This article was originally published in Industry Week
By mining their internal data on pump repairs, Service Pump is now able to predict when a customer’s pump is likely to fail and how much the customer is likely to spend operating a pump in their unique environment. They can also provide customized preventative maintenance plans and schedules to extend the lifetime of their customers’ products.
Know your customers, industry 4.0 edition
Not so long ago, manufacturing was singularly about making things. Manufacturing companies would develop and create a product, hand it off to a series of distributors or partners, and then collect their cut of the profits. No more.
The Harvard Business Review published a pivotal article in 2010 called “Rethinking Marketing,” in which the authors outlined what used to be standard practice: make a product, find a market for it, and find a way to sell to that market. But, as the article pointed out, this no longer works. Thanks to the “Amazon Effect,” customers expect to interact with companies and shape the products they use.
Though the HBR article was published almost a decade ago, it seems manufacturers are still struggling to catch up to consumer needs and expectations. To ensure long-term success, they must move beyond distribution channels and engage directly with their products’ end users.
Putting customers first might sound obvious, but in many ways it represents a monumental shift in how most companies do business. Too often, manufacturers who invest in Customer Relationship Management (CRM) software use it merely as a sales tool for activity tracking rather than what they are built to be: a 360-degree viewpoint of your customers’ experience to help you understand and interact with them better, and make more successful products in the process.
Manufacturers should be using their CRM systems to deliver the four core elements of customer experience: immediacy, personalization, consistency, and anticipation.
Let’s break these down.
Manufacturers have seen first-hand the impact technology can yield on the shop floor. Yet, many still use an old-school approach to customer service, with a handful of staff members answering phone calls on a landline.
But online communities, self-service portals, text messaging systems, social media platforms and chat bots—all enhanced with AI–are now fundamental tools.
Your CRM system should serve as the centralized hub unifying these channels and allowing you to respond quickly–and consistently–regardless of how your customer chooses to communicate.
Your CRM database can also offer you key insight, allowing you to elevate problems to proactively address emerging issues. Seeing a sudden uptick in service calls on a particular product? If these issues are logged properly in your database, you can identify the problem and streamline your response. You might also choose to automatically flag certain issues or problems with key accounts for a quick response by a manager. This sort of prioritizing allows your leadership team to prioritize their work and move quickly to ensure the satisfaction of top clients.
In addition to expecting near immediate responses, customers still want manufacturers to deliver the personalized service one might expect from the old mom-and-pop shops of days gone by. Did I mention customers’ standards are high?
Fortunately, automation and artificial intelligence offer companies the ability to virtually clone their customer service teams and deliver highly personalized service quickly and at scale.
But no one likes talking to a robot or feeling like they’re just one of thousands to receive the same message. So employing these tools successfully takes a thoughtful and strategic approach.
When implementing any technology, I always recommend starting with your people, then examining your processes. Automated and AI tools should be carefully crafted and authentic extensions of your company culture and brand.
In other words, think about the characteristics and practices of your most successful customer service agent. Often, it’s the little touches like remembering a customer’s buying history or the problems they’ve recently worked to solve.
Or maybe even something as simple as sending a note of congratulations when they achieve a major business milestone.
Once you’ve identified those key touchpoints, you can map strategies for replicating that level of personalization by building out your CRM database and automating considerate, authentic communication.
Most manufacturers started out providing the sort of personalization and expediency outlined above, but were unable to keep up as their businesses grew.
In attempting to meet the unique needs of their customers, many manufacturers have accommodated highly personalized requests and customized their pricing, procedures or processes to meet the needs of specific customers. Easy enough to do when your customer base is small, but over time this lack of consistency becomes a nightmare.
Fortunately, we now have the ability to harness data to gain clear insights into our processes and outcomes and begin sifting through the mess we’ve created (I’ve been there!) as we’ve worked to grow our businesses.
Start with taking a look at who your customers are and sorting them into tiers. I’ve found the 80/20 rule to be extremely helpful. In most cases, 80% of your business comes from 20 percent of your customers. Find the 20% that is offering you the most value and identify them as “key accounts” or “top customers.” These people deserve your constant attention, individualized service, and some flexibility in the way they do business with you.
The remaining 80% of your customer base is, of course, important, but it doesn’t make sense to continue offering them the level of personalization and customization of your top customers.
Revisit your processes and agreements in working with this tier of customers, and find ways to streamline, standardize, and automate your interactions with them. Putting in place consistent pricing structures, service level agreements, and communications processes with these customers will help you more effectively and efficiently serve them while freeing up time for platinum level support for your top accounts.
Think back to the “Amazon Effect” I mentioned earlier. Amazon does a great job of predicting its customers’ needs based on their past order history. Chances are, if you’ve ordered standard household items–let’s say, paper towels—from Amazon in the past, you’ll start seeing notifications about reordering right around the time you’re about to run out.
Other retailers have taken this a step further. One British grocery chain, for example, sends coupons for beer to male customers who purchase diapers—because they know these customers aren’t able to go to the pub as often with an infant at home!
This level of anticipation and proactive service doesn’t have to be limited to the B2C realm. Take, for example, Service Pump & Supply, an industrial provider of water transfer and management systems. By mining their internal data on pump repairs, Service Pump is now able to predict when a customer’s pump is likely to fail and how much the customer is likely to spend operating a pump in their unique environment. They can also provide customized preventative maintenance plans and schedules to extend the lifetime of their customers’ products.
But service quality like this is only as good as the data you maintain. New roles and responsibilities are necessary to tackle a master data management strategy, building governance, and mining your data for meaningful insights. A strong business analyst or data scientist will be a rising role in the manufacturing space.
All of this adds up to an exciting new world for manufacturers. For the first time in our history, we have the ability to deliver deeply personalized services and products at an enterprise level. Now is not the time to be intimidated by change — let’s embrace this opportunity to provide better, faster service at scale.
Andrew Rieser is president and co-founder of Mountain Point, a digital transformation consulting firm specializing in the manufacturing sector. He has nearly two decades of experience in designing and implementing digital business processes.