Customer Loyalty Programs – Increasing Customer Loyalty throughout the customer base!

Customer Loyalty Programs – Increasing Customer Loyalty throughout the customer base!

Suhail Khan – Director of WW Customer Loyalty Program – FileNet Corporation

February 2005

Why Customer Loyalty?

Why should we care?

What’s at stake?

Customer Loyalty Vs. Customer Satisfaction

Promoters and Detractors

The Big Picture

Companies With Satisfied, Loyal Customers Enjoy Higher Margins, Greater Profits – And Consequently, Higher Stock Price-earnings Multiples.

Customer Loyalty: Return to Investors

05

10

15202530

3540

19.5223.42 23.62

6.12 7.14 7.65 8.01 9.03

Customer Loyalty CLI Score

35.40

AverageP/E

Ratio

Current Market Trends

What Customers are doing differently Experience matters

Positive experience means repeat action Vendor selection criteria

Commitment, not loyalty? The “Trust Factor” “A 5% increase in customer retention yields a 75%

increase in customer net present value.” -Fred Reichheld

Incentive driven model Loyalty rewards

Main Customer Loyalty Business Objectives

1. Measure, monitor and improve overall customer satisfaction within major product, service, and geographical areas

2. Increase software revenue through retention and growth of profitable customers

3. Measure against the Customer Loyalty Index (CLI)

4. Use key drivers of customer loyalty to develop company-wide cross-functional prioritized action plans

Customer Loyalty Focus

Working with and complementing the efforts and initiatives of each organization at FileNet

Teaming internally to enable us to partner externally with our customers

Re-focusing on the requirements of our customers Managing our customers' expectations Building relationships and communicating with our customers

at various levels Placing highest emphasis on our performance - at all levels Creating cross-organizational partnerships

Keys to successful Customer Loyalty Program

Create Customer Loyalty Program goals

Contract third party organization to conduct Customer Relationship surveys

Agree upon measurement model (CLI)

Create Tactical and Strategic plans to address immediate and future goals

Tie compensation of all employees to Customer Loyalty improvement

Company Culture and Focus

Drive to total “satisfaction” to build Loyalty

Customer Loyalty must be a core value

Gain Top Executive sponsorship CEO includes program as top initiative

Weave through the corporate/management fabric

Tie compensation to Loyalty goals

Measuring Customer Loyalty

What is the Customer Loyalty Index?

Measurements? Why its important?

Components of the Customer Loyalty Index?

Overall Satisfaction Continue to Buy Recommend Choose Again

Customer Loyalty Program

Strategic: Form Executive Customer Loyalty Council -

Stakeholders Senior representation from all organizations to

collaborate and breakdown internal and external barriers preventing our company from achieving total customer satisfaction

Tactical: Form a cross-functional team to resolve major tactical

issues identified from surveys Address “Trigger” Issues identified through surveys

Key Customer Loyalty Program Activities

Quarterly Customer Relationship Surveys Survey Data connected to CRM Application

Allow Sales and Field personnel to have access to Customer Survey data for their particular accounts

Global Partner Relationship Survey North America, EMEA and Asia Pacific

Sample Customer / Partner Loyalty Plan

Define Roles for MembersCharter for CouncilCompany wide Engagement Strategy

Performance Metrics for CL related projectsUnique/connected CLOs across company

Monthly Company wide CL communiquéMonthly CL Employee Roundtables

CL Road show – Visits to US District and International officesCustomer VisitsCL Collateral GenerationCL Quarterly Workshops for ManagementCL information on FileNet.com

Customer/Partner Loyalty Plan

2005 Customer/Partner Loyalty Council

CLOs for FileNetOrganizations

CL Customer/Field Outreach Plan

Communication Initiative for 2005

Customer Loyalty

Quarterly Surveys

Quarterly surveysContacts pre-definedReporting methodology pre-defined

Customer Loyalty Projects

Knowledgebase ProjectReference Project

Key Customer Loