

o Describe the types of value-added CRM activities

o Explain the benefits of value-added service

o Describe how an organisation value adds to customer service

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6.1 Value-added services and its purposes in customer service

Value-added services refer to how the company starts with a product or service and
then add onto that commodity to imbue it with extra value. In this way, a value-added
service acts as an enhancement, improving the original product or service and making
it even more enticing to consumers.

6.2 Key characteristics of value-added service

There are four characteristics that most company will include as part of any value-added
service offering that they wish to devise for their customers.

6.2.1 Simplify Customer Experience

Value-added services must focus primarily on customer needs. These offerings will
help the customer accomplish something meaningful. For example, providing advisory
services that support the customers meet their needs or ease their efforts.

Value-added services should be simple and flexible enough that they can be offered
to a customer at any point in time during the customer lifecycle and achieved maximum
value. Offer something that a customer needs EXACTLY in how and when they need
it.

6.2.2 Increase process efficiency

Value-added service offerings include additional products or services as well. Services
that highlight additional product or service opportunities for customers may inspire new
ideas for customers and bring about partnership opportunities. For example, IT service
staff offering a customer a message template might also offer creative services or
imaging services or strategic campaign advice. With this, it builds in the natural flow
of increasing process efficiency with the customers.

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6.2.3 Showcase Expertise

Good value-added services tend to position the service team as “problem solvers” and
deemed as subject matter experts. The more the customer sees the service team as
a trusted partner with useful and right-sized offerings that help them be successful, the
stronger the relationship with that customer will be.

6.2.4 Improve product design

The delivery of true value-added services tends to illuminate the need for other, similar
or related services. For example, a good value-added IT service builds the output and
defines the interaction with a database so that a great development department can
transform that service offering into a new product module. When that happens, it takes
that services team and goes after the NEXT customer need that arises.

6.3 Types of value-added CRM Activities

1. Marketing engagement
CRM has its base in marketing and is closely related to it. Over the years, marketing
has evolved from focusing on direct sales to customer relationship marketing. The
focal point is to create loyal customers by offering not just a product, but also an
experience.

Here are some strategies to improve continuous marketing engagement:

x Send a thank-you email as a token of appreciation and connect the company
with them with a positive impression. And the base of creating customer
relationships is connecting with people.
x Ask for reviews to measure a company's customer success with their products
and services. The company can encourage customers to provide reviews; they

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can entice them with a discount or special deal, like free shipping on their next
order.
x Cross-sell or upsell products through post-purchase emails. Notify the
customers of the company's new products and offer product recommendations
based on their previous purchase.
x Customer loyalty programs are one of the best ways to engage customers
after they have made their purchase.
x Request for referrals is an effective form of marketing. People tend to make
a purchase for sure when a friend or family recommends it. The best time to
request a referral after the sale is closed.

2. Sales force automation

Sales department focus on creating strategies, to maintain and build customer

relationships to generate revenue. In order to do the above efficiently, the sales
department needs to be automated, collect data regarding the customers, their age,
sex, address, phone numbers, personal details, professional details, preferences
and spending patterns etc. to create a profile that can be used to enhance customer
relationship.

CRM Software not only automated routine tasks. It also shows the sales reports and
analysis, which help to analyse the past data and prepare upcoming strategies. If
the graph of sales is increasing, it means the company has captured the right
strategy. However, if the graph is declining, it is time to introduce a new strategy.

Companies can integrate CRM with other software to exchange data from each
software with the primary system. For example, connect the chat software with CRM
to fetch basic data of customers. This integration will help save a lot of time and
improve company performance.

3. Customer loyalty improvement

One of the most important factors for customer loyalty is customer service and
support. The extent of after-sales service and support offered determines the
continuing customer relationship. If the service and support system is not adequate,
customer relation will suffer.

