Maintaining Loyal Customers

Maintaining Loyal Customers

اسلاید 1: Maintaining Loyal CustomersCNI’s journeyKenny OngCNI Holdings Berhad

اسلاید 2: How to fail without trying

اسلاید 3: The Roadmap to Failure Fred Wiersema and Mike TreacyPerformanceTimeClear SailingToday’s performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrow’s actual performanceDownpresure of Unclear Strategy

اسلاید 4: Denial and Defense“It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia“It’s good value but not in our preferred customer market.” - ABC vs Toyota“Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO“The rules we are playing by have always worked before” – AMEX vs VISA

اسلاید 5: The Roadmap to Failure Fred Wiersema and Mike TreacyPerformanceTimeClear SailingToday’s performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrow’s actual performanceDownpresure of Unclear Strategy

اسلاید 6: Ad Hoc TacticsSelectively hold discounts to hold business that has started to go elsewhereIntroduce new promotions, terms, conditions, and offers to confuse and cloud the marketBeef up customer service by adding people to fix mess-ups and quicken delayed shipmentsDelay capital investments and adjust accounting methods to portray quarterly financial results more favorablyIntroduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers

اسلاید 7: The Roadmap to Failure Fred Wiersema and Mike TreacyPerformanceTimeClear SailingToday’s performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrow’s actual performanceDownpresure of Unclear Strategy

اسلاید 8: Contents:Agenda:IntroductionPhilosophyCustomer FocusStrategy ExampleNext Steps

اسلاید 9: IntroductionThe basis for all our Customer Loyalty strategies

اسلاید 10: Intro: CNI17 years oldMain Board Public Listing: August 2005Products: Consumer Goods and ServicesCore Business: MLMOthers: Contract Manufacturing, Export/Trading, eCommerceMalaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, PhilippinesStaff force: ± 500Distributors: ± 250,000 Malaysia

اسلاید 11: Intro: MLMSell through peopleRelationship & people skillsCompensation PlanFollow-upIntegrityR&DTrainingFunctions & EventsTight regulations

اسلاید 12: PhilosophyThe anchor for all decisions

اسلاید 13: Philosophy:Goods Return Policy“I don’t care if they return a Goodyear tire. If they said they paid $200, pay them $200.”Nordstrom does not sell tires

اسلاید 14: Philosophy“In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied.”HBR March/April 1996

اسلاید 15: Philosophy“CNI is more than business. We strongly believe that every individual has the opportunity to attain a better living through CNI.”

اسلاید 16: PhilosophyUltimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”Sergio Zyman“Retention and Loyalty useless if No Conversion is happening.”

اسلاید 17: PhilosophyLoyalty is Useless…Virtual Consumption vs. Real Consumption

اسلاید 18: PhilosophyLoyalty is misleading…Heavy Consumption ≠ LoyaltyLoyalty ≠ Heavy Consumption*Today’s focus is on Loyalty, not Consumption.*To increase consumption, refer Marketing

اسلاید 19: PhilosophyLoyalty = Relationship (something like Dating)Loyalty ≠ PointsLoyalty ≠ RedemptionLoyalty = Get more people, to buy more, more frequently, at higher prices

اسلاید 20: Customer FocusKeeping an eye on the right thing

اسلاید 21: FocusTargetingAlignment

اسلاید 22: Focus: Segment & TargetKnow your “Customer”UserDistributorLeadersSuper LeadersDCOSPOCorporate

اسلاید 23: Focus: Segment & TargetTargeting based on Value of the Customer:Value of Customer = RFM = Recency x Frequency x Monetary

اسلاید 24: Focus: Segment & TargetTargeting based on Value of the Customer:Present ValuePotential ValueLowHighHigh

اسلاید 25: Focus: Segment & TargetLoyaltyExperienceSwingFormerOpposition

اسلاید 26: Loyalty 1: ExperienceLoyalty = Experience vs. ExpectationsSolution Strategy: Value Disciplines

