What's "Automoron" doing to you now? 
If you're not careful, it might be killing off customers!

07/19/02 

For what happens when automation runs amok, we've coined the name "Automoron."

Egg -- a bank in the United Kingdom -- recently sent a letter to one of its customers ... and wound up with "egg" on its face!

It started with the salutation ... "Dear Mrs. Deceased!"

While this customer was already past saving -- the woman had passed away -- the news of this blunder traveled far and wide. Reuters news service featured the incident in its "Oddly Enough" section, read throughout the world (click here for your copy). Did this automoron hurt business and the company's image? We'll let you decide.

Think lightning can't strike twice? Bank of America probably didn't either. Check this out! 

Verisign ... the company that owns Network Solutions, once the world's largest registrar of web domain names ... uses a formidable direct mail process to solicit registration renewals. As the expiration date for the domain registration approaches, an ever increasing torrent of notices appear in one's mail. 

There seems to be no awareness at their renewal department when a former customer has left -- by shifting its domain registration from Verisign to a competing registrar. The renewal notices come on. Aside from demonstrating a lack of awareness about losing the customer, this process is horrendously expensive. With 29 million domain names coming up for renewal - most annually - at a three percent defection rate, the results of not recognizing lost accounts could cost Verisign $2 million annually, or more. 

With hot competition now giving much lower registration pricing, rumors now indicate that the Verisign defection rate is as high as ten percent, making it a real possibility such writings to "dead" customers is wasting $6.5 million a year. What's curious, Verisign knows the former customer has gone to a competitor, because it is an integral part of the domain registration transfer!

CitiBank ... owned by CitiGroup, the second largest financial institution on our planet ... recently lost three of our accounts due to an "automoron" blunder. 

We got a curt notice - obviously generated by some automated system gone berserk - about one of our three accounts. This one with a zero balance had not been used in months. It was insulting. As a result, we closed all our accounts, one of which was generating about $600 annually for the company.

“Euromoney” magazine recently named CitiGroup “The Best Bank in the World,” so this happens in the "best" of circles. We sent a note to CitiGroup's chairman to let him know of our decision to leave. Now, our departure would be complete if we could just stop all their mailings asking us to accept their card. 

What can be done to detect and prevent such mishaps?

First - management must believe automoron can happen - and conclude it is probably is happening now! Otherwise, no action to detect and prevent it will be taken.

Next, firms need to empower front-line employees to react immediately to wronged customers, rather than taking the "so what" attitude. Saving a relationship with fast response gives time to root out the systemic problem - and identify an issue that is probably jeopardizing thousands more accounts. In the Citibank case, a manager was far more adept at instantly closing all our accounts than at saving the relationship. She was empowered to close accounts, not save them - or find someone who could.

Next, open "phantom" accounts with your own company. Assign trusted employees to "steward" these accounts (acting as if they are customers). If feasible, let them actually make purchases. Have them report on communications screw-ups and poor customer service. Give them extra rewards for finding problems, and share some of the money when corrections mean savings. Every so often, have them "terminate" these accounts, and report on what your company did to salvage the relationship. You might be surprised to find "nothing" was done. Another approach is to use outside firms to test, monitor and report your company's performance.

Also, insist your IT department cross-match holders of every account about to receive a "negative" communication. Like CitiBank, you could be sending a highly-charged notice to a perhaps highly-valued person holding multiple accounts. Use human intervention to decide, and make that human being responsible for the results. Of course, sometimes bad news must be conveyed to customers. Just assess what other affects it will have on your company before sending it on.

These are just a few suggestions. There are many other ways to stop "automoron" in its tracks. One way is to bring in an outside "marshal" -- a company with the assignment to root out customer killing villains. With no vested interests in departmental or employment issues, such a firm will be able to act and report with a clearer perspective. Contact us if you want help in this regard.

That's it for this segment. We hope these thoughts have been useful, and we welcome your comments. To give us your input ... just click here.



William H. Thompson
Principal

PS - Visit the Thompson Group web site. Click here!

PPS - We have used actual company names and documented events to describe real events. This does not imply the entities named are any less adept at practicing business than any other firm.