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Providing product warranty helps to retain loyal customers when the product or
service is guaranteed to deliver properly. Products sold cannot be expected to last
forever, but backing behind it for an extended period shows that the company is
confident in producing a high-quality product. Warranties can also increase revenue.
Offering a free warranty with the product for a limited time, then offering customers
the chance to extend the warranty for a fee can be very profitable if the company
sells a product with a low defect rate.

Offer a toll-free number, customer service email address, chat function on the
website, or even provide a dedicated customer service staff to the customers to cater
for any need or help, assigned the company's salespeople to regularly contact
customers to see if they need help, advice, or suggestions can retain customer
loyalty. This process can be built into the CRM system, segmented and scheduled
periodically to ensure maximum customer loyalty. Tapping on the CRM system,
customers will be delighted to receive personalised notification and follow up from
the company on their product warranty status. This gesture helps to increase
customer satisfaction and promote customer loyalty.

4. Insights and Analytics

The entire CRM process is dependent on information technology and data analysis.
All customer data is collected and analysed using software. This gives businesses
insights into their customers, preferences, and buying patterns, providing the
business with guidelines to improve overall customer experience.

With CRM software, various reports like conversion reports, churn reports, sales
reports, strategy analysis reports, performance reports can be generated and save
a lot of time. From these reports, businesses can develop new strategies to attract
more potential customers and retain existing customers.

6.4 Benefits of value-added service

6.4.1 For Organisation:

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1. Generates Repeat Business

One of the main benefits of providing value-added service is that it persuades
people to do business with the company more than once. When the company treat
buyers with kindness and respect, it develops a relationship that makes the
customers reluctant to go elsewhere to shop. The advantages do not just stop
during the sales transaction, whether on the phone, other means or in person.
Companies do take additional steps, such as sending a thank-you email or card
after each purchase; this creates personal connections and generates a positive
sales experience.

2. Enhances Business Reputation

Boosting the company's reputation is another advantage of value-added service.
Customers often talk about their experience when dealing with businesses,
especially if it is unusually good or poor. By delivering strong service, the service
team uses an effective marketing tool known as word-of-mouth advertising.
Customers will be happy to tell their friends and relatives about how well the
business has taken care of them, resulting in additional advertising at no cost to
the company.

3. Provides Competitive Advantage

What separates one company from another when their products are homogenous?
It is when a company knows how to take advantage of the benefits of good
customer care. In a time where customers often complain about the lack of service
or the feeling that they mean little to a business, providing additional value-added
service can set them apart from their competitors.

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4. Improves Employee Morale

The benefits of good customer care can also affect the kind of work environment
created at the company. When employees see that a company emphasises on
providing good and value-added customer service, which includes respect for
others, kindness, and going the extra mile, they will feel more connected to the
values and principles on which the company is founded. This will lead to a more
pleasant environment and make employees feel good about working for the
company.

6.4.2 For Customers

When customers receive value-added service from a company, it will heighten the
purchase experience and increase consumer satisfaction. Customers will find the
products and services they had purchased to be worth more than what they had paid.
The value-added service also helps create a sense of loyalty to the brand, translating
to repeat sales eventually.

6.5 Describe how an organisation’s value adds to customer service

6.5.1 Management Support

Managing a team of customer service professionals well, can help build agents who
are engaged with their work and value-add to great customer service.

Management should learn how to:

1. Motivate with rewards and recognition

Happy employees lead to happy customers. There are many ways to ensure the
success and positive attitude of the employees. Using rewards and recognition is
just one. Every company has a different culture and requires a unique approach.
Be sure to customise the rewards and recognition program to reflect the norms and

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values of the environment the company want to create. Rewards can improve
morale and job satisfaction with a systematic approach.

2. Stay cool and calm when understaffed and extra busy

On busy days when the company is short-handed, management needs to devise
a strategy for dealing with this situation beforehand.

Have prompt communication to explain the situation to the team. Engaged them
by explaining that the company is behind them. Make use of this chance to use the
rewards and recognition strategies to help keep the team motivated through the
longer working hours. Cancel or reschedule non-critical events so that the team
can stay focus on customer service. Bring in lunch and work along with them to
show the support.

