vodacom cm programme 2015 - part 2

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Maximising Value through Customer Management


NEVER

DISA

Terrorism by Blog!

Customers• Companies are more complex

• Competition is fierce

• Fragile customer loyalty

• Want to be involved in pricing, (don’t want to pay for what they don’t want)

• Time, urgency, effort and complexity: Old pace is outpaced and in overdrive

• Shift from transactional sales to relationships and partnerships

• Market segmentation – as it was

• Want to be involved in product quality and service design

• Market research limitations

Challenges Facing Marketers Today - 1

“Market research is like driving down the road looking in the rear-view mirror.

You only see what has passed.”Anita Roddick, The Body Shop

Customers• The failure of marketing communications and promotions

• Word of mouth trumps advertising – always


Interruption MarketingInterruption Marketing1. Put on your best suit, shoes, tie, accessories

and after-shave, and go to a demographically correct singles’ bar

2. March up to every woman and propose marriage

3. If turned down, repeat the process to everyone in the bar

4. If you come away empty-handed, blame the suit, shoes, tie and after-shave

1. Put on your best suit, shoes, tie, accessories and after-shave, and go to a demographically correct singles’ bar

2. March up to every woman and propose marriage

3. If turned down, repeat the process to everyone in the bar

4. If you come away empty-handed, blame the suit, shoes, tie and after-shave

“Spray and Pray” “Spray and Pray” Maximising Value through Customer Management

Mass Advertising…Mass Advertising…• Usually displays no real evidence that it is working because very few notice it in the clutter

• Is one-way and doesn’t allow for participation

• Is not easily tested or measured

• Is unpredictable and expensive

• And is often used to generate fear amongst competitors or improve the morale of employees

• Is not trusted/has poor credibility

• Usually displays no real evidence that it is working because very few notice it in the clutter

• Is one-way and doesn’t allow for participation

• Is not easily tested or measured

• Is unpredictable and expensive

• And is often used to generate fear amongst competitors or improve the morale of employees

• Is not trusted/has poor credibility


http://www.google.co.za/webhp?hl=en

Self Defence by Customers

Marketer CustomersAdvertising and Promotions

Direct Mail

Email

SEO Marketing

Agent Sales Tools

• Live search

• Web search

• Social networks

• Word of mouth

So, the Biggest Challenge of All?

The declining power of traditional advertising &

promotion, and of traditional media


Advertising is expensive!Advertising is expensive!

“Half the money I spend on advertising is

wasted; the trouble is, I don't know which half.” (John

Wanamaker)But that was then…

Now closer to 10%

Fact: There are too many brands and companies - and too few customers

Fact: Cost of advertising has almost doubled – with less “views”

Fact: There are so many more media that it’s impossible to reach your target audience with just one partner

Fact: Your message will not stick out above all the clutter

Fact: Your customers and prospects don’t believe the messages anyway:

• Only 18% (14%) of people believe adverts are true (AdWeek, Dec 2009.) Even less 10-year olds

• Word of mouth trumps advertising – always, always, always! (Even Social Media)

• An entertaining viral video can be watched by millions

Customers• The failure of marketing communications and promotions

• Word of mouth trumps advertising – always

• Therefore, they want communication that is relevant, anticipated, timely, personalised and customised. (RAP)

• Demand for better customer service, more “experiences,” and for better recovery from problems

• Poor internal processes to manage customers


So why is this all so important?

Because of the consequences that you have to live with when your

customers are unhappy versus delighted (versus indifferent)

Activity – page 39Activity – page 39


• R & D and market research• Product & service development, and launch• Advertising and promotion• Getting new customers on board

Customer loyalty is extremely profitable

Year0 1 2 3 4 5

Cus

tom

er P

rofit

Acquisition Costs

Base ProfitBase ProfitMarketing Cost ↓Marketing Cost ↓Cost to Serve ↓Increased SalesIncreased SalesReferralsPrice PremiumBut benefits also accrue from…

More proof…

• 5% reduction in customer defections leads to up to 85% profit boost

• &0% of customers switch to a rival due to bad service

• Loyal customers are more profitable

• 94% of unhappy customers will buy again, IF properly handled. 88% said they’d spend more

• Return of marketing investment in retention is 13 to 15 times greater than cost of acquisition


Why should you care?• “Profitability” of company

• Lifetime value of loyalty

• Company image: Word of mouth & public reputation

• Customer reaction and response to us

• “Marketing” and communication costs

• Tolerance & forgiveness

• Effect on competitors & others

• Company security and your job stability

• Financial reward and other recognition

• Pleasant work environment & morale; better work relationships

• Growth opportunity & career advancement

• Sense of pride


Oh, and one final challenge…In recent surveys asking executives to rate their success in customer care, customer

loyalty, and customer management, most rate their companies as good, very good, or

exceptional

When asked the same questions, most of their customers disagreed!

This is the business world’s great delusion


It doesn’t have to like

this!

“Be very afraid of our customers,

because they are the folk that have

the money.

