Arm's length intimacy

When the voice-mail menu reaches "Push six if--," when the automated banking system won't accept your new card (fresh from that very bank), and the pharmacist sadly advises you that "the system" has lost your insurance records, it's tough to celebrate the customer benefits of computerization. "If this is your idea of personalized service, allow me to offer in return a truly personalized angry customer

When the voice-mail menu reaches "Push six if--," when the automated banking system won't accept your new card (fresh from that very bank), and the pharmacist sadly advises you that "the system" has lost your insurance records, it's tough to celebrate the customer benefits of computerization. "If this is your idea of personalized service, allow me to offer in return a truly personalized angry customer experience," frustrated users snap back at their automated world.

So what do customers really want? And is there any reason to hope that they'll ever find it in this brave new interactive world? More to the point, will your company be able to deliver it and continue to be profitable at the same time?

What "it" is Customers want to be recognized as individuals, they want to be remembered as individuals, and they want individualized service, according to marketing experts Don Peppers and Martha Rogers, and that's basically what they've always wanted. The two are co-authors of The One to One Future: Building Relationships One Customer at a Time, and Enterprise One to One: Tools for Competing in the Interactive Age (New York: Currency, a Division of Random House, 1997). What's more, Peppers and Rogers, like a growing number of other thought-leaders, are convinced that information technology can be the great enabler, not the destroyer, of genuinely customer-centered businesses.

"The computer is now changing the actual character of the competitive model itself, supplanting it with a customer-driven model," they explain in Enterprise One to One. "When we say 'customer-driven,' we are talking about a business that relies on delivering highly tailored, individualized products and services to each of its customers - whether these customers are consumers or other businesses - based on feedback from and integration with these customers."

Three technology-based capabilities underpin this view, according to Peppers and Rogers: the ability to create computerized databases to remember and keep track of information about individual customers; the ability to have an interactive dialogue with customers; and the ability to routinely produce and deliver customized products or services. For some industries, the change from traditional marketing (which groups customers into "targeted markets" or niches according to shared characteristics) to this personal view of the customer may be difficult indeed. For the trucking industry, however, personalized service is and always has been at the very heart of the business. The issue on the table now is how to utilize technology to do it even better.

"We definitely see a change taking place in the working relationship between us and our fleet customers, and it's been accelerating in the past twelve months," observes George Dunn, vp-domestic sales for Qualcomm Wireless Business Solutions. "For example, many customers want independent access to a wide range of information. They want to be able to quickly find answers to questions on their own, without having to call someone at Qualcomm and ask.

"Customers are also insisting that we make very good use of their time when we're together. There has to be more on the meeting agenda than 'just' relationship building," he adds. "But this doesn't mean an end to personal contact. In fact, we've recently reorganized our sales team so that one group calls on prospective clients while another is devoted entirely to taking care of our existing customers, specifically making sure we understand their strategic direction so that we can keep adding value to their operation. It is absolutely not a one-size-fits-all approach to customer service."

"We view this as very positive for us as well as for our customers," adds Susan Hind, marketing communications manager. "We don't want to be a hardware supplier to our customers. Instead, our hope is to be an integrated part of each of our customers' businesses, applying technology solutions on their behalf.

Technology-enabled personalization PACCAR Parts, a Division of PACCAR Inc., is utilizing technology to bring a personalized approach to the aftermarket parts and service arena. The company has introduced a private online parts and service network for Kenworth and Peterbilt dealers, customized electronic parts catalogs on CD-ROM for fleet customers, and new systems that enable PACCAR Parts (PPD) to help its dealers manage their parts inventories, and dealers to help fleets manage theirs. The programs take full advantage of all three of the computer-enabled capabilities on the Peppers and Rogers list: databases, interactive communication, and mass customization.

"This whole industry is becoming very difficult to manage from a parts and service point of view," observes Robert Christensen, general manager for PPD. In the aftermarket, there are 200 to 300 significant suppliers, thousands of dealers, and hundreds of thousands of fleets. Information that causes parts to be used can originate with the fleets or their dealers or with the suppliers. We sit at the midpoint, so we're really best situated to facilitate that information exchange."

For example, Fleet ECAT, a customized electronic parts catalog on CD-ROM, is designed to bring chassis-specific, point-and-click parts information about their own vehicles to fleets, along with key drawings and illustrations to assist with installation. Although there are about half a million parts currently in the total PPD system, users don't need to know a single part number to get the information they want, according to Christensen. Instead, they can access a truck or frame view drawing and simply click on the part or assembly in question to pull up part numbers or complete bills of material.

