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40 years of experience in Strategic Stakeholder Relationships
and Strategic Leadership
Many other areas of expertise: 6-sigma/lean, balanced scorecard, cultural
change, performance measurement, “excellence” frameworks, HR
Lived or Worked in over 37 countries around the globe
More than 155 different organisations assisted including Xerox,
Shell. DuPont, Nortel, Johnson & Johnson, Royal Bank of
Scotland Group, Department of Defence (UK), Stora Enso
(Finland), Red Cross, Oracle as well as many SME’s
Owner of Care Associates, Kansas City, Missouri; MQI
Consulting, Boston and The Centre for Innovation Management
Europe Ltd., UK
The Strategic Customer Management System
Customer Focused Culture
In a customer focused organisation there are only two positions: (1)either you serve the customer directly ; or (2) you serve someone who does
Source: Xerox Corporation
Management at all levels regularly meets with customers to
listen and learn about changing requirements, how their
organisation is performing in meeting those requirements and
to strengthen relationships with customers
Leadership
Management at all levels regularly meets with customers to listen and learn
about changing requirements, how their organisation is performing in
meeting those requirements and to strengthen relationships with customers
Policy and Strategy
All new initiatives are evaluated for their impact on the customer before they
are implemented
Human Resources
The skills and knowledge most critical to building and sustaining customer
relationships have been identified and training has been conducted for all
customer-contact employees.
The Strategic Customer Management System
Vision, Business Plan and Key Business Objectives
Customer Focused Culture
Sin #2:Sin #2:Not Answering the Question: Not Answering the Question: What’s in it for the Customer?What’s in it for the Customer?
KBO’sKBO’s CustomersCustomers SuppliersSuppliers CommunityCommunityBusinessBusiness
PartnersPartnersShareholdersShareholders
KBO1KBO1
KBO2KBO2
KBO3KBO3
KBO4KBO4
X
X
X
X
Other strategic issues!
Customer Relationship Strategies
The Strategic Customer Management System
Vision, Business Plan and Key Business Objectives
Customer Focused Culture
Sin #3:Sin #3:Failure to Define Specific Failure to Define Specific
Relationship StrategiesRelationship Strategies
Customer Relationship
Strategies
The Strategic Customer Management System
Vision, Business Plan and Key Business Objectives
Customers
CustomerExperience
• Sales•Delivery•Service•Others
Customer Focused Culture
Sin #4:Sin #4:Failure to Understand and Enhance Failure to Understand and Enhance The Customer Engagement SystemThe Customer Engagement System
Sales Process Delivery
CustomerPurchaseDecision
CustomerPurchase
Consideration
System Design
Installation Repair Service / Maintenance
FirstInvoice
OrderSubmission
CreditReview
Purchase Cycle
CustomerPurchase
Consideration
Training Technical Support
Account Maintenance
“Telecommunications”
What are 5 key management questions that need to be asked?
Sin #6:Sin #6:Failure to Understand Your CustomersFailure to Understand Your Customers
To the Appropriate Depth orTo the Appropriate Depth orBreadth and Add Value Along the WayBreadth and Add Value Along the Way
What are the two costs incurred by customers What are the two costs incurred by customers every time they do business with your every time they do business with your organisation?organisation?
1.1. E_______E_______
2. E_______
So, how do you know if you adding value in a customer relationship?
Basic NeedsBasic Needs
WantsWants
Value Value is determined by is determined by benefitsbenefits
It is any tangible or intangible benefit which the It is any tangible or intangible benefit which the
customer perceives the competition is either unwilling customer perceives the competition is either unwilling
or unable to provide. It is an immediate spource of or unable to provide. It is an immediate spource of
differentiation and competitive advantagedifferentiation and competitive advantage
There are 8 sources, but …..There are 8 sources, but …..
