20110102

Customer Management Insights

Customer Strategist Çağlar Gogus: What the C-Suite Needs to Know About Customer Management

C-level executives have enormous demands on their time and focus. But if they're concerned about the operational performance of their organizations, as most senior executives are, then it would serve them well to pay greater attention to customer management issues, especially on a more granular level.
With the recent economic turmoil, there is a significant loss of trust amongst customers towards several industries. Recent turmoil also reminded regulator bodies around the world to put the customer back on top of the focus for several industries and also for those businesses in which customers are the only source of organic growth. In such an environment, are executives taking ownership of their customers sufficiently?


Corporate Culture is What You Do, Not What You Say

Corporate Culture is What You Do, Not What You Say

You can't earn the trust of your customers with a policy statement. You can only earn trust with actions. The problem is that the "actions" your company takes are taken by employees, not by the CEO or the Board of Directors. As far as a customer is concerned, the ordinary, low-level customer-contact employee they interact with on the phone or at the store - that employee is your company.
If you want to ensure that your company treats customers the way you would want to be treated if you were a customer yourself, then you need to manage the way individual employees deal with and interact with customers. Obviously, policies and practices will be involved, but procedures by themselves won't be sufficient. What you really need is a "culture of customer trust" within your company.
Writing a "value statement" for your company is not at all the same thing as living it, nor will it have much impact on your real-world culture. I once visited a company that had a written set of official company values, and these values were posted throughout the headquarters, along with the company's official mission statement. You've probably seen stuff like this before (who hasn't?) but to protect the identity of this client, I'll paraphrase the mission statement they posted, which went something like this:
Do the right thing for customers and be a highly admired company.

Now doesn't that just sound terrific? That's a great attitude to take toward customers, the market, and the business's overall purpose. It's a marvelous statement of values for a forward-thinking, customer-oriented company. Yet the more employees and middle managers I met, the more it became clear to me that everyone in the organization was focused on one thing: Make this quarter's numbers at any cost. These managers' daily actions and decisions supported a different set of values - a set of values that weren't written down and posted on the wall, but which permeated the culture and dominated how the company decided which actions were right for it and which were wrong. The unwritten value statement, if it had been posted on the wall, would have read:
Do whatever it takes to make the numbers.

We haven't yet read about this firm being involved in any kind of covered-up product defect scandal, or industrial safety failure, or customer service meltdown. But my guess is that the only reason we haven't is that the company just hasn't encountered any serious threat to its quarterly bottom line yet. Sooner or later, however, they are likely to meet such a problem, and when they do they will fail the test. And then everyone will wonder how a company with such marvelous values could have acted in such a self-centered, uncaring fashion toward their customers, their employees, or their shareholders.
The culture at your firm will reflect how you measure success, how you reward people, what tasks you consider to be important, how quickly and effectively you make decisions, and who approves decisions. Your culture will reflect how friendly people are to others, how trusting they are, how much disagreement is tolerated, and what actions are considered out of bounds. You can write down the values you wish you had, but if you want your firm to live up to them then you'd better make sure that all your systems and processes are aligned with them, too.

Why Putting existing customers first is important?

Although unemployment rates continue to remain high and some market sectors, such as real estate, have not yet rebounded, most corners of the economy continue to gain strength. As corporate financial performance improves, many CEOs are focusing on expanding product sales or diversifying into new markets.
That type of thinking is a common knee-jerk approach most decision-makers often make in the early stages of an economic recovery. Ultimately, however, it's a misguided methodology.
The best advice for the C-suite is to avoid the mistakes of the past and shift away from product-centric, short-term financial strategies to a longer-term, customer-focused approach. As consumer spending ticks up, CEOs should be evaluating customer behaviors and attitudes to help them develop a more comprehensive understanding of what customers want from their company and then tailor products to meet their needs. Such a customer-centric strategy, which has paid enormous dividends to companies such as Apple during the recent recession, can go a long way towards helping CEOs achieve longer-term goals and generate sustainable revenues for their businesses.


Customer Interaction: THE MAN WITH THE FOLDING CHAIR


One day a few years ago, a top executive in the German headquarters of Siemens AG was on his way to an internal sales meeting at one of the division offices when he encountered sales manager carrying a folding chair with him into the meeting. Curiosity aroused, the exec asked what was going on, and the manager replied that whenever he brought this chair into a meeting, the whole character of the discussion was different. "Just watch," the manager said, as they both entered the conference room. Several people, including sales reps, were already gathered in the room when the manager brought his chair in, unfolded it, and set it down empty next to his own seat.
"Who are you expecting to join us?" asked several of the sales reps already gathered for the meeting. "Shouldn't we just get some more chairs brought in here?" some others suggested.
"No," the manager replied, "this is my customer's chair. I brought it into the meeting so my customer can sit right here and listen to our discussion." Then, with a nod to the empty chair, he said the meeting could begin. But, as he had predicted, the character of the discussion was indeed quite different from the typical sales gathering. Several times during the meeting, participants found themselves asking whether a particular point would be made in this particular way if the customer were actually sitting there and listening. Would we say this in front of our customer? What would our customer think of our plan for dealing with this issue? How do we think our customer would interpret this new policy? Would our customer agree with us that this is a good idea or not?
In the corridors of Siemens, based on this and other similar meetings, this sales manager became known as "Der Mann mit dem Klappstuhl," or "the man with the folding chair." There's a lesson in this story for all of us: We should be putting the customer's perspective into every discussion we have and every decision we make. Nothing is more important to the long-term health of our business than the trust and confidence of our customers.

Organizing Sales Teams Around the Customer

yucel.jpgCustomer Strategist Yücel Ersöz: Organizing Sales Teams Around the Customer

In today's complex selling environment, many organizations have come to realize that relying on new product features is not enough to attract more customers. Many are discovering that they need to organize internally around their customers.
This involves creating new avenues of sustained growth, which hinges on evolving the sales strategy. Sales organizations should adopt a targeted customer segmentation approach that aligns sales with customer segments.
This alignment requires a reorganization that begins with segmenting customers by their transaction histories, buying processes, and needs and preferences. When salespeople understand customers' net present value along with key segmentation, it maximizes conversion ratios and increases activity per customer.
By focusing on segmentation efforts, executives can better assess customers' potential value and ways to realize this value. Different buying processes and decision mechanisms of buyers necessitate different sales services to different customers.
Some customers will require a specialized sales force while others do not. The sales force selling aircrafts to airlines, for instance, will require sales staff with technical knowhow, as well as staff knowledgeable about maintenance and financing. Dealing with a grocery chain, on the other hand, is mostly about hard bargaining.
When organizing a sales force, there are five approaches:


Honesty & integrity make the Difference


In presentations to business groups, I often emphasize the importance of always trying to earn the trust of customers. Customer trust may be the single most important asset any business can have, and two conditions must be met before a customer will trust you:
  1. Intent. The customer has to perceive that you have the right motive - that is, that you intend to act in the customer's own interest, and that you won't sell the customer's interest short when that advances your own business goals.
  2. Competence. You must be capable of carrying out that good intent in a reasonably competent manner.
Both these conditions must be met for a customer to trust a business. Either one, by itself, will not be sufficient. It does a customer no good to deal with the best-meaning company in the world if that company doesn't have enough competence to deliver on their good intentions. The problem is that customer trust is too often overlooked by busy executives, under pressure to show immediate financial results in their operations. It's easy to overlook the central role of customer trust in the success of a business, because trustability is not something we normally measure and report to shareholders on any regular basis. If you want to begin to understand your own company's attitude toward customer trust, these are the kinds of questions you should ask yourself:

  • Do you ever find the need to have one story for the company
    but another for the client?
  • Do you remind customers when their warranties or service
    agreements are almost up?
  • Would you rather sell to knowledgeable and informed customers,
    or to uninformed customers?
  • Do your salespeople make more money by selling products?
    Or by building relationships?

The Key to Successful Customer Relationships Is Effective Employee Engagement

Customer Strategist Orkun Oguz: The Key to Successful Customer Relationships Is Effective Employee Engagement

Products don't generate revenues.
Customers do.


But in order to satisfy customers and build the types of trusting relationships that will help companies maximize their revenue potential, organizations must first have properly motivated and engaged employees.
Employee engagement involves the steps that companies take to capture the hearts and minds of their employees, and motivate them to give their best effort to customers.
You can't become a customer-centric organization until you've become employee centric. Your company is only as strong and effective as your customer-facing staff. There will always be critical moments for your customers that no CRM suite or marketing script can address. Only an engaged, caring, customer-facing staff can handle these types of instances properly.
A highly-engaged employee typically feels more connected to the business and its performance. In fact, according to a study by Hewitt Associates, the level of employee engagement at companies that have achieved compound annual profit growth of at least 10 percent for a five-year period is more than 20 percent higher than at single-digit growth companies.
In addition to connecting customers with the right employees who are incented to fulfill their needs, companies realize other meaningful business benefits from having engaged workers. Employee turnover will be reduced, particularly in high-churn areas such as contact centers. HR costs will drop as companies have to devote less time and capital to recruiting new employees. That will also lead to lower training costs as companies retain longer-tenured, knowledgeable workers.
Nevertheless, the HR-related cost savings that stem from these actions pale in comparison to the impact that a highly engaged employee will have on cross-sell/upsell rates and other favorable business outcomes that result from happy, satisfied customers.


The Missing Link of Social CRM

Customer Strategist Martin Förster: Social CRM Requires a New Marketing Skill: Having a Conversation

Many companies today are trying to understand Social CRM and integrate it into their marketing activities. The way they do this is by optimizing their existing campaigns for social media, or sometimes by creating wholly new campaigns revolving around the viral character of social media. These companies are present on Facebook, Twitter, YouTube, and MySpace; they send their marketing messages nicely wrapped through all channels, they reach a large audience of fans and followers. Just like they did before Web 2.0.
What is common to most of these companies is that they understand social media as another channel for campaigns. They fail to grasp the totally new character of social media, the one that justifies calling it Social CRM. By including social media in their channel mix, enterprises are giving up traditional outbound one-to-many communication to their customers. Instead, they are inexorably entering into a continuous multidirectional conversation between not just one but many customers and the enterprise that occurs permanently, that is driven by customers, and that takes place irrespective of the enterprise. The enterprise can opt to participate, but the conversation will continue regardless....

Employee Engagement: Workers of the world, unite!

Karl Marx, the Division of Labor, and Employee Engagement

workers unite.pngOne of the single most important elements of industrial efficiency and technical progress is the concept of "division of labor." The original thesis behind division of labor was stated succinctly by Adam Smith in Wealth of Nations, with his classic description of the pin factory, where each task was divided into standardized steps to be completed more cost-efficiently by different people and machines. When an analogous principle is applied to nation-states we get the theory of comparative advantage, which underlies the benefits of free trade. Both division of labor and comparative advantage presume that people can perform separate tasks and then trade with each other for mutual benefit. Trading is critical. Without trading, among people and nation-states alike, progress is stunted.
By dividing labor and trading for mutual benefit we have now progressed to the point where virtually every artifact around us that is "man-made" can only be produced through the collective efforts of many, organized in a way that is far too complex for top-down management (or state planning), and using expertise that no single individual can possibly possess on his or her own. The economist Leonard Read may be most famous today for an essay he wrote more than 50 years ago to illustrate this point, using an ordinary wooden pencil as his example.


The Mechanics of a Robust e-mail Marketing Strategy

Customer Strategists Kurt Neckebrouck and Isabelle Jansen: Building a Sticky Email Marketing Strategy

Compared to paper-based customer communications, email marketing is often considered to be a more cost-efficient tool. Still, many marketing leaders continue to struggle with effective approaches for delivering relevant email content to recipients to help boost opt-ins and response rates.
These challenges are further complicated as email - and by association, email marketing - continue to compete with social media for consumers' mindshare. According to MarketingSherpa's 2010 Email Marketing Benchmark Survey, while 81 percent of executives polled say they believe that social media helps to extend the reach of email content to new markets, 71 percent of decision-makers say this ongoing battle for eye-share between email marketing and social media will increase in importance over the coming year.
As the survey results suggest, decision-makers must continually fine-tune their email marketing strategies to help ensure that their message resonates with their intended audience and helps companies to meet their goals. When considering those objectives, decision-makers need to ask themselves the following questions:


Customers at the Forefront of Strategic Planning

Customer Strategist Orkun Oguz: Place Customers at the Forefront of 2011 Strategic Planning

Many executives are in the throes of the budget season, so their discussions with other decision-makers will invariably turn to strategy setting for the coming year. Given the current backdrop - a sluggish economy, the need to manage growing complexity in the multichannel environment, and increased opportunities for using customer data and analytics - executives should be thinking about growing their businesses through customer-centricity.
As companies set their revenue targets and other financial goals, executives can chart their strategies in a couple of different ways. They can choose to apply a short-term, product-centric approach that might enable them to meet their quarterly earnings targets. But in doing so, senior management runs the risk of alienating loyal customers by applying aggressive sales tactics in the drive to meet their numbers.
By comparison, a customer-centric method of strategy setting is a more balanced approach to engendering long-term customer value while driving greater loyalty and consistent revenue growth in the near term. In addition, a customer-centric approach will help companies to foster gains in customer lifetime value and customer profitability over the long haul.


Six Things Organizations Should Fix in 2011

Customer Strategist Wayne Kingston: The Six Things Organizations Should Fix in 2011

This year I've been involved at varying levels with some 50 Australian companies across verticals ranging from banking and finance to telecommunications to retail, pharmaceuticals, media, utilities, transport and logistics, and travel and entertainment. And I've talked with executives ranging from the CEO, COO, CMO, CFO, and CIO right through to receptionists and call centre operators. What I've learned is remarkably similar across most, if not all of them.
Here are the six I've selected as the things I'd most like to fix in 2011:

1. Organisations are too busy "being organizations" to truly address the needs of their customers. Most organisational structures are exactly that: structures. Very few firms are fluid enough to put the needs and wants of their customers ahead of the needs and wants of the executives who run them.

2. Most companies are still structured around "product silos" rather than customer segments. Their financial reporting systems are traditionally built around measuring their "return on products." Businesses using those financial systems find it very difficult to convert to measuring the "return on customers." And next to none are capable of measuring customer lifetime value.

3. Many executives are still confused by social media--or at the very least they are confused about how to capitalise on it. The more fragmented our media and channels to market become, the more confused our executives have become in deciding how to reach out to their customers.

4. Many customers are disillusioned with most of the companies they deal with. Customers today want and demand complete transparency. The days are gone that you can fool most of the people most of the time. Today they just have to Google you, or ask on Facebook whether you are pulling the wool over their eyes . And when is it going to sink in that customers demand to talk to real, local people and not to machines!

5. "Below the line" is now well and truly the new "above the line." Most CEO's are demanding more and more accountability for their marketing dollar, while most customers block out just about any message that is not directly relevant to them. Consequently, the company's customer database is now a major corporate asset.

6. And, last but not least, no company will fix any of the above until their respective CEOs assume the role of "chief customer officer." You can't delegate customer centricity. Unless the CEO is driving CRM (or what we prefer to call CEM, or customer experience management) the executives throughout the rest of the organisation will find it too hard to be truly customer centric. If only we were all Richard branson!

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About the Author: Wayne Kingston is a Managing Partner of Peppers & Rogers Group

Revenue Management and Customer Centricity

Don Peppers and Martha Rogers Ph.D. invented one-to-one business strategy over 15 years ago. Today, they are recognized gurus, acclaimed authors and globally sought-after speakers.

Topic:

Customer Strategist Dietrich Chen: Revenue Management and Customer Centricity -- Imperatives in an Era of Consolidation


Customer Strategist Dietrich Chen: Revenue Management and Customer Centricity -- Imperatives in an Era of Consolidation

The recent news about Southwest and Airtran merging, which was closely followed by the approval of the pending merger between United and Continental, continues the consolidation in the airline industry that started in 2008 with the Delta and Northwest merger. These changes provide more than opportunity; they signal a need for change. Airlines today must integrate their revenue management and loyalty program data to gain a competitive advantage. Doing so will help to increase customer value, profitability, and retention.
We won't rehash in detail the pros and cons of these airline mergers as every news publication has laid them out already for their readers. A still-recovering economy has continued to put enormous pressure on the travel industry, and while price points and occupancy levels seem to be slowly recovering, they are still a far cry off from the industry's heyday. Economies of scale, access to new markets, and the growth imperatives dictated by Wall Street surely played an important role in the recent merger fever. It would not come as a surprise if there is more to come in the near future as other airlines, primarily American Airlines, see their market position eroded and threatened by the recent merger activities. Alaska Airlines, USAir, or perhaps even JetBlue are all potential merger candidates.


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Taking organizational redesigns from plan to practice: McKinsey Global Survey results






A recent McKinsey survey examines the reasons executives cite for successful a...
20110102







The consumer decision journey





The consumer decision journey Consumers are moving outside the purchasing funnel—changing the way they research and bu...
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20110101

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Thousands of business books are published every year- Here are the best of the best



After years of reading, evaluating, and selling business books, Jack Covert and Todd Sattersten are among the most respected experts on the category. Now they have chosen and reviewed the one hundred best business titles of all time-the ones that deliver the biggest payoff for today's busy readers.



The 100 Best Business Books of All Time puts each book in context so that readers can quickly find solutions to the problems they face, such as how best to spend The First 90 Days in a new job or how to take their company from Good to Great. Many of the choices are surprising-you'll find reviews of Moneyball and Orbiting the Giant Hairball, but not Jack Welch's memoir.



At the end of each review, Jack and Todd direct readers to other books both inside and outside The 100 Best. And sprinkled throughout are sidebars taking the reader beyond business books, suggesting movies, novels, and even children's books that offer equally relevant insights.



This guide will appeal to anyone, from entry-level to CEO, who wants to cut through the clutter and discover the brilliant books that are truly worth their investment of time and money.
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Welcome to O2 Inside Business Management



This Blog is designed to explore best practice business management insights. An insider's point of view, to create new opportunities for action and desired outcomes, by boosting your business oxygen.



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Oxygen deficiency is detrimental - severe brain damage may ensue in as little as three minutes. So doctors treat malfunctions such as heart attack or stroke with more oxygen.



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4 Key factors for Decision making Success

The four elements:
  • Clarify the what of the decision. Help everyone understand exactly what decision is under consideration.
  • Determine the who. Specify who will play the key roles—recommending a course of action, offering input, signing off on the recommendation, making the decision and then executing it.
  • Understand the how. Establish a clear process for gathering data, agreeing on criteria and preparing alternatives.
  • Make the when explicit. Create clear timelines for making the decision—and executing it.
The four steps together are a great way to cut through logjams and get things working more effectively. We describe each step in detail and show how companies apply them in our book Decide & Deliver, and on the website www.decide-deliver.com.

Creating value: An interactive tutorial - McKinsey Quarterly - Corporate Finance - Valuation

Creating value: An interactive tutorial - McKinsey Quarterly - Corporate Finance - Valuation
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