According to the 2008 Executive Survey by Gartner and Forbes.com, retaining and enhancing relationships with current customers is the number one business issue, followed by attracting new customers. This makes CRM a top priority for many companies. CRM is foremost a business strategy that drives the reengineering of customer processes to improve the customer experience and increase revenue and profitability for the company. However, when it comes to technology, there is no one solution - but more than 50 submarkets, technologies and applications. Our recently released CRM Hype Cycles provides insight into these technologies, including definition, hype and maturity level, business impact, user advice and sample vendors. We break these technologies into five major areas: sales, markteing, customer service, e-commerce and analytics.

The "Hype Cycle for CRM Sales, 2008" is designed to aid enterprises in surveying the sales automation landscape to understand the maturity, progress and rate of adoption of leading technologies, applications and delivery models. Decision makers should use this framework to investigate the attractiveness and suitability of sales technology solutions in enabling sales strategies to advance revenue growth and margin expansion.

Many applications and technologies are available to support marketing; however, the levels of maturity and market adoption vary dramatically among them. Organizations should use the "Hype Cycle for CRM Marketing Applications, 2008" to determine the maturity and adoption levels of different marketing applications, and to align their corporate investments, based on corporate philosophies regarding innovation, company type, anticipated business benefits and willingness to assume vendor risk.

The "Hype Cycle for CRM Customer Service and Field Service, 2008" describes the impact of new consumer expectations for consistent service across multiple channels, including telephone, face-to-face and Internet-based customer service. Gartner is seeing progress from small and innovative software providers in support of processes that affect the costs of providing service and the overall customer experience. Analytics is playing an increasingly important role in customer service.

The "Hype Cycle for E-Commerce, 2008" illustrates the varying hype and maturity levels of e-commerce technologies, as well as their business dynamics and complexities. Organizations that want to evolve their e-commerce capabilities into next-generation customer experiences and increase sales and customer retention should use this Hype Cycle to understand the hype, technology maturity and business impact of leading e-commerce technologies.

Analytical capability is increasingly packaged as a solution to address specific business issues, instead of being created with generic business intelligence tools. Gartner's "Hype Cycle for Analytic Applications, 2008" shows the maturity, adoption rates and benefits of different analytical applications, including those that support CRM. Many of these capabilities are also featured on our sales, marketing, customer service and e-commerce Hype Cycles.

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This week we reflect on the e-commerce trends that have taken shape in first half of 2008. Our clients have demonstrated great interest in e-commerce, being driven by an amalgamation of market trends such as economics, consumerization, Web 2.0, replacements of aging systems, increasing customer demands for easy-to-use sites, competition driven by the ease of finding sites via Google and much more. In this environment, organizations will be measured by how well they deliver an overall online customer experience.

Aside from the economic environment that is impacting most regions and industries, one of the most influential trends is consumerization. People desire easy-to-use Web experiences for any type of purchases, and they compare their personal B2C user experiences with the B2B sites they use in their daily professional activities.

Consumerization of the user interface has many B2B organizations puzzled as their distributors and partners ask for an "Amazon-like" shopping experience. Meanwhile B2C organizations are increasingly raising the bar for everyone as they seek new ways to make it even easier to move customers from simply browsing to actually buying. This is the embodiment Web 2.0's impact on e-commerce, and it is driving change in e-commerce tactics on how to drive more sales from the web (see "Key Issues for Web 2.0 and Beyond, 1H08"). One of the first places organizations are starting to address Web 2.0 is with the user interface (see "Nine Web 2.0 Tools Can Boost E-Commerce Sales") as organizations seek to differentiate themselves and to make it even easier to find, evaluate and purchase their products and services online.

Organizations want to continue to build on the brand they have established and to reach more new customers and they are turning the web and internet based marketing to do this. (see "E-Marketing Improves the Customer Buying Process").

Newly available software-as-a-service offerings for e-commerce are making e-commerce available to more organizations and we are now seeing the impact of this new model within the e-commerce market. (see "SaaS Impact on E-Commerce"). In fact, this year's e-commerce Magic Quadrant has several vendors offering SaaS e-commerce services, while one of the licensed software vendors offers SaaS as a third way to own e-commerce (the other two being hosted and traditional on-premise licensed software). These trends are reflected in the e-commerce solution market, with many vendors enjoying growth in their client base and a rise in the number of RFPs they are receiving. This year's e-commerce Magic Quadrant has 20 vendors, up from 11 last year (see "Magic Quadrant for E-Commerce"). Take the opportunity at mid-year to review your e-commerce strategy relative to these changing market conditions.

