FedEx delivers CRM

After several acquisitions and continued growth, the shipping giant absolutely, positively needed a better way to listen to its customers.

BALTIMORE -- The caller was angry. He'd called ahead to request that FedEx pick up an important package, and the

shipping giant had failed to do so.

At least, that's what the customer thought. After he phoned the FedEx call center to complain, a service representative was able to tell him what had really happened.

"They were able to say, 'Sir, a courier went by your office at 11 o'clock this morning. And Pam at the front desk said there was no package,'" said Scot Struminger, FedEx's vice president of IT, in a presentation at last month's Gartner CRM Summit. "Now, it probably wasn't a great day for Pam. We have to be a little concerned about that. [But] you never want a customer calling you back and saying, 'I had this experience, and you don't know anything about it.'"

FedEx's CRM system, which is based on software from Amdocs Ltd., was the subject of a case study at the Gartner show, where the company was praised for the way it listens to its customers.

And there are a lot of customers to listen to. FedEx ships a daily average of 5.4 million packages, and it fields 600,000 customer calls each day. Its 56 call centers are staffed by more than 4,000 service reps.

Live the life of your customer. Become a customer. Do business with your company from the outside.
Scot Struminger, FedEx's VP of IT,

Adding to the challenge is the organization's complexity. Though FedEx operated as a single company for most of its history, it made several acquisitions during the past six years. The companies it bought have continued operating much as they always have, and today FedEx comprises, in part, three subsidiaries that use the FedEx name, each one serving a different branch of the shipping market.

In the wake of these changes, the challenge for the IT and customer service staff was to ensure that the corporation's internal structure was invisible to the customer. FedEx, which had previously used a homegrown system for tracking deliveries, began looking around for packaged software.

Choosing a vendor

With the help of a consultant, FedEx decided on three requirements for its new system: The software had to have an open architecture, be scalable, and come from a reliable vendor with whom FedEx could build a solid relationship.

The latter factor is one that buyers often overlook, Struminger said, but it was a key element for FedEx.

"We're a relationship company, and we needed to feel good about the supplier," Struminger told SearchCRM.com. "We needed to understand that they were in this with us."

The selection process took one month, he said, adding that he thinks many companies take too long selecting a vendor: "Hire a consultant who does this for a living. ... Make it good, make it comprehensive, but don't overanalyze. If you stay with a top-tier performer, you'll be fine."

Implementing the system

In September 2000, FedEx purchased version 10 of Amdocs' ClarifyCRM suite. Of the suite's many modules, FedEx is using ClearCall Center, ClearSupport and ClearSales. The shipping giant customized these pieces to suit its needs.

One year after it was purchased, the Amdocs software was installed at the FedEx call center in Memphis, Tenn., which is also the site of the corporation's headquarters. The rest of the U.S. rollout was completed in May 2002. Since then, the software has been deployed at FedEx's Canadian sites, and deployments are under way in Europe and Asia, as well as Mexico.

FedEx is running Clarify on Hewlett-Packard hardware. The primary database that Clarify interacts with is Oracle 8.17, but the system also interfaces with other platforms and tools, including AS/400 systems, IBM's IMS database management system and ERP software from PeopleSoft Inc.

What the software does

With the Amdocs system in place, FedEx has the luxury of giving its call center reps instant access to a customer's profile -- at the moment the call comes through, Struminger said. He likens the feature to Caller ID.

The customer profile, however, reveals much more than a name. The profile gives the service rep a host of data, including the number of packages that the customer ships and the customer's annual revenue.

"What [that] does is, it prepares the rep to talk to the person," Struminger told attendees. "And we know that when our reps are more confident and know more, it's a better transaction."

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Another benefit is that customers can call a single phone number to inquire about most any question, regardless of whether it's a billing problem, for example, or an inquiry about a package. Similarly, any representative can handle inquiries about any FedEx subsidiary.

Scott Kolman, director of Clarify product marketing at St. Louis-based Amdocs, said that the Clarify tools work as they do for FedEx in part because of design decisions that the company made. And, he said, one of the software's highlights is the fact that it's easily customizable. Clarify's data model is published to customers, which makes it possible for them to add fields and otherwise extend the software's functionality. This characteristic is useful for a company like FedEx, which had some unique needs. An added benefit is that Clarify can pull data from third-party applications -- for a more complete view of the customer.

Kolman noted also that customers generally buy the suite in pieces and that most do some customization, though he also said the suite is "tightly integrated" and can be installed out of the box.

Pricing for the Amdocs system varies, depending on factors like the number of concurrent users and the number of servers. Asked to provide a range, Kolman said that an implementation can cost in the hundreds of thousands or millions of dollars.

Results

Though FedEx wouldn't say exactly how much it spent on its own implementation, the company describes the system as one that's paying off. Customer satisfaction is up, Struminger said, citing an internal survey. The number of incoming calls has been reduced by 89,000 daily, or about 13%. Generally, customers who call are helped by the rep who answers the phone -- they don't have to be transferred. And the turnover rate for customer service reps is down by 20%. The company declined to say what its actual turnover rate is, but Struminger maintains that reps are happier with the new system.

"One of the outcomes of implementing CRM was ... we made our customer service rep's job better," Struminger told SearchCRM.com. "Think about it: If they have the information to solve whatever it is you're calling about, and they can do it effectively and efficiently, that's instant gratification for them. ... They have a better job."

Lessons learned

Struminger has plenty of advice for companies considering CRM. Among his recommendations: Don't completely outsource the deployment of your CRM software; put a vendor representative and a third-party implementer on the team, but maintain leadership of the project.

Make your business and IT executives partners, in both the planning and management processes, he said. And once an implementation is in place, don't get caught up in cross-selling and up-selling to customers; concentrate on helping them with whatever they're calling in about.

And, he added, never lose the customer's perspective.

"Don't get too internally focused," Struminger said. "Live the life of your customer. Become a customer. Do business with your company from the outside. Call customer service. People spend plenty of time asking, 'What's the competition doing?' [Ask yourself]: 'Well, what am I doing? What am I doing to myself?'"

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