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Total customer orientation


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  • 1. TOTAL CUSTOMER ORIENTATION How to make it happen and pay off Kai Howaldt Chemical Sales Marketing Conference Amsterdam, March 14, 2007 MUC-90007-043-05-02-Ec.ppt 1
  • 2. TOTAL CUSTOMER ORIENTATION is about value and values MUC-90007-043-05-02-Ec.ppt 2
  • 3. Why we talk about total customer orientation Megatrends in Marketing & Sales > Intense global competition for customers – Customer, not product is bottleneck CHALLENGE > Increasing need to understand customers – From products to overall solution > Further differentiation of customers' needs and customer value – No one fits all solutions > Growing significance of clear value propositions – From consumer goods to chemical commodities > Increasing bandwidth of marketing instruments and sales channels – Opportunity and need to differentiate Catch the customer at the moment of truth MUC-90007-043-05-02-Ec.ppt 3
  • 4. Catching the customer at the moment of truth requires a basic paradigm shift Product Influence defines Market access delivers Customers "NEW paradigm" Product/solution defines Market access Influence "OLD paradigm" choose Customers MUC-90007-043-05-02-Ec.ppt 4
  • 5. At the moment of truth, all values must match Customer values Company value proposition MOMENT of TRUTH Customer value It's all about values MUC-90007-043-05-02-Ec.ppt 5
  • 6. Then it's highly likely that the customer will buy Customer values Company value proposition MOMENT of TRUTH Customer value It's all about values BUY! MUC-90007-043-05-02-Ec.ppt 6
  • 7. Understanding the customer in this way can help build TCO TCO Process Understand Target Moment of truth Track Gain & retain MUC-90007-043-05-02-Ec.ppt 7
  • 8. The customer-oriented and value-based market approach is based on four key processes TCO Processes "Insights" about markets and customers "Target" customers > Customer values and archetypes > Customer value > Actual value proposition > Target segments > Target value proposition > Target value creation Secure efficiency & effectiveness > Customer value & profitability > Sales funnel/sales effectiveness > Campaign effectiveness/ROMI Source: Roland Berger Understand Target Moment of truth Track Gain & Retain "Gain & retain" customers > Relationship > Product/service/solutions > Touch points: sales, sales channel, customer service > Price > Marketing/communication MUC-90007-043-05-02-Ec.ppt 8
  • 9. Our understanding of TCO: A comprehensive approach to a customer value-based company TCO enabler Link to corporate strategy > Living the customer-value orientation > Qualification and recruiting > Management processes and incentive systems > Continuous change mgmt. and improvement processes Source: Roland Berger TECHNOLOGY Culture and change mgmt. Understand Target Moment of truth Track Gain & Retain ORGANIZATION > CRM systems > Use of e-technologies > Selection of system/technology partners > Holistic approach/top management issue > Markets and regions > Value chain STRATEGY Technology Organization and processes > Customer-oriented structures and processes > Organizational efficiency > Organizational anchoring of the TCO responsibility CULTURE MUC-90007-043-05-02-Ec.ppt 9
  • 10. Three basic concepts drive the TCO process Understand WHAT Target, gain & retain, track are values and needs of the customer? WHAT > value proposition do I have to deliver? > marketing & sales mix do I need to convince the customer? Values grid HOW valuable and important for the business is the customer? WHERE are the customers on the path to the moment of truth? Potential to buy potential Willingness pay …….. to to pay Cost of serve cost to Lifetime to sell lifetime to sell Customer value Lost potential IDENTIFY INFORM Sales funnel EDUCATE NEGOTIATE HOW > much can I invest in gaining and retaining this customer ? > much priority do I have to put on this customer? WHEN > do I have to take which action to guide the customer on the path to the moment of truth? MUC-90007-043-05-02-Ec.ppt 10
  • 11. TOTAL CUSTOMER ORIENTATION in basic commodities MUC-90007-043-05-02-Ec.ppt 11
  • 12. Roland Berger has developed one common language for value profiles based on 15 values/needs SECURITY I RELATIONSHIP Empathy Loyalty Experience Customer Solidity VALUE profile Simplicity Commitment Integrity Company Service Innovation Competence VALUE proposition Ownership Durability Customization Cost Purchase Precision Price Excellence COST T PERFORMANCE MUC-90007-043-05-02-Ec.ppt 12
  • 13. EXAMPLE – CHEMICAL COMMODITY Based on different customer needs, we defined five customer segments CUSTOMER SEGMENT "PRICE SEEKER" "QUALITY SEEKER" "IMAGE SEEKER" "RELATIONSHIP SEEKER" "PROCESS PARTNER" BASIC CHARACTERISTICS Need-based customer segments > Can only be attracted by the pure price > Demands "standard quality", sees all suppliers as having the same quality and service level > Accepts additional services, but does not pay for them > Low loyalty towards supplier as price is the dominating decision criterion > Focuses on consistent adherence to specifications, particular in terms of purity > Highest performance, quality and service requirements > Does test the quality regularly without trusting the brand (therewith low loyalty) > Allows a higher price for higher quality, but actively compares with competition > Trusts the brand instead of checking the product/service provided > Is not price conscious, buys instead of high ABC price; sees that as confirmation for high quality/reliability > Once satisfied this customer does not actively compare with competition > Focuses on the good (personnel) relationship with ABC > Seeks intensive support, service competence and commitment are key > Convenient services are absolutely necessary, does not want to care about the delivery > Usually ABC are a D-product for him, price is not decisive > Usually does not compare with competition and is a loyal buyer, as long as needs are met > Reliable and transparent logistics services are key > Price stability is important, but not the dominating criterion > Allows a higher price if logistics services are superior (delivery of more complex services demanded) > If high (service) requirements are met, loyal buyer Source: Project team, Roland Berger MUC-90007-043-05-02-Ec.ppt 13
  • 14. Total customer orientation ... ... is a new paradigm and needs change – Customer values and value are key. Consistent market approach and organization are the natural consequence ... is a top management issue – It is not a marketing concept but involves the entire company (R&D, supply chain, organization, culture, ...) and gives orientation (joint language) ... rapidly pays off – In specialties and commodities ... is pragmatic and implementation oriented – Although it looks sophisticated ...make it happen, it pays off! MUC-90007-043-05-02-Ec.ppt 14
  • 15. TOTAL CUSTOMER ORIENTATION How to make it happen and pay off MUC-90007-043-05-02-Ec.ppt 15