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Analytical applications are becoming increasingly important to organizations trying to find a competitive advantage in a tight economy. Organizations want (and need) the benefits of analytical tools, but may not have the resources to commit to learning a specialized tool, conduct formalized training programs or hire outside experts. This situation exposes a significant dichotomy – while the market appears to be saturated, it remains largely untapped when it comes to resolving the analytically-unsupported decisions that happen throughout organizations.

This market evolution from analytical specialization to analytical ubiquity is a painful transition for both users and vendors. Within organizations, traditional power centers find themselves marginalized by the pace of adoption of analytical applications by operational business units. Simultaneously, vendors offering analytical tools struggle to make the transition from providers of best-in-class capabilities that appeal to the few, to providers of capabilities relevant to the masses.

To help organization make the most of analytical applications and make sense of the crowded market, start by reading the "Hype Cycle for Analytic Applications, 2008." This document tracks 38 categories of analytical application and shows their relative maturity and importance to different organizations. Then, continue on to "Q&A: Customer Experiences With SPSS's Analytics Applications" which tracks the experiences of two insurance companies as they move toward packaged analytical applications.

"Case Study: Caixa Galicia Understands Customer Profitability" shows a Spanish bank's experience with the adoption of a customer profitability analysis application and the pervasive impact this had on their customer relationships and organizational performance management processes. "Arvato Uses Analytics to Reduce Out-of-Stock Exposure" is a case study of the development of a vendor managed inventory system in the retail music industry. Finally, the latest "Magic Quadrant for Customer Data-Mining Applications" shows the evolution of the data mining market as it moves from workbenches to packaged applications that address the key elements of the customer relationship.

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Judging by Gartner CRM inquiries, interest in our fall CRM Summit and readership of this blog, CRM is definitely back on many firms' agendas. However, there is a difference in the focus of CRM today. Not only are more firms recognizing that CRM is a business strategy rather than just another IT project, but many are realizing that there is also a "C" in CRM, or "customer" in customer relationship management. That's why we've chosen the theme of "CRM 2.0: The Next Generation of CRM" for our September CRM Summit in Chicago. It emphasizes the ability of companies to look from the outside in (that is, from the customer's perspective), rather than looking from the inside out (that is, the company's perspective). Balancing both perspectives is critical in this next generation of CRM. The upcoming Summit will look at customer experience management, innovation, customer loyalty, reengineering customer processes and customer analytics as major themes.

We have lots of great content, with keynotes from Fred Reichheld on driving growth through customer loyalty, Don Peppers on customer-driven innovation and Paul Greenberg on business models for the era of the social customer. Jeff Schumacher and Marc Singer from McKinsey have a session on change management and collaboration; Peppers and Rogers will moderate a session on customer loyalty; and Bob Thompson of CRMGuru.com will facilitate a panel on contact center metrics. More than 20 Gartner analysts will have more than 40 sessions across five major tracks: CRM strategy and implementation, sales and marketing, customer service and support, CRM analytics, and CRM technology and architecture.

This year's CRM Summit is the one CRM event you don't want to miss. It has answers to all your questions about the next generation of CRM, whether you are a business or IT leader or CRM project manager. As conference chair for this year's CRM event, I look forward to seeing all of you there.

For more information, go here.

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Most customer service organizations have successfully built layer upon layer of supervisors and managers to handle customer service exceptions. For the most part, barring extreme exceptions, they are ready to handle problems and reach resolutions. However, once in a while, a problem is so extreme, has such dire consequences to the customer or has caused irreparable damage. The answer to these problems (which are less than 0.5 percent of interactions) is what sets world-class customer service organizations apart from common customer service organizations.

Traditional customer service organizations escalate problems up to supervisors, usually through two to three layers of supervisors, until the customer gives up or customer service is no longer empowered to help. These organizations expect the customer to eventually give up and move on (that is, put up with the problem or go to the competition). Yet, some customers just won't go away. They demand that the company take corrective action beyond what the supervisors and, potentially, even a manager can approve — they demand to get to the president or CEO of the company.

