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Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
Managing Customer Loyalty - Micro and Macro Approach
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Managing Customer Loyalty - Micro and Macro Approach

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  • 1. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Overview  Customer Loyalty and Business Growth  Micro Approach to Improving Loyalty  Macro Approach to Improving Loyalty  Summary
  • 2. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Customer Loyalty  The degree to which customers experience positive feelings for, possess allegiance to, and exhibit positive behaviors toward a company
  • 3. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Customer Loyalty and Business Growth  Research shows companies with higher customer loyalty experience accelerated business growth Low High BusinessGrowth Revenue,Profit,Marketshare Customer Loyalty Attitudinal and Objective Measures of Loyalty1 Slow Fast 1 Retention, Advocacy, Purchasing, Renewal rate, Churn rate
  • 4. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Micro Level Approach  Understand the customer relationship for a specific survey respondent  Individual survey respondents  Identify customers who indicate they are disloyal  Threatened customer relationship  Use individual loyalty questions  Target improvements on disloyal customers to address specific needs immediately  Action plan directed at impacting individual customers
  • 5. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Proactive Follow-up – Notification  Distribute completed survey response to the Account team  Highlight issues around loyalty questions or specific business attribute questions  Distribute survey responses to all business units with an identified satisfaction or loyalty problem
  • 6. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Proactive Follow-up  Account team coordinates follow up with the customer to address all identified issues  All business units with issues participate in follow-up  Sales  Product  Services  Use CRM system, if available, to manage and monitor the follow up process and track follow- up activities
  • 7. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Integrate with Account Planning  Provide the Account team with tools and access to customer satisfaction data for their accounts  Include customer satisfaction objectives in the account plan  Minimize surprises before visiting an account
  • 8. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Business Unit Review  Each business unit takes ownership for their area  Link specific questions to each business unit  Identify Customer Satisfaction Officers in each business unit  Manage the process  Leverage reporting tools  Engage the rest of the business unit  Develop and execute action plans to address issues  Example: Vertical Industry Product Marketing  Customer Satisfaction Officer for each industry  Receives trigger emails for product target gaps of 2 or higher  Contacts customers to understand product issues  Identifies Product Marketing follow up items  Reports quarterly to management on PM specific metrics and actions
  • 9. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Macro Level Approach  Understand the customer relationship across all customers  Analyze entire customer base  Identify systemic reasons causing loyalty/disloyalty  Software quality, technical support, staff knowledge  Target company-wide improvement programs directed at all customers  Help improve the service delivery system  Impacts how the work gets done
  • 10. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Business Areas Business Areas Performance (Average Rating) Impact on Customer Loyalty Perceived Customer Value 6.60 0.81 Perceived Customer Centricity 6.47 0.78 Product Effectiveness 7.21 0.65 Lifecycle Services 6.81 0.65 Account Management 6.61 0.69 Global Customer Support 6.42 0.64 Advanced Customer Services 7.32 0.54 SaaS 7.22 0.54 Saas CRM 7.04 0.78 University Program 6.54 0.50 Customer Services Management 6.84 0.55 Consulting Services 6.73 0.61 Partner Satisfaction 7.20 0.43 Performance and Impact on Customer Loyalty
  • 11. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Performance in Business Areas Performance (average satisfaction with business areas)
  • 12. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com 0.00 0.20 0.40 0.60 0.80 1.00 Partner Satisfaction University Program Advanced Customer Services SaaS Customer Services Management Consulting Services Global Customer Support Lifecycle Services Product Effectiveness Account Management Saas CRM Perceived Customer Centricity Perceived Customer Value Impact on Customer Loyalty (correlation between business areas and Advocacy Loyalty Index) Impact on Customer Loyalty If you can perform well in these areas, customers will likely have high loyalty. Impact is correlation between business areas and customer loyalty
  • 13. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Driver Matrix Prioritizes Investments Impact LowHigh Key Drivers INVEST in these areas. Improvement in these areas are predicted to attract new customers (advocacy), increase purchasing behavior (purchasing) or retain customers (retention) Hidden Drivers LEVERAGE as strengths in order to keep current customers loyal. ADVERTISE as strengths in marketing collateral and sales presentations in order to attract new customers (advocacy), increase purchasing behavior (purchasing) or retain customers (retention). Weak Drivers MONITOR as lowest priority for investment. These areas have relatively low impact on improving customer loyalty. Visible Drivers CONSIDER as strengths in marketing collateral and sales presentations in order to attract new customers. EVALUATE as areas of potential over-investment. Low High Performance For each business area, examine its performance and impact on loyalty simultaneously. 1. Key Drivers – Invest in areas to increase Customer Loyalty. 2. Hidden Drivers – Use features in marketing to grow customer base. 3. Visible Drivers – Consider features in marketing to grow customer base. 4. Weak Drivers – Monitor as lowest priority for investment.
  • 14. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Where to begin improvements To improve customer loyalty, you may consider focusing on following areas: 1. Perceived Customer Value 2. Perceived Customer Centricity 3. Account Management 4. Global Customer Support 0.30 0.40 0.50 0.60 0.70 0.80 0.90 6.00 6.25 6.50 6.75 7.00 7.25 7.50 ImpactonCustomerLoyalty (correlationbetweenbusinessattributes andAdvocacyLoyaltyIndex) Performance of Business Attribute (Customer Rating)
  • 15. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Marketing Messages To focus marketing message, you may consider leveraging following areas: 1. Saas CRM 2. Product Effectiveness 3. Advanced Customer Services 4. SaaS 5. Partner Satisfaction 0.30 0.40 0.50 0.60 0.70 0.80 0.90 6.00 6.25 6.50 6.75 7.00 7.25 7.50 ImpactonCustomerLoyalty (correlationbetweenbusinessattributes andAdvocacyLoyaltyIndex) Performance of Business Attribute (Customer Rating)
  • 16. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Business Areas Performance (Average Rating) Impact on Customer Loyalty Perceived Customer Value 6.60 0.81 Perceived Customer Centricity 6.47 0.78 Product Effectiveness 7.21 0.65 Lifecycle Services 6.81 0.65 Account Management 6.61 0.69 Global Customer Support 6.42 0.64 Advanced Customer Services 7.32 0.54 SaaS 7.22 0.54 Saas CRM 7.04 0.78 University Program 6.54 0.50 Customer Services Management 6.84 0.55 Consulting Services 6.73 0.61 Partner Satisfaction 7.20 0.43 Marketing/Improving Your Company/Brand ImproveLeverage Consider 1 Business area ratings range from 0 (Extremely Dissatisfied) to 10 (Extremely Satisfied; 2 Impact is the correlation between Business Area sand Customer Loyalty.
  • 17. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Outcomes of Two Approaches  Micro level approach  Addresses special causes of disloyalty  Focuses on changing individual issues  Customer-specific improvements  Short-term  Macro level approach  Addresses common causes of disloyalty  Focuses on improving systemic issues  Organization-wide improvements  Long-term  Both approaches impact customer loyalty  Addresses specific customer’s concerns  Improves the service delivery system
  • 18. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com Managing Customer Disloyalty Characteristics of Different Approaches to Managing Disloyalty Focus of Management Causes of Disloyalty Improvements GeneralApproachesto ManagingDisloyalty One customer at a time (micro approach) Address a specific customer Special reasons for disloyalty that are unique to specific customer Short-term and customer-specific Customer base/segment (macro approach) Address customer group/ segment Business processes cause disloyalty for many customers Improve business processes; Long- term and organization- wide Both approaches (micro and macro) needed to manage customer loyalty
  • 19. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com For More Information Bob E. Hayes, Ph.D. Email: bob@businessoverbroadway.com Web: www.businessoverbroadway.com Blog: www.businessoverbroadway.com/blog Twitter: www.twitter.com/bobehayes Business Over Broadway Business growth through customer insight

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