Redesigning the Customer Service Policies and Strategies - Essay Example

? CRM Model or Contents Current Situation 3 Redesign the Service Policies and Strategies 5 Design Customer Loyalty Strategies and Programs 6 Evaluate Technology-Related Tools (CRM) That Could Support Your Customer Service and Loyalty Programs 10 Apply Metrics That Will Measure the Success of Your Customer Service and Loyalty Programs 11 Conclusion 15 Works cited 16 Current Situation Caribbean Cargo DC, LLC whose headquarters are in Washington, D.C. is a company that deals with shipping and freight services. Its main focus is in Washington, D.C., Virginia and Baltimore Metro areas. In 2007, Caribbean Cargo DC established a partnership with Caribbean Cargo and Package Services, Inc. so as to provide better services in a good package to its clients. This was seen as a key driver to increase their business coverage. They also managed to be in partnership with Econocaribe Consolidators, Inc. and AmeriJet International, Inc. which is one of the largest freight forwarding carriers and they are based in the US in the United States while the latter is a leading cargo shipment company. Caribbean Cargo DC, LLC goals include providing services that are reliable, efficient and an exceptional customer service. With these services they hope to be recognized by the customer as the better option when it comes to freight forwarding. The marketing strategy in place is not specific as they do not have an ample program that can act as the dependable CRM strategy. According to Peppers and Rogers (2004) the IDIC methodology consists of 2 broad categories; analysis and action. Analysis includes the company’s initiative to identify and differentiate their customers while action involves interaction and customization. IDIC is a methodology that involves several aspects that ensure company prospers efficiently. These include: identification, differentiate, interact and customization. Identification involves identification of the customers that the company handles. Caribbean Cargo DC, LLC does not have a clear focus on who their dependable customers are. For example, their traditional CRM model is based on the customer making a call to inquire about their freight and shipping costs. After that the customer can visit the warehouse offices and they are shown the entire process and the different packages that they can choose. Later on the fill out forms and make deposit payments. This type of customer relationship leaves out the biggest aspect of maintaining a customer because they cannot distinguish whether the customer will be just a first time customers or return customers. In addition to that, it lacks proper channels to create personal relationships and interaction and finally customization of products so as to perfectly fit an individual customer needs. Most businesses that have not yet implemented the IDIC model still reap few benefits from the traditional CRM model. These include the ability to communicate with their customers, either first time customers or return customers and they can be able to negotiate on the charges involved as well as offer their customers discounts. With that, return customers may be offered discounts since the company may consider them as loyal customers. This may also act as a perfect channel where the loyal customers may promote the business to other clients who may also be interested in the services offered, thus this may just be another method that is not reliable for a business to depend on. Some of the impacts of the company’s goals and marketing strategies include the fact that they have maintained the shipping business in the Caribbean with respect to their goals of providing services that are reliable, efficient and an exceptional customer service. The diagram (SWOT) below shows the strengths, weaknesses, threats and opportunities that face Caribbean Cargo DC, LLC. Redesign the Customer Service Policies and Strategies With reference to the IDIC methodology, identification is a key step in IDIC. The current situation that they are in, they do not have a means where the customer can be able to search for information from their website and that goes hand in hand with the lack of a tracking program that the customer can use so as to track their order online by use of an Identification Number (IN) or Tracking Number (TN). The recommendation would be to implement the stated programs so that they can enhance customer experience and the same TN can be used to also track their customer thus the adherence to the IDIC identification step. With regard to the process involved with a new customer where they call to inquire about their freight and shipping costs, the customer visiting the offices, they discuss the suitable shipping charges and finally the make the down payment. This type of format that they have adopted can be time consuming because if a client was to do business with them, they should find a very simple way where the customer leaves their details online and this can be done securely when the client creates a profile with them, next they are given the necessary information and from there the customer can make a call and determine how to proceed, this will definitely lead to tasks efficiency. Taking full advantage of this model, then it can be ensured that the outcome will be in parallel to their stated organization and goals of efficiency and customer satisfaction. Design Customer Loyalty Strategies and Programs The current situation is that they do not have a loyalty or awards program for return customers. This can be referred to the fact that since they lack a better CRM model that has incorporated identification of customers, then definitely it would be hard upon them to be able to distinguish which customer needs an award. With regard to the company overall goals that include providing services that are reliable, efficient and an exceptional customer service. The loyalties programs are prone to ensure to their customers are well serviced and awarded for the business that they conduct with Caribbean Cargo DC, LLC. If they have a good CRM model, then this will definitely be a means to retain