Opening Keynote The Strategic Value of Measuring Customer Migration Alok Shende Vice President Frost & Sullivan
Trend I
The Changing World of Telco <ul><li>From waiting lists to 20 need and value based segments </li></ul><ul><ul><li>Discreet ...
Print Fulfillment Unsure Web Generational Beliefs Demographics Market Place Dynamics Not Interested Consumer trends Engage...
Proliferation <ul><li>Information </li></ul><ul><li>Distribution </li></ul><ul><li>Communication </li></ul><ul><li>Sales &...
Trend II
The Income Demographic Shift
Auto industry Trends CAGR 11% CAGR 16.9% CAGR 22.4%
Telivision Industry Trends
Polarization <ul><li>For many industries including cars, Consumer durables, clothes, computers, retailers, growth is highe...
Customer Equity
Customer Equity <ul><li>“The total lifetime value of a firm’s customer base“ </li></ul><ul><li>Customer Equity => Sharehol...
Customer value matters <ul><li>Customer profitability management is an integral feature of effective customer relationship...
Engaged Customer Model Awareness Consideration Conversion Loyalty Unaware Aware Unaware Relevant Non Relevant Converted No...
What customers really want <ul><li>Show me that you care </li></ul><ul><li>Appreciate and value my business </li></ul><ul>...
Analytical prerequisite <ul><li>A level of detail sufficient to document how each customer comes into contact with the com...
How comfortable are you with your measurement today <ul><li>In 1999 we replaced our original model with a behavior based p...
What do you do with the information <ul><li>How do we go about designing a customer experience and ensure consistency at a...
Challenges
Lack of Historical Customer Track Records <ul><li>Traditionally been low on customer focus, resulting in the least custome...
Integration Bottlenecks <ul><li>Indian businesses have adopted automation and business solutions at various speeds based o...
Summary
Over all key Success Factors <ul><li>Start with the client </li></ul><ul><li>Clearly defined sub segments </li></ul><ul><l...
<ul><li>&quot;Companies that measure profitability by customer have a distinct advantage over those that don’t. They can m...
Thank You [email_address] +91 9892593581
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The Strategic Value of Measuring Customer Migration

  1. 1. Opening Keynote The Strategic Value of Measuring Customer Migration Alok Shende Vice President Frost & Sullivan
  2. 2. Trend I
  3. 3. The Changing World of Telco <ul><li>From waiting lists to 20 need and value based segments </li></ul><ul><ul><li>Discreet offerings have ballooned </li></ul></ul><ul><ul><li>Prepaid, Postpaid, Family-friendly, night and weekend schemes, Text, data, messages, music </li></ul></ul><ul><li>Customer touch points </li></ul><ul><ul><li>Company owned stores, web, shared and exclusive dealers, telemarketing agents, affinity partners </li></ul></ul><ul><li>Communication channels </li></ul><ul><ul><li>Television, print media, bill boards, event marketing, viral marketing, Product placements </li></ul></ul>
  4. 4. Print Fulfillment Unsure Web Generational Beliefs Demographics Market Place Dynamics Not Interested Consumer trends Engaged World Conditions Telemarketing Desire to Interact Political Trends Peer Influence Consumer Stage Emotional State Trends email
  5. 5. Proliferation <ul><li>Information </li></ul><ul><li>Distribution </li></ul><ul><li>Communication </li></ul><ul><li>Sales & Service channels </li></ul><ul><li>New customer segments </li></ul><ul><li>Media </li></ul><ul><li>Marketing Approaches </li></ul><ul><li>Products </li></ul><ul><li>Technology </li></ul>
  6. 6. Trend II
  7. 7. The Income Demographic Shift
  8. 8. Auto industry Trends CAGR 11% CAGR 16.9% CAGR 22.4%
  9. 9. Telivision Industry Trends
  10. 10. Polarization <ul><li>For many industries including cars, Consumer durables, clothes, computers, retailers, growth is higher at high end and lower end </li></ul><ul><li>“ Should we relinquish one segment for another?” </li></ul><ul><li>“ How do we separate the price, quality, brand and delivery in the emerging paradigms’ </li></ul><ul><li>“ How does this translate into sales force, organisational hierarchy….” </li></ul>Tiers High End Mid End Low End Nominal growth relative to average growth Average Growth
  11. 11. Customer Equity
  12. 12. Customer Equity <ul><li>“The total lifetime value of a firm’s customer base“ </li></ul><ul><li>Customer Equity => Shareholder Equity </li></ul><ul><li>Data driven analytics can measure customer equity to high degree of accuracy </li></ul><ul><li>Managers can manage the current and future customer value and it’s likely impact on the share holder value </li></ul><ul><li>Firms such as Dell, Royal Bank of Canada and Best Buy concentrate on raising their ‘returns on specific customer segments. </li></ul><ul><li>RBC share value increases in the past one, three and five years (and through the last &quot;recession&quot; or downdraft in the stock markets.) </li></ul>
  13. 13. Customer value matters <ul><li>Customer profitability management is an integral feature of effective customer relationship management (CRM) </li></ul><ul><li>Understanding customer profitability is an essential element in building customer value and through that share holder value </li></ul><ul><li>The benefits for effective profitability management are not restricted to high value customers </li></ul><ul><li>Critical when developing client value propositions that will improve revenues and /or costs </li></ul><ul><li>Corner stone for sales performance management and benchmarking reports </li></ul><ul><li>Feeds financial management reporting and risk management decisions </li></ul><ul><li>Informs product design/management </li></ul>
  14. 14. Engaged Customer Model Awareness Consideration Conversion Loyalty Unaware Aware Unaware Relevant Non Relevant Converted Not Converted Loyal Not Loyal Engaged Not Engaged Evangelist
  15. 15. What customers really want <ul><li>Show me that you care </li></ul><ul><li>Appreciate and value my business </li></ul><ul><li>Treat me as an individual, not a member </li></ul><ul><li>Demonstrate that you know me </li></ul><ul><li>Anticipate my needs </li></ul><ul><ul><li>Regardless of where and when I interact with you </li></ul></ul>
  16. 16. Analytical prerequisite <ul><li>A level of detail sufficient to document how each customer comes into contact with the company plus the associated revenue and costs; </li></ul><ul><li>A comprehensive view of the customer’s relationship with the company so that the true, holistic contribution or cost is understood; </li></ul><ul><li>A consistent view over time so that changes in the relationship can be properly understood; </li></ul><ul><li>Timely information reporting so that the company can act promptly to seize the opportunity while risk is minimal; </li></ul><ul><li>Flexibility so that as the business environment changes, the measurement process can smoothly adapt. </li></ul>
  17. 17. How comfortable are you with your measurement today <ul><li>In 1999 we replaced our original model with a behavior based profitability model </li></ul><ul><li>Averages hide insights. Actual account data resulted in 75% of our customers shifting 2 or more profitability deciles </li></ul><ul><li>Given that we know 90% of profitability comes from 20% of our customers, accuracy matters </li></ul><ul><ul><li>Quote from a leading bank </li></ul></ul>
  18. 18. What do you do with the information <ul><li>How do we go about designing a customer experience and ensure consistency at all touch points </li></ul><ul><li>Use our customer information and decision technology to </li></ul><ul><ul><li>Segment Customers </li></ul></ul><ul><ul><li>understand profitability </li></ul></ul><ul><ul><li>predict preference and behavior </li></ul></ul><ul><li>Create personalized strategy for each customer </li></ul>
  19. 19. Challenges
  20. 20. Lack of Historical Customer Track Records <ul><li>Traditionally been low on customer focus, resulting in the least customer-tracking systems in place </li></ul><ul><li>Limited or scant customer behavior information and trends have been captured in systems in the past </li></ul><ul><li>Almost zero historic records of customer trends and reactions to many marketing and promotional schemes </li></ul><ul><li>Level of digitization of processes and value chains of suppliers, customers, and partners is very low </li></ul><ul><li>Lack of real-time, authenticated, and exhaustive information poses a strong hurdle for BI </li></ul>
  21. 21. Integration Bottlenecks <ul><li>Indian businesses have adopted automation and business solutions at various speeds based on their requirements and understanding of the solution </li></ul><ul><li>The overall technology adoption has been so diverse, with large and disparate systems that the systems are difficult to integrate </li></ul><ul><li>Systems integration is a major problem for a BI which has to extract information from various sources and across different business departments and functions </li></ul>
  22. 22. Summary
  23. 23. Over all key Success Factors <ul><li>Start with the client </li></ul><ul><li>Clearly defined sub segments </li></ul><ul><li>intimate knowledge of client needs </li></ul><ul><li>n depth competitor assesment </li></ul><ul><li>identify gaps and client unmet needs </li></ul><ul><li>Develop Fact Base </li></ul><ul><li>Determines if gap is product, process, policy, training or communication </li></ul><ul><li>Quantify size and opportunity </li></ul><ul><li>Engage partners </li></ul><ul><li>Business leads with client / identify desired client experience </li></ul><ul><li>partners determine desired product, process, communication plan or solution </li></ul><ul><li>Enable sales force </li></ul>
  24. 24. <ul><li>&quot;Companies that measure profitability by customer have a distinct advantage over those that don’t. They can more intelligently manage their customer-facing processes. But even more important, they can identify and strip costs out of processes that do not add strategic or economic value to the relationship. They can then reinvest in processes that are mutually valuable to the relationship. That leads to profitable growth.“ </li></ul><ul><li>Capgemini Profitability Practice Leader Marc Shingles </li></ul>
  25. 25. Thank You [email_address] +91 9892593581
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