1. TOTAL CUSTOMER ORIENTATION
How to make it happen and pay off
Kai Howaldt
Chemical Sales Marketing Conference
Amsterdam, March 14, 2007
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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
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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
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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
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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!
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7. Understanding the customer in this way can help build TCO
TCO Process
Understand
Target
Moment
of truth
Track
Gain &
retain
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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
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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
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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?
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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
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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
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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!
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