At this point, ordinary customer service organizations will tell the customer the address where they can write to the office of the CEO to complain — again, hoping the customer just moves on. In rare cases, where the customer writes a letter, a form letter is usually sent back with explanations as to why the customer's demands are not possible. A few world-class customer service organizations do allow customers to reach the executive level (either a chief corporate officer or another executive), so they can hear first hand, from the customer, what happened. These executives can also help customers and bring relief to a complex situation. Their most-important contribution is the ability to regain the customer — if he or she ended up satisfied (which usually happens 95 percent of the time) — and to create a hard loyalty base by letting customers know that the executive team in the organization is not only aware of problems, but also working hard to resolve them. The simple act of talking to a customer on the phone has the capability to defuse the worse situations — and convert almost-gone customers to loyal ones.

Is your CEO ready to talk? Let me know how you handle those top-level escalations.

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Most companies like to analyze data. It gives them a sense of security: "We understand our business and our customers because the metrics on the reports says so." The reality is somewhat different, however. The analysis of operational customer data alone explores only one of several dimensions and can lead to incorrect conclusions. Other data sources need to be included, such as informal interaction data (that is, what was said and how it was said during customer-agent conversations) and more-formal survey data, both of which collate data directly from the customer (with or without their knowledge) for analysis.

I am currently writing a case study on an organization that embraced this broader concept of data analytics with startling results. It identified several areas for process improvement and highlighted discrepancies between what its traditional operational analysis was telling it compared with the reality of the situation. One example is highlighted below:

Survey analysis revealed that customer dissatisfaction in specific locations fluctuated at different times of the year. The question the company asked was: "Was this due to those customers genuinely receiving a poorer level of field service and, if so, which aspects of the service need to be delivered differently, or were they just more difficult to please?" The company mined the associated operational service data for insight and found an interesting correlation: customers became more tolerant of a lower level of service during extreme weather conditions. For example, if there was flooding or heavy snow, customers were much more tolerant of engineers being late and service levels slipping.

From an operational insight perspective, the company could see a reduction in service efficiency in those areas at the same time and would normally have diverted extra resources to those regions to fund field engineer overtime to bring the service levels back up. Instead, with this insight, it increased the number of call center agents and got them to proactively confirm adjusted engineer arrival times (via call, SMS and so forth). This reduced inbound calls and the need for engineer overtime to meet slipping operational service levels. It also improved customer satisfaction. The proverbial win-win. Nice.

So, is this company alone or have you found some interesting insights since taking a more holistic approach to data? I'd love to know.

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As CRM analysts, we are always finding flaws in processes and the overall customer experience given by the companies we have relationships with (or, should I say, "undergo transactions with," because few companies have embraced the true concept of a relationship). Many of these stories have been documented as blogs, with associated "call to action"-type pleas at the end.

In my rotating role as CRM blog manager, I began to wonder if, as CRM analysts, we were setting our expectations too high. Do our standards reflect what the average consumer is actually looking for?

Interestingly, I was at a friend's 30th birthday (I hang around with her in the vain hope of holding onto my own youth) when someone started telling a story about credit cards. On a trip to Norway, his credit card stopped working after a few hours. When he got back from his vacation, he called the bank to ask why. He was told that it was due to the fact that the bank thought his card details had been stolen and someone was using it fraudulently in Norway (because it was not being used in his usual spending location or pattern). What seriously annoyed him, but amused me, was that he had pre-ordered some Norwegian currency from his bank, which he had picked up before setting off. Therefore, the bank knew he was travelling to Norway. When he inquired about this to the fraud department, they told him, "We didn't have access to that information, sorry."

This restored my faith somewhat in what we preach. Consumers do care and so should you! So, we may huff and puff about CRM, CEM, CDI and a multitude of other acronyms, but the bottom line is that it's for a good reason.

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Networks are powerful things. It doesn't matter if you reject Metcalfe's Law (that says the value of a network is in proportion to the square of its size) as inflated, or Sarnoff's Law, or Reed's Law, or any other law — as Galileo supposedly whispered before his death, "Eppur si muove!" (and yet it moves!). The Internet, and especially formal and informal social networks (such as YouTube, Bebo, Facebook, MySpace or Gawker), ensure that any mistake a company makes, at any time and in any place, will become fodder for the daily regiment of trivia, pique and vented spleen.

