Net worth: capturing the customer - customer service

Chief Executive, The, Jan-Feb, 2003

So even as Verizon debuts a new Digital Companion product geared toward its tech-savvy customers -- allowing them to receive alerts on their PCs whenever one of their telephone lines, whether home, work or mobile, gets a voice mail message -- the company also continues to provide four-party service plans for more cost-conscious rural customers. "The mentality is, 'Yes, get anything new you'd like out there, but don't forget to manage everything you have;" Babbio said.

In fact, the companies most successful at enhancing customer value are those that not only nurture current customers but also leverage those relationships in developing new products and services. It was by looking at its existing transaction base that United Parcel Service, for example, developed products and services for a sister company, UPS Capital. "The one thing that seemed to be disconnected was the flow of funds," explained Robert Bernabucci, CEO of the global transportation and information services firm's supply chain financing arm. "We went in and looked at the $1 billion a year that was running through our COD services and said, 'Is there a way we can speed fund flow in an arena that is typically thought of as being fraught with credit risks?' We found a way to underwrite it and advance those funds -- and it wound up becoming a cornerstone of the business."

To isolate more opportunities like these and act on them, UPS Capital draws on input from both customers and frontline workers. "We have 4,000 account executives who deal with customers and understand their wants and needs," said Bernabucci. "The 100,000 drivers we have on the street touch our customers daily and know the businesses we deal with. And we have a group of about 30,000 intimate customers that we have contact with on a periodic basis to evaluate technology and its impact on what we do in the aggregate. We listen to all of them."

Progressive and Pragmatic

"For us, technology is liberating," said Susan Alderton, managing executive of Stephens Financial Group," and it allows us to take a step back in time to where service and quality went hand-in-hand. It's a bit like knocking down the local Wal-Mart and rebuilding it as a morn-and-pop shop, where they know your name and whether you bought Viva or Bounty paper towels."

Yet as companies rush to collect indepth data on thousands of customers and analyze it in search of value-add opportunities, it can be all too easy to get caught up in what's possible -- and lose sight of what's practical. "Who's going to pay for all this mass customization?" asked Elisabeth DeMarse, president and CEO of Bankrate.com. While mass customization is possible, thanks to new technologies and the Internet, she noted, the economic models to make it profitable are lagging behind.

"Is the consumer going to pay a premium for mass customization? Are advertisers going to be prepared to pay for one-to-one marketing? The answer is no," DeMarse said. "So just because you can do it doesn't mean you will. It will get there; it's just that the economic models have not [kept pace]."