PPD's new inventory forecasting and replenishment system for dealers, called Managed Dealer Inventory (MDI), and its fleet counterparts, the Connect programs, are designed to take personalized service to the collaborative level, with the addition of interactive communication to the sophisticated database and customization capabilities utilized in ECAT.

Under the MDI system, for example, dealership inventory is jointly managed day-to-day by the dealer and PPD, explains Christensen. The dealer supplies market information and buying preferences and sets service and investment objectives. Then PPD customizes and manages the system to those objectives, providing reports on inventory turns, inventory investment, product availability, and emergency-order percentage. The system even automatically adjusts forecasts to consider seasonal trends or promotional demands, he adds, and generates recommended orders for each MDI vendor.

"The Connect programs, the dealer and fleet collaborative inventory management version, actually place our dealers in a position to managing a fleet's inventory for them," says Christensen. "We believe there's a continuum of customer service," he adds. "We find ourselves taking on more functions as trust and confidence build over time."

The same side of the desk As technology enables companies to take on more duties for each of their customers, it moves business relationships away from the strictly transactional and out into new, more intimate territory. That deeper business relationships should be a result of computerization may seem paradoxical, even startling. But it's happening.

"As soon as you start talking about products that will impact the way your customers do business, such as dispatch and fleet management systems, you have to get much more involved with your customers," says Edward Forman, president and CEO of Prophesy Transportation Software. "Trucking is a very complex business. Sometimes understanding the problems you're trying to solve for a particular fleet is tougher than actually solving them.

"You also have to be willing to let customers get more involved with your business," Forman adds. "It's not a one-way relationship. At Prophesy, for example, we believe we have to share our vision and our strategies with our customers, keeping them informed about where we are going in order to make sure we stay aligned. This deeper level of involvement on both sides definitely results in longer-term relationships."

"The relationship between carriers and shippers in the days of regulation used to be almost entirely transactional, sometimes even adversarial," reflects Al Koenig, president and CEO of Midwest Specialized Transportation. "Today, the focus is on how carriers can assist in solving their customers' problems. Working together on the same problems requires more involvement and more openness. At Midwest, we've even gone so far as to place our employees in the offices of our customers to make sure transactions are being handled properly. It's a long-term commitment."

The value of the loyal customer Long-term customer relationships, of course, are not simply a by-product created by the addition of technology-to-business relationships. Creating long-term relationships, specifically long-term profitable relationships, will be the driving goal of tomorrow's customer-focused organizations, according to many marketing experts, including Patricia Seybold, author (with Ronni Marshak) of (New York: Times Books, a division of Random House, 1998).

"Firms that are able to attract and keep the right customers are significantly more profitable than those whose customers defect after a few transactions," she observes. It doesn't take much mulling over the benefits of a loyal customer - makes more purchases, efficient to work with, willing to pay higher prices, refers others to you - to see her point.

"Today, companies that are measuring [individual] customer profitability and have organized themselves to retain customers have a strategic advantage," Seybold continues. "In the very near future, customers will expect you to know who they are and deliver what they need. Within two years, companies that identify and leverage customers will be the norm. Firms still selling product families to anonymous customers will be struggling to remain profitable."

Seybold is writing specifically about electronic commerce and e-business, but her list of eight critical success factors also has broader application as a checklist for firms that want to move from a product- to a customer-centered organization, regardless of the technologies they employ to help achieve it:

* Target the right customers

* Own the customer's total experience

* * Streamline business processes that impact the customer

* Provide a 360-degree view of the customer relationship

* Let customers help themselves

* Help customers do their jobs

* Deliver personalized service

* Foster community

If all this sounds overwhelming, consider the alternatives (virtually none, if you want to remain viable, according to Seybold), and then consider the benefits. The rewards for becoming a one-to-one customer-driven company are "immense," according to Peppers and Rogers. " Not only will the 1:1 enterprise be able to generate unprecedented levels of customer loyalty, it will be able to improve its overall unit margins as well, even in the face of parity-level product competition," they note in Enterprise One to One. "In terms of continuing business, the 1:1 enterprise can make itself practically invulnerable to competition from other firms - even from other 1:1 enterprises, offering not just the same products, but the same level of customization and relationship-building."

Before racing out to hang up the "What are we? We're 100% customer-driven!" banners in the office cafeteria and hallways, it's worth pausing to consider the impact becoming customer-driven will have on your own company. Just think about the words: customer-driven. Could that mean the customers will actually be calling the shots for your business?

