Link of Customer Satisfaction to Brand Value by qcy16770

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									Are your Customers Satisfied?
         Kathryn Saducas
         Partner marketing manager
  The importance of
customer satisfaction
   to your business
Customer focused
  organisation
Goals of Customer Focus:

  Creating          Offering          Building
  Better            compelling        deeper
  Products or       customer          customer
  Services          experience        relationships


End goal of customer focused strategies is the same:

   Boosting retention and repurchase =
               more sales!!!
 Business Performance Factors
 Contribution to Shareholder Value




Source: Price Waterhouse Coopers, 2002
 Customer Satisfaction = Profits
• Knowing what drives
                               • Attracting NEW
  customer loyalty is
  important to your
                                 customer is 4 x cost of
  company‘s financial health     retaining existing
• Repeat customers and new
                                 customer
  customers from referrals    • 5% increase in
  continuous revenue             customer retention 
  streams                        75% in aggregate
• Disloyal customers are         lifetime profits from
  expensive to replace           that customer
 What are your customers worth?
           Customer Lifetime Value = CLV
• S = average revenue per
  customer sale               Lifetime Value of
• C = costs of servicing
  customer
                               Customer (CLV)
• V = expected # sales per
  year
                                      =
• Y = expected # years        [(S-C)*(V*Y)-
  customer will use your        A+(A*N)]*F
  services
• A = cost of acquiring new            OR
  customer                    • Margin * # sales – cost of
• N = # of referrals from       acquisition + savings from
  customer                      referrals * correction factor
• F = correction factor
  What are your customers worth?
           Customer Lifetime Value = CLV
• S = average revenue per        –   S = $20,000
  customer per sale
                                 –   C = $5,000
• C = costs of servicing
  customer                       –   V=2
• V = expected # sales per       –   Y=5
  year
• Y = expected # years
                                 –   A = $1500
  customer will use your         –   N=4
  services                       –   F = 1.2
• A = cost of acquiring new
  customer
• N = # of referrals from     CLV = [($20000-$5000)*(2*5)-
  customer                      $1500+(1500*4)]*1.2
• F = correction factor           CLV = $185,400
Why Customer Sat. is important?
Study by Le Beouf:
“the reasons why customers no longer dealt with a particular
supplier”
A customer
satisfaction
 program
 Customer-Focused Initiatives

Customer Champion
                                                                                                                        Customer Value Attache
Create a customer champion Director who
is responsible for championing the voice of
                                                                                                                        Nokia product engineer goes on-site with
the customer through the organisation.                                                                                  customer for up to 1 month to learn about
                                                                                                                        challenges and show how Nokia can add
                                                                                                                        value




Everyday Life Observation
To gain deeper understanding of customer,
send video crews & TV cameras into 80                                                                                Customer Charter & Advocate
households around world to capture customer                                                                          Independent customer advocate whose role is
daily routines                                                                                                       to resolve particularly difficult customer and
                                                                                                                     business problems. Customer charter to
                                                                                                                     improve customer experience with service.




                               Customer Success Engineer Team
                               Centralised group that diagnoses root causes   Customer Partner Experience
                               of complex customer problems and               Organisation-wide customer and partner
                               implements solutions across business           satisfaction index to provide a holistic view of
                                                                              business health and trigger specific corrective
                                                                              actions where necessary.
The 6 Ps of Marketing
Customer Feedback Program
• With a well constructed feedback program
  you can get key insights into customers
  to:
  – Identify key drivers of customer experience
  – Glean insights into health of your company
  – Detect early warnings of any erosion of your
    relationship or value proposition
Customer Program Activities
1.
1    Assess internal root cause for customer
     perceptions – satisfaction drivers
2.
2    Derive action plans to resolve most critical
     issues – set your objectives
3
3.   Implement these actions
4.
4    Track your progress with ongoing customer
     research
5.
5    Link these customer metrics to your financial
     results & staff incentives
6.
6    Tell your customers how you used their
     feedback
 Case Studies
Rice University Case      • Methodology:
                            – 50% surveyed (group 1)
  Study showed                and 50% not surveyed
  customer satisfaction       (group 2)
                            – Group 1 were twice as
  improves customer           loyal to company
  retention and company   • Conclusion?
  profits                   – Customers want to be
                              coddled
                            – Surveys  increase in
                              auxiliary product sales
                            – Surveys create opinions
At Microsoft

