Why you need Customer Flow Management. A Qmatic White Paper

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1 Why you need Customer Flow Management

2 About this white paper Ask anyone whether they like standing in line and the answer will almost invariably be no. So how can some establishments get away with relatively long dwell times without generating complaints? Part of the answer might be Customer Flow Management, a methodology invented and developed by Qmatic AB based on more than 30 years of accumulated experience from a wide range of industries and countries. This white paper aims to introduce the benefits of Customer Flow Management for your business and show how waiting need not always be a pain for your customers. Page 2

3 Introduction: when your welcome falls flat Recent years have seen massive developments in the field of business intelligence (BI), whereby manufacturers and retailers rely on tools from vendors such as SAP, MicroStrategy or Infomatica to analyse historical data for the purpose of gaining insights into customer behaviour trends. Similarly, another set of tools has been touted as changing the way companies manage their relationships with customers. Companies such as Salesforce.com offer customer relationship management (CRM) software suites that enable corporations to manage their customer relationships with unparalleled insight and granularity. If you are prepared to spend on BI and CRM, it makes sense to spend on something else which will allow you to analyse instore customer behaviour in real time. The aim of all these tools, which large corporations will routinely invest millions of pounds, euros or dollars in, is essentially to drive sales and profitability. A similar process happens in the delivery of public services. However and despite the rise of the Internet, the point at which customers and products or services meet is usually a physical space, whether it is a high street store, a bank or a hospital waiting room. And that is where all of an organisation s costly investment and detailed understanding often falls flat. No amount of expenditure on BI or CRM can make up for a poor experience when a customer walks through your door. When you have a customer on your premises, they are usually there for the express purpose of buying something or soliciting your services. This is often the most critical stage in your sales process. So if you are prepared to spend on BI and CRM, it makes sense to spend on something else which will allow you to analyse in-store customer behaviour in real time. This new competitive tool is called Customer Flow Management (CFM). What is CFM? CFM can be defined as managing the flow of customers and their experience from initial contact to final service delivery. It helps companies adopt a consumer-centric perspective and begins when a customer makes an appointment for a visit or enters a shop, bank, hospital or a public sector service centre. CFM stresses the importance of planning and monitoring the customer s entire visit, possibly also capturing data and information at each point of contact with a member of staff or self- service point. Furthermore it can link all the service points together, helping managers understand the dynamics of the customer s visit and, ultimately, their experience. Page 3

4 In short, CFM can link the vast amount of customer information in CRM databases to the real-time activities targeting and influencing the customers present in the service provider s premises, as shown here: ERP / Enterprise Resource Planning I have a need to manage my product lifecycle from initial conception through to delivery to the end user. Customers don t see it but it performs an important task in helping me deliver the products they need and get the products to them when they need it. I want customers CRM / Customer Relationship Management We need to manage the relationship our company has with our customers. From the moment they become our customers I want to understand their needs as well as deliver great service to them. The system will also give me insight into which product we should develop in the future. I want to know my customers CFM / Customer Flow Management We need to deliver the best face-to-face service that we are capable of. I know that if customers wait too long for service it affects satisfaction. Also, it is important that we maximize profits on every transaction. I want to serve my customers The benefits of CFM CFM can increase sales and productivity by up to 30% and decrease costs by up to a similar amount simply by ensuring your customers are at the right place and the right time to be served by the most appropriate person. Perhaps more importantly, though, it can also significantly improve customer and staff satisfaction rates, leading to increased loyalty and retention. The exact benefits in this respect are difficult to quantify but there is evident value in reducing perceived waiting times and creating a more relaxed working environment, with knock-on effects in terms of reduced security requirements (thanks to fewer angry customers) and so on. Finally, a further advantage of CFM is that it can incorporate data capture mechanisms that can provide additional insights into customer preferences and behaviour, helping guide business improvements and competitiveness in the mid- and long-term, as shown: More competitive service providers Increased customer satisfaction Increased staff satisfaction Page 4

5 The CFM process The CFM methodology developed by Qmatic has been implemented in more than 40,000 instances across 110 countries, and currently handles around 1.7 billion users a year. Initially it involves mapping your current CFM process and defining an optimal one, taking into consideration how the process affects your business, customers and staff, and the direct and indirect impact it has on your key performance indicators. If your target process is different from your current process, you need to define and implement a system that helps you achieve your target process. These two steps may be sufficient for some companies to achieve their objectives and targets. However, the real power of CFM becomes apparent if the new system not only supports the target CFM process but also gathers and stores data on the flow of customers. Properly used, this data can be analysed to generate insights about your operations and customers. Developing the internal processes and routines to More competitive capture this potential is the third and final step of the CFM methodology: service providers A Map the current and define the target Customer Flow Management process C Develop processes to gain insights from continuous data analysis and process re-evaluation B Design and implement a solution to achieve the target Customer Flow Management process CFM in action To illustrate the benefits of a strategic approach to CFM, consider the case of a large multi-national retailer selling fashion clothing, accessories and home décor, with large department stores in Europe and the US. Page 5

6 The challenges addressed with the CFM solution were all related to the checkout areas, which were chaotic and inefficient, with multiple queues for multiple service points without segmentation, which stressed customers and resulted in low staff productivity. The company replaced multiple queues with single queues feeding multiple checkout points, and installed electronic call-forward systems with modern LCD displays to call customers to the next available checkout. Media screens directed customers and providing targeted ads. The results? Customers preferred the new solution since single line queuing was considered fairer. The media screens reduced perceived waiting time. The improved customer flow reduced staffing needs by 15%. And there was less shrinkage from customers picking checkout counters where they knew staff who gave non-approved discounts. Conclusion Compared to many other process-led business improvements, CFM is a relatively low-cost measure with clear and tangible benefits. But perhaps its most important benefit is the impact it has on something which is invaluable, yet largely intangible: your customers experience of your brand. To find out more about how Qmatic can help improve your business through CFM, contact Qmatic UK, Derwent House, Ground Floor, University Way, Cranfield Technology Park, Bedfordshire MK43 0AZ; phone: +44 (0) ; info.uk@qmatic.com. About Qmatic Qmatic is the world leader and innovator in Customer Flow Management (CFM) solutions that are designed to increase sales and productivity while reducing costs for organisations in the retail, retail finance, public, healthcare and travel sectors. Its software, hardware and consultancy helps organisations such as HSBC, Barclays, DVLA, Homebase, Boots, Marks & Spencer, Post Office and UK Border Authority to value time within the physical customer experience and derive real-time management information (MI) that powers meaningful business decisions. This MI can drive important considerations such as in-store/branch/location skills routing, store layout and design, employee training and job satisfaction, customer loyalty and retention, brand equity, opportunity sales, real-time feedback and problem resolution as well as efficiency and cost control. Qmatic s services range from barriers through to both independent and networked virtual and linear queue management systems, to mobile phone applications, kiosk systems and new media. Twitter: Page Qmatic Group. All rights reserved