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Pursuing Customer Inspired Growth

Pursuing Customer Inspired Growth is the third presentation in A.T. Kearney's 2017 IIA series on taking difficult steps towards growth. The presentation focuses on pursuing customer-inspired growth as an answer to companies' growth imperative. It discusses traditional growth approaches and their limitations, and proposes becoming truly customer-centric by focusing on "blockbuster" customer experiences that are critical, frequent, and high in emotional value. The presentation outlines A.T. Kearney's methodology for discovering blockbusters, designing customer propositions around them, delivering proofs-of-concept, and driving organization-wide adoption through change management best practices.

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An answer to the Growth Imperative IDEAS INTO ACTION PRESENTATION – MAY 2017 Pursuing Customer Inspired Growth
Taking Bolder Steps: The 2017 IIA series present forward-looking conversations about taking difficult but essential steps 1. February: Digitising Supply Chains: The Fourth Industrial Revolution 2. April: Simplifying Service Operations: Unlocking the Triple Win 3. May: Pursuing Customer Inspired Growth: Our Answer to the Growth Imperative June Special Event: Amazon is Coming: Are You Ready? 4. June: Making mergers work 5. August: Facing up to the future of Productivity: Productivity and the fully automated work force 6. September: Resetting Cost: Leveraging Third Party Economics
20% – 50% THE SITUATION Corporate share valuations imply an ambitious growth imperative 3 Percentage of Australian Big 4 Bank valuations attributable to growth “We are very good at inorganic growth, but we don’t have the DNA to enable us to grow organically” “There are hundreds of top-line initiatives in our company but I am not sure we are investing behind those which will move the needle and I am not seeing results” “Western markets are stagnating and emerging markets are now growing at half the rate of a few years ago.”
THE CHALLENGE Traditional approaches trade-off time and magnitude of impact Approaches to growth 4 ? M&A New Product Development Digital/Omni Channel Transformation Enhance Sales Force Effectiveness Marketing Campaigns Impact Timeframe SlowFast LowHigh
Rallying around Blockbusters enables the organisation to go big and go fast THE SOLUTION Becoming truly customer-centric requires choosing the right place to start Three pathways to achieve customer-centricity 5 Objective Promise Op model Enablers Drive rapid change in the customer experience by defining the goal-post then working through the operating model to the enablers Align organisation, capabilities and performance standards first around a single blockbuster customer proposition, then expand across other Events Change the mind-set, culture and capabilities before then pursuing alignment across the organisation’s operating model and promises Logically robust… Immediate customer impact… More fundamental change… …but realistically difficult …but requires agility …but pace can be very slow ‘Vision-Led’ Objective Promise Op model Enablers ‘Enabler-Driven’ Objective Promise Op model Enablers ‘Blockbuster’ Order of implementation: First Last Segments
DISCOVER Blockbusters have three key features – criticality, frequency and value – and can occur at multiple levels Drives Business Value High Volume; Frequent High Emotional Value to Customer SME Market Leaving home Segment Growing Family Event 6 Support work from home Service disruption Moving home Moving abroad Grow internationally Child gets 1st phone CriticalitytoCustomer Moving business Growing business Lost phone Immigrating Set up my business Frequency Leaving home Growing family First professional job B2C B2B Client ExampleBlockbuster Discovery
THE SOLUTION Is being “highly satisfied” enough in today’s market? 7 +25-100% (avg. 52%) +13% avg Fully emotionally connected Perceive brand differentiation Highly satisfied Not emotionaly connected -18% avg Relative customer value by level of connectedness Organisations that optimise emotional connections outperform competitors 26% higher gross margins 85% higher sales growth
PCE METHODOLOGY PCE Labs’ end-to-end approach to customer innovation is rapid, modular, scalable and in market in less than three to six months 8 DISCOVER 2-4 WEEKS DESIGN +4-6 WEEKS DELIVER +8-12 WEEKS DRIVE +3-12 MONTHS Identify Blockbusters and understand root causes Design elements of proposition that WOW and build the business case Bring the design to life - develop, test, and deploy a new value proposition Implement, scale and roll-out the solution across the organisation Design + Consulting + Analytics + Agile = PCE Methodology