• Worldwide Survey Apr & Oct
• Customer Escalation Tool
• RMTP – Response Management Through
  Partner
• Feedback forms at events (9 point scale)
• Tactical Research – Qualitative &
  Quantitative
• Anecdotal feedback
• Roundtable sessions
Understand Satisfaction Drivers
                                    Service
    Emotional                       Quality
     Factor



                 Customer
                Satisfaction
                                              Price

    Product
    Quality

                       Access to
                       products &
                        Services
Value Mapping
     high

                      support

                                   Sales staf f
            service                                              product


                      reputation
  value                                                Bus
                                                     expertise

                                   Easy to do
                                    bus with




                                                  Brand




      low             satisfaction                                         high
Example of Value Mapping
                           high
Service Deployment Time [30%]

     Reputation and customer
            testimonials [25%]

     Account Managers/ Sales
             experience [15%]

     After Sales Support [10%]

      Business Process [10%]

         Market/Branding [5%]

               Innovation [3%]

       Strategic Direction [2%]

                                                   satisfaction
                             low                                              high
                                   1   2   3   4       5     6    7   8   9
Avoiding the Pitfalls
• Listening to the wrong customers
• Incorrectly identifying customer priorities
• Failing to consider strategic objectives
• Failing to align organisation around
  execution
• Failing to ‗get paid‘ by customers for new
  value
• Losing momentum – ―campaign mentality‖
Case Study – GAP Clothing
  Ways to measure
customer satisfaction
Different forms of measurement
                         Online
   Annual             Questionnaires              Feedback
  Customer                                         Forms
 Satisfaction
   Surveys
                                       Online
                                       Polls
                                                    Customer
                                                     Service
   CRM                                              Feedback
                                    Other
 Software                          Surveys
                                 (Benchmarking,
                                  Employee, Org
                Focus Groups       Alignment)      Phone or
                  (Formal/                           Fax
                  informal)                        Surveys
Partner Program - CSAT Tool




  http://www.microsoft.com/partner/media/csat/
Microsoft CSAT – Points Awarded
Participation
Individual Customer     Points
Responses
                                 Partners may only survey
10-24                   5        the same individual once
                                 every six months.
25-49                   10
50-99                   15       Only the first eight
100+                    20       individual responses per
                                 customer organisation are
Net Satisfaction (20+            eligible toward Partner
responses required)              Points calculations.
NSAT Score              Points
165-174                 10
175-184                 15
185-200                 20
Measurement & Reporting
• ―Satisfaction‖ can be measured on a scale
• Align business functions around a single customer-focused metric



                                                   NSAT = (VSAT-
                                                   DSAT) +100
                                                   VSAT = 8+9
                                                   DAST = 1 to 4
     Food for Thought
 The name of the game should be
about "giving customers a memory
and experience so great that they'll
want to repeat it." The game is not
 all about getting that score—that
 darned customer score—any way
              possible.
10 Golden Rules
1 Believe customers
1.                          6
                            6. Don‘t spend vast sums
     possess good ideas         of money
2
2.   Gather customer        7. Make it easy for
                            7
     feedback at every          customers to provide
     opportunity                feedback
3
3.   Focus on continual     8. Leverage technology to
                            8
     improvement – start        aid efforts
     with top 10 issues     9. Share feedback
                            9
     bugging your               throughout the
     customers                  company
4
4.   Solicit good and bad   10. Use feedback to make
                            10
     feedback                   quick changes
5
5.   Seek real time
     feedback
      In Summary
“You can’t move a mountain in
  a day, but you can make it
 easier to climb by clearing a
             path.”
Information Source:
• ―Why track end to end customer experience?‖
  TNS Prognostics White paper
• ―Driving Customer-Focused Decision Making‖ –
  Marketing Leadership Council USA
• www.Marketingprofs.com

								
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