Cisco Systems built a customer-centric culture through initiatives like customer advocacy programs, centralized technical support, and acquisition strategies that focused on solving customer problems. As Cisco grew, it faced challenges in maintaining direct customer contact and customized service. It addressed this by consolidating customer-facing functions into a single customer advocacy organization and tying employee bonuses to customer satisfaction metrics. Cisco's restructuring further improved its ability to rapidly innovate and better serve customers through initiatives like the Customer Focus Initiative and Customer Response Program. Building customer loyalty requires more than just satisfaction - it involves understanding customer needs and creating value.

1. Cisco Systems:
Building and Sustaining a Customer-
Centric Culture
Gaurav Eshpuniyani – 033
Gautam Jain – 035
Girdharee Lal Saran – 036
Girish R Lala – 037
Inderjeet Singh Basra – 039
Kapil Singh – 043
L N Abhishek - 048

2. Contents
• Background and culture of Cisco
• Problem
• Customer centric model
• Initiatives of Cisco to build and sustain a
customer centric culture
• Customer satisfaction vs. Customer loyalty
• Examples from our Companies. --- Pending

3. Background
• Sandy Lerner and Leonard Bosack founded CISCO
• In 1986, they assembled 1st CISCO router
• Venture capitalist Donald Valentine of Sequoia
Capital invested $2.5 million
• Unhappy with the new corporate atmosphere, In
1990, Lerner and Bosack left the company
• Between 1993 and 2001, acquired 73 companies
• One third of Cisco’s technology from acquisitions
• Separate business units to meet the needs of
each without compromise

4. Culture
• Core Values: Empowerment, teamwork, open
communication and trust
• Inculcation of Cisco values in staff in all
meetings
• Egalitarian practices
• Accessible management
• Ranked 15th on Fortune’s “Best companies to
work for” list in 2001

5. Problem
• Cisco was adding customers ten times the rate it was hiring engineers
• Growth rendered one to one contact between customers and engineers
impractical
• Sustainability of customer advocacy when Cisco gets bigger
• Due to economic downturn Cisco axed 8500 employees lowering sales by 1/3rd in
2001
• Cisco’s three decentralised business lines had product overlap and redundancy
• Cisco’s structure became inefficient as the co. grew and customer expectations
and needs changed.
• Cisco was a high touch vendor and worried whether the cos reorganisation would
hurt its ability to maintain and develop customer loyalty.
• Sliding market share
• whether Cisco will be able to convince the customers that they are buying the
relationship rather than a router
• How Cisco should justify it premium charge

6. Customer centricity
• Refers to the orientation of a company to the
needs and behaviors of its customers, rather
than internal drivers (such as the quest for
short term profit).

7. FIVE KEY STEPS FOR IMPLEMENTING A
CUSTOMER-CENTRIC MODEL
1) Identify who your customers are
2) Find out what your customers want
3) Design your customer and sales process
around the needs of the customer
4) Train your employees
5) Put in Place Performance Metrics and
Measure Customer Feedback

8. HOW DOES A CUSTOMER CENTRIC
BUSINESS LOOKS LIKE?

9. THE FOUR KEY ATTRIBUTES IN A
CUSTOMER CENTRIC BUSINESS
• They know their customers:
They understand their value, needs and they listen to
them.
• Customer centric business strategy:
The business is built around their core customers
• Customer culture:
Employees live and breathe their customers
• Customer metrics:
The business tracks its customers as part of key
business performance tracking

10. BENEFITS TO THE ORGANIZATION
• A profitable customer base
• Clear understanding of how to grow your business
and profits, based on a deep knowledge of your
customers
• An ability to respond quickly to your customer
needs and changes in your business environment
• A faster, more efficient organization, as everyone
beats to the same drum
• Better protection in downturns, due to more loyal
customers

11. Customer Advocacy
• Lerners belief – Success was not a matter of
developing cutting edge technology, but of
developing cutting-edge technology that was
relevant to the customer.
• Consolidation of all functions that directly
touched the customer but sales into a single
“Customer Advocacy” organization
• “Customer Satisfaction” – Everyone’s Objective
• Customer Advocacy ingrained in people.
• Cisco viewed technology as a means to an end.
• Employees direct contact with the customer
• Staff bonuses tied to customer satisfaction

12. • IT function used technology to drive customer
satisfaction and loyalty
• 5 point scale measured customer satisfaction
• Payment on the basis of customer intimacy
• Pre and post sales customer sales online surveys
• Detection of dissatisfied customers, trends and
potential challenges
• Understand customer concerns/preferences and
develop action plans

13. Consolidation of Technical Support
• Centralized Technical Assistance Centre (TAC) across
all product lines – 1996
• Resulted into in-depth support, online or by phone,
at any hour of the day, anywhere on earth.
• Cisco engineers worked directly with the people
• To overcome customer perception developed four
priority system
• Cisco’s Critical Account Program (CAP) to take over
serious cases
• Even low score surveys were followed to know
reasons

14. Internet Business Solutions
• Cisco automated processes that didnot require human touch
like
– employee training
– financial and project management
– ranking and reward system
• 90% to Cisco’s customer business and virtually all administration was
done online
• IBSG developed ”iQ Net Readiness Scorecard” with four drivers –
Leadership, governance, competencies and technology – No charge to
cos.
• IBSG goal was to become a thought partner and trusted advisor for the
customers in their eBusiness journey and acceperate their progress
• Cisco measured IBSG only on customer success in implementing
solutions that IBSG helped and the overall customer satisfaction