DISCOVER ACTS, our proprietary tool measures full customer value, not just advocacy or satisfaction ACTS Captured Customer Value 9 ACTS, our proprietary customer value metric… …can be used in conjunction with NPS × =% of value potential captured $ spent per year $ sales potential in near future Conversion factor Potential value1 Captured value × ARE YOU AWARE OF THIS BRAND? HAVE YOU CONSIDERED BUYING THIS BRAND? HAVE YOU TRIED THIS BRAND? WHAT SHARE OF YOUR SPEND DO YOU TRUST THIS BRAND FOR? % YES % YES × % YES × % SPEND A C T S Missed opportunity Churn and burn 35 40 25 20 30 15 5 10 0 0,0 0,5 1,0 2,01,5 NPS score ACTS Score
DISCOVER The ACTS survey identifies areas to focus to turn revenue potential into revenue growth Client ACTS by segment (vs Challengers) 10 20% 17% 28% 36% Competition 56% 23%20% 34% 49% 22% 47%47% 80% 31% 25%30% 49% 21% 26% 43% n.a.0.3% ACTS Score 1.8% 0.9%2.3% 1.1% ACTS ScoreACTS Score ACTS Score ACTS Score Branch Retirees A C T S Loyalty Benefit Hunters A C T S Inertial Online A C T S Credit Shoppers A C T S Bargain Seekers A C T S
DISCOVER Blockbusters are critical to the customer and frequent in market Discovering Blockbusters within a Segment 11 Observations • The most frequent events for Credit shoppers are buying or upgrading a car and staring a new job. • The most painful events relative to its frequency are losing job, loan for school, and home downsizing. • Frequent events which cause pain and can be potentially addressed are dream vacation/special purchase, buying a first home, and starting a new job. Frequency Purchase investment property Bought or upgraded car Bought a first home Divorced Moved to a new city Lost wallet Planned for retirement Car accident Started a new job Dream vacation / special purchase Required loan for school Lost my job LevelofPain/Emotion Recently Immigrated Downsized home Married Had children
DESIGN Having narrowed our focus on a Blockbuster, we think expansively about designing the proposition and customer experience Proposition and Customer Experience Design 12 Proposition Architecture Your signature domain Set and forget (grocery) shopping Penny wise, pound wise • Shared online budgeting and planning tool – with parents and flatmates • New persona based bundles with discounts and ‘Easter eggs’ • App to see how furniture will fit in the room (AR) and enable joint purchases, lay- buys, etc. • Personalised checklist generator for all grocery needs (w/ suggestions based on Q&A) • Smart shopper app – smart shopping list, reminders, aisle finder and easy check-out • Automated stock tracking and home delivery • Online account and e-coaching sessions on every day finances • First job package – goal saver and goal deals • Shared credit card with parents with budgeting and tracking Core product / service elements and Price Value-added adjacent products and services Information Search Experience Purchase Experience Service/ Support Experience Product Use Experience
PCE ‘DELIVER’ Ideas are tested live for viability, desirability and feasibility in the LiveFlow lab 13 BOOTCAMP LEADERSHIP VISIT SOLUTION SESSIONTOOLS PRESENTATIONCOMMERCIAL VIDEO A.T Kearney has used LiveFlow implementation methodology in both high value and high volume products across geographies LiveFlow Overview Representatives from all E2E BUs brought together, one physical location, for ~8–12 weeks to experiment, diagnose issues, and determine solutions and improvements. Principles Customer Oriented Focus on ideas to improve end-customer experience, customers actively engaged as part of the process 1 CEO Visibility and Support CEO Updates on Progress, CXO visits to LiveFlow 7 Focused on Doing Subset of live orders identified and tracked to completion 3 Practical Solutions Issues, ideas, changes identified that can be implemented next business day 4 Collaborative E2E accountability within the LiveFlow team, champions identified to carry changes back to BUs 5 Innovative No sacred cows, no sensitive areas, everything is considered; if doesn’t work, try something else 6 Forward Looking Discuss and review changes impacting long term releases 2
WHAT ARE THE ADVANTAGES OF A LIVEFLOW We use LiveFlow to quickly deliver tangible customer, frontline, organisational and commercial benefits Typical LiveFlow Outcomes 14 Transformed Customer Experience Lift in Sales Force Productivity • Build the case for change by delivering tested and proven solutions • Drive change through engaging change agents at the grass-root level within the business • Achieve material changes delivered through simplifying and improving processes • Deliver fast and accurate products, service and billing, and reduce the back-log of orders "stuck in the pipe" Lasting Organisational Change Improved Efficiency • Reduce end-to-end cycle times (in some cases 50%-70% reduction) • Minimise variation in cycle times to provide consistency and reliability • Simplify customer interaction to minimise customer effort and reduce rework • Simplify the frontline role and streamline interface to operations • Make it easier for the frontline to input good request • Reduce the follow up loops and inefficiency in dealing with irate customers IMMEDIATE IMPACT & GROWING ADVANTAGE
