There is no such thing as an unprofitable customer, says UK consultant Al Dunn, only unprofitable ways of dealing with customers.
Organisations have to transform the ways customers can be served, says Dunn, who was a founder and director of industry monitor The Yankee Group and now runs UK company D-age Directions. They must operate with an entirely new logic, says Dunn. This need, he says, is not due simply to the e-commerce revolution but to the general deregulatory atmosphere in many Western countries, forcing organisations like telcos and banks to face more and new kinds of competition.
Dunn, who delivered the keynote address as the SAS Users Group conference in Queenstown last week, is a long-time observer of IT trends. Under the D-Age Directions banner, previously known as Multimedia Skills, Dunn has provided consultancy for a wide variety of top companies, including British Telecom and Nokia.
His keynote covered some of the themes of his recent book, "How to win customers in the digital world - Total Action or Fatal Inaction", co-authored with Peter Vervest.
Many companies are still barely off the ground with e-business and its related transformations, Dunn says. "They tell you they’ve spent $15 million on a strategy for the e-world and it’s still on PowerPoint."
Dunn classifies the failures into several categories; Companies guilty of "fatal action" are those who do the right things wrong. "They spend energy on total quality management [and similar philosophies] but it has no effect." They interpret positive customer interaction in terms of front-end staff smiling at the customer, but the front-end staff are not backed up with competent support processes.
"Fatal inaction" applies to those organisations that concentrate on intelligent internal activities, meaningless to the customer. Eighty to 90% of the information is in the service of the upper echelons of the company, he says. "They don’t know who the customer is."
Such organisations treat the customer according to rigid rules, he says. A Gold Card member with a certain airline, Dunn was dropped to silver card status because he had not travelled for six months - because he was writing his book.
The "fortress Web" syndrome prevents the customer getting what he/she needs out of the Web site. "You want to buy something and you get a mission statement."
The game is to match the companies’ portfolio of capabilities - technological and otherwise - to the customer’s needs, he says.
A well-designed digital dashboard will help the company be continuously aware of failure to serve the customer well, and ensure that customer needs drive the company, Dunn says.
An effective technique is to try the new customer-facing logic out with a few customers first, then when it’s working with them - doubtless after a bit of trial and error, spread it to the rest.