profit by design mark hocknell june 2016

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Profit By Design

leveraging from the power of customer spend dynamics and advocacy

1 © Mark Hocknell 2016 Profit by Design

Mark Hocknell 8th June Brisbane

Overview • Customer Portfolios and profit

– Customer spend and advocacy

• What is the problem..?

• Business Alignment with Customer Intent – The Three Phases – Living under the cloud

– Customer Strategy and Value

• Architecture for Customer Engagement – The Conversation that Attracts and Keeps your

Awesome Customer


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Profit by Design © Mark Hocknell 2016 3

• Understand how the value is created for Customer groups – For the business (e.g.: higher retention, therefore

increased profitability; product mix and usage etc)

– For the customer - services, usage, accessibility, etc

• Develop strategies to create more customers with the same characteristics as the more profitable customers.

• Sweet spot is the Two-way exchange of value

• Large portions of profit-contribution come from small portions of customers.

Customer portfolios and profit

Advocacy and Net Promoter Score


• Promoters / Passives / Detractors NPS

• 40 40 20 = 20

• 20 40 40 = -20

• Percentage of Promoters minus percentage of Detractors = NPS

• Relative to alternatives available to your customers, NPS is a predictor of future success.

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Customer portfolios and profit Key takeaways:

• Not all customers are equal – In how they gain value from the business, or in

how they reciprocate value

– Or in advocacy

• Customer portfolios are created by the business – implicit and explicit actions and decisions.

• Two-way Value exchange – includes the advocacy from your customers.


What is the problem..?

How the traditions of sales mislead


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The Eight Great Misleading Traditions of Sales

1. “Perception that sales is easy”

2. “Build it and they will come”

3. “It is all a numbers game”

4. “The gun sales guy”

5. “One throat to choke” (managing the parts rather than the whole)

6. “Focus on targets and dollar outcomes”

7. “Close the sale”

8. “Sell the product/service”

Profit by Design 7 © Mark Hocknell 2016

These ‘traditions of sales’ mislead businesses into thinking they are growing profitably; but instead they typically lead to the creation of a customer portfolio that has low overall profitability – the majority of customers contributing little profit and little advocacy.

Business Alignment with Customer Intent

The Three Phases – Living under the cloud Customer Strategy and Value


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Create the Customer Strategy

Understanding Two-Way-

Value

Customer Groups

Delivery of Value

Experience and Process Management. Measurement and Improvement.

Alignment of resources: people, culture, communications, sales tactics. service delivery.

Value Proposition Development

What does each Customer Group value? What is the Value Proposition for each

Customer Group?

Phase One

Phase Three

Phase Two


Customer groups identified Two-way value quantified Intent with each Customer Group agreed.

Value Propositions • Two Levels for the customer – answers:

• “Why I should buy from you” – Your business, you the sales person

• “Why I should buy your product/service” – Over the alternatives

– Use specifics

– Needs to answer three questions

• Customers make buying decisions emotionally, then seek rationale to justify.


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Architecture for Customer Engagement

The Conversation that Attracts and Keeps your Awesome Customer


•Thru email contact aim to define the potential customer • Offering support/help in learning • Build rapport, provide information and reiterate value propositions and benefits

• Awesome Customer B

• Awesome Customer A

Advocates Unknown Customers

Visitors / Contacts

Known Guests

Customers

Customer Buying/Decision-making process:

0. Unaware.

No problem, trigger or

need.

Customer Engagement:

1. Awareness

of a problem, need, or

trigger to improve.

2. Customer

investigates and

considers initial set

of solutions

3. Customer

adds or subtracts potential brands/

solutions (shortlist)

4. Customer

does active evaluation of options

5. Customer makes the purchase decision

6. After purchase

Customer develops expectations of performance –

informs re-purchase and level of advocacy

Attraction: • Blogs • “Free” Reports • SEO • Word of Mouth

Open up: • Direct contact • Call / email • Guide thru the decision-making process • Open the relationship

Delight • Deliver value and great experiences • Continuous improvement

Getting to know: • One pagers • White papers • Landing pages • Web site design

• Inform/Educate • Values • Problems/ Benefits

• Outbound / Referrals • Proactive contact

Internal Sales – Values Based Sales Process

Sales – 4 Step Sales Process

• Account management • Service delivery


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Sales Cycle

Adoption1 Innovation

Adoption2 Product/Service

Values & Ethics

Customer Decision-making process

Scripts/Prompts vs Methods

Initial Inputs Secondary Stage Act Measure / Monitor

Do the results suggest changes to

the Initial Inputs..? Progressive Improvement

Customer Groups Value Propositions

Architecture for Customer Engagement: The Conversation that Attracts and Keeps your Awesome Customer

•Thru email contact aim to define the potential customer•Offering support/help in learning•Build rapport, provide information and reiterate value propositions and benefits




0.Unaware.


need.