Create ‘purpose in the role’ to build the emotional commitment at an individual level that motivates for change PCE ‘DRIVE’ As sprints progress we embed the A.T. Kearney change methodology to scale up post proof of concept The Vanguard Group Sequential De-Bottle- necking Front Line Advisors Purpose in the Role Post- Change Plan ‘Thinking’ PMO Define the Vanguard Group of key influences to drive viral change; Requires an in-depth analysis of the informal network to identify the ‘right’ group of credible influencers to shape opinions and spread change Analyse how the change should be sequenced to drive major performance improvement by understanding cause – effect mechanisms to define the most efficient path to change Establish a ‘Thinking’ PMO that goes beyond the check-the-box templates to maintain the focus of the organisation on the transformation over time Establish Front-Line Advisors closest to the change in a two-way dialogue to identify roadblocks and understand how to implement the change at a local level Define a clear post-change plan for how the underlying capabilities will be embedded into the organisation during and after the change 1 2 3 4 5 6 15
WHERE CAN THIS BE USED? The Blockbuster approach can be used to achieve multiple customer objectives 16 Objectives Approach Launch of Blockbuster propositions enabled by PCE methodology Growth Cultural Transformation InnovationDigital Transformation NPSGrowth Cultural Transformation New Business Build
Some questions to consider • Do you know your Blockbuster Opportunity? 17 What would you lose if you tried? • Can your organisation benefit from growth? • Are your blockbusters expansive and emotional, yet pragmatic and rapid? • Do your Proof Of Concepts reach their full potential? • Do you have a Live Lab that delivers significant releases each Quarter? GETTING STARTED
APPROACH PRINCIPLES A.T. Kearney has created a dedicated global division, combining the best of multiple disciplines to build compelling new value propositions 18 Unconstrained Customer Focus Commercial Viability Tangible Outcome Staging  Design emotionally expansive propositions and experiences  Focus on which needs matter most for each individual customer  Strive to Influencing behaviors that drive outcomes consumers desire  Human centered design thinking  Leverage scalable / automated solution designs  Build business case into potential solutions  Consider link to existing product portfolio  Drive investment in the future  Employ an agile and lean methodology, focused on testing, learning, and refining  Engage customers in co- creation  Help build internal capabilities around value proposition design Our approach and capabilities allows us to rapidly design and deliver market- beating propositions and experiences Proposition and Customer Experience Labs
OUR TEAM A.T. Kearney PCE Labs is a global team of designers, data scientists and entrepreneurs focused on CX innovation Tatiana Goncharova REGIONAL LEAD, EMEA Michael Dunstan REGIONAL LEAD, APAC More than 7 years consulting and industry experience focusing on digital marketing, analytics, CX design and product development. 10 years consulting and industry experience, mainly across telecommunications, utilities, financial services. Nigel Andrade GLOBAL CO-LEAD PARTNER Developed the PCE framework and stepped out of traditional consulting to build a new way of supporting clients reinvent and relaunch propositions across industries and markets Steve Mulligan GLOBAL DESIGN LEAD Jeroen Lubbers GLOBAL PARTNERSHIPS LEAD More than 12 years experience in designing better ways for organisations to serve their customers, staff and key business partners. 10 years of experience working with partners and their products to support clients in achieving their business objectives. Vladimir Lukin GLOBAL DATA SCIENCE LEAD More than 14 years of experience in predictive modelling, business forecasting and statistical consulting Diego Casanova MANAGER, AMERICAS Proven success record of global consulting experience across multinational companies in retail, utilities and financial services Ian St-Maurice GLOBAL CO-LEAD, PRINCIPAL Senior marketing consultant with over 20 years experience advising firms across industries including high tech, telecom on their toughest strategic marketing issues 19
A.T. KEARNEY PCE LABS ATK PCE Labs is a fully integrated part of A.T. Kearney – global in reach with deep customer and innovation expertise 20 A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organisations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues.