Customer Focused Organizations for more effective & efficient CRM

1. GOALS OF CUSTOMER FOCUS:
End goal of customer focused strategies is the same:
Boosting retention and repurchase =
more sales!!!
Creating
Better
Products or
Services
Offering
compelling
customer
experience
Building
deeper
customer
relationships

2. BUSINESS PERFORMANCE FACTORS
CONTRIBUTION TO SHAREHOLDER VALUE
86% 83%
75%
71%
62%
47%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Product/Service
Quality
Customer Sat.
& Loyalty
Operating
Efficiency
Financial
Results
Innovation Employee
Satisfaction
Source: Price Waterhouse Coopers, 2015

3. Knowing what drives customer
loyalty is important to your
company’s financial health
Repeat customers and new
customers from referrals 
continuous revenue streams
Disloyal customers are
expensive to replace
Attracting NEW customer
is 4 x cost of retaining
existing customer
5% increase in customer
retention  75% in
aggregate lifetime
profits from that
customer
CUSTOMER SATISFACTION = PROFITS

4. 3%
5%
9%
14%
69%
No reason
Other Suppliers
Competitors
Product Dissat.
Attitude of owner,
manager or employee
WHY CUSTOMER SATISFACTION IS IMPORTANT?
Study by Le Beouf:
“the reasons why customers no longer dealt with a particular
supplier”

5. A customer
relationship
program

6. IT STARTS WITH A SERVICE VISION
WHAT DOES A SERVICE VISION DO?
 It communicates your precise customer
focus
 It identifies how you will be unique and
distinguished in the eyes of customers
 It provides a tool for aligning energy
and effort so customers enjoy
consistency and reliability
 It serves as a grounding for service
standards, measures, and practices

7. MARRIOTT LODGING
We will fulfill the obvious and subtle work, travel and leisure needs of our
guests away from home by consistently providing a place they find
comfortable, amenities they find valuable, and an experience they find
positive and memorable.

8. VICTORIA’S SECRET CATALOGUE
VICTORIA’S SECRET STORES
Relationships with our clients are intimate, loyal and respectful. We
will always provide a pampering and indulgent shopping experience
that is absolutely dedicated to legendary client service, urgency, passion
and results.

9. THE RITZ-CARLTON
CREDO
“WE ARE LADIES AND GENTLEMEN
SERVING LADIES AND GENTLEMEN”
WE PLEDGE TO PROVIDE THE FINEST PERSONAL
SERVICE AND FACILITIES FOR OUR GUESTS WHO
WILL ALWAYS ENJOY A WARM, RELAXED YET
REFINED AMBIENCE. THE RITZ-CARLTON
EXPERIENCE ENLIVENS THE SENSES, INSTILLS
WELL-BEING AND FULFILLS EVEN THE
UNEXPRESSED WISHES AND NEEDS OF OUR
GUESTS.

10. CUSTOMER FOCUS INITIATIVE
CAUTIONS AND WARNINGS ABOUT TODAY
 Defend rather than try to learn;
blame rather than seek to
understand
 Work the example and miss the
point
 Attempt to fix what’s bad without
using or supporting what’s good
 Think you have no stake, no

11. CUSTOMER FOCUS INITIATIVE
WARNINGS ABOUT SERVICE CULTURE
CHANGE
 It takes more time than you think
 It also takes much longer than
you think
 It is never orderly and precise
 It will involve every senior leader
in ways that can be awkward

12. CUSTOMER FOCUS INITIATIVE
WARNINGS ABOUT CULTURE CHANGE
 It will have failures and successes
 Service quality may get worse
before it gets better
 Some associates will never “get
it” and will likely work against it
 Each culture change effort is
custom; and, there is no precise
blueprint

13. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
IF YOU STUDIED THE COMPANIES THAT
THEIR CUSTOMERS’ TODAY SAY ARE
CONSISTENTLY CUSTOMER-CENTRIC,
WHAT WOULD YOU FIND?

14. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 Their motivation for a strong and
enduring customer focus comes from
more than simply an economic,
financial or marketplace advantage
 They have a clear service vision that
permeates the organization and is
used as a touchstone for all plans and
practices

15. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 They craft a distinctive “brandable”
customer experience that flows out of
their vision/values and is in sync with
their total offering (across all customer
touch points)
 They create customer metrics
(including report cards) that reflect
their customers’ definition of service
excellence

16. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 They use broad based employee
participation and over communication
as key tools to learn, early warn,
improve, and implement as well as
foster employee buy-in
 They have selection, orientation and
training processes that reflect a strong
customer focus

17. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 Leadership demonstrates that a
customer focus is crucial to the
success of the organization
 Customer metrics are integrated into
performance management, leadership
accountabilities and incentives.

18. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 They thrive on continuous customer
feedback and customer intelligence
used to drive continuous improvement
throughout the organization
 They have clear service standards
throughout the organization designed
to promote consistency among internal
partnerships and excellence in internal
service

19. CUSTOMER FOCUS INITIATIVE
CHARACTERISTICS OF CUSTOMER FOCUS
CULTURES
 They use well-practiced service
recovery for customer intelligence and
process improvement, not just for
damage control at the front line
 Front line employees are empowered to
solve most customer issues and are
frequently affirmed for their service
excellence

20. CUSTOMER FOCUS INITIATIVE
CREATING A CUSTOMER FOCUS CULTURE
 A rough “back of the envelope”
framework without timelines
 An approximation, based on experience
of others
 A starting place based on your goals
and the initial assessment
 A tool for discussion, exploration and
alteration

21. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS CULTURE
FOCUS
Grounding
Direction
ASSESS
Learning
Knowledge
REPAIR
Improving
Quality
REFINE
Discovering
Invention

22. Customer Focus InitiativeCustomer Focus Initiative
Creating a Customer Focus CultureCreating a Customer Focus Culture

23. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Conduct Customer, Culture and
Employee Research
 Craft and Communicate Customer
Focus Strategy and Vision
 Gain Employee Understanding of and
Commitment to Vision
 Identify/Eliminate/Incapacitate
Barriers to Strategy and Vision
FOCUS
Grounding
Direction

24. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Develop Customer Focus Accountability
Methods for Leadership
 Insure Selection, Orientation and
Training Support Vision
 Begin Service Quality Peer Review
Process for Partnering
 Begin Customer Service Standards
Development System wide
FOCUS
Grounding
Direction

25. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER
FOCUS CULTURE
 Elevate customer report card to
“driver” status
 Use service recovery tools for customer
intelligence
 Craft/communicate/use real-time
feedback tools system wide
 Intensify senior leadership’s live
assessment of customer focus
ASSESS
Learning
Knowledge

26. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER
FOCUS CULTURE
 Craft leadership process for reviewing &
using customer intelligence/feedback
 Begin system wide cycles of service
training and develop processes for inter-
unit review/improvement
 Begin focus on affirmation methods
 Implement performance management &
compensation systems to reflect a
customer focus
ASSESS
Learning
Knowledge

27. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Intensify focus and train organization on
service recovery
 Develop tools and guidelines for
responsible freedom (empowerment)
 Formalize service improvement process
 Design a system wide renewal effort to
deal with “the wall”
REPAIR
Improving
Quality

28. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Develop processes for complaint
analysis/breakdown trends
 Revamp customer intelligence
communication systems for early
warning and rapid repair
 Institute training on quality tools and
methods to eliminate negative variances
 Improve inter-unit interfaces
REPAIR
Improving
Quality

29. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Develop ways to surface, reward and
recognize innovation
 Create a cadre of rotating, internal
service quality consultants
 Include residents in service reinvention
process
 Train leaders in leading a creative work
environment
REFINE
Discovering
Invention

30. CUSTOMER FOCUS
INITIATIVE
CREATING A CUSTOMER FOCUS
CULTURE
 Develop ways to expand community
connections
 Create service standards for vendors
and suppliers
 Institute training in lean thinking to
eliminate unnecessary waste
 Begin using customer focus as a part of
marketing/advertising
REFINE
Discovering
Invention

31. Customer RelationshipCustomer Relationship
Success is aSuccess is a
Journey, Not a DestinationJourney, Not a Destination

32. S = average revenue per
customer sale
C = costs of servicing customer
V = expected # sales per year
Y = expected # years customer
will use your services
A = cost of acquiring new
customer
N = # of referrals from
customer
F = correction factor
Lifetime Value of
Customer (CLV)
=
[(S-C)*(V*Y)-A+
(A*N)]*F
OR
Margin * # sales – cost of
acquisition + savings from
referrals * correction factor
WHAT ARE YOUR CUSTOMERS WORTH?
Customer Lifetime Value = CLV

33. S = average revenue per
customer per sale
C = costs of servicing customer
V = expected # sales per year
Y = expected # years customer
will use your services
A = cost of acquiring new
customer
N = # of referrals from
customer
F = correction factor
S = 20,000
C = 5,000
V = 2
Y = 5
A = 1500
N = 4
F = 1.2
CLV = [(20000 - 5000)*(2*5) –
1500 + (1500*4)]*1.2
CLV = 185,400
WHAT ARE YOUR CUSTOMERS WORTH?
Customer Lifetime Value = CLV