3. Broaden the team's horizons with events

An exciting way to motivate and encourage the service team is to offer
opportunities to get involved in other important company initiatives, including travel
and outside-the-office activities.

In the process of organising external events, the service team can share expertise
and knowledge with other people in the industry. They have chances to present
information, lead a group, and hone skills that broaden their horizons. Events
provide the opportunity to get out of the routine, offer new learning experiences
and better involved in the customer service community.

4. Keep things fresh with rotating roles

Build a support team structure that includes rotating roles and assignments.
Implement some form of ranking system for those roles. Management can
temporarily pull people from less critical roles during an extra busy period until
things get back to normal. This keeps things fresh and helps motivate the service
team to perform better.

5. Empower the support team

Empowering the support team means trusting the teams and believing in their
competency to make the right decisions on behalf of the company. This involves
the day-to-day customer service process in making frontline records changes,
giving discounts, refund or waiver of penalty, etc. With empowerment, employees

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sense that they are a valuable part of the whole and an integral component of the
"Big Picture". They will strive their best to make things work, and the organisation
will thrive.

6. Achieve transparency
Clear, open communication helps to set expectations and gets things done. The
larger the organisation, the more important and challenging it is in achieving
transparency.

6.5.2 Regular feedback – Management and staff

As management is making decisions that affect everyone, it is important to get
feedback from all levels of staff.

Management should spend time with the front line, shadowing them and getting input
about their work. A regular weekly or monthly one-to-one feedback session helps
leaders make educated suggestions for change.

1. Explain the Reasoning behind a Decision

It is important to explain, afterwards, why a decision was made, whether or not the
team's feedback is taken into consideration. Explaining the reasons helps get
everyone on the same page.

2. Allow Anonymous Feedback

Provide an option or avenue for receiving feedback anonymously. Companies give
staff a voice without making them feel like they are at risk. They encourage staff to
submit their thoughts or questions through newsletters and committed to answer
within two weeks. If feedback is insufficient, send out a survey.

3. Request 360-Feedback
If the management is open to anonymous feedback about the organisation in
general, then it has to be open to feedback about the management itself. Request
360-feedback about what works and what does not. Find out what can be done
better and then act on it. The last thing the company want is for the service team
to feel like they have taken time to share their ideas only to see nothing change or
improve.

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6.5.3 Regular Feedback – Customers

Regular feedback from customers gives a clear insight into the why of consumer
behaviour, including:

x Why people do or don't care about a product or service

x Why one feature or product is better than another
x Why offerings fall short or perform better than expected

Here are a few ways to gather feedback and insights for customer service per
organisation's perception:

1. Cultivate the Human Connection

Call and chat with customers to develop relationships. People buy from brands
they like and trust, so if a customer has already made the purchase, they are more
likely to buy again. Keep good vibes rolling by checking in on how they enjoy using
a new feature or a product. Do so especially when the customer is close to a
subscription renewal deadline.

2. Take Advantage of Other Assets

Include a simple feedback box on the bottom of a web page or end of the online
sales portal to allow customers to give immediate response or feedback. Big
brands like Google have a standing question at the end of their online help
material: "Did you find this helpful?"

3. Live Chat and Messaging Support

Tab on technology, use live chat support, an online tool that makes interactions
easier. Customers have access to support and answers during the purchase
process, during and after office hour. Customer's feedback captured in real-time,
and chats are recorded for future use.

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4. Monitor Social Channels

Create an online forum on social pages for customers to talk about positive
experiences and share stories about the brand in their social circles. The
community vibe encourages customers to connect with the brand and each other.
Companies monitor and track these feedbacks to value adds to customer service..

5. Creatively Display Customer Feedback

Feature positive customer feedback on the website and showcase various
features and solutions to critical customers concern. Putting a face or brand to a
comment helps future buyers feel more comfortable that the glowing customer
feedback is legitimate.

