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Intelligence Briefings: Models Of Customer Management

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Case study: the travel and transport sectors
Package and document collection and delivery

UPS, as the world's largest carrier of packages and documents, has been active in pushing out the frontiers of globalised customer management. One of the strong factors in its favour here has been the relative lack of intermediation -- although agencies are still used in a number of emerging countries. This ensures that all customer management procedures can be implemented through line management processes rather than the influencing and motivational approaches required to ensure that agencies manage customers in the desired manner. For UPS, the challenge has been to ensure that the quality of customer management continues to advance through the use of technology, while containing costs so as to ensure that its competitive marketing position remains strong.

In the age of e-commerce, this has become even more important. On many web-sites of merchandise suppliers, customers can now choose the carrier of the merchandise simply by clicking on the logo of the preferred carrier. Many customers do this on the basis of price. In the United States, this has given UPS a competitive advantage over its main direct competitors and allows it to compete effectively with the US postal service. Customers who choose UPS can now also track their consignment through the web. In fact, over half of the tracking enquiries made through the web by customers are via these "partner" web-sites. This is an interesting example of partnership relationship marketing at work -- UPS is now able to influence customers who are "intermediated" via the product suppliers.

For UPS, one of the keys to the globalisation of its well established but continuously developing customer management model is the availability of advanced telecommunications infrastructure. If any customer (shipper or receiver) anywhere in the world is to be able to track a consignment, he or she needs to have the device required to receive the data. UPS's own technology ensures that the data about the consignment gets immediately to its systems. The latest version of its Delivery Information Acquisition Device (DIAD) transmits information as soon as it is scanned in. With the mobile telephony developments mentioned earlier in this paper, customers who need it will get nearly instant notification of delivery.

All this refers to the operational process of customer management. In terms of installing and developing the process of customer management, the issues faced by UPS are very much those highlighted among our research respondents. The model of customer management in its most mature market is evolving very rapidly because of the impact of e-business throughout the supply chain.

The new development is that receiving customers can now specify UPS more easily -- or not. Therefore, UPS must extend its brand strength from business customers to any customer who could be receiving -- and, therefore, choosing -- UPS on the web. Meanwhile, in emerging economies, UPS is still installing a more conventional call centre-based infrastructure of customer management, knowing that this will have a shorter life than in more mature economies because it will be overtaken by e-business methods of customer management.

In terms of our models of customer management, UPS follows a policy of "top vanilla" for most customers, with a strong CRM/major account offer for large commercial customers. Top vanilla standards have to advance rapidly under the impact of e-business. But e-business also makes it easier for major account customers to have relationships with multiple carriers, so the standards of service and costs offered to these customers need to be extremely competitive.

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