Service hotlines ring up

Service hotlines ring up $35m in business a year

By Denesh Divyanathan

YOU ring their number when your new dinner table is delivered with scratches, or when the laptop you bought just last month emits one long, high-pitched beep before rising to hardware heaven.

It is a rare consumer who has never called a customer service hotline to learn more about a product, place an order or lodge a complaint.

Little wonder then that Singapore's interactive customer relationship management (CRM) industry, which also encompasses the sophisticated hardware and software used in managing customer contact, is worth more than US$20 million (S$35.4 million) a year, and growing.

Although companies have been cutting back on information technology spending over the past few years, American consultancy Frost & Sullivan said the interactive CRM market in Singapore grew by 22.3 per cent to US$22.6 million last year.

This year, it expects the market to grow by 15.4 per cent to US$26.1 million before hitting sales of US$36 million in 2004.

'A lot of the growth will actually come from large companies which will continue to invest in new applications...such as multi-channel contact centres,' said Mr Manoj Menon, Frost & Sullivan's Asia-Pacific technology practice director.

He added that mature markets such as Singapore and Australia would see growth from the small and medium-sized enterprises sector as businesses such as hotels and hospitals start up five- to 10-seat call centres.

'Even small enterprises are realising that they have to take care of their customers,' he said.

Mr Menon was speaking to The Straits Times on the sidelines of an event yesterday to honour US-based Avaya as the leading regional player in the interactive CRM space.

He also played down concern that Singapore's call centre industry may lose out to cheaper locations such as India and the Philippines, pointing out that the Republic's highly skilled workforce and solid infrastructure allow it to focus on higher value-added services.

'Singapore also has advantages in terms of multi-linguistic capabilities,' he added.

According to industry estimates, there are more than 4,000 people working in some 140 call centres in Singapore.

Most of these centres are managed by telecommunications companies such as SingTel, M1 and StarHub, as well as financial institutions such as Citibank.

In terms of industry trends, Mr Menon noted the increasing use of the very popular short messaging service by companies in their interaction with customers, especially in 'pushing' or selling products and services.

Time for change
Radical though some of this thinking may be, it’s also hugely timely, as Abbey National’s fortunes can most kindly be described as mixed. In the summer a warning that the bank was set to lose millions of pounds on bond holdings and private equity investments was issued. This was the final straw for chief executive Ian Harley, who jumped ship in late July as takeover speculation ran rife in the City of London.

The Bank of Ireland made a takeover bid but its offer – pitched too low to tempt investors – was turned down. The speculation was quelled when Abbey National appointed former UBS president, Luqman Arnold, as its new chief executive. Arnold is credited with turning UBS around in the late 1990s after its difficult merger with Swiss Bank Corporation.

So Abbey National now looks set on following its recovery plan alone. More than ever, then, the reinvention of Abbey National is a top priority and the One on One CRM initiative is right at the heart of that strategy. The firm is one of the most recognised brand names in the UK. By its own estimates, Abbey National reckons to have a relationship with one in three of all UK households.

But those relationships are not being maximised to their greatest potential. “We have 16 million customers so we are a high-touch brand for the UK,” says McGinn. “But, for example, our retail customers have an average of 2.1 products each with us, which is pretty low. We want to drive up the value of our customers.

“Some 10 per cent of our customers make 100 per cent of our profits. We need to hang on to them but get the other 80 per cent up to being more profitable for us. That means improved cross-selling and up-selling so we can get the number of products up to 3 or 3.5 per customer.”

But that doesn’t mean treating customers as simply figures on a balance sheet, insists Andrew Barton, Abbey National CRM director. “CRM is often just seen as a strategy to help you to sell more,” he admits. “What we believe is it has to be seen as being about a strategy that creates an environment in which the customer wants to buy and that makes us, as a company, a more relevant place from which to buy. If we can improve the quality of that environment then that’s the key to people buying more in the long term. That’s what our strapline of ‘Making Customers’ Lives Easier’ is about.”

Such thinking was behind the decision in January 2001 to examine how the company managed its relationships with its customers. This was to result in a 12-month ‘thinking’ period, during which the limitations of the existing technology infrastructure was one of the subjects that came to the fore.

