Peter Drucker knew it and said it in 1999. Not the first. Not the last. But his voice sure does count. “knowledge is the most important resource of the twenty-first century.”
It surely is important in providing a perfect customer experience.
And it is essential that the technologies we all use to help deliver such customer experiences enable us to use knowledge to improve our work and our processes to satisfy customer needs, wants, motives and passions. We rely on all sorts of technologies, especially when the work we do is complex and the scale is huge. The good social networks help a lot—especially in collaborating to design better ways of doing our work so that it satisfies others. But they generate so much “Big Data” that even the biggest companies have trouble monitoring them and converting the data into useful knowledge.
We need a corporate business view for utilizing knowledge for effective customer relationships.
Such knowledge is a critical company asset but too often it is trapped inside the minds of just a few internal experts. These people become the gears around which all decisions must flow. Good for job security but not all that helpful in turning this knowledge to work on behalf of customers across the corporate spectrum.
So somehow, this knowledge needs to be captured, translated and automated so it can improve the entire company and help all the customers that seek solutions that can make their lives and their work better and more satisfying. When this works correctly, then it is more likely that company and customer can learn to trust one another to work for the good of one another.
30 Years Ago — Knowledge-enabled coupons
Thirty years ago, the promotion agency I founded with two partners ran a program for P&G and for Kraft where we mailed recipe booklets to millions of households. The content in the booklets encouraged homemakers to see new uses for our clients’ products and at the back of each booklet was a set of six coupons coded to the household. As these coupons flowed through the redemption process we were able to analyze the results and alter the offers to stimulate purchase and to minimize the cost of the next purchase. Given technology back then, this was tough work. But we were able to see when a customer bought toothpaste at a 15 cent discount and would then shift the next coupon for toothpaste to 10 cents, or if they did not purchase at 15 cents then raise the next coupon value to 25 cents. This was using knowledge to reward customers and grow the market.
My focus here is on the technologies where knowledge-enablement is especially important because these technologies touch virtually every process in every company of any decent size—Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP). When enabled with knowledge, they can maintain a balance between corporate investments and customer experience. When these systems are dumb (and I think too many are), they make us humans using them look and act dumb.
Two technologies evolved to help executives manage the investments in sales and marketing that most impacted revenue, profit and customer value. Sales Force Automation (SFA) and Marketing Automation (MA). Initially, SFA was misnamed as Customer Relationship Management, a name that over-promised what the early stage systems could deliver that actually slowed adoption by businesses.
Eventually, they have begun to merge into a new vision of a true Customer Relationship Management approach to business—and as knowledge-enablement begins to impact CRM and ERP, both company and customer will benefit.
Sales Force Automation Technologies
SFA evolved more from a focus on sales relationships with prospective and current customers than on actually looking forward to customer needs. It was a sales management tool that handled explicit customer data better than implicit data. Explicit Knowledge About Customers– who the customers are, where they live, education levels, job function and job department … their role in making decisions. This tends to be explicit knowledge and is relatively structured for easy usage.
The SFA system tracked who the prospects and customers were, and where each customer was in the sales cycle. It helped assure that the sales team was responsive to customer needs at each step in the sales cycle so there was a continuous forward movement from sales lead to closed deal. Helpful, as far as it went, but corporate-centric instead of customer-centric.
Marketing Automation Systems
Marketing Automation Systems initially hovered over corporate websites and email to acquire, update and keep track of customer activity and to automate campaign building and sales lead tracking. These MA systems handled implicit data better than CRM. Implicit Knowledge from Customer Behaviors—such as what their histories and connections reveal, what customers do on our websites, how they respond to various promotions, and how customer requirements, expectations and interests impact purchasing patterns. This tends to be implicit knowledge and is relatively unstructured and a bit more difficult to apply.
Customer Relationship Management Systems
Finally, it seems, CRM systems are becoming what their name implied years before they were capable of delivering on the promise. It is taking a merger of Marketing Automation, Sales Force Automation and the addition of Customer Service Automation to arrive at a vision that can now revolutionize how business and customers can respond positively to one another. But they still rely more on data input from the sales organization and are not yet using knowledge-enablement of various CRM processes to help sales or customer in making smarter, faster decisions.
Enterprise Resource Planning Systems
I jumped right over the oldest of these technology systems—Enterprise Resource Planning (ERP), mostly because these systems in the past were isolated on running complex manufacturing businesses more efficiently, with little impact on customers. Gradually, ERP solutions have grown to manage just about every kind of “back office” process, from procurement and supply chain management to human relations and finance.
According to Jeff Immelt, General Electric CEO, who recently wrote on IdeaLabs: “A major driver of future manufacturing is speed and simplification because the only way to serve our customers better and compete in a complex world is by working faster and smarter.” That’s exactly where knowledge-enablement becomes a powerful competitive advantage and has as its goal to serve customers better.
Thinking back to the recipe booklets with smart coupons, it was dark ages compared to what can be done today.
Consider a fire engine manufacturer such as Smeal Fire Apparatus. When you see a fire engine, red lights spinning and sirens blasting, a big red truck passes you on the street. But fire engines are incredibly complex machines to build—often with 50,000 variations in components. In the past, just configuring the right mix of components and pricing out the fire engine took weeks and weeks. Today, we are able to embed a CRM system with knowledge to dramatically accelerate the speed of such decisions, down to hours. We are able to put all the knowledge of the company’s internal experts into a knowledge configurator that pushes all the information needed to build a fire engine with 100% accuracy right onto a sales person’s tablet computer where sales and customer can make rapid decisions.
Jeff Wegner, Regional Sales Director for Smeal Fire Apparatus said, “Knowledge management gave us an 83% reduction in order processing time. So much has improved with the use of this system. We’re not only saving a tremendous amount of time, but our costs have been drastically reduced, as well.”
This is the kind of knowledge enablement that Jeff Immelt alluded to. And it is an example of how knowledge enablement of complex business processes is already leading to greater speed to market, lower cost for customers and an overall better customer experience.
“Graduate Owl” image courtesy of Theeradech Sanin at FreeDigitalPhotos.net