Customer Intimacy

1. Customer Intimacy The Key to Profitability

2. Product Market Manage Total Customer Experience Managing for Success

3. Core 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

4. Examples of Core Values

5. 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”

6. What Does It Mean to Put the Customer at the 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

7. Ultimately, it requires customer intimacy – customer intimacy is ESSENTIAL for success in today’s world!

8. “The new agenda in CRM is to make customers feel good whenever they make contact with your company. Every interaction isn't a moment to be avoided or cut short, but an opportunity for further intimacy with the customer." Steve Ballou, CRM Global Service Leader at the IBM Institute for Business Value

9. 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

10. Customer 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.

11. The question is not “how many customers do you have” but it is “how well do you know the customers you do have – what is the depth of the relationship?”

12. 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

13. Knowing the Customer Better Leads to 500X 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

14. Growing 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?

15. 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

16. But what is loyalty? There is functional loyalty and emotional loyalty Which do you want?

17. “The emotionally loyal customer feels an attachment to the firm or the brand that transcends functional attributes. This is a loyalty that is likely to last, even in the face of competition that offers a more functionally-attractive alternative.” Jim Barnes, Executive VP – The Bristol Group and Professor of Marketing at Memorial University Newfoundland

18. Focus 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

19. Practical 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 • Tracktheir preferences and provide them whenever possible • Empoweremployees 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

20. Developing A Customer-Centric Culture

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

22. 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 Measure and Reward the Right Things

23. 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.

24. The Service Model TOOLS 1 4 Customer Image Investment Culture to Support Strategy Identify what to “stop doing” Organizational Structure Tools Communicate Train Reinforce Right People 2 3 Delivery Products

25. The question is again…how well do you know your customers – what is the depth of your relationship with them?

26. Customer Experience Nirvana