The relationship between company and customer isn’t complicated from the customer’s point of view. All the company needs to do is provide service. The type of service varies depending on the type of business, but the need remains the same: Quality service in a timely manner at a reasonable price.

Consistently providing top quality service requires tools. Customer relationship management (CRM) applications seem like a dream come true for many companies. They provide insight to customer behavior improving marketing effectiveness while reducing costs. They were never designed to replace service, only to enhance it.

Unfortunately, many companies had poor service before adding CRM. They apparently thought that the new shiny tool replaced the need to care about their customers. They forgot that customers are people. They have unique opinions, needs, wants, likes, and dislikes, but one thing is universal. They don’t want to be managed. All they need or want from a company relationship is service. It’s that simple from a consumer’s perspective.

The combination of CRM and high quality service improves customer loyalty, company growth, and bottom line profitability.

It isn’t easy, but it’s more effective than any other strategy. I call it customer relationship care (CRC). It requires the integration of marketing and service with a focus on the customer experience.

Implementing a CRC strategy requires that the marketing team work closely with the customer care team to identify bottlenecks, policies, and processes that reduce service quality. Everything a company does provides some sort of service for the customer whether it is a marketing campaign, answering questions, or delivering products. When team members start seeing their functions within the organization as serving their customers, it is a game changing event.

Customers and prospects shift from being targets, numbers, and profiles to being individuals with needs and wants. There are fewer complaints and more compliments. Proactively eliminating problems before they reach the customers means that there is less time and effort spent resolving issues. Customer acquisition and retention is easier because alienation is gone.

Making the shift from CRM to CRC isn’t a project, it’s an evolution.

Get it started in your company by changing the way you think about customers, prospects, other departments, and your job. Start looking for ways to eliminate potential problems and share your successes with others. When people see a successful strategy, they want to emulate it. Before long, everyone will be participating, your customers will become avid fans, and your company will be growing in size and profits.

Inventory management is a risky business. Too much product on hand increases carrying costs. Too little reduces customer satisfaction. Finding the perfect balance between the two is near impossible.

The best managers know that they are in the risk management business and use every available tool to minimize their exposure. One key component is the cost of backorders. Knowing how much being out of stock costs your company helps refine the order decision.

There are both short-term and long-term costs associated with backorders. The short-term are the processing costs for multiple shipments to customers and receipts from vendors.

The long-term costs should keep you awake at night.

Being out of stock costs you customers. If you handle a backorder situation well with good communication, the first one or two times won’t have a negative effect. But, let it become a regular experience and you destroy loyalty.

Your marketing is less effective because people have become disillusioned with your company. Every promise is judged by your failure to deliver. If you don’t have a relationship with the inventory management team, you won’t have a clue that there is a service issue.

To measure the effect of backorders on your marketing, compare the order history of customers who have never had a backorder with those who had multiple out of stock experiences. Then, work with your inventory management team to minimize the problem.

Add notices to your website to let people know when items are getting low on inventory or out of stock. If the ability to reorder is questionable, remove the item from the website when inventory is depleted. You can always add it back, but you don’t want to go through the notification process and disappoint your customer.

Review the transactional emails to insure that they are communicating the right message to your customers. If an item is backordered, offer a substitute when available. If there is an extended delay, offer a gift or discount on the current order. Offering it on a future order adds insult to injury. And, always give your customer the option of canceling. Lost orders are disappointing. Lost customers are debilitating.

For more information on calculating the costs of backorders read: Are Backorders Sabotaging Your Bottom Line?

It doesn’t keep you from being one either.

There’s an ongoing conversation about what defines a social media guru. Occasionally I join in, but mostly I chuckle. The questions are legitimate, but I experience déjà vu every time I see a tweet or post debating the validity of other people’s claims.

Years ago, I submitted a proposal to conduct an efficiency audit on a company’s operations. I lost the contract. It happens, but this loss was particularly poignant. The winning firm specialized in marketing.

What did this marketing firm know about operations? One of the consultants and I became friendly competitors over time. When I asked why they went after the operations job, he said that it was their policy to expand their areas of expertise with on the job training.

I would say it differently. I would say that they expanded their areas of expertise at their client’s expense.

The same is true of social media merry-go-round cowboys (or girls) who think that because they know how to open a twitter account they are qualified to sell their service. They are, if they are offering clerical skills. But, if they promise to deliver anything more, they are misleading their prospect/clients.

Delivering measurable results requires expertise, experience, and testing.

Of course, there will be times when theories become realities, but most of the times they become expensive failed projects. When I asked my friendly competitor how the project worked out, he said that they were able to provide a few tips that saved the company some money. He considered it successful. Maybe the client saw it that way too, but the reality is that the same amount of money could have bought better results.

Social media is so new there isn’t a viable business model that is repeatable and sustainable. Every project is a test to find the right mix of conversation and marketing that works (translation: generates revenue, loyalty, and/or reduces costs). The people who tell you differently are wrong.

Some cowboys ride the merry-go-round.

(Most likely with a toddler in tow, but they are still going round.)

Telling the difference between a consultant who can deliver measurable results and one who is seeking on the job training requires due diligence. Start with the following questions. If they are answered to your satisfaction, you significantly improve your chances for a successful implementation.

How much of your revenue is generated from speeches & how much is generated from projects?

A good percentage of the people presenting themselves as consultants make their living on the speakers’ circuit. There is a big difference between inspiring someone else to act and knowing how to roll your sleeves up to do it yourself.

Do you receive anything when you recommend a tool or service?

Most affiliate marketers are small fry when compared to consulting firms. Vendors desperately seeking new customers are willing to provide almost anything for a consultant who favorable influences his or her client. If you are hiring a consultancy for an independent opinion, make sure that they are working for you, not the vendors.