15. Acquisition Strategy
• Focus on skills/technologies that Cisco lacked
• weighed the culture of its potential acquisition targets
• Only focussed on companies that solved the customer
problems
• Cisco treated the employees of the acquired companies as
great assets
• Did not lay off employees of the acquired companies
• Provided extensive cultural orientation to the new companies.
• Cisco’s customer centric orientation and acquisition aplomb
helped propel its growth

16. Cisco Restructuring
• Shift from decentralized operation focused on specific
customer to a centralized one focused on
technologies, marketing and engineering
– Engineering was organised around eleven technology groups
– Three sales groups were retained
• New structure to promote rapid technical innovation by
eliminating overlap in R&D
• Products designed with more common parts
• Bought larger quantities of fewer parts
• Used interchangable circuit boards resulting into saving of $23
million
• Cisco gained market share due to restructuring

17. Customer Focus Initiative (CFI)
• CFI was created to serve customers better
• CFI included
– indepth analysis of customer info by managers at all levels
– developent of new business models
– designing strategy to overcome tactical challenges
• Customer Response Program (CRP) was developed in 2002 to solve
customer problem
• Customers were touched in different ways through:
– Customer satisfaction surveys
– interactions with customers in the fied on continual basis
– interactions with channel partners
– targetted surveys
– portal to capture all end user data
• All this data used to determine the top 10 issues with CISCO as the co. felt
that the customer information is the pulse to know what makes them tick

18. • Customer value summaries
– CVS shares the work that Cisco did on an account with the
customer
• Customer Champion Program
– CCP matched Sr. Cisco executives with key customers
based on customer need and personality
– Customer had full access to their sponsor executive

19. The New “Managerial Paradigm”

20. Satisfaction
– If the performance falls short of expectations, the
customer is dissatisfied.
– If the performance matches the expectations, the
customer is satisfied.
– If the performance exceeds expectations, the customer
is delighted.
Conclusion: Do not create high expectations.
– Satisfaction is not ultimate goal of the company.

21. Customer Loyalty
• Costs for transforming an active customer into a loyal
customer:
• Costs for winning a new customer:
• Costs for winning back dissatisfied customers:

22. Customer Satisfaction vs.
Customer Loyalty
 Customer satisfaction measures how well a
customer’s expectations are met.
 Customer loyalty measures how likely customers are
to return and their willingness to perform partnership
activities for the organization.
 Customer satisfaction is a prerequisite for customer
loyalty.
 However, customer satisfaction does not mean your
customers will certainly return.

23. Customer Satisfaction/Customer Loyalty
Loyalty
High Low
Satisfied and Happy
High
Loyal wonderers
Satisfaction
“Hostages” “Dealers”
Low

24. Customer Groups
• Loyalist and Apostle-
– Completely satisfied customer
– Needs match companies offering very well
– Positive WOM
• Defector and Terrorist-
– More than dissatisfied, quite dissatisfied and Neutral.
– Spread Negative WOM
– Ready to switch

25. Customer Groups
• The Mercenary-
– Defies Satisfaction Loyalty rule
– Maybe completely satisfied but isn’t loyal
– Chase low prices, Fashion, Impulse
• The Hostage-
– Customers are stuck in virtual Monopoly
– Complain frequently,
– Create low morale with employees

26. Customer Groups
Type Satisfaction Behavior Cost
Loyalist / Staying and
High Low
Apostle Supportive
Defector / Low to Leaving or
High
Terrorist Medium Left Unhappy
Coming and
Mercenary High Medium
Going
Low to Unable to
Hostage Low
Medium Switch

27. Apostles and Terrorists on the
Satisfaction-Loyalty Curve
100% Apostle
Zone of affection
80 Near Apostle
60 Zone of indifference
40
Zone of defection
20
Terrorist
1 2 3 4 5
Very Dissatisfied Slightly diss. Satisfied Very
dissatisfied satisfied
Source: Heskett et al. Satisfaction © 1994 by the President and Fellows of Harvard College
27

28. Competitive Situations
High Source: Harvard Business Review, Nov-Dec 95
Low Competition
L Varying levels
o of Competition
y
a Significant barriers to
lt switching
y
Slight barriers to
switching
Highly Competitive
Low
1 2 3 4 5
Completely Completely
Dissatisfied Satisfied

29. How the Competitive Environment Affects
Satisfaction-Loyalty Relationships
hostages apostles
Noncompetitive High Highly
Zone Local telephone Competitive
Regulated Zone
monopoly or Airlines Commoditization
few substitutes or low
LOYALTY
Dominant differentiation
brand equity PCs Consumer
High cost of Hospitals indifference
switching Many substitutes
Powerful Low cost of
loyalty program Automobiles switching
Proprietary
technology terrorists mercenaries
Low
1 2 3 4 5
Completely Completely
dissatisfied satisfied
SATISFACTION
Source: Adapted from Jones and Sasser
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30. KPMG
• Customer Satisfaction and creating value to the customer is focus of our
organization in every project
• Always aims to build long term relationships – most of the business in our practice
is recurring business
• Concept of Account Manager is there in our organization as well, where the head of
division is usually the relationship manager as well
• Tries to understand the customer needs and sets customer expectations in advance
while drafting the project scope only
• Though, try to always provide value add in the deliverables to exceed customer
expectations
• Loyalty is quite high in KPMG clients on the basis of its satisfaction
• In case of any fault, KPMG always responds immediately and solves the issue asap
• Building relationship is the key to any business

31. Thank you