اسلاید 27: Loyalty 1: ExperienceThey are the most innovativeConstantly renewing and creativeAlways on the leading edgeA great deal!Excellent/attractive priceMinimal acquisition cost and hassleLowest overall cost of ownershipA no-hassles firmConvenience and speedReliable product and serviceExactly what I needCustomized productsPersonalized communicationsTheyre very responsivePreferential service and flexibilityRecommends what I needIm very loyal to themHelps us to be a successProduct LeadershipOperationalExcellenceCustomerIntimacy

اسلاید 28: Loyalty 1: Experience* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service AttributesRelationshipImage

اسلاید 29: Loyalty 1: Experience* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service AttributesPriceQualityTimeSelection√√Smart ShopperRelationshipImageOperational Excellence: Quality and selection in key categories with unbeatable prices

اسلاید 30: Loyalty 1: Experience* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service Attributes√BrandTimeFunction√√Best ProductRelationshipImageProduct Leadership: Unique products and services that push the standards

اسلاید 31: Loyalty 1: Experience* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service Attributes√√√√ServiceTrusted BrandRelationshipImageCustomer Intimacy: Personal service tailored to produce results for customer and build long-term relationshipsRelations

اسلاید 32: Loyalty 2: SwingLoyalty = Best alternative at the current moment until I find another alternativeSolution Strategy: Base Retention

اسلاید 33: Loyalty 2: SwingSwing Customers are “loyal” because:Individual RelationshipsConvenience (at that point in time)Tied-upProduct UniquenessPromotionsNo better alternativeDownlinesNo known alternativePsychologically lazy

اسلاید 34: Financial“To satisfy our stakeholders, what Financial objectives must we accomplish?”Internal Process“To satisfy our customers, in which internal business processes must we excel?Customer“Who are our target customers?What is our value proposition?”Learning & Growth“What capabilities and tools do our employees require to help them execute our strategy?Focus: Corporate Alignment

اسلاید 35: FinancialLearning & GrowthInternal ProcessCustomers / DistributorsRevenue GrowthProductivityMarket ValueDepartment OperationsSupplier & AlliancesExternal InvolvementTarget MarketsProducts/ ServicesChannel StrategiesHuman ResourcesTechnologyInformation & IntelligenceSystems & ProcessesFocus: Corporate Alignment

اسلاید 36: FinancialLearning & GrowthInternal ProcessCustomers / DistributorsFocus: Corporate AlignmentProfit after Tax. Revenue. Cash-to-cash cycle. Operating cash flowCustomer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. Distributor Rank Achievement. No. of Active Distributor. No. DC/Regional Sales. Distributor with commissionCustomer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Sponsoring Program. On Time Delivery. No. of Effective Training. Number of Effective A&P% of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to strategic information. Q12 Index. % staff evaluated on Culture alignment

اسلاید 37: Strategy ExampleWhat we have done and why

اسلاید 38: StrategyMamak stall

اسلاید 39: StrategyValue DisciplinesBase Retention4-wheels

اسلاید 40: Operational Excellence(low cost producer)Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership (best product)Customer Intimacy(best total solution)Strategy: Value Disciplines

اسلاید 41: Zig Ziglar“Most prospects that don’t buy are confused about the offer”

اسلاید 42: Operational ExcellenceCompetitive priceError free, reliableFast (on demand)SimpleResponsiveConsistent information for allTransactionalOnce and DoneCustomer IntimacyManagement by FactEasy to do business withHave it your way (customization)Market segments of oneProactive, flexibleRelationship and consultative sellingCross sellingProduct LeadershipNew, state of the art products or servicesRisk takersMeet volatile customer needsFast concept-to- counterNever satisfied - obsolete own and competitors productsLearning organizationStrategy: Value Disciplines

اسلاید 43: Operational ExcellenceMove know-how from top performing units to othersBenchmark against best in classEnsure operations training for all employeesUse disciplines like TQM for continuous learning to reduce costs and improve qualityStrategy: Value Disciplines

اسلاید 44: Strategy: Value DisciplinesCustomer IntimacyCapture knowledge about customersUnderstand customer needsEmpower front line employeesEnsure that everyone knows the customerMake company knowledge available to customers

اسلاید 45: Product LeadershipReduce time to marketCommercialize new products fastEnsure that ideas flowReuse what other parts of the company have already learnedEnsure there are multiple sources of fundingStrategy: Value Disciplines