Our competitors are never going to send us money”


Theme 2: Introduction to Customer Management – Understanding Loyalty

and Actioning Customer [email protected]

www.LeadershipLaunchPad.co.za

mailto:[email protected]

http://www.delightyourcustomers.co.za/

What is a customer?• Anyone who is affected or impacted

or influenced by our efforts, or anyone that we pass our work onto…

• Anywhere…• Whether they pay us or not…• And who can affect our future in a

positive or negative way

Customer Loyalty

Behaviour

Customer Loyalty

Behaviour

Low

High

Customer Satisfaction Perceptions

Customer Satisfaction Perceptions

Low High


So What is Customer Management?

Customer management is aimed at building a portfolio of loyal customers by offering them on a

continuous basis a product/service package tailored to their individual needs.

It is the strategic management process that uses individual customer data to enable a tailored,

mutually trusting, valuable and win:win proposition

(Today supermarkets and hotels are more trusted than banks, police and politicians!)


DefinitionCustomer management is the sum of all

business activities that create long-term and mutually profitable customer partnerships

through consistent on-going innovation and the maximisation of added value. Thus, CM is the process by which you manage the extent of

your aim to be driven by your customers

Offensive Marketing: Offensive Marketing: Chasing chickens Chasing chickens

Offensive Marketing: Offensive Marketing: Chasing chickens Chasing chickens

• Is the barrel full?

• What do they do for us?

• Why do they “leak” out?

Thus, once they are inside we need to Thus, once they are inside we need to defend! The key question should be: defend! The key question should be: “Why “Why

should they stay?”should they stay?”

Thus, once they are inside we need to Thus, once they are inside we need to defend! The key question should be: defend! The key question should be: “Why “Why

should they stay?”should they stay?”

1%

3%5%

9%14%

68%


Companies want their customers to be loyal to

them…

But they are not prepared to be loyal to their

customers

Who is Wayne Duvenage?



The Customer Experience Model

Product: Must Work

ServiceService

ExperienceExperience

Delivery SystemDelivery System


The Customer Experience Model

Value for money, reliability, variety,

safety, price, available

Emotional, partnership, relationships, social impact,

atmosphere

Emotional, partnership, relationships, social impact,

atmosphere

Value for time, choice, communication,

individual

Value for time, choice, communication,

individual

Knowledge/skills, access, attitude, caring

processes

Knowledge/skills, access, attitude, caring

processes

Brand and image of company, but also skills/attitude/ personality of people

Brand and image of company, but also skills/attitude/ personality of people

If you could pick one only?

“Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3)

High barriers to switching

Continuous value

innovation

Put Relation-ships First

Sustainable Customer Loyalty


“Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3)

Sustainable Customer Loyalty


What do you want when you spend your money?

Dimensions of Service QualityGetting the Basics Right

• Reliability: Consistency of performance and dependability. The company performs its work right first time, and honours its promises

• Responsiveness: The willingness or readiness of staff to provide service, (rather than apathy). It also involves timeliness and a sense of urgency. It’s about short queues and no delays

• Competence: The possession of the required skills and knowledge to do the job and perform the service

• Access: Approachability and ease of contact, both by telephone, and in a “live” face-to-face situation. We can include things like hours of business and convenient location in this category

• Courtesy: Politeness, respect, consideration, friendliness, warmth, and even love from staff who deal with customers

• Understanding the Customer: Knowing customer’s specific needs & requirements, & who they are. Examples: individual attention and recognising them

• Communication: Keeping people informed always. Especially true if something goes wrong, (reassure customer that problems will be handled.) Includes explanations, training & clarity about prices/costs. Half communication is about listening


• Credibility: Trustworthiness, believability, honesty, ethics and integrity are all important here. It’s about having the customer’s best interests at heart. Your name, brands and reputation contribute to this, but so do the personal characteristics of the people who work there

• Security: Freedom from risk, danger, doubt, and/or worry. Whether customers feel comfortable doing business with you. Includes elements of physical safety, financial security, & confidentiality.

• Tangibles: The physical evidence which impacts on the customer: appearance of staff, the physical facilities, the tools and equipment, even other customers. Anything that affects or attacks any of the five senses is important here. (Customers use physical representations of the company as symbols of the quality of products and service.)


Important Customer Experience Factors: HCCM Research

B2B

•Extent of personal contact

•Flexibility/responsiveness to needs

•Implicit understanding of client needs

•Proactively eliciting client’s objectives and priorities

•Proactively checking that everything is okay

•Promise fulfilment

•Knowledge and expertise

B2C

•Helpfulness

•Value for time

•Customer recognition

•Promise fulfilment

•Problem solving

•Personalisation

•Competence

•Accessibility

• Location: questionable

• Architecture: fine

• Sea views: almost

• Service: VIP superb!

• Remember me?

• Pillows

• Biltong and diabetic chocolate

vodacom cm programme 2015 - part 2

Education

customers fact

customers challenges

customers companies

mass advertising

cost of advertising

better customer service

clutter fact

views fact