What does this mean for customers? Well, it means cable technicians can't fall asleep on the couch. It means customer service representatives cannot berate the customer for dropping service. It means that when a customer calls a bank in the U.S. to drop a credit card, the bank doesn't scare him or her (for example, "Life's circumstances can change in an instant, and although you have not used the card in seven years, there may come a time when it is the only protection you have").

Customers are recording you, videotaping you, uploading and downloading you, and scrutinizing and berating you - in front of millions of people, at zero cost to them. It is no longer one to one to one: one letter of complaint in, one letter of "sorry and tough luck" back. Customers will no longer bother with the complaint letter. They will simply pass the experience on to a friend.

Until now, we have been firing the "bad" employee. Why fire the employee? Who hired them, trained them and coached them? Are we firing them because they followed protocol or got frustrated at the company's awful policies and practices? If you really want change to happen - and you should - begin scrutinizing how the processes were created that got you into this position in the first place. Although it is much simpler to blame the agent, they are likely the symptom, not the cause of the problem.

We don't see this situation getting better; we do see it becoming more severe. What is your strategy?

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Aaaahh, the holidays and the holiday sales flyers. While perusing through a flyer, I came across a promotion for a GPS navigation system for my car. After getting lost the day before, I thought it was time to get yet another gadget for my collection, so I went to the seller's Web store and entered the Web ID from the flyer into the search bar. To my surprise, it went straight to the right product.

I quickly looked over the product reviews of others and found that the product was one of the highest rated in the group. The price of the GPS looked appealing, so I went to the "pick it up today" option. Apparently, sales items are not stocked in my area. The GPS was sold out in six stores within a 30-mile radius.

I thought I'd have it shipped home and added it to the cart. Well, two of my research items came to mind while doing this: user-defined content (the reviews which sold me) and the fact that the business process of promotion to cash was broken.

Next, I thought I needed some accessories to go with the GPS. The accessories were in stock at the store but I chose to have them shipped, because going to the store no longer seemed fun without the GPS prize.

Once again, the user-defined product reviews of the accessories made me feel like I was buying the best product for me. However, I really wanted the items today. I couldn't wait any longer not getting lost anymore, so I abandoned the cart and decided to save my money.

Let's review:

Sales promotion in flyer linked to site: Good
Promotional Web ID printed in flyer: Good (but could use larger font)
Web ID working with search engine: Good
Shopping recommendations and cart managed: Good
User-defined reviews: Excellent (Nice use of Web 2.0)
Online reservation and in-store pick up: Good
Stock in any store: Bad

Nice second-generation multichannel focus. However, did I mention the Wed ID that took me to a different product than the one in the flyer? Well, that's third-generation.

How was your shopping over the holiday? (And for you business-to-business folks, don't think you don't promote and sell out-of-stock items by the truck load.)

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Gartner analysts are exposed to all kinds of stories about CRM. We hear of great successes and incredible failures; fantastic, positive surprises and shocking, negative results. However, throughout all this, we must be able to extract the characteristics of a world-class CRM implementation to use as a reference. Of course, these characteristics change with time and experience. What may have been sine qua non three years ago, is now no longer required. There are certain characteristics that make a CRM project excellent: it takes the time to properly identify needs, create a detailed strategy on what to do and expect, deploys to solve specific pain points, and measures to ensure success as planned. No matter how we measure them (using the eight building blocks, a return on investment model or simply comparison and analysis), excellent implementations share these principles.

Of course, without validation this is simply a theory. To validate these statements, Gartner chooses the best projects introduced (and documented) each year and rewards the responsible party with the CRM Excellence Award to recognize how far they have come. This year, we changed the award to accommodate changes in the market, changes in deployments and to make the award more competitive. We are looking for the ultimate CRM implementations and we are getting great entries. However, we are still looking for that superb, killer entry that sets itself apart. Is your CRM case study the one?

Let us know. Enter the contest and share your CRM excellence case study. But hurry, the deadline is approaching.

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As we rush into Web 2.0, maybe we should start with multichannel 1.0.

I went to book a summer flight through my credit card company's travel department. After finding the perfect flight and learning there were three seats left, I tried to use my membership travel points. "The rewards system is currently unavailable." OK, so I call customer service. They couldn't help me, but they would transfer me. Nine minutes on hold later, I am still waiting. On my other line, I call the airline directly, because they are listed as a partner. But, in fact, they are not a partner. They do, however, have a partner who is a partner, and if I call the partner's partner and set up an account, then they could transfer points to my account. So, I call the partner of my card's partner and hear, "We are experiencing technical difficulties. If the line goes dead while you are on hold, please call back later."

Web sites down, call centers that can't handle basic calls, wait times lasting 20 minutes or longer; are any of them making money? You guessed it: the credit card company; and it doesn't seem to be in a hurry to improve. And no, I did not get the frequent flyer seats.

Web 2.0, Web-oriented architecture, service-oriented architecture, Ajax, rich clients, semantic HTML, REST and so forth. While your technologists get excited about all the new toys, maybe the lines of business that interact with customers might see how the basics can be improved. Who is in charge of determining your priorities, and what is it based on? Who in the CEO's office will see these daily insults to your customers? Or maybe you have fixed this problem. If so, we'd love to hear from you.

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Whenever I arrive at the airport in Tel Aviv, my first stop before leaving the terminal has been to the counter of one of the country's largest cellular communications providers. I have done this three times a year for the past five years. I rent a pre-paid cellular GSM phone. I never question the price. I always replenish the phone account with extra minutes. (Yes, I know it would be cheaper to buy a phone. Don't ask why I rent, but you do have to wonder!) This cellular company always profits handsomely from my business. That is, until yesterday, when it lost me as a customer, likely forever. As in most industries, it has a strong competitor, and next time I will try them out. My experience highlights how the marriage of poor processes and bad technologies can cost a business revenue and hurt profits.

My rented mobile phone died within 48 hours of picking it up. I dialed the main number of the cellular provider from my hotel phone, which transferred me to service. I asked if I could stop into a local store and swap phones. No, was the reply, I would have to travel to one of the service centers and deal with it there. I told them I was only in the country for four days on business and was unable to get a cab to travel to a repair center in the next town. Well, they said, that is all we can do.

Upon leaving Tel Aviv, I left my mobile phone at the airport office where I picked it up. I asked the representative if I could pay only until the time I called the provider for mobile phone replacement. Basically, I wanted a 50 percent discount for having had no phone for three days. The representative had no record of my call to the service center three days earlier, nor any way to look up a call. She looked at the phone I returned and tried to turn it on. When she couldn't, she returned it to the bag and printed out my bill. I said, "So, you are charging me 100 percent of the total for a phone that does not work?" She, of course, had no authority to do anything else but that. None of the five people at the office had any authority to make any decisions, nor was there anyone with more authority whom they could call. I asked if she could at least make a note in my payment record that I was dissatisfied with the service. She said she would write it down and tell her boss. I asked her why she did not just enter it into the system. "Because sir, there is no system."

Would this be your company's response to a long-standing, profitable customer on his or her first encounter with a defective product or bad service? How do you know?

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With the excitement surrounding the World Cup, Magnus Soderlund's work on customer loyalty led him to note that the highest level of customer loyalty he could identify was when customers tattoo themselves with the logo of their supplier. The obvious and rare commercial example is Harley-Davidson customers. But in soccer, it's common for fans (not customers) to tattoo themselves with their team's insignia. Are your customers so emotionally tied to your organization that they tattoo themselves with your logo?

In asking that question during the past two years, I've only come across two examples where companies found that their customers had tattoos. Both were in the food industry, where branding is strongly funded.

Do you have an example where customers tattoo themselves? Is there a proxy for tattooing that you've noticed emerging among your most loyal fans? I'd love to hear about it.

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Most organizations are trying to improve the customer experience, and many are looking to automate key processes. However, unless done properly, the end result can undermine the customer relationship, not strengthen it. For example, I recently moved and called my financial brokerage firm to inform them of my address change. Three weeks later, an official "address change confirmation" letter arrived addressed to my old address asking me to confirm my new address. Luckily, I am still paying for my mail to be redirected (mail addressed to me at my old address is diverted to my new address). If I wasn't, I would not have received this letter. This brokerage company is responsible for looking after my hard-earned investments, and getting something as basic as this wrong scares me. If the brains behind its customer process design create workflows that send letters to addresses they know you are no longer living at, then what on earth are they doing with more-serious and complex subjects, like security/identity confirmation and share transactions?

OK, this process error isn't critical, and that's the reason why it slipped through the net, but it has impacted my perception of the firm's brand and professionalism. Are you sure all your customer processes are having their desired effect? Or, have you had or seen similar moments of madness that you'd like to share?

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A recent U.S. university research study applied modified human personality profiling tests to pets (in particular dogs). Four personality traits were assessed: energy levels, affection-aggression, anxiety-calmness and intelligence-stupidity. The results showed that there were clear differences by breed, but more importantly, significant personality differences within the breeds themselves.
Taking the concept one step further, the university believes this technique should be used to match pets to their owners on the basis of similar personalities. Although a somewhat amusing concept, the idea of "personality alignment" is one that all business-to-consumer (B2C) organizations should investigate.

Contact center agents and their pets (customers) need to connect just as dogs and their owners do. Studies have shown a link between this connectivity and improvements to metrics, such as customer satisfaction, call length and first-call resolution. In addition, the knowledge of personality traits can help personalize customer interactions and improve the customer experience.

So, can you tell your "neurotic poodle" customers from the "agreeable Dobermans?"

If so, I'd love to hear from you.

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Knowledge management is a high-value, low-cost initiative that, when done right, can yield dramatic cost savings and directly impact client satisfaction. Why, then, do we see so many organizations leave it behind? Here is a simple case in point: My daughter was flying from Madrid to New York and she discovered that after six months abroad she cannot fit all her belongings into two suitcases. The questions she had were: Can I check in with an extra bag, and if yes, what will it cost? After a 30 minute search of Web sites and telephone calls to airline call centers, she still did not have an answer.

What happened? She had purchased her ticket through one airline that sent her a ticket aboard a "partner" airline. She went on the Web site of both airlines, but found nothing except a cryptic message on the Spanish airline's Web site that said that extra bags were subject to IATA baggage regulations. Alrighty then. She called the airline that sold her the ticket, but they weren't sure of the answer. They gave her the telephone number of the airline she would be flying on and put her on hold for 14 minutes. After 14 minutes (which is now 25 minutes later), the airline said that it was possible and the price would be dependent on weight and other factors. Well, she asked, what is the price? The airline representative could not say, except that it was in a "range." What range, she didn't know, but she suggested calling the departing airport.

On and on it went, and the end does not matter, except to say that the next phone call took another 30 minutes and two transfers. How much money did it cost the airline? Will the airline ever understand the broken process? Who would take ownership? Will it ever be able to tie this event to lower customer satisfaction? Will the airline find out that the daughter of a Platinum customer was involved?

How much is poor knowledge management costing your organization? How do you know? Which processes are broken? Whose responsibility is it to fix them? In what order do they need to be fixed? Who says?

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I shop at the grocery store near the Border’s (a large book store for those of you outside the U.S.) and the Cost World Plus (foreign stuff).My wife shops at the grocery store near the Target (high-end Wal-Mart for those of you still outside the U.S.) and Starbuck’s (no explanation needed, I suspect). Of course, they are both the same grocery store, and we each understand what the other means when we give each other directions and reference points, but it does highlight the issue that everyone considers the same thing in different contexts. As we think about our customer relationships, what is the mental image you call to mind, and what is the image you think your customers call to mind? Just as each customer segment you define considers you in comparison to a different set of direct competitors, I suspect each segment also thinks of you in the context of different noncompetitors.

Here is a thought experiment. Write down a letter of the alphabet, then write down the two letters on either side (e.g. starting with “R” gives you “P,” “Q,” “S” and “T”). Then write down five companies or organizations starting with those letters, pick from a variety of different industries and then consider what a customer who thinks of your company in the context of each of those organizations might think. What would they expect? What would they wonder about why you don’t provide it? Personally, I wish my book store would have little crib guides (like the menus available in grocery stores) that gave a reading list of good movie and book tie-ins, or a good selection of music to read with a particular book. I wish my grocery store would do the same thing as my hardware store and run how-to clinics on prepping vegetables. Please share with others anything you come up with that you think one industry could learn from another.

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My digital video recorder ran out of space on Tuesday, right before the season finale of Lost. In my somewhat state of panic, my first immediate thought was to figure out how to BitTorrent the episode when I remembered that ABC recently started showing full version online episodes of several of their shows, including Lost. I visited the site, ABC, and in an instant, pulled up the episode and watched the entire thing for free. It was terrific and very smart of ABC. Here’s why:

I was going to get the episode one way or the other. There were multiple ways for me to do this, such as iTunes, BitTorrent or my friend’s house (he taped it successfully). ABC had the fastest, most-convenient way to watch it and this was the only reason I went to the site. ABC would have lost the opportunity to market to me completely.

