CRM: Finding the Treasure in Your Customer Data
After analyzing the information on a customer-by-customer basis, they realized that 30 percent of our most profitable customers were being impacted by general rate increases that were basically subsidizing unprofitable business. So the company stopped giving our most valuable customers general rate increases. The rest of our customers receive rate increases based on market conditions annually.
Six months into this implementation, our executives noticed what could be construed as an increase in customer churn. Senior executives and our cross-functional team began obsessing: Could it be because of the differential way we were treating customers based on our new ranking system? Was it OK to lose some of our less valuable customers? After much discussion, we realized we were overreacting and continued down our course. Customer churn soon returned to normal.
More important, over the past 18 months we have realized ROI beyond what we were ever expecting. Even after pruning undesirable business, Pitt Ohio Express saw a 9.3 percent jump in revenue in 2004. Before the initiative, the company delivered on time 98 percent of the time; that figure remained constant in spite of the changes. In essence, in the last 18 months, we have seen some of the best profits in company history, without impacting the overall level of service we offer to our customers. And we have laid the foundation to becoming a marketing-driven, customer-centric organization. What I have learned from all of this is that killing a major project does not necessarily have to be an ending. It can also be the beginning of something great for the whole organization.