customers and make them refer the company to other potential clients. The loyalty programs that can be adopted should depend on the customers business. Below is a program that Caribbean Cargo DC, LLC can adopt: CARIBBEAN CARGO DC, LLC LOYALTY PROGRAM Member Benefits Less than 200,000 spent on services No discount off on the next shipping service. Every $ 200,000 spent of services 5% off on the next shipping service. Every $ 400,000 spent of services 10% off on the next shipping service. Every $ 600,000 spent of services 15% off on the next shipping service. Every $ 800,000 spent of services 20% off on the next shipping service. Every $ 1,000, 000 spent of services 25% off on the next shipping service. Others 30% off on the next shipping service. Earning Bonus Points through the services utilized For every 250,000 spent Customer receives quarter bonus points Customer can redeem points wherever they are Customer redeems points for their next shipping Email offers and Promotions Email offers and Promotions Based on shipping in a certain period is prone to be discounted This model can be best implemented if they have developed a customer database that would securely and adequately store all these client information. The database should be real-time and should enable convenient relationships between the customer entities. As a result, an effective loyalty program would ensure that customers are well catered for and are appreciated by Caribbean Cargo DC, LLC. In addition to that, the reward should be based on their customers and what values are achievable. If in that event, Caribbean Cargo DC, LLC comes up with a program that will be a hard nut to crack by the customers, then they will find it pointless to engage in the loyalty program and also other services offered by the company. Include Differentiation of Customers by Loyalty Segments in Your Customer Service and Loyalty Program Designs Customer differentiation is essential for Caribbean Cargo DC, LLC. They should be able to differentiate their customers based on what they can offer. Profitability index is essential despite the loyalty and bonus programs that they can offer. Thus they should be able to establish the best alternative to award their repeat customers so as to ensure that they still get profits from business. Thus they should be very selective when it comes to engaging their customers in the loyalty program. For example, a customer who is always giving them business that is worth a smile to the company should be well rewarded as compared to the one who just gave them a small onetime business. A solution to this would be the implementation of the Decile analysis tool that is used to group the company’s customers into 10% categories with regard to their revenue or margin.  It includes determining the amount of revenue that is generated by the top 20% of the customers. This tool is also used in conjunction with the Pareto analysis or the 80/20 rule, where 80% of your revenue/margin is produced by the top 20% of your customers. A design that can be adopted would be to categorize the customers into three groups that is; below zero, migrators, most growable and most valuable customers. According to Peppers and & Rogers (2004), Below Zero customers are likely to cost the business more money than that which the customer has contributed. Thus clients who make a onetime shipment can be categorized into the below zero segment as they do not invoke frequent repeat business with Caribbean Cargo DC, LLC. As a result, in an aim to make the business profitable, Caribbean Cargo DC, LLC should aim at not spending too much time and effort with this customer segment and it may lead to a strained business relationship. Migrators are those customers who are not fully differentiated as to where they may be placed since they can either be profitable or they may have some potential growth. It is the company’ s goal to determine whether they can migrate them to the Most Growable Customers (MGC) group or to at least show them that they can be able to conduct big business if they are willing to do it. Most growable are those who have the most growth potential and this can be realized through cross selling, keeping the customer for a long period and getting the customer to operate in a manner that will cost the company less money. They can be termed as those customers with the optimal potential to take the business to the next level and finally most valuable customers (MVC) are those who already have the highest actual value to the company. This is because they conduct frequent business as well as they bring more revenue to the company and they are also characterized as being the most loyal customers. The designs below describe the different describes the customer loyalty differentiation categories by Peppers and & Rogers (2004). BELOW ZERO DESIGN INDEX MEASURES BUSINESS INCOME FROM CUSTOMER Daily Income Shipping services 5% Weekly Income Shipping services 10% Monthly Income Shipping services 15% Intangibles Based on future services approximation 15% Loyalty Total Number of years as a client 5% Liabilities Based on the shipping costs, warranty, cheque deposits and bounced cheque, write offs, 30% Growth potential Based on the customers capability as their nature of business 20% MIGRATORS DESIGN INDEX MEASURES BUSINESS INCOME FROM CUSTOMER Daily Income Shipping services 5% Weekly Income Shipping services 10% Monthly Income Shipping services 15% Yearly Income Shipping services 20% Intangibles Based on future services approximation 10% Loyalty Total Number of years as a client 10% Liabilities Based on the shipping costs, warranty, cheque deposits and bounced cheque, write offs, 15% Growth potential Based on the customers capability as their nature of business 15% MOST GROWABLE CUSTOMER INDEX MEASURES BUSINESS INCOME FROM CUSTOMER Weekly Income Shipping services together with other services 5% Monthly Income Shipping services 10% Yearly Income Shipping services 15% Intangibles Based on future services approximation 10% Loyalty Total Number of years as a client 10% Liabilities Based on the shipping costs, warranty, cheque deposits and bounced cheque, write