Will you explain how and why everything in your recommended actions works?

If your consultant can’t explain how things work, it means that he or she doesn’t know. Not knowing is okay when it is a test environment and the consultant is honest about it. Not knowing when you are hiring the person for specific expertise indicates that you need a different consultant.

How will success be measured?

What does successful completion of the project look like? What tools and benchmarks will be used? If they’re not measuring and documenting the results, you’re wasting your time and money.

Will you be taught how to do everything your consultant does for your business?

You don’t want your business held hostage by a third party. Knowing how to do what you need doesn’t mean that you’re going to terminate the relationship. It means that you’re protecting your business.

Who owns the rights to the analytics and results?

It’s your business, your numbers, and your future. Make sure that it stays that way.

Why should you work with his or her firm?

There has to be a differentiating factor that distinguishes this consultant from the other 41 million. For example, integration is the difference between my consultancy and other marketing or operations firm. We make everything work together. We know how websites, direct mail, email marketing, catalogs, and operations work. This allows us to find the right balance for the company.

What is your guarantee?

Every consultant should have a guarantee. After all, don’t you guarantee your service and/or products? It is good business practice.

Choose carefully when selecting a consultant. You want to find one that has the experience and expertise to deliver, understands your corporate culture, and is willing to share the risk.

Last week I answered a call from one of my favorite retail clients. My friendly greeting was answered with “I have a vision that keeps turning into a nightmare.” No “hello, how are you?” or “Cold enough for you” chitchat in this call. She was clearly on a mission.

I suggested that we start with the vision. Her vision was an integrated organization where everything from marketing to fulfillment worked together. Customers and prospects could move easily from one channel to another finding what they need or want along the way. Their social media efforts would ease the way for their catalog and email campaigns.

She knew the benefits; we’d been discussing them for months. She knew the urgency because I’d been nagging encouraging her to get started. She knew the risks of inaction. Her competition was already gaining market share. She wanted to start the process but there was a problem.

She had too many channels and departments operating as silos.

Every time they started planning the integration, the details overwhelmed them. They left the meetings with more questions than answers:

How do we make our legacy systems work with new marketing tools?

Who is in charge?

Who should be involved?

How deep should the integration go?

How do we divide responsibilities?

What happens when…?

What’s a reasonable timeline?

How do we measure success?

Where do we start?

The last question is easy to answer. You start where you are and build from there. The rest will be answered as you go.

Channel integration is a process.

The first step is to identify your two strongest silo channels. They are the ones that need to be integrated first. (Remember the 80/20 rule?) Document the areas where lack of integration is a known problem. Create benchmarks before you start resolving issues.

Improvements in one area always highlight challenges in another. This is an opportunity. Treat it as such. It is easy to get overwhelmed by the continuous flow of new challenges. If you begin with benchmarks, and update them regularly, you’ll see progress (and new opportunities.)

Break your large, overwhelming tasks into bite size mini-projects that can be completed in 1 – 5 days. Your goal is to move forward one step at a time.

Recognize that sometimes you have to backtrack or detour to move forward.

If you take it slow and steady, missteps carry little risk. Avoid the temptation to look for the latest and greatest turnkey solution. It costs a lot of money and time while rarely delivering significant results.

Don’t forget the other channels while you’re integrating your best ones. Start capturing social media user id’s now. It’ll make integration and measurement easier down the road.

Get started today for a better tomorrow. Holiday 2010 is just around the corner.

Does information and ideas flow freely through your organization? Or, do your departments keep to themselves? If your marketing, operations, and IT departments aren’t working well together, it’s because your corporate culture places a higher value on departmental performance than teamwork.

Everyone knows that teams playing well together win more often. It is little surprise when a team comprised of superstars loses to a less talented squad. The stars tend to put their personal objectives ahead of everything else. Your departmental teams work the same way. Their focus is to keep their group on top. They don’t notice that some of the things they do have a negative effect in other areas.

If you try to resolve the issue with a decree, the knee-jerk reaction is resistance and fear. It increases any animosity in your organization. Since lack of information is the reason that there are challenges, try a different approach. Invite your marketing, operations, and IT team leaders to lunch.

This is a special lunch, so you have to plan it carefully.

• Don’t skimp on the price. This is an investment in your company’s future.
• Ordering in is better than going out if you can guarantee an uninterrupted time. If not, choose a restaurant conducive to conversation so you can chat freely.
• Establish ground rules in advance. Each participant should bring two items to discuss: 1) The one thing that the other departments could do to make things easier for his/her team; 2) One thing that the other team leaders should know about his/her department.
• Communicate your objectives to each participant. They are: Improved teamwork; Reduced problems; Better customer service.
• Keep everything as simple and friendly as possible.

It often helps to provide an example of your expectations prior to the lunch. For example, the marketing manager’s two items might be: 1) If customer service would notify marketing when customers complain about campaigns, it would help them create better promotions. 2) Marketing campaigns are planned months in advance. Last minute changes, even good ones, are expensive and hard to implement.

Don’t expect a lot during your first lunch. Depending on your office politics (and don’t tell me that your office doesn’t have politics. If you have two people together, there is some form of politics involved.), there may be a lot of animosity and trepidation involved. Your goal is to open the dialogue so that your team leaders start interacting. Given time and the right guidance, they will start working together. (They may even learn to like each other.)

Taking your leadership team to lunch has a great side effect – they start to think differently. When the lunch is a regular part of their routine, they know that anything they do may be discussed. It changes “What’s in it for me?” to “How does this affect others?” or “Does this move us closer to our goals?”

The investment of time and money in a regular lunch date creates a paradigm shift from “me” to “team” thinking. It’s a small price to pay for a huge return.