customer intimacy

Customer IntimacyCustomer Intimacy

The Key to Profitability

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Managing for SuccessManaging for Success

Manage

Market

Total Customer Experience

Product


Core Values – Focus is The Key to SuccessCore Values – Focus is The Key to Success

Organization must be tuned to a single value discipline to achieve market leadership• Best total cost (operational effectiveness)• Best product (product leadership)• Best total solution (customer intimacy)

The organization, your culture and your business models must be in synch with that value discipline

Doesn’t require abandoning the other two - just focusing energy and assets on a single focus

Alignment is key


Examples of Core ValuesExamples of Core Values

THE DISCIPLINE THE CHARACTERISTICS THE LEADERS

Operational Excellence

Providing middle-of-the-market products at the best price with the least inconvenience.

FedEx, Hertz, McDonalds, Saturn, Maytag, Southwest Airlines, Charles Schwab, Wal-Mart, Dell, Timex, 800-Flowers

Product Leadership

Offering products that push performance boundaries. The message is offering the best product — period.

Nike, 3M, Sony, Swatch, Revlon, Intel, Harley Davidson, Walt Disney

Customer Intimacy

Focusing not on delivering what the market wants, but specifically what the Customer wants — cultivating relationships above all and delivering a total solution.

Nordstrom, the original IBM, Airborne, Four Seasons, Lands End


If You Choose Customer Intimacy, You Must…If You Choose Customer Intimacy, You Must…

Employ a culture of managing “total customer experience”

Embrace a culture of managing “moments of truth”

Demand a culture that puts the customer at the “center of your world”


What Does It Mean to Put the Customer at the What Does It Mean to Put the Customer at the Center of your World?Center of your World?

“All value travels from your customer to you through processes, many of which you can control directly [e.g., phone support], some of which you can influence positively [e.g., rectifying poor service], and a few of which you have no control over [post-relationship word-of-mouth]. So engineer the processes you can control so their value doesn’t leak out on the floor.” Paul Ward, CRM Consultant

Ultimately, it requires customer intimacy – customer Ultimately, it requires customer intimacy – customer intimacy is ESSENTIAL for success in today’s intimacy is ESSENTIAL for success in today’s

world!world!

““The new agenda in CRM is to make customers feel The new agenda in CRM is to make customers feel good whenever they make contact with your good whenever they make contact with your

company. Every interaction isn't a moment to be company. Every interaction isn't a moment to be avoided or cut short, but an opportunity for further avoided or cut short, but an opportunity for further

intimacy with the customer." intimacy with the customer." Steve Ballou, CRM Global Service Leader at the

IBM Institute for Business Value


Describing Customer Intimacy Describing Customer Intimacy

Customers desire intimacy – okay, they may not say that, but they do Customers want to be known Customers want to have confidence that the service will be consistent Customers desire convenience Customers want to feel welcomed – like they belong Customers know problems will occur, but the response to problems is what

is most important People do business with people they like! Very frequent customers are more apt to become more loyal if offered

unique rewards customized to their lifestyles, which requires deep customer intelligence

Customer Intimacy DefinedCustomer Intimacy Defined

Customer intimacy is when companies identify the unique differences and needs for each customer and seek to fulfill those individually, thus developing an

emotional connection with that customer that often goes beyond loyalty to a long-lasting relationship built upon

trust, reliance, confidence and comfort – the brand takes on importance and meaning to that customer.

The question is not “how many customers The question is not “how many customers do you have” but it is “how well do you do you have” but it is “how well do you

know the customers you do have – what is know the customers you do have – what is the depth of the relationship?”the depth of the relationship?”


Once You Know Them…Once You Know Them…

You can market to them in a manner relevant to their needs

You can reward them in a manner relevant to their lifestyle

You can recognize them in the manner they choose You can reap the rewards of return business and word-

of-mouth/viral marketing


Knowing the Customer Better Leads to 500X Knowing the Customer Better Leads to 500X Improvement in Marketing ROI Improvement in Marketing ROI

According to Peppers & Rogers, you need to know…• Who…

Demographics – age, occupation, income, etc.