It's a sobering thought. According to Michael Hammer, considered to be one of the world's leading business thinkers, it's also absolutely true.

"Customers care nothing for our management structure, our strategic plan, or our financial structure. They are only interested in one thing - results, the value we deliver," he writes in his essay, "The Soul of the New Organization" (included in The Organization of the Future. Edited by Frances Hesselbein, Marshall Goldsmith, and Richard Beckhard. San Francisco: Jossey-Bass, 1997). "A customer focus forces an emphasis on results and on fashioning a culture that supports their delivery. When a customer calls the tune, everyone in a company must dance," Hammer continues. "Like it or not, security, stability, and continuity are out, because there simply isn't anyone on the scene who can provide them. The company can't because the customer won't."

In the new customer-driven companies Hammer envisions, employee diligence and obedience (in exchange for job/financial security) are gone, replaced by commitment to business success. For their part, instead of security, companies offer freedom and the chance for personal growth, or "initiative for opportunity," as Hammer describes it. "This is not theory; this is reality," he adds. "The twenty-first century organization is characterized by responsibility, autonomy, risk, and uncertainty. It may not be a gentle environment, but it is a very human one."

So how do you manage a fleet in this "very human" environment, with an all-volunteer army of employees working together to provide customized personal service to your shippers - each of whom are each struggling to do the same thing for their customers with a work force just like your own?

The answer will require a shift in our most basic premises about the purpose and structure of business, according to William Halal, professor of management at George Washington University and author of numerous books, including his latest, The Infinite Resource: Creating and Leading the Knowledge Enterprise (San Francisco: Jossey-Bass, 1998). "Business must be profitable," he notes, "but Robert Haas, CEO of Levi Strauss, explained the problem: 'People look through the wrong end of the telescope, as if profit drives business. Employee morale, turnover, consumer satisfaction ... that's what drives financial results.'"

Halal proposes that enterprises organize themselves into small, changeable, self-managed work units. These, he suggests, will help to create the right environment of entrepreneurial freedom combined with cooperation to deal with the complexity that is the hallmark of today's business world. But this alone is not the answer.

"If working with employees, suppliers, customers, and even competitors is beneficial, it follows that the mission of business must somehow encompass all these interests instead of simply making profit for shareholders," he urges. "If modern business is to be viable, it has to do more than be productive, adaptive to change, collaborative, and knowledge seeking. It must also comprise a civilized economic system that represents a better way of life. ... In short, it has to serve some worthy social purpose: producing valuable products and services, offering people meaningful lives, protecting the environment, and fostering a compatible global order. If it fails this test, resistance from government, labor unions, and other interests is certain."

Many progressive fleets and other trucking industry companies have come to similar conclusions by different routes. At Qualcomm, for example, the recent reorganization of people into new work groups is supported by a new sense of commitment to shared values, according to Susan Hind.

"The redeployment of people is a solid foundation, but evolution will take place on top of it," she explains. "To help guide that evolution, we've implemented a 'principles approach' for dealing with customers and with one another. It has three parts: respect, integrity, and listening. Customers have the same right to call us on a principles violation as they have on a contract violation."

"Profitability is an indicator of the good health of an organization, including its customers, employees, and associates," notes Don Schneider, president and CEO of Schneider National. "As a leader, you are there to serve your people and your customers. If the market-driven economy is run by people who genuinely have concern for others, it's the best system in the world."

Comments about the new role, and the new value, of the individual - as customer, employee, or business associate - are more than just polite, politically correct talk. They are becoming incorporated into the financial assessments of a company's net value. "In the world of finance today, things aren't what they used to be," observes Bill Birchard in his essay, "Intangible Assets + Hard Numbers=Soft Finance" (Fast Company magazine, October 1999). "In the new economy, the most valuable assets have gone from solid to soft, from tangible to intangible. Instead of plant and equipment, companies today compete on relationships. Assets come in the form of patents, knowledge, and people."

Birchard goes on to list five questions financiers use to measure value in the new economy:

1. Where's the talent?

2. What are the channels?

3. How are the relationships?

4. Are you fast?

5. Where are your intellectual assets?

Questions two and four are about using technology to bring products to market and services to customers. Questions one, three, and five are about people.

It's ironic that on the eve of the third millennium information technology has led business full circle, back to where all commerce began - the one-person to one-person exchange. Then again, perhaps this is where we were headed all along, into the bazaars and marketplaces of the world armed with the technologies that can help make even the farthest flung global relationships personal ones.

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