In common with most financial institutions, Abbey National had accumulated a plethora of legacy systems over the years. “We had every brand name you can think of,” admits McGinn. “It all needed to be wired together and there are a lot of risks with that. The first things we decided to do were to stop building systems and get out of being a software company ourselves. We decided to buy out of the box, get on with the implementation and turn off a whole bunch of redundant systems. That way we could get back to being a bank, not a software developer.”

To that end, much of the remainder of this year and next will be taken up with a Siebel eFinance packaged applications rollout, the biggest that the vendor has enabled in Europe. The initial deployment will be in both branches and call centres, while future deployment phases will add new functions, such as the ability for customers to book appointments anywhere in the business and eChannel capability.

But Barton is adamant that the technology rollout is only part of the initiative, an enabler rather than the be-all and end-all. “We are incredibly clear within the business that the One on One initiative is not an IT project,” he insists. “It’s been made incredibly clear to everyone that, while we have to get the IT right to get to the starting blocks, the real success will be determined by our people. They need to buy in to the idea that by using the technology they can help us change our approach to our customers.”

Poor track record
That’s a viewpoint that finds favour with Colin Shepherd, strategic business director at CRM research consultancy Detica. “Retail banking doesn’t have a great track record in CRM, often because the institutions come at the problem very much from a technology point of view,” he argues. “They can have really good analytical skills and lots of information about the customer that can be gathered, but it’s often not integrated into the wider sales and marketing operations.

“Often the marketing analysts tend to get overlooked or ignored because of the product-driven cultures of the companies,” he adds. “Successful CRM needs to be built around a customer-centric culture. Product offers need to be targeted around the needs of the customers, not because of the convenience to the product side of the business. That means getting much closer to the customer.”

This is clearly identified as a fundamental plank of the Abbey National outlook, insists Barton. “We know we need to be much better at using the data we have about a customer to anticipate the needs of that customer better,” he says. “I think everyone’s mental picture of outbound customer contact is cold-calling, the double-glazing-salesman approach. That’s just a complete turn-off. It needs to be about calling in a way that is actually helpful to the customer.

“For example, if a customer has a savings bond that is maturing, a phone call to say it is reaching a certain point and invite the customer to come in and discuss what he or she might want to do next – that becomes a helpful anticipation of their needs. Where we make calls to customers like that and they subsequently buy, their level of customer satisfaction is higher.”

As well as providing better cross-selling functionality, the new CRM software rollout is also enabling the firm to take its business to the customer rather than the other way around. “We want our customers to be able to do business with us when it suits them, not when it suits us,” he explains. To that end, the company has overhauled its website for e-commerce, reducing the number of pages from 1,200 to a simpler and more customer-friendly 400 (“Less is more,” argues McGinn), and is exploring areas such as digital television as a channel to reach the customer.

The improved data access and cross-matching provided by the new application infrastructure is helping Abbey National crop up in unexpected places. Forty branches will open in supermarkets to meet the needs of couples out doing the weekly grocery shop. The bank is also piloting a scheme with an outlet in Homebase in Liverpool to catch customers who might need credit information. In its first week of operations, this outperformed expectations by more than four times.

McGinn reiterates Barton’s point that One on One is a project where technology is the jumping-off point for wider change. “This is not about technology in the end,” he says. “This is about culture, procedures, people and some technology.

It’s about changing people’s attitudes – that’s the biggest challenge. You need really strong change management. People need to be told about the changes and what the project’s about and what’s going to be achieved.”

Everyone’s in on it
As a result, McGinn has spent a lot of time talking to staff and raising awareness of the One on One project, including at senior-management level. “We’ve found stakeholder management to be critical. I’m the sponsor and I sit on the retail board so it’s absolutely clear where the buck stops.

This helps to bring focus on our direction. We brought everyone involved in the project, including our technology partner, into the same location, the same building. This means that you can all talk around the coffee machine. We wanted to have everyone cheek by jowl.”

Along with Abbey National’s current financial issues, the One on One project is clearly a long-term proposition. “We are learning as we go along,” admits McGinn. “Sometimes it’s exciting, sometimes it’s frightening, but there really is no option. This has to work. It has to work for us and it has to work for our customers.”

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