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Maintaining Loyal Customers and Customer Service Strategy

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Maintaining Loyal Customers CNI’s journey Kenny Ong CNI Holdings Berhad
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Page 1: Maintaining Loyal Customers and Customer Service Strategy

Maintaining Loyal CustomersCNI’s journey

Kenny OngCNI Holdings Berhad

Page 2: Maintaining Loyal Customers and Customer Service Strategy

Contents:

Agenda:• Introduction• Philosophy• Customer Focus• Strategy Example• Next Steps

Page 3: Maintaining Loyal Customers and Customer Service Strategy

Introduction

The basis for all our Customer Loyalty strategies

Page 4: Maintaining Loyal Customers and Customer Service Strategy

Intro: CNI

1. 17 years old

2. Main Board Public Listing: August 2005

3. Products: Consumer Goods and Services

4. Core Business: MLM

5. Others: Contract Manufacturing, Export/Trading, eCommerce

6. Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines

7. Staff force: ± 500

8. Distributors: ± 250,000 Malaysia

Page 5: Maintaining Loyal Customers and Customer Service Strategy

Intro: MLM

1. Sell through people

2. Relationship & people skills

3. Compensation Plan

4. Follow-up

5. Integrity

6. R&D

7. Training

8. Functions & Events

9. Tight regulations

Page 6: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

The anchor for all decisions

Page 7: Maintaining Loyal Customers and Customer Service Strategy

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

Page 8: Maintaining Loyal Customers and Customer Service Strategy

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

Page 9: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

“CNI is more than business.

We strongly believe that every individual has the opportunity to

attain a better living through CNI.”

Page 10: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

Ultimate 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.”

Page 11: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

Loyalty is Useless…

• Virtual Consumption vs. Real Consumption

Page 12: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

Loyalty is misleading…

• Heavy Consumption ≠ Loyalty

• Loyalty ≠ Heavy Consumption

*Today’s focus is on Loyalty, not Consumption.

*To increase consumption, refer Marketing

Page 13: Maintaining Loyal Customers and Customer Service Strategy

Philosophy

1.Loyalty = Relationship (something like Dating)

2.Loyalty ≠ Points3.Loyalty ≠ Redemption4.Loyalty = Get more people, to buy

more, more frequently, at higher prices

Page 14: Maintaining Loyal Customers and Customer Service Strategy

Customer Focus

Keeping an eye on the right thing

Page 15: Maintaining Loyal Customers and Customer Service Strategy

Focus

1. Targeting

2. Alignment

Page 16: Maintaining Loyal Customers and Customer Service Strategy

Focus: Segment & Target

Know your “Customer”

1. User

2. Distributor

3. Leaders

4. Super Leaders

5. DCO

6. SPO

7. Corporate

Page 17: Maintaining Loyal Customers and Customer Service Strategy

Focus: Segment & Target

Targeting based on Value of the Customer:

Value of Customer = RFM = Recency x Frequency x Monetary

Page 18: Maintaining Loyal Customers and Customer Service Strategy

Focus: Segment & Target

Targeting based on Value of the Customer:

Present Value

Potential Value

Conversion Micro Support

No action Maximize

Low High

High

Page 19: Maintaining Loyal Customers and Customer Service Strategy

Focus: Segment & Target

Loyalty

Experience Swing Former

Opposition

Page 20: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

Loyalty = Experience vs. Expectations

Solution Strategy: Value Disciplines

Page 21: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy

Page 22: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes Relationship Image

Page 23: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Price

Quality

Time

Selection

Smart Shopper

Relationship Image

Operational Excellence: Quality and selection in key categories with unbeatable prices

Page 24: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Brand

Time

Function

Best Product

Relationship Image

Product Leadership: Unique products and services that push the standards

Page 25: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 1: Experience

* Treacy & Wiersema, The Discipline of Market Leaders, 1995

Product/Service Attributes

Service Trusted Brand

Relationship Image

Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships

Relations

Page 26: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 2: Swing

Loyalty = Best alternative at the current moment until I find another alternative

Solution Strategy: Base Retention

Page 27: Maintaining Loyal Customers and Customer Service Strategy

Loyalty 2: Swing

Swing Customers are “loyal” because:• Individual Relationships• Convenience (at that point in time)• Tied-up• Product Uniqueness• Promotions• No better alternative• Downlines• No known alternative• Psychologically lazy

Page 28: Maintaining Loyal Customers and Customer Service Strategy

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

Page 29: Maintaining Loyal Customers and Customer Service Strategy

Financial

Learning & Growth

Internal Process

Customers / Distributors

Revenue Growth

ProductivityMarket Value

Department Operations

Supplier & Alliances

External Involvement

Target Markets

Products/ Services

Channel Strategies

Human Resources

Technology

Information & IntelligenceSystems &

Processes

Focus: Corporate Alignment

Page 30: Maintaining Loyal Customers and Customer Service Strategy

Financial

Learning & Growth

Internal Process

Customers / Distributors

Focus: Corporate Alignment

Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow

Customer 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 commission

Customer 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

Page 31: Maintaining Loyal Customers and Customer Service Strategy

Strategy Example

What we have done and why

Page 32: Maintaining Loyal Customers and Customer Service Strategy

Strategy

• Mamak stall

Page 33: Maintaining Loyal Customers and Customer Service Strategy

Strategy

1. Value Disciplines

2. Base Retention

3. 4-wheels

Page 34: Maintaining Loyal Customers and Customer Service Strategy

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

Page 35: Maintaining Loyal Customers and Customer Service Strategy

Zig Ziglar

“Most prospects that don’t buy are confused

about the offer”

