Who is Bill Gaw?
And why should we
listen to him?
Lean
Enterprise Articles
|
How to identify and master the BASICS |
Increase the
effectiveness of your |
Customer Loyalty
Part 1 of 4
For my latest article:
"Supply Chain Management."
Click Here
For help in your search
for a new career:
Lean Management
To
review our training
programs, click on
the links below:
Performance
Management Training
Supply
Chain
Management
Program
Operations
Management Training
Other Options:
Manufacturing Simulation Game
Thinking Outside
the Box
Lean Manufacturing Implementation
Operations Management Solutions
Supply Chain
Inventory Management
|
As we enter the twenty-first century, the fundamental challenge for business has become creating and keeping customers. In an increasingly global and noisy marketplace, the reasons that this focus on customer loyalty has become primary for commercial businesses are many. First, customer expectations of both products and vendors have been rising. As choices multiply in terms of product features, prices, and brands, customer preferences become more refined, more demanding. Value-added becomes a much more prevalent criterion and requires businesses to distinguish themselves in a clear and compelling way. Second, organizations are finding that they must respond faster to customer requests as the role of Just-in-Time, zero downtime, and speed to market become more common. In responding quickly, businesses find that they must often bring together separate centers of expertise in a coordinated way in order to satisfy the customer. An equipment problem on an airplane, for instance, may require the airplane manufacturer to pull together capabilities in mechanical engineering, electronics, supply chain management, and customer service in emergency fashion. A slow or unresponsive approach would surely lead to loss of customer confidence and ultimately to loss of the customer. Finally, the explosion of technologies for both communications and commerce mean that even secure customers can be approached by competitors in new and innovative ways. The success of Dell in its use of the Internet clearly outflanked the channel-centric positions of PC companies like Compaq and IBM. Cellular phones, EDI, and videoconferencing are other new tools for connecting with customers and recalibrating the loyalties. Faced with such a problem, many businesses try to deal with the issue by throwing more people or technology at the issue. Hence, one suboptimal approach to retaining customer loyalty is to hire more sales people to deal with the customer. However, such an approach may backfire if no coordinating mechanisms are provided for these sales people. Alternatively, equipping the sales force with laptops may prove counterproductive if the right valued-added processes are not being supported. THE KNOWLEDGE MANAGEMENT APPROACH This paper proposes a more cost-effective approach. In this alternative, customer loyalty is established and increased through the judicious use of knowledge management. Based on key principles of knowledge engineering, an information technology (IT) framework will be presented that addresses management of the customer relationship. This framework is then positioned within the context of current capabilities and legacy systems. Finally the appropriate IT tools are described and positioned in light of organizational and customer changes. Some illustrative examples of this framework will then be highlighted. This paper will show, for instance, how an intranet-based approach can make the company's own sales reps more effective. It will also review an extranet approach wherein the knowledge management capabilities are also shared with a channel partner. Finally, the paper will note how the use of the Internet for e-commerce can bring this knowledge management approach to individual consumers as well as business customers. From these examples, some key operating principles to guide the deployment and use of the knowledge management approach will be derived. Before starting, it is always useful to clearly define what knowledge management means. According to Ernst and Young, a well-known consulting organization, knowledge management can be defined as a framework or system designed to help companies capture, analyze, apply, and reuse knowledge to make faster, smarter, and better decisions and achieve competitive advantage. Typically this framework has two dimensions. From an IT
viewpoint, knowledge management focuses on databases, sharable
documents, and other storage devices. From an organizational point
of view, the focus is on collaborative processes, learning
dynamics, and knowledge transfer. However, the processes for sharing that data and for transferring knowledge must come into play. In fact, knowledge both as a data object and as a process is to be noted in the sales transaction. For the customer, knowledge has value as a piece of information with which to make better purchase decisions. For the business, i.e., the seller, knowledge is developed and expanded in a process potentially involving team participants from the seller side. The enabling technology for this knowledge management approach is the Internet, specifically the World Wide Web paradigm. The Internet protocol, often referred to as TCP/IP, and HTML (hypertext markup language) are the networking standards that allow for both ease of use and standardization. With this technology as a standard, the organization can build the knowledge management elements that contribute to interactive communication, group collaboration, and ultimately, customer commerce. A more detailed look as the elements of this knowledge engineering framework from the seller viewpoint will now be presented. To Be Continued STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy." All at no cost of course. Your personal information will never be disclosed to any third party. privacy policy
Here's
what one of our 13,000 plus subscribers "Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again." Kerry B. Stephenson. President. KALCO Lighting, LLC "Back to Basics" Training for anyone ... anywhere ... anytime Business
Basics, LLC © 2001-2009 Business Basics, LLC |