I was a captured audience. ABC.com added non-skippable commercials to the feed. They were very short, they were interactive and I paid attention to all (3) of them.

I was exposed to other marketing outlets. ABC took back the control, brought me back to its Web site, not someone else’s, and was able to control not only its brand, but also the advertising while improving customer experience. Exploring the site further, I saw audio Podcasts of Lost (and other shows) to keep people interested/connected. These are also great marketing outlets for ABC.

This is a win-win for marketers and customers, and should be a standard practice for programming networks.

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I'm not an e-commerce expert, so I'm not sure why I'm writing this blog, but a thought crossed my mind and I wanted to share it. Four months ago, I bought a derelict Victorian house in the U.K. and have slowly been restoring it to its former glory. To do this on my meager analyst salary, I have had to hunt around for the best deal on everything - from toilets to dishwashers. The standard process I have followed is to search online every evening for the best deal and then ring my local supplier, who I know and trust, the following day to price-match, which the supplier invariably does. The supplier may take a few days longer to deliver, and it may be a few pounds more overall, but I know the product will come on the scheduled delivery date and won't be damaged.

What would it take for me to stick with the best deal online and not wait for the following day to order it locally over the phone? Yes, I would save a few pounds and hopefully have it delivered earlier, but there is an increased risk to overcome, as well as my fear of the unknown. The proliferation of online feedback sites, where consumers are happy to "tell all" about their experiences, provides me with a good source of information about a particular company's reliability. Some customers are ecstatic and highly recommend a company, whereas others had an awful time. Not wanting to end up in the latter camp, I err on the side of caution and wait till the following morning to place my call.

Good and bad customer experiences are inevitable - the delivery lorry could have broken down, after all. What sets great companies apart is how they deal with these situations. It appears from visiting numerous customer review sites that many online retailers in the U.K. have yet to embrace the concept of the customer experience. Being the cheapest is not always the best, and with online public humiliation easily accessible, isn't it about time online retailers spent as much time on customer service and the customer experience as they do on ensuring their price is 1 percent lower than the competition's. Until this happens, I'm going to continue contributing to my local retailer's retirement fund.

I'd love to hear from anyone who has tracked the "stickiness" of their Web site over time and can demonstrate how customer service improvements were the strongest glue.

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I worked from home Monday because my home phone line had corroded from excessive moisture in the basement and the only time that the phone company could offer me for repair service was a nine-hour window: 8 a.m. to 5 p.m. When I spoke to the service representative on Sunday, I was dismayed with the idea of staying home the entire day, and I let her know: "Your company should be ashamed that all it can offer me is a nine-hour window for repair." Up until that moment, the service representative was calm and polite. The moment I changed my tone though, she became cross and began to speak louder in an upset voice, defending the long wait as "standard." I asked her to please not raise her voice. She was now angry that I was not happy. She at least wins points for identifying closely with her company, but what about the customer? Who is on the customer's side?

I was trying to resist laughing at the absurdity of the situation. This same company, not two days earlier, mailed me an offer to move my broadband to its DSL service, because it was cheaper than the competition. Sure, I thought, now I can double my chances of being chastised and getting poor service. But I was in for a bigger surprise. After waiting the entire day Monday, no repair person showed up at my house. At 5:30 p.m., an automated voice unit called my house: "This is to confirm your repair for tomorrow, Tuesday, 16 May 2006, between 8 a.m. and 5 p.m." The service repair agent had gotten her revenge. She mis-scheduled the repair call. Whether intentionally or unintentionally, we'll never know. And when I called again, they apologized for their error and promised me the first appointment on Tuesday: between 8 a.m. and 10 a.m. In my dreams, maybe. The technician arrived at 5 p.m. and sat in my driveway talking on her cell phone. She was blissfully unaware of the promise made to me the night before.

What can we understand from this? This telecommunications company will never uncover that it might as well be burning its marketing dollars, because during its moments of truth, in front of the customer, it is failing. And worse still, it will never know that it is failing. The processes are flawed, the brand promise is not kept and the offers are poorly timed. For all we know, the National Security Agency is likely to hear the conversation of my poor customer experience before a customer service supervisor.

How good are you at understanding the true customer experience?

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