1.Awareness


trigger to improve.

2. Customer

investigates and


of solutions

3. Customer


solutions(shortlist)

4. Customer



6. After purchase



Attraction:• Blogs• “Free” Reports• SEO• Word of Mouth

Open up:• Direct contact• Call / email• Guide thru the decision-making process• Open the relationship

Delight• Deliver a value and great experiences• Continuous improvement

Getting to know:• One pagers• White papers• Landing pages• Web site design

• Inform/Educate• Values • Problems/ Benefits

• Outbound / Referrals• Proactive contact



• Account management• Service delivery


Secondary Stage • This is where we connect the dots and design the

sub-processes to support our overarching Customer Engagement, on purpose.


•Thru email contact aim to define the potential customer•Offering support/help in learning•Build rapport, provide information and reiterate value propositions and benefits




0.Unaware.


need.

1.Awareness


trigger to improve.

2. Customer

investigates and


of solutions

3. Customer


solutions(shortlist)

4. Customer



6. After purchase



Attraction:• Blogs• “Free” Reports• SEO• Word of Mouth

Open up:• Direct contact• Call / email• Guide thru the decision-making process• Open the relationship

Delight• Deliver value and great experiences• Continuous improvement

Getting to know:• One pagers• White papers• Landing pages• Web site design

• Inform/Educate• Values • Problems/ Benefits

• Outbound / Referrals• Proactive contact



• Account management• Service delivery

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Five Levels of Customer Engagement Capability

5 On Purpose

4 Almost There

3 Middle of the Road

2 Ad Hoc

1 Exit Strategy


• Customer acquisition based on customer strategy (Awesome customer known) • Revenue / profitability is predictable • Processes / systems enable customer engagement • Leaders focus on results – purpose is customer focused

• Employees engaged • ↑ NPS • ↑ Retention

• Sales results are random • No process or method • Non-productive relationships, stress and worry

• Targets are money driven • Product is main focus • Leaders are “Gee Men” • Features selling

• We are highly skilled at creating interesting reasons for poor results • Lost sales are about price • Moderate sales team turnover • “Noisy” customers

• Targets are money driven • Blend of Product and Customer focus • Features selling (some advantages)

• Revenue / profitability appears stable but sometimes unexplainable • Separate marketing and sales functions, targets • Processes / systems in development to be integrated • Leaders focus on targets – purpose is company focused

• Revenue / profitability appears stable • Integrated customer functions and goals • Clear understanding of good leads (MQL/SQL) • Leaders focus on targets – purpose is company focused

• Personas developed • NPS used (overall) • Developing collaboration / skills

Profit by Design • Remember to build a really profitable customer

portfolio you need to, design it from the start – Know you Awesome Customer (spend and advocacy) – Know the Two-way value exchange – Know your value propositions and how to deliver

them – Use and implement the Architecture for Customer

Engagement to start that Conversation that Attracts and Keeps your Awesome Customer

So you can build your profitable customer portfolio

on purpose


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Profit By Design leveraging from the power of customer

spend dynamics and advocacy


About Mark Hocknell. Mark is a speaker, author, mentor and consultant in Australia. He is regarded as a thought leader in customer centric business, selling and leading sales teams, and in the implementation of performance measurement and performance management frameworks.

Mark seeks to free organisations from management thinking and practice that does not work - to align their resources, continually improve to deliver value for their customers and maximise the realisation of business results. With an extensive career (spanning 25 years) across management consulting, executive management, and academia, Mark uses his skills to help lift the performance of organisations and businesses to achieve the change and results they are striving for. He can be contacted by email: [email protected]

2-Day

How to Design

your Business for Profit

Workshop


mailto:[email protected]

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2-Day How to Design your Business for Profit Workshop

Day One

1. Customer Portfolios and Promoter behaviour

2. Customer Strategy Groups and Portfolios

3. Two way value (Value maps, CLV)

4. Value Propositions

– Why you

– Product / Service the three levels and specificity

Day Two

• Architecture for Customer Engagement

1. Adoption x2,

2. Values Ethics and the Sales Cycle

3. Customer decision-making

4. Scripts prompts and methods designed

5. Implementation


2-Day How to Design your Business for Profit Workshop

All the examples, case studies, templates, tools and techniques you need to make sure you get it

100% nailed..!

And design your business for profit, by attracting and keeping

your awesome customers.


profit by design mark hocknell june 2016

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