Clustering/Segmentation – household level, geo-demographics

Lifestyles – interests, hobbies, habits, preferences

• Why…Attitudes such as optimism about the future & social interaction

• How…Propensities - are they “likely to” purchase and what channel?

• What…Behaviors – purchases and responses

• When…Are they in the market – purchasing patterns


Growing Market Share from Frequent TravelersGrowing Market Share from Frequent Travelers

One of the challenges is to bridge the gap to garner more loyalty from very frequent travelers

If hotels could reduce their hotel choice from three or more hotels to just two, according to the McKinsey Quarterly, 7 to 10 room nights per year per customer could be gained

Hotels have to ask “what do you give to a person who has everything they need and has hotel points and airline points galore?”

If you have 10,000 customers, how do you know which 100 are the most important?

Why is customer loyalty important?Why is customer loyalty important?

According to a recent TIA report, hotels get nearly half of their revenues from the small segment of travelers who spend about a month each year on the road: frequent

visitors make up only 10 percent of all hotel guests but account for 44 percent of hotel nights

But what is loyalty?But what is loyalty?

There is functional loyalty and emotional loyalty

Which do you want?

““The emotionally loyal customer feels an The emotionally loyal customer feels an attachment to the firm or the brand that transcends attachment to the firm or the brand that transcends functional attributes. This is a loyalty that is likely to functional attributes. This is a loyalty that is likely to

last, even in the face of competition that offers a last, even in the face of competition that offers a more functionally-attractive alternative.”more functionally-attractive alternative.”

Jim Barnes, Executive VP – The Bristol Group and Professor of Marketing at Memorial University

Newfoundland


Focus on the Total Customer ExperienceFocus on the Total Customer Experience

Customers want a positive, enjoyable and unique experience from the beginning until the end of their experience with you

They desire an emotional connection that, once made, often ensures long-term loyalty

They must be valued for a lifelong contribution versus a one-time contribution to revenues

Customers desire the perception that they are in control - ensure your customer-facing processes are engineered for how customers buy, when they buy and what they buy

Customers want choice And they want this across all channels


Practical Ways to “Wow” Your CustomersPractical Ways to “Wow” Your Customers

Relevant communication Acknowledge all requests, at time of sale and when you fulfill them Ask for and respond to their opinions immediately Track their preferences and provide them whenever possible Empower employees for action Recognize their value – make them feel special Create unique and customized rewards for loyalty Respond to and resolve issues quickly and with concern

Developing A Customer-Centric CultureDeveloping A Customer-Centric Culture

In order to develop a customer-centric culture, you In order to develop a customer-centric culture, you must reward and model the right behaviors.must reward and model the right behaviors.


Measure and Reward the Right ThingsMeasure and Reward the Right Things

Measure and reward employees based upon customer satisfaction, not just revenue goals

Set a few achievable goals, such as percentage of repeat customers or increase in percentage of preferences for each custome

Ensure you can track the goals and measures you have set

Do not rely on IT to perform customer service for you

Train, develop and reward front-line employees to focus on the “moment of truth” with customers

Allow excellent employees to become role models for other employees


Transform to an Organization that…Transform to an Organization that…

Is customer centric. Is customer intimacy focused. Values the potential lifetime customer value. Rewards customer centric behavior. Stresses each “moment of truth”. Has emotionally loyal customers.


TOOLS

ToolsOrganizational Structure

Right People

Culture to Support Strategy

CommunicateTrain

Reinforce

Identify what to“stop doing”

Investment

The Service ModelThe Service Model

1

2 3

4ImageCustomer

Products Delivery

The question is again…how well do you know your The question is again…how well do you know your customers – what is the depth of your relationship customers – what is the depth of your relationship

with them?with them?

Customer Experience NirvanaCustomer Experience Nirvana

customer intimacy

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