اسلاید 46: Operational Excellence(low cost producer)Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership (best product)Customer Intimacy(best total solution)Strategy: Value Disciplines

اسلاید 47: Operational Excellence(low cost producer)Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership (best product)Customer Intimacy(best total solution)Strategy: Value Disciplines

اسلاید 48: The McPlaybook*Make it easy to eat50% drive-thruMeals held in one handMake it easy to prepareHigh TurnoverTasks simple to learn & repeatMake it quick“Fast Food”Tests new products for Cooking TimesMake what customers wantProwls market for new productsMonitored field tests*Adapted from: Businessweek , Februrary 5th 2007

اسلاید 49: Increase switching costsComplex relationships - they will be reluctant to go through the hassle of undoing those relationships in order to leaveEnsure no competitor will be able to come up with a big enough offer to outweigh their switching costIncrease switching cost, by providing valuable, but entangling, servicesE.g. Telcos, ERP, Microsoft, ConsultantsTailor your offeringUnderstand customer behaviors and motivations to personalize experience for its best customersShare of WalletInformation is KINGIBM, AmazonStrategy: Base Retention

اسلاید 50: Preempt DefectionsPredict, Response, ExecuteKeep track of customers’ changing value criteriaBe ahead of the customer’s decision cycleCredit cards, AvisBond with CustomersMost customers, under most circumstances, won’t evaluate a full range of alternative products when making a repurchase decisionBrands create emotionsNeed to influence customers to be on your side e.g. Apple, Baby productsStrategy: Base Retention

اسلاید 51: Strategy: Base RetentionMega packagesCommunityReward programs (Points)Membership SubscriptionEmail communicationNewslettersPersonalized alertsReminder & Gift suggestionSurveySuggestion BoxSelf ProfilesPrograms x Lifestyle MatrixFun, Interactive programs (e.g. design and submit your own: recipe, jewelry, greeting card etc.)Switching Techniques (e.g. Balance Transfer of credit cards)

اسلاید 52: Strategy: 4-WheelsCultureCorporate ObjectiveCorporateStrategyStructureResourcesLeadershipPerson

اسلاید 53: Strategy: FrameworkOrg StructureJob DesignC&BPolicies & proceduresDecision makingJob fitManagement SystemsBSC and KPIsDecentralized & EmpowerStructure

اسلاید 54: Strategy: FrameworkToolsPhysical facilitiesPeer supportInformationT&D Programs (internal)ICT SystemseCommerceResources

اسلاید 55: Strategy: FrameworkRole modelingVision/Mission/PhilosophyLeadership StyleF/L importanceDelegation & EmpowermentC&B, PromotionsSense of UrgencySpeak regularly about customersLeadership

اسلاید 56: Strategy: FrameworkInvolve everyone in Customer FocusSelf managed teamsRecognitionRecruitmentTrainingProfit sharingManager’s roleValuesPerson

اسلاید 57: Person Development: BES

اسلاید 58: Strategy: FrameworkFocus pointAlignmentQualityInnovation & DifferentiationRisk takingPerformance ManagementCorporate obsessionDecision makingCulture

اسلاید 59: Strategy: FrameworkCultureCorporate ObjectiveCorporateStrategyStructureResourcesLeadershipPerson

اسلاید 60: Mistakes and ChallengesISOSeparating Sales, Marketing, and DCSNew productsMisinterpreting customer enthusiasmLack of FrontlinersBackofficeCustomers = FrontlineLack of Training‘Talent’ CriteriaInternal ServiceHiring2nd level CRM databaseBalance between Service and ControlFeedback from the Field

اسلاید 61: Next Steps

اسلاید 62: Next Steps…CRMDC OnlineeCommerceCustomer IntimacyTNA reductionAPQPBrandingLoyalty programsProduct R&DExternal networksField supportUpgrade DCsSmoothen supply chainBESTargeted marketingFor CNI:

اسلاید 63: Next Steps…Customer philosophyReview SOPsRe-orientate staffTrainingPerformance Mgmt SystemC&BResourcesProduct QualityCustomer Service qualityStop defectionsHiringSet standardsMake it everyone’s responsibilityFor starting up:

اسلاید 64: Thank You.soft copy of slides: kennyong@cni.com.my