Page 36: Maintaining Loyal Customers and Customer Service Strategy

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Strategy: Value Disciplines

Page 37: Maintaining Loyal Customers and Customer Service Strategy

• Operational Excellence• Move know-how from top performing

units to others• Benchmark against best in class• Ensure operations training for all

employees• Use disciplines like TQM for continuous

learning to reduce costs and improve quality

Strategy: Value Disciplines

Page 38: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Value Disciplines

• Customer Intimacy• Capture knowledge about customers• Understand customer needs• Empower front line employees• Ensure that everyone knows the

customer• Make company knowledge available to

customers

Page 39: Maintaining Loyal Customers and Customer Service Strategy

• Product Leadership• Reduce time to market• Commercialize new products fast• Ensure that ideas flow• Reuse what other parts of the company

have already learned• Ensure there are multiple sources of

funding

Strategy: Value Disciplines

Page 40: Maintaining Loyal Customers and Customer Service Strategy

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

Page 41: Maintaining Loyal Customers and Customer Service Strategy

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

Page 42: Maintaining Loyal Customers and Customer Service Strategy

The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

Page 43: Maintaining Loyal Customers and Customer Service Strategy

• Increase switching costs– Complex relationships - they will be reluctant to go through the

hassle of undoing those relationships in order to leave– Ensure no competitor will be able to come up with a big enough

offer to outweigh their switching cost– Increase switching cost, by providing valuable, but entangling,

services– E.g. Telcos, ERP, Microsoft, Consultants

• Tailor your offering– Understand customer behaviors and motivations to personalize

experience for its best customers– Share of Wallet– Information is KING– IBM, Amazon

Strategy: Base Retention

Page 44: Maintaining Loyal Customers and Customer Service Strategy

• Preempt Defections– Predict, Response, Execute– Keep track of customers’ changing value criteria– Be ahead of the customer’s decision cycle– Credit cards, Avis

• Bond with Customers– Most customers, under most circumstances, won’t evaluate a full

range of alternative products when making a repurchase decision– Brands create emotions– Need to influence customers to be on your side – e.g. Apple, Baby products

Strategy: Base Retention

Page 45: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Base Retention

• Mega packages• Community• Reward programs

(Points)• Membership Subscription• Email communication• Newsletters• Personalized alerts• Reminder & Gift

suggestion• Survey

• Suggestion Box• Self Profiles• Programs x Lifestyle

Matrix• Fun, Interactive programs

(e.g. design and submit your own: recipe, jewelry, greeting card etc.)

• Switching Techniques (e.g. Balance Transfer of credit cards)

Page 46: Maintaining Loyal Customers and Customer Service Strategy

Strategy: 4-Wheels

Culture

Corporate

ObjectiveCorporate

Strategy

StructureResources

Leadership

Person

Page 47: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

• Org Structure• Job Design• C&B• Policies & procedures• Decision making• Job fit• Management Systems• BSC and KPIs• Decentralized & Empower

Structure

Page 48: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

• Tools• Physical facilities• Peer support• Information• T&D Programs (internal)• ICT Systems• eCommerce

Resources

Page 49: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

• Role modeling• Vision/Mission/Philosophy• Leadership Style• F/L importance• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about customers

Leadership

Page 50: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

• Involve everyone in Customer Focus• Self managed teams• Recognition• Recruitment• Training• Profit sharing• Manager’s role• Values

Person

Page 51: Maintaining Loyal Customers and Customer Service Strategy

Person Development: BES

Page 52: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making

Culture

Page 53: Maintaining Loyal Customers and Customer Service Strategy

Strategy: Framework

Culture

Corporate

ObjectiveCorporate

Strategy

StructureResources

Leadership

Person

Page 54: Maintaining Loyal Customers and Customer Service Strategy

Mistakes and Challenges

1. ISO

2. Separating Sales, Marketing, and DCS

3. New products

4. Misinterpreting customer enthusiasm

5. Lack of Frontliners

6. Backoffice

7. Customers = Frontline

8. Lack of Training

9. ‘Talent’ Criteria

10.Internal Service

11.Hiring

12.2nd level CRM database

13.Balance between Service and Control

14.Feedback from the Field

Page 55: Maintaining Loyal Customers and Customer Service Strategy

Next Steps

Page 56: Maintaining Loyal Customers and Customer Service Strategy

Next Steps…

1. CRM

2. DC Online

3. eCommerce

4. Customer Intimacy

5. TNA reduction

6. APQP

7. Branding

8. Loyalty programs

9. Product R&D

10.External networks

11.Field support

12.Upgrade DCs

13.Smoothen supply chain

14.BES

15.Targeted marketing

For CNI:

Page 57: Maintaining Loyal Customers and Customer Service Strategy

Next Steps…

1. Customer philosophy

2. Review SOPs

3. Re-orientate staff

4. Training

5. Performance Mgmt System

6. C&B

7. Resources

8. Product Quality

9. Customer Service quality

10.Stop defections

11.Hiring

12.Set standards

13.Make it everyone’s responsibility

For starting up:

Page 58: Maintaining Loyal Customers and Customer Service Strategy

Thank You.

soft copy of slides: [email protected]


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