The pre-requisite (Example: Corning)The pre-requisite (Example: Corning)
Image/reputation/brand strengthImage/reputation/brand strength The “feel good factor”The “feel good factor”
Image/reputation/brand strengthImage/reputation/brand strength The “feel good factor”The “feel good factor”
Process Ease of doing businessEase of doing business
Responsiveness/speed/fast cycle timeResponsiveness/speed/fast cycle time
People
Product/service/technology (enabler) Features and benefits (Innovation is a key)Features and benefits (Innovation is a key)
Support
Information
Customer Relationship
Strategies Customer “Sensing”
Processes
The Strategic Customer Management System
Vision, Business Plan and Key Business Objectives
Customers
CustomerExperience
• Sales•Delivery•Service•Others
Customer Focused Culture
Sin #5:Sin #5:Having Dysfunctional or Having Dysfunctional or
UnderutilisedUnderutilised “ “Sensing” ProcessesSensing” Processes
50
45
40
35
30
25
20
15
10
5
0Delivery
Process Areas
34.6
11.4
ProblemFrequency
(Percentage) 19.7
16.6
6.4
Sales Service Admin Installation
Problem Detection Survey
20
17.5
15
12.5
10
7.5
5
2.5
0Delivery
Process Areas
7.56.5
Percent of customers
said they would stop
doing businessbecause of the
problem
18.0
4.3
11.1
Sales Service Admin Installation
Problem Detection Survey
Rapidly Changing Stable
Stable
RapidlyChanging
Ma
rke
t C
on
dit
ion
s (
cus
tom
ers
& c
om
pet
itio
n)
Technology
Where is your organisation today? How fast is your operating and market environment changing? How are you leveraging your contact centre(s)? Whether you like it or not, EVERY organisation is moving closer to the most “uncomfortable” or challenging cell
in this matrix
Increased need for “real” time
data & information•Customer•Market
•Competition
Customer Relationship
Strategies Customer “Sensing”
Processes
The Strategic Customer Management System
Vision, Business Plan and Key Business Objectives
Customers
CustomerExperience
• Sales•Delivery•Service•Others
Customer Focused Culture
CRM
Feedback
Sin #7:Sin #7:A Failure to Establish an Integrated A Failure to Establish an Integrated
Information Architecture,Information Architecture,Infrastructure and utiliseInfrastructure and utiliseSystematic ApproachesSystematic Approaches
ComplaintsComplaints
CSMCSM
ContactContactCentresCentres
CustomerCustomerVisitsVisits
CustomerDatabase
Loyalty/Relationship Council
ListeningPost
TeamsIdentify & Prioritise
Opportunities for Improvement
Assign Ownership
Develop & ExecuteAction Plan
AccountManagement
Teams
ConsumerConsideration
Find Item
In-Store Assistance(visible/available, accessible,professional/knowledgeable,
courteous/respectful)
In-Store Experience(avoid unpleasant surprises, e.g., not having advertised
items)
Consumer Decision I
Travel to Location (logistics
convenience)
Attract orConnect with Consumers
AdvertisingMessage and
Image
Communication
Arrival
Consumer Decision IIPurchase
Item
Consider Other Items
Decision IIICheckout Process
ProductUsage
Service Delivery
(installation)
After SalesExperience
The Customer Promise,Keeping Commitments,Meeting Expectations
Convince & Convert to or strengthen loyalty
Resolving problems or complaints
Decision IVShould I
return in the future based
upon this experience?
Management at all levels regularly meets with customers to
listen and learn about changing requirements, how their
organisation is performing in meeting those requirements and
to strengthen relationships with customers
Management places a priority on using customer feedback data
and the analysis and interpretation of this data to facilitate
improvement activity within their organisation.
WillingnessWillingnessto Recommendto Recommend
92%
96%96%
No ProblemNo ProblemExperience (46%)Experience (46%)
68%
42%42%
15%Non-complaints (12%)
Dissatisfied (17%)
Mollified (63%)
Satisfied (20%)Satisfied (20%)
Complaints (88%)Complaints (88%)
ProblemProblemExperience (54%)Experience (54%)
Customers
How effective is your problem/complaint management process?How effective is your problem/complaint management process?
Problem Detection Survey
100
90
80
70
60
50
40
30
20
10
0
32.5m
Percentage of Closed Accounts
5.8m 3.0m
18% ofcustomerscomplain
52% ofcustomers
are notsatisfiedwith how
thecomplaint
was handled
38% ofcustomers
not satisfiedwith
complainthandling
close theiraccount
This 38% represents 1.2million customersor 3.6% of the total customer base
Based on £158revenue percustomer p.a. (from2003 Report andAccounts) this is worth an estimated£182.4 m in lostannual revenue
Source: Adapted from Ernst & Young, Treating Customers Fairly
LowExtremelyExtremelySatisfiedSatisfied
Level of Satisfaction with Complaints Handling
High
VeryVerySatisfiedSatisfied
FairlyFairlySatisfiedSatisfied
FairlyFairlyDissatisfiedDissatisfied
VeryVeryDissatisfiedDissatisfied
ExtremelyExtremelyDissatisfiedDissatisfied
% of customers
taking negative
action
6%27%
20%
25%
36%
56%
44%55%
35%
40%35%
35%
65%
Useaccountless
Closeaccount
Do nottake upany newproducts
Source: Adapted from Ernst & Young, Treating Customers Fairly
The proportion of The proportion of negative actions by customersnegative actions by customers
increases significantly increases significantly as satisfaction withas satisfaction withcomplaints handlingcomplaints handling
reducesreduces
And there is even And there is even more bad newsmore bad news(High Net Worth)(High Net Worth)
Reliability: eliability:
Getting it right: first time, on time and every timeGetting it right: first time, on time and every timeKeeping your promisesKeeping your promises
RResponsiveness:esponsiveness:
Acting with an appropriate sense of urgency to ensure we give the Acting with an appropriate sense of urgency to ensure we give the customer what they want, when they want it and do so in a customer what they want, when they want it and do so in a
courteous and professional mannercourteous and professional manner
UUnderstanding the Customer Completely:nderstanding the Customer Completely:
Making certain we take the time to listen and fully understand Making certain we take the time to listen and fully understand the customer’s requirements of us and what is most important to the customer’s requirements of us and what is most important to
them so we can deliver accordingly – no unpleasant surprises -them so we can deliver accordingly – no unpleasant surprises - and that you understand them and/or their businessand that you understand them and/or their business
SStraightforward:traightforward:
Keeping things simple and uncomplicated so we are easy to do Keeping things simple and uncomplicated so we are easy to do business withbusiness with
Four Key Universal Customer Requirements
Indifferent
Satisfied
Loyal
Secure
Increasingly “Benefits” D
riven
Incr
easi
ngly
“Pr
ice”
Dri
ven
Differentiationfrom
CompetitionThrough Value
LOW
HIGH
To be successful, your organisation must identify the customersit wants, attract them and keep them through building
relationships based upon an appropriate value proposition
Key findings:Key findings: Customer loyalty drives profitability and Customer loyalty drives profitability and
growth.growth. A 5% increase in customer loyalty can boost profits by A 5% increase in customer loyalty can boost profits by
25% to 85%25% to 85%
Customer satisfaction drives customer loyaltyCustomer satisfaction drives customer loyalty Xerox found that its very satisfied customers were six Xerox found that its very satisfied customers were six
times more likely to repurchase equipment that those times more likely to repurchase equipment that those who were merely satisfiedwho were merely satisfied
Staff satisfaction drives customer loyaltyStaff satisfaction drives customer loyalty low staff turnover was found to be closely linked to low staff turnover was found to be closely linked to
high customer satisfactionhigh customer satisfaction
EmployeeEmployee
behaviourbehaviour
MerchandiseMerchandise
ValueValue
ServiceService
HelpfulnessHelpfulness
CustomerCustomer
impressionimpression
CustomerCustomer
recommendationsrecommendations
EmployeeEmployee
retentionretentionCustomerCustomer
retentionretention
Return on assetsReturn on assets
Operating marginOperating margin
Revenue growthRevenue growth
A COMPELLING PLACE
TO WORK
A COMPELLINGPLACE
TO INVEST
A COMPELLING
PLACE TO SHOP
5 UNIT INCREASE5 UNIT INCREASEIN EMPLOYEEIN EMPLOYEE
ATTITUDEATTITUDE
1.3 UNIT INCREASE1.3 UNIT INCREASEIN CUSTOMERIN CUSTOMERIMPRESSIONIMPRESSION
0.5% INCREASE0.5% INCREASEIN REVENUEIN REVENUE
GROWTHGROWTH
DRIVESDRIVES DRIVESDRIVES
The Service-Profit Chain at Sears
AttitudeAttitude
aboutabout
the jobthe job
AttitudeAttitude
aboutabout
the companythe company