CRM helps ward off trouble before it starts

The tire blowout disaster that overwhelmed Firestone last summer had an unexpected positive effect on one of its top competitors.

After a spate of news stories last August about defective Firestone tires causing fatal accidents, concerned customers inundated the call center at Greenville, S.C.-based Michelin North America Inc. to make sure that their tires didn't have the same problems. But despite the 100 percent spike in call center activity, Michelin was able to meet the challenge, thanks to a customer relationship management (CRM) package it had put in place just nine months before the crisis hit, said Michelin officials.

"There was a halo effect from that particular situation," said Larry Mims, centralized services team manager at Michelin. "If we had not had the [CRM system in place], we would have had additional costs in extra manpower."

Michelin's situation illustrates the need to have a solid CRM system in place - not just to better serve customers but also to cope with the unexpected, observers said.

"The last thing you want to do is hang up on the customer complaint," said Mike Schiff, director of data warehousing strategies at research firm Current Analysis Inc. in Sterling, Va.

Unfortunately, at Nashville-based Bridgestone/Firestone Inc., things didn't run so smoothly.

After the tire recall was announced, the number of hits on the company's Web site more than doubled, crashing the site for 12 hours. The firm had to turn to an external Internet service provider to assist with the Web site hosting.

"We have learned that you can never be too prepared for a crisis," said a Bridgestone spokeswoman, who explained that the company is now evaluating its customer relations systems and expanding its Web-based services.

Ford Motor Co., whose Explorer sport utility vehicles were most affected by the faulty tires, also had to establish a high-tech, quick-response "war room" to cope with managing the tire recall and replacement efforts.

Fortuitous Preparation

Luckily for Michelin, it had installed a CRM system from Astute Inc. in Columbus, Ohio, in November 1999 for less than US$500,000. Without it, "we might not have been able to capture as much of the information from the consumers as we otherwise would have," said Chad Hake, Michelin's director of consumer relationships.

Using a customer's phone number, Michelin was able to aggregate information about individual tire owners and get an idea of the concerns they had with a given tire on a particular type of car, said Hake.

Michelin was not only able to handle the huge influx of calls, faxes and Web inquiries, but it was also able to collect valuable data from customers that could later be used for marketing and to improve CRM processes, Hake added.

But installing a system for crisis control can be a tough sell for IT departments, said Schiff. "Can someone say, ‘We need a server that's twice as powerful in case of a recall?' " he asked. "Management does not want to hear bad news."

But trying to assemble a CRM system after a disaster hits, like with the Tylenol cyanide scare years ago, isn't a good idea, said Bob Zurek, an analyst at Forrester Research Inc. The call center staff has to be trained and the CRM data has to be prepped to create integrated customer profiles, or it won't work. "Remember, the competition is just a click away," Zurek said.

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