offs, 25% Growth potential Based on the customers capability as their nature of business 25% MOST VALUABLE CUSTOMER INDEX MEASURES BUSINESS INCOME FROM CUSTOMER Weekly Income Shipping services 10% Monthly Income Shipping services 15% Yearly Income Shipping services 25% Intangibles Based on future services approximation 10% Loyalty Total Number of years as a client 10% Liabilities Based on the shipping costs, warranty, cheque deposits and bounced cheque, write offs, 15% Growth potential Based on the customers capability as their nature of business 15% Evaluate Technology-Related Tools (CRM) That Could Support Your Customer Service and Loyalty Programs Technology would be handy so as to help them track their customers and know how to differentiate them effectively; it would also assist in streamlining their internal processes as well as increase their productivity and make their customer service efficient by reducing calls related to resolutions by their customers. The benefits included in these CRM models is the fact that they seek to resolve all these factors and they may also have other additional factors, for example Net suite and Salesforce.com are models that have added advantages such as cloud storage and easy integration with the company’s website. Some of the best CRM tools that could be adopted include Salesforce.com that could be used so as to propagate sales and marketing for the company and create awareness of the products and services that they deal with. In addition to that it provides an efficient customer service aspect. Secondly they could also use the Microsoft Dynamics CRM that is best as it allows for the integration of Sales, Marketing, and customer service applications. The third option would be the implementation of Net suite which is web based and it can be easily integrated into the customer’s website for ease of use. As a result, the better option for a business that has incorporated a website would be to use Salesforce.com. Its benefits include: the fact that it is cloud based, thus the data for the company would be better placed and secure. It also aims at ensuring that business processes, people, and technology to achieve the goal of customer relationship are achieved. It also supports integration with Microsoft products that may be in use by the company, it allows for cross selling and customer segmentation as well as it is best when implemented in a medium size business. Apply Metrics That Will Measure the Success of Your Customer Service and Loyalty Programs Setting up this kind of a program for the customers is one which is prone to utilize utmost resources during its implementation as compared to the long term benefits that the program is prone to give in. As a result; implementation of a reliable database requires expertise when invoking the services of a competent programmer. Approximately, 50 to 70+ dollars is the amount paid to a competent database programmer in the US. When translated to database design, installation, implementation, testing and other miscellaneous costs, the table below can be able to summarize the costs that can be associated with a custom made database and the services of a programmer. METRICS MEASURE FOR DATABASE PROGRAMMER DATABSE DESIGN AND IMPLEMENTATION APP. TOTAL COSTS TO BE INCURRED DAILY COSTS App. 50 dollars per hour and the programmer spends 5 hours a day 250 dollars WEEKLY COSTS For 5 days a week 1250 dollars MONTHLY COSTS For 26 days a month, Weekends excluded 32,500 dollars per month TOTAL COSTS 32,500 DOLLARS PER MONTH OTHER COSTS SUCH AS DATABASE TESTING, TRAINING , MONITORING, BACKUP DEVICES AND DRIVES DATABASE TESTING Testing the database frequently per month 1,000 dollars TRAINING Training the staff on the new database features. Costs may be 100 dollars per day for 5 days a week 500 dollars MONITORING Monthly monitoring if the database 200 dollars DATA BACKUP DEVICES 300 dollars OTHER TOTAL COSTS 2,000 DOLLARS Therefore, the implementation of already made software will cut down the costs associated with its implementation and the services of the database programmer by a huge margin. This is because all the costs for the database programmer are eliminated and there exists only a onetime fee for the entire package where the services are also reliable. In addition to that, the implementation of analytical tools by readymade software is prone to help them make more reliable decisions based on their customers and they will be able to do cross selling to their customers. This will also maintain the inflation of the charges related to shipping from the customer end. As a result, if they are to invest in an integrated system they may charge an extra 50 dollars to each customer, and this will definitely cover for the costs associated with the acquisition of the new system thus they will have attained their money back in the specific duration of time. This may act as a breakeven point between income and costs incurred by the company. Therefore this action will end up as a win win situation due to the profits that they will start accumulating as a result of the system’s acquisition and implementation. Conclusion Caribbean Cargo DC, LLC can be described as a medium sized business that has the capability to grow to maximum potential and even expand on their market reach if they are to take initiative to implement the customer loyalty programs as well as come up with ways so as to develop clear cut implementation of the IDIC methodology. Keeping up with technology is also another aspect that they should focus on so as to maintain a competitive edged against their competitors as a long term organizational goal. Once all these aspects are implemented them, it is notable that their success will no longer be limited by factors that can be prevented. Works cited Caribbean Cargo. Web. Retrieved from: http://www.caribbeancargodc.com/ Peppers, D., and Rogers, M. (2004). Managing Customer Relationships: A Strategic Framework. NJ: John Wiley & Sons. Salesforce.com. Products. Web. Retrieved from: http://www.salesforce.com/products/ Net Suite. Products. Web. Retrieved from: http://www.netsuite.com/portal/products/crm/main.shtml Read More