6.5.4 Artificial Intelligence

Artificial Intelligence is coined from two different words. Artificial means man-made
while intelligence is the capacity of the mind to understand principles, truth, facts or
meanings, to acquire knowledge, and apply it to practice. Therefore, Artificial
Intelligence (AI) is the ability of a machine or a computer program to think and
learn. The concept of AI is based on the idea of building machines capable of
thinking, acting, and learning like humans. AI is good at analysing data and
providing helpful suggestions and insights to the humans using it.

Companies made use of CRM to understand customers better and offer them
customised and valuable products, tailored to their needs. This is done through the
collection, storing and providing data at the request of customers but the process of
extraction, analysis and interpretation, which gives the true value of the information
received, is often left out. This is due to an ever-increasing data to process and digest.

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This is where AI comes to the rescue. CRM and AI are a powerful combination where:
x AI collects and processes huge amounts of data.
x It can understand Natural Language.
x Detects patterns and predicts behaviours.
x Uses reasoning to calculate risks and solve problems.

The goal with artificial intelligence in CRM is to let AI handle the analysis, and make
smart recommendations about a customer or prospect based on all the data about
that person the system has collected.

¾ Past Trends

An AI-powered CRM will learn from past decisions and historical patterns to score
the best leads for sales. Artificial Intelligence will also be able to predict future
customer behaviour. How? AI is very helpful when it comes to analysing customer's
emotions by a simple phone call, in order to establish strategies that will increase
the engagement. The company will be able to connect with the customers on an
entirely new level, because the company will give them exactly what they want,
when and how they want it.

¾ Predictive data manipulation

What is predictive data manipulation? It is the search for patterns found in the
historical and transactional data to predict future behaviour. In doing so, it identifies
risks and opportunities by consolidating all the customer data existing within the
company's databases with what customers are saying on social media and other
public platforms. Companies can build powerful tools for delivering exceptional
customer service.

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If analysed and harnessed properly, companies can leverage it to transform their

businesses and boost brand engagement. Companies collecting such gigantic
data can use the combined power of Big Data, AI and its machine learning
capabilities to make the customer journey more enlivened and personalised.

Big Data is an extremely large and complex set of data or information. In CRM, big
data analysis refers to a set of gigantic data that may be analysed using computer
technologies to reveal patterns or trends relating to human behaviour.

Machine Learning is the ability of technologies to comprehend and filter data. In

CRM, it takes the past customer exchanges and gives recommendations on how
to improve customer sales and engagement for the best outcomes. From here, it
learns new sales patterns and new insights as the data pool grows and becomes
richer. Some examples of Machine Learning are Zendesk, Microsoft Dynamics,
Salesforce and SugarCRM etc.

Based on customer reviews and feedback, it becomes easy to navigate around

their needs and browsing patterns and customise web design to individual
customer's taste. Such level of AI technology intervention gives prediction and
manipulation on:
x Customer service interaction
x Engagement level
x Customer satisfaction
x Customer retention
x Repeat business
x Conversion metrics

¾ The present applications of AI for customer service

1. Banking industry - e.g. China Merchant Bank or Bank of America, with front-end bot
powered by WeChat messenger handles as much as nearly two million customer
inquiries daily. Since most queries are quite common, automated responses via AI
chatbots such as Erica prove to be a cost-effective solution. Thus eliminating the
need to hire thousands of employees.

2. Transport and Logistic industry – e.g. KLM, the Netherlands airline, turned to
DigitalGenius to provide AI-powered customer service solution. This solution helps

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to diminish waiting time for queries to be answered. The solution has AI learning from
live support interactions, adapting to reply format and suggesting responses to the
human reps.

3. F&B industry – e.g. Subway, Dominos, Starbucks have all recently embraced AI to
enable customers to place orders without any human involvement. They can rely on
Facebook Messenger chatbots or simply tell Amazon's AI bot, Alexa, to order a meal.

4. Others areas of AI predictive manipulations are at the healthcare, hospitality, retails

etc.

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