Building Loyalty Management Strategies and World-Class Service Since 1984
Volume 2, Number 1
Winter 2004-2005
Are You True to Your Mission?
CONTENTS
Are You True To Your Mission? [continued p.2] SCORE 2005 Set for April 18-21 in Boston [continued p.2 and 3] Customer Profile: BostonCoach [p.4 and 5] Applying BPM to Services Revenue Programs[p.5 and 6] Is Cash really King? [p. 6 and 7] Omega Update[ p. 8 and 9]
you had a prosperous 2004 and are even more enthusiastic about results expected in 2005. As each new year begins, it’s only natural for a company to assess where it is and where it’s going. But are you also looking at where you’ve been? It’s important to reflect on your company’s heritage and founding philosophy. The core competencies and entrepreneurial drive that launched your firm and has carried you to where you are today. And it should serve to inspire and validate your vision for the future.
Happy New Year! On behalf of everyone at Omega, I hope
Every company has a mission statement. When was the last time you looked at it? Is it still accurate? Does it continue to drive your motivation to excel at what you do? Omega’s does, and I’d like to show you how we keep the good times rolling by remaining faithful to our core philosophy.
[Continued on page 2]
John Maraganis President & CEO
SCORE 2005 Sponsors
SCORE 2005 Set for April 18-21 in Boston
All the details are in place! SCORE Conference 2005
– Symposium for Customer Operations and Relationship Exposition – will be held on April 18-21 at the Seaport Hotel in Boston.
Help Desk Institute
Our third annual industry event, SCORE 2005 is coproduced by Omega and Customer Relationship Management Institute (CRMI). Every company has a mission statement. When was the last time you looked at it? Is it still accurate? Does it continue to drive your motivation to excel at what you do? Omega’s does, and I’d like to show you how we keep the good times rolling by remaining faithful to our core philosophy.
SCORE Conference 2005 Media Sponsors
♫ “Please come to Boston for the springtime” ♫ – Dave Loggins
…and the start of SCORE Conference 2005 -- Patriots Day! That means the “Shot Heard Round the World” re-enactment, the 109th Boston Marathon and a special morning game for the World Champion Red Sox. Be part of it all: Boston, history, and SCORE Conference 2005 -- another revolutionary event! REGISTER BY Feb. 28 TO RECEIVE A $200 EARLY BIRD DISCOUNT CALL TOLL-FREE TODAY: (877)624-0659
[Continued on page 2]
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[Are You True To Your Mission? Continued from p.1] A mission statement should keep you focused on who you are as company and what you stand for. It also should possess key words or phrases that define your core competencies, serve as branding messages, and state your customer value proposition. Omega’s mission statement is below. Everything we have done, are doing and will do ties directly to this creed:
pany’s mission statement to reaffirm your values. Speaking of value, that’s what our blockbuster industry event – SCORE Conference 2005 – is all about. In its third year, SCORE is an intensive four-day conference on customer relationship management (CRM) dedicated to creating and sustaining customer loyalty management strategies. Read the story in this newsletter and then register to attend today. We look forward to seeing you there! Value is also the operative word in our new CRMI Membership Program. Advance your career while strengthening job skills, and “earn as you learn,” by accumulating points that can be redeemed for valuable rewards, such as savings on shopping, travel and entertainment. If you interact with customers or employees on a professional level, this is where you belong! Read more about this exciting new program in this issue of The Loyalty Strategy Report. Also in this newsletter, we profile the impressive results of the loyalty management strategy program implemented by BostonCoach, and we welcome Omega business partners and contributors Incentive Logic and Rainmaker Systems. Finally, were nearly finished tabulating the client loyalty management programs completed last year, and will soon be announcing the winners of the 2004 Omega NorthFace ScoreBoardTM Award winners. This program recognizes those companies who – as voted by their own customers – have achieved excellence in customer service. This is the most prestigious honor in its field, and more than 80 companies have won the NorthFace ScoreBoard Award since program began in 2000.
~Assist our clients in the development of a Loyalty Management Strategy for increasing customer satisfaction and loyalty that result in increased revenue and profits.~
Break down your mission statement to see if really works for you. In Omega’s example, there are four key elements: •“Assist our clients in the development…” signifies that we are a services company that helps clients establish a specified course of action •“…of a Loyalty Management Strategy…” this is our branding statement and competitive differentiator. No other company uses this phrase as a corporate descriptor. •“…for increasing customer satisfaction and loyalty…” underscores our core competency and states the objective of a loyalty management strategy •“…that result in increased revenue and profits.” Reaching this goal is the only reason any company exists. This is Omega’s customer value proposition, the byproduct of a loyalty management strategy. Of course, some mission statements are longer and more complex, but the point is to refer periodically to your com[SCORE 2005 Continued from p.1] SCORE Conference 2005 is expected to attract hundreds of executives from customer service, support, sales and marketing to learn the latest thinking in developing loyalty management strategy and best-in-class customer operations. In today’s challenging business climate, maximizing customer loyalty and retention is more important than ever. Every company has a specific strategy for core business functions like sales, marketing, service and product development. But the same vision and planning is required to create a strategy for building customer loyalty, and that’s exactly what you’ll learn to do at SCORE Conference 2005. At this prestigious event, you will join some 500 service executives from North America’s leading companies who are expected to attend. You are sure to leave the confer-
ence buzzing with new ideas and techniques you can use right away within your own organization. The SCORE Conference 2005 has been designed to help you increase your knowledge and awareness of the methods others have used to implement a loyalty management strategy that encompasses both employees and customers. This year, Omega is teaming up with Customer Relationship Management Institute (CRMI) to bring you an intensive, entertaining four-day program that covers all areas of building a loyalty management strategy and managing customer operations. The principals of Omega were pioneers in the CRM industry. During the late 1970s and early ‘80s, customer service was seen as a cost center, and CRM’s initial focus was to reduce costs essentially by automating customer administrative service tasks. The industry has evolved and has brought us from cost center to profit center, but CRM has not 2
[SCORE 2005, continued from page 2] adequately addressed the challenge of customer acquisition, retention and growth. That’s because the old strategy of competing on product and price no longer is enough to lock-in customer loyalty. Today, companies must also develop a customer loyalty
Register today by calling 877-624-0659 or at www.omegascoreboard.com Register by February 28 to receive a $200 Early Bird Discount. Here are other SCORE Conference Discounts
Association members (limit 1 discount): AFSMI, ICSA, SSPA, ContactCenterWorld.com, SOCAP, CCNG, ASQC, ASP, ICMI, HDI, CRMxchange CRMI Membership, 1 year ($295) $100 per attendee
$100 per attendee
strategy, which of course includes product and price, but adds the critical dimension of delivering superior service to customers at all touch points, and encourages employee commitment to the concept by linking their compensation to measurable increases in customer satisfaction loyalty and retention. The producers of SCORE 2005, Omega and CRMI, have helped hundreds of companies to develop a loyalty management strategy and customer relationship training for employees. This experience and knowledge have resulted in this powerful conference agenda. The objective of SCORE 2005 is to assist attendees in developing a loyalty management strategy that will result in higher revenue and profits, while leveraging the sizeable investment companies have made in CRM technology. Besides exploring best practices in customer and employee loyalty, SCORE features two full days devoted to excellence in customer operations. These are the critical customer touch points that greatly influence customer satisfaction and loyalty. The sessions cover customer erations within contact centers, field service, help desk, order processing, technical support and sales/marketing. SCORE is the only event that addresses both loyalty management strategy and customer operations. A highlight of our annual conferences is the presentation of the Omega NorthFace ScoreBoard℠ Award. This is the original industry award based solely on an organization’s ability to achieve a customer satisfaction rating of 4.0 or higher out of a possible 5.0 score over a 12-month period. Many of the winning companies will present case studies at the conference. You will gain valuable insights from these real-world examples of best practices and innovative ideas from companies that have successfully implemented a loyalty management strategy – and have the benchmark processes to back it up. We look forward to seeing you in Boston – City of Champions – which is our home too. We know you will enjoy SCORE Conference 2005 and the Patriots Day festivities!
CRMI Membership, Multi-year ($885) Team of 2 or more from same company
$200 per attendee
$100 per attendee
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Customer Profile: BostonCoach
Raising the bar for Customer Satisfaction
“Our BostonCoach account manager, Greg Rich, provided critical support and input to the company throughout this process.” This detailed research helped BostonCoach determine which potential service options were of the greatest interest to its customers. “As a result, we were able to narrow our focus and develop a program tailored to their specific requirements,” says Kavanagh. “For instance, the data showed that an overwhelming number of our most frequent travelers gave the highest ranking to guaranteed availability of vehicles. We took this key feedback and other important information from the survey process and developed and launched our new Preferred Customer program, a first-of-its-kind offering in the ground transportation industry.” As members of the program, frequent customers receive special benefits, including priority call routing through a dedicated toll-free phone line, guaranteed vehicle availability and complimentary service vouchers. “Omega provides us with the insight we need to evaluate our performance and achieve our aggressive goal of continuously improving the experience of our customers," Kavanagh says. BostonCoach’s unwavering commitment to its customers was recognized by Omega in both 2002 and 2003, when the company received Omega’s NorthFace ScoreBoardSM Award. Presented annually, the award is given to organizations that not only offer exemplary service to their customers, but also center their existence on a deep commitment to exceed all customer expectations. “Delivering superior service to our customers is our top priority,” says Kavanagh. “With help from Omega, BostonCoach has worked hard to raise the bar on quality not just for ourselves, but for the ground transportation industry as a whole.” About BostonCoach BostonCoach is a global provider of ground transportation solutions and travel services. The company operates company-owned sedans, limousines, vans, minibuses and buses in Boston, Chicago, Newark, New York, Philadelphia, San Francisco, Washington, D.C., Atlanta and Dallas. And through the BostonCoach Connection, a network of carefully selected affiliates, the company services more than 450 cities around the globe. BostonCoach is a wholly owned subsidiary of Fidelity Investments, one of the world’s leading investment companies. BostonCoach can be found on the World Wide Web at www.bostoncoach.com .
“We firmly believe that no other company in our industry takes quality as seriously as BostonCoach, nor makes the types of investment that we do in the quality process.”
-- Bill Kavanagh, Chief Operating Officer, BostonCoach
of ground transportation services worldwide, BostonCoach is relentless in its pursuit of quality and superior customer relations. With customers in more than 500 domestic and international destinations, BostonCoach strives to ensure that every customer has a positive experience that exceeds his or her expectations. “We actively monitor customer satisfaction and have a team dedicated to targeting areas requiring improvement,” says Bill Kavanagh, BostonCoach chief operating officer. “We firmly believe that no other company in our industry takes quality as seriously as BostonCoach, nor makes the types of investment that we do in the quality process.” Since 2000, BostonCoach has used the Omega Management Group to conduct quarterly surveys measuring the level of satisfaction among its customers. “We selected Omega because of its knowledge and expertise in the loyalty management field and the superior methodology of their research,” said Kavanagh. Omega provides BostonCoach with independent customer satisfaction scores by interviewing the company’s customers about their service experience with BostonCoach. “Over the years, we have revised and expanded the list of survey questions to better understand our customers’ satisfaction levels and their needs,” Kavanagh says. “Omega has worked closely with us to design a survey that provides clear, meaningful and measurable information that we can use to further improve our business.” BostonCoach carefully analyzes the information obtained through the Omega surveys and takes prompt, appropriate action to maintain the highest level of customer service. “Recently, BostonCoach engaged us to conduct additional surveys with a select group of its most frequent customers, asking them to identify the services they would most like BostonCoach to offer in the future,” says Joe Camirand, general manager of client service operations at Omega.
As one of the largest providers
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[BostonCoach continued from page 4.]
Applying BPM to Services Revenue Programs
Geographies Worldwide Deployment Summary •Operates company-owned sedans, limousines, vans, minibuses and buses in Boston, Chicago, Newark, New York, Philadelphia, San Francisco, Washington, D.C., Atlanta and Dallas. •Through the BostonCoach Connection, a network of carefully selected affiliates, the company services more than 450 cities worldwide. Omega Services •Customer Satisfaction Surveys •Executive Briefings Benefits •Understanding customer needs is first step in exceeding their service expectations •Survey process helps further improve business operations •Research identifies new ways to reward best customers Customer’s Implementation Advice •Strive to ensure that all customers have a superior experience •Have dedicated team to track and act on all aspects of customer service quality •Measure customer satisfaction on a quarterly basis and change some of the questions to capture new information each time.
Michael Silton President Rainmaker Systems
Peter Drucker, renowned business management guru, once said “If you can’t measure it, you can’t manage it.” Supporting Drucker’s claim, recent business articles and analyst reports tout Business Performance Management (BPM) as the “next big thing.” The basic concept of BPM is to define key performance indicators and then systematically monitor these indicators to determine if the business is achieving expected performance levels.
While the concept of measuring performance is not new to the services arena, it has primarily been focused on tracking service delivery metrics and compliance with service level agreements. But BPM concepts can also be applied to the marketing and selling of services to identify opportunities to increase service revenue and enhance customer loyalty. There are many ways to monitor the performance of services marketing and sales programs. Below are a few examples drawn from Rainmaker’s experience of selling support and maintenance services in the high-tech industry. Data Quality – Since maintenance services are a supplementary sale to existing customers, the quality of customer data will directly affect the success of a services marketing and sales program. If your customer information is out of date, incorrect or incomplete, you will waste marketing dollars and thwart your sales efforts. By tracking data quality, companies can identify and correct the root causes of poor customer data. Call Volume – Many companies use telesales representatives, either in-house or through a telesales outsourcer, as their primary method for closing service orders. Tracking the telesales call volume, and more specifically the ratio of inbound to outbound calls, can be another powerful way to gauge the value of your services sales initiatives. Since outbound calls are typically reserved for higher value customers, a shift in your inbound/outbound call volume ratio can signal a dramatic increase or a dangerous decline in your service revenues. Service Coverage – One of the goals of any services marketing and sales program is to increase the percentage of installed products that are covered by a service contract. Surprisingly, many companies do not keep track of this important metric for service and product loyalty.
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[Applying BPM, Continued from page 5.] One way to view this information is to compare service coverage levels for different product or customer segments. New service offerings may need to be developed to address segments with low service coverage. Drucker has good advice for service managers seeking to increase revenues. To be successful, companies need to select meaningful metrics that can be systematically tracked over time. They also need to establish minimum performance levels and be prepared to implement new programs to improve performance levels. Finally, services managers need to publish a services revenue dashboard to communicate performance levels to top management, building awareness of the metrics and an understanding of their impact on service revenues. Michael Silton is CEO of Rainmaker Systems, a leading outsourcer of sales and marketing programs for service contracts. Rainmaker’s services include customer data mining, strategic direct marketing, professional telesales, hosted contract management websites, invoicing and collection services. For more information, visit www.rmkr.com
Cash Rewards
PROS
Time efficient No selection hassles
CONS
Little trophy value May become expected compensation over time Cash is fleeting Taxable as income
Easy to fulfill
No bragging rights Used primarily to pay for needs instead of rewards
Non-Cash Rewards
PROS
Memorable
CONS
Fulfillment of reward can be more complicated
Is Cash really King?
Cash as an incentive
Symbolic with inherent trophy value Cost-effective for company Considered as a gift
Michael Edwards Chief Technology Officer Incentive Logic, Inc.
Could be considered non-taxable on employee's income if under $400
Bragging rights included with reward
always rank cash as the #1 incentive reward they would want to receive. But when people are asked how they feel after receiving a specific gift valued at $250 versus an extra $250 in cash, they routinely report feeling better about the merchandise. These are two of the several arguments for noncash rewards versus cash rewards for incentive programs and for recognizing your customers and employees. There are several other reasons why you should consider giving a non-cash reward to your top-performers.
When polled, customers and corporate employees
Bragging Rights People feel a little uncomfortable talking about money; however, it is easier to brag about earning a trophy item or trip. Memorability Cash normally gets used for basic needs; thus, it doesn't carry the same memorable qualities as does a non-cash reward. Reward Value People use cash to buy things. Why not give them a great "thing" so they don't feel like they are splurging on some un-necessary item when they really need to pay off their credit card bill?
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Cost-Effectiveness Non-cash items are actually more cost-effective because they require an investment of only $.04 per incremental dollar versus $.12 when giving cash. Trophy Value Non-cash rewards last for a long time, cash does not. People can brag about trips, trophies, and cool car accessories. Tradition Non-cash rewards can be utilized to establish a repeatable tradition in your company. These traditions are part of building a corporate culture. Summary Recipients of an incentive or reward are faced with an emotional/rational dilemma when they receive cash. More often than not, our nature does not allow us to reward ourselves with luxuries until our other needs are met. Most will give in to financial obligations they feel should be attended to first. Giving people cash so that they can pay bills to help relieve financial woes can lead to cash rewards becoming an expected form of compensation. Most importantly, if asked, cash reward winners won't even remember what they did with the money five years later, why they received it or what they used it for. Reward your audience for their contributions toward your goals and relieve their emotional/rational dilemma by eliminating cash as an option. The “trophy value” or “bragging rights” that exist with a noncash reward often surface and remain a topic of discussion for months and years after the reward has been given. Quick Facts -Cash is highly requested, but easily forgotten." In a survey of 1,010 award recipients, 29% used their cash incentive to pay bills. 18% don't remember what they used it for. 11 % used it for household needs. -Cash as a reward for employees causes a fine dividing line where compensation begins and ends. "Some organizations fall into the trap of giving cash where recognition is really the proper vehicle. If it's not intended as compensation... cash should never be used." -"Rewards should be sticky. Cash is slippery." Therefore, cash is not memorable. 56% of employees view cash awards as salary and not incentive promotions -69% agree that travel and merchandise awards are more memorable than cash payments -65% believe a business can build a more exciting and memorable program
Sources: The Incentive Federation, 1997 Wirthlin Worldwide March 5-8, 1999
Incentive Logic, Inc. offers a full line of incentive and reward software and services that enable companies to motivate, thank or reward customers, increase partners’ promotional effectiveness and recognize or drive employee productivity. Visit www.incentive logic.com for more information
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Omega Update
CRMI Membership Program Established in 2002, the Customer Relationship Management Institute (CRMI) fosters superior expertise in customer relationship management through education programs and professional development services that will help advance your career while strengthening job skills. CRMI’s programs and services include: • Seminars/Webinars • Annual SCORE Conference • Center for Loyalty Management • Research and Intelligence Services • Employee Surveys and Incentive Programs • Career Center In 2005, CRMI is launching a Membership Program – unique in our industry – designed to provide unprecedented career development and networking opportunities while rewarding individuals and organizations for investing in customer relationship management. Such a program is needed to unify the many “customer touch points” that exist in companies today: • Customer Service • Field Service • Technical Support • Human Resources • Call Center Operations • Help Desk • Sales & Marketing • Professional Services
Our goal is to promote cross-functional understanding of how ALL points of contact play a role in ensuring customer and employee satisfaction, loyalty and retention. We have developed our CRMI Membership Program to appeal to professionals from these multiple disciplines who share a common goal of establishing superior relationships that build customer loyalty. Even better, as you participate in CRMI programs, you “earn as you learn” by accumulating points that can be redeemed for valuable rewards, such as savings on shopping, travel and entertainment. CRMI members can take advantage of the following programs and services, and in some cases earn points that can be redeemed for valuable merchandise and other benefits. • Education • Center for Loyalty Management • Subscriptions • Seminars/Webinars • Annual SCORE Conference • College/University Network • Career Center • Research and intelligence services • Employee surveys and incentive programs Membership in CRMI is open to professionals involved in any area of the full spectrum of customer and employee contact. As a CRMI Member, you earn points based on the various services you purchase that are redeemable for valuable rewards, such as • • • • • • Merchandise & gift certificates Discounts on rental cars, hotels, airlines and restaurants Entertainment Vacations Health club and spa discounts Shopping coupons and discounts
Professionals in each of these areas already have access to membership organizations that provide skill building and career resources within their specific fields. However, these organizations are dedicated to their vertical fields, and do not embrace professionals in allied fields who also have ongoing contact with customers, prospects and suppliers.
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If you interact with customers or employees on a professional level, this is where you belong! Watch for further details in the very near future, including a brand new CRMI website. 2004 NorthFace ScoreBoardSM Awards
"Building Customers for Life" The results are being tabulated and the 2004 winners will soon be announced for Omega’s NorthFace ScoreBoardSM Awards. Omega established the NorthFace ScoreBoardSM Award program in 2000 to recognize organizations who not only offer exemplary service to their customers, but who center their very existence on a deep commitment to exceeding customer expectations. In 2004, hundreds of projects, many international in scope, were judged from scores of companies based in the U.S. and abroad. The winners will be selected from this group, and many will be repeat winners. Award recipients qualify by having measured their customer satisfaction levels throughout the calendar year in such categories as technical support, field service, sales process, account management and training. The award recipients are those who, based on survey responses from their own end users, achieved a 4.0 or above out of a possible 5.0 score in the categories measured. Omega’s market research indicates that achieving a 4.0 rating or above over an extended period of time is clear evidence of building customer loyalty. This is the level that essentially locksin profitable long-term customer relationships and significantly raises the bar for your competitors. As the only award of its type determined by customer responses, the NorthFace ScoreBoard Award is the “Oscar” of the customer service industry. Award winners receive a formal letter from Omega, congratulating them on earning this high honor. In the past, many winners have requested a separate ceremony at their place of business, so more company executives and employees can feel the pride and sense of accomplishment from their hard work. In addition, we will formally recognize winners at a gala ceremony during our SCORE 2005 Conference.
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