By Kim S. Nash  |  Posted 2006-09-05 Print this article Print

The winning projects in the Baseline/The Hackett Group ROI Leadership Awards pulled in relatively quick returns with hosted, Web-based systems.

: Aiming to Please">

Aiming to Please

Winner: Nikon
Return on Investment: 3,203%
Project: Customer Relationship Management

For decades, Nikon cameras have captured beautiful images, from high fashion in Vogue to spacescapes shot from every manned space mission since Apollo 15 in 1971. The Nikon name carries connotations of fine photography and top-notch equipment, and people expect a certain level of quality from the 89-year-old, $5.9 billion Tokyo company.

The problem was, Nikon's customer experience wasn't as good as the company wanted, says David Dentry, general manager of technical support and customer relations at Nikon's U.S. subsidiary in Melville, N.Y. For example, customers had to wait more than three days for a response to queries sent by e-mail, he says, and high-end professional photographers—the company's most profitable customers—were often frustrated by some customer support staff who knew less than they did.

Nikon hired Dentry in 2002, he says, "to help bring customer service into a more modern world and also reduce costs and time."

The way Nikon reshaped how it serves customers by phone, e-mail and the Web snagged the company top honors in this year's Baseline/The Hackett Group ROI Leadership Awards. Nikon disclosed detailed costs as part of its entry but requested that the figures not be published. For that investment, the company, as of June, showed a return of 3,203%.

Nikon's previous customer service system involved several separate elements. Phone agents could query a homegrown Microsoft SQL Server database of common questions and answers, such as troubleshooting printer issues with Nikon's digital cameras.

But there was little history kept on customers to help agents converse personably and knowledgeably with callers. The system also required someone to sort incoming e-mail to get it to the right person.

Four years ago, the company replaced all of that with a contract for customer relationship management software and services from RightNow Technologies in Bozeman, Mont. RightNow's eponymous software lets agents open and update electronic records on each customer who contacts Nikon support, no matter how the contact comes in—via phone, e-mail or the Web.

The customer service agents now have a history to draw from when speaking with customers, as well as a database of questions and answers all agents now use consistently.

That increased each agent's efficiency. But with RightNow, Nikon also set up a self-service section of its Web site where customers could find answers to questions themselves. According to Nikon, the self-help site initially drew 20,000 inquiries per month, and soon as many as 45,000. The company estimates it saves $10 for each phone call or e-mail it avoids.

Also part of Nikon's return: savings from not having to hire and train additional support agents as customer service volume has increased during the past four years. The company declined to say how many customers contacted the support center in past years, but says it had 3.5 million customer interactions in 2005.

Nikon's U.S. project has since been replicated by Nikon Europe and Nikon Asia. "We presented it to them, and they all liked it," Dentry points out. "That was a good feeling." Nikon now runs the system in 19 languages worldwide.

The feelings weren't always good. Dentry won't say exactly what customer satisfaction scores were for Nikon's 60-agent service department. But he describes some of the problems the revamp addressed.

For example, under Nikon's old system, photographers who sent questions via e-mail waited an average of 80 hours for an answer. That's because all incoming e-mail landed in one mailbox. Once every day—or two or three—a support agent would read each message and route it to an appropriate technical expert to answer. "That person was doing it as a side job in addition to their regular support job," Dentry explains. "It was really holding us up."

Now, a photographer customer can fill out an electronic form at Nikon's Web site. There's a box to type in a free-form question. But there are also fields in which to specify items such as product name, category of problem and, for customers already on file, a user ID code. Using those keywords, the RightNow workflow system automatically directs messages as they arrive to the right experts. As a result, average response time to e-mail has dropped from 80 hours to five.

Nikon's CRM system allows special attention for professional photographers, who are the customers who spend the most money with the company, Dentry says. For example, messages that specify questions about Nikon's D2X product line—professional digital cameras priced at $5,000 or more—are funneled to a group of highly trained support staffers.

Next, Nikon plans to go beyond reactive customer service with e-mail marketing newsletters to specific customer segments, Dentry says. But accurate profiling is key: People with a Nikon Coolpix point-and-shoot consumer camera won't care about an e-mail on the new Zoom-Nikkor lens for the top-of-the-line D2X camera, Dentry notes: "We want to make sure data we send is important data for each customer." —KIM S. NASH

Total Benefits: $14,511,160
Return on Investment: 3,203%
Note: ROI assumes 8.73% annual discount rate on cash flows.

Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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