Building a deeper customer relationship
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Nothing is as it seems when customer behavior and relevant data are compared.
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Building a deeper customer relationship
- 1. THE CASE
- 2. WEBSHOP FREE RETURNS CAMPAIGNS WASTE 3,2 M€ CHURN 42 % VALUE –12 %
- 4. Increase Sales ‘My team hit their sales targets’ + + Increase Experience ‘I increased customer retention – and hit my target for new customers’ On-time Product Development ‘I launched the new range with the higher gross margin on time’ ? = ‘Nobody knew how our decisions impacted the bottom line!’ INDIFFERENT TO PROFITABLITY Delight Customers ‘We achieved every fulfillment and customer satisfaction target we were set’ + HAPPY PERFORMERS IN SILOS …BUT PRODUCT MANAGEMENT Jef OPERATIONS Gary SALES Paul MARKETING Daisy MEET THE CORPORATE CITIZENS …
- 5. The moment when driving Operational Excellence and Customer Experience as separate silos just isn’t good enough. ” “
- 7. Acquire MANAGE TRULY SMART… Serve Retain
Editor's Notes
- The scene has been set for a tremendous collaboration between the Business and the CFO, or not? If I tell you the following as a result out of some polls and some recent experiences. The Business - does not know that only 10 % of the customers generate profits for the company (90 % of resources…?) 50 % of marketing budgets are spend on the wrong customer segments Finance 90 % of Finance professionals have never heard about Customer LifeTime Value 50 % of CFO’s admit the urgency for transform but are missing key competences like “Empathy” and “Creativity” Business and CFO’s should collaborate very closely in evaluating new business models, because what is mostly the biggest pitfall in it, is starting something because of a trend and not understanding is this really contributes to the bottom-Line Peter will tell you more about how to build new businesses.
- Meet the corporate citizens Each has his own KPI’s defined within the silo and is maximizing his performance on the short term, because this is how they are measured for running the silo in the most efficient and effective manner. Only, siloed optimizations could lead to inefficiencies elsewhere in the value chain. That is why bottom-line profitability at always should be brought into the equation when evaluating improvement or transformation programs
- Operational Excellence and Customer Experience are absorbing most of the improvement budgets nowadays, but…
- Have you considered that running them side by side, still trying to optimize the performance in the short term (profitability) might be destroying Company Value over longer term. Transformation programs might seem influencing the KPI’s in the right direction, even profits might have increased, while Company Value has gone down. Therefore I want to make you aware that automating processes without aiming in the right direction will not lead to the expected impact on Company Value. Let’s make an analogie : If you are not good in driving a car, take a “2 cheveau” and one day you will hit something “smoothly”, If you are not good in driving a car, and you take a Ferrari, you will hot something “very hard” In order to aim right I am presenting a KPI which seems to be looking at a bright future.
- I am introducing you the KPI who reflects best Company Value nowadays. (80 % of Fortune’s 500 Companies are valued based on intanginbles and not on past period performance anymore) Let me explain Customer Life Time Value based on aa simple formula -Acq = Cost of acquiring new customers N = how a customer remains Margin = what the customer contribuites to the bottom-Line (incl complexity of serving him) Ret = Effort needed to keep the customer happy and lenghten the relationship Once you have this youo can calculate what an individual customer is worth. Company Value is then the Total of all invidual Customer Values.
- The scene has been set for a tremendous collaboration between the Business and the CFO, or not? If I tell you the following as a result out of some polls and some recent experiences. The Business - does not know that only 10 % of the customers generate profits for the company (90 % of resources…?) 50 % of marketing budgets are spend on the wrong customer segments Finance 90 % of Finance professionals have never heard about Customer LifeTime Value 50 % of CFO’s admit the urgency for transform but are missing key competences like “Empathy” and “Creativity” Business and CFO’s should collaborate very closely in evaluating new business models, because what is mostly the biggest pitfall in it, is starting something because of a trend and not understanding is this really contributes to the bottom-Line Peter will tell you more about how to build new businesses.