Text: Erik Bouwer

The past fifteen years we have been busy with CRM – with limited success. Most important driver behind CRM was to record and make available all information about the customer. Now a prominent role for social media is emerging, says Ed Peelen. Customer expectations therefore have to be managed more carefully.

According to Peelen the playing field for customers and companies has changed: it is no longer about the sole relationship between customers and providers. There are more stakeholders: think of shareholders or investment companies. The question is whether there will be enough focus in the boardroom on long term aspects. “A valuable customer base of loyal customers with a high lifetime value ensures the value of the company even more. This is also in the interests of shareholders.”

But that does not mean that financial stakeholders agree on this. “They look differently to investments and risks. Marketeers often underestimate the odds, financial people are often more cautious,” states Peelen. So investing in social media oriented customer relations is still difficult to sell.

Managing expectations
Do we need a new approach towards customer contact and customer service? In the aviation sector, when dealing with a low cost airline the customer knows very well what to expect. In the telecom industry still excellent service is expected, even when one buys a budget product like a prepaid telephone subscription.
“How often a customer really doesn’t know what to expect? With prepaid know most people are ware that they buy a “Ryan Air’ product,” says Peel. He recognizes that there is a trend in which transparency and honesty are getting more important. “This includes the way a little more flexibility and compassion.” Peel called the Dutch supermarket chain Jumbo as an example: “They deal effectively with exceptions. For example: an older customer with a flat tire will be brought home. Yes, this costs money, but brings a lot of goodwill too. Look at it as an investment in sympathy. ”

Customer economics?
Is there enough financial knowledge about serving customers? Within health economics, the costs of healthcare are defined or measured, in order to create a balance between costs and benefits of first-time-fix. Peelen: “Theoretically in England a lifetime is worth twice as much as in The Netherlands – fortunately does not count in customer contact. Reports in the field of customer value are often well used.”
Peelen thinks that as an organization you have to be careful with differentiated levels of service quality  when based on customer value. “Capabilities depend heavily on the market you are in. For a health insurer, I can imagine it isn’t desirable to open or close certain contact channels for certain groups. ”
Customers – whether that customer now has a high or low customer value –  nowadays are increasingly exploring the Web. They also leave behind their remarks and comments on products and services. “The use of social media by customers does not always have to have a negative impact,” says Peelen. “Take a look at the Apple community. An important part of the questions of consumers are resolved there. Interesting, when considered from a cost perspective. A good relationship between brand name and its customers is important and can be positively affected.”

There is more in life than bilateral contact
The persons engaged in social media can thus be seen as an extension of customer service. “We are raised with bilateral contacts: customer versus company. Now we must learn to deal with the group. Group interaction no longer takes place exclusively within the interaction between company and customer. We always have known the golden rules for that relation.”
The front office is not the only touch point. In social media there are opinion leaders with followers, who will be included in customer contact, Peelen explains. In his eyes service will change in the near future: “Customer care will be carried out more and more outside the company borders, assisted by people who are not employed by the company. These like helping other people and build up status on this. Another type of helpdesk is created. Different clusters arise that are complementary. You can no longer carry out customer service processes by limiting yourself to traditional channels such as telephone and e-mail.”
Respect to the user groups
With social media many new possibilities arise. Peelen doesn’t think that online opinion leaders in social media will join the company. “You must keep the relationship healthy. To employ them is perhaps the worst thing you can do: they probably want to stay independent. User groups of software companies in the past were reluctant too in terms of getting to close to the company. Members of user groups within the Lego network however think is fun to have close contact with the company. In this case there’s is a strong relationship, which doesn’t conflict.”
According to Peelen, offering benefits to opinion leaders or members of user groups might be usefull. Probably there are opportunities to invite them – for example for joining a customer panel or seminar. “The members of these groups then can meet each other online. But the way you set this up, should be tailored the group style and preferences. In fact you are engaging the social domain, not the commercial domain.”

Ed Peelen points out four trends in customer contact:
1. The customer contact partially moves towards social media.
2. The customer focus of companies will get better –  forced by the customer more than ever.
3. The contact center as a workplace is getting better because the work is growing knowledge-intensive, more varied and less tightly regulated.
4. Social media will, even more than traditional customer contact, increasingly contribute to a (positive) brand experience.

Ed Peelen is partner and cofounder of consultancy company ICSB Marketing and Strategy. He has a broad experience in marketing and strategy in financial services, utility companies, telecom operators, logistics providers and transport companies, not-for-profit organizations and business services. Some examples of customers are Eneco, KLM, Microsoft, Oxfam and Robeco. His specialties are in marketing and strategy in CRM, customer-oriented business, customer experience and event marketing. Peel wrote over fifteen books and many articles. He is a frequent speaker and moderator at conferences. He is chairman of the jury that issues the Dutch CRM Awards. He is also editor of the Journal of Direct, Data and Digital Marketing Practice. He worked ten years as a professor at Nyenrode Business University and in various management positions.

Erik Bouwer (1966) is editor of the Dutch Customer Contact Magazine. As editor in chief of Intellectueel Kapitaal – a Dutch business magazine on knowledge technology – one of his areas of expertise is social media. Bouwer worked for several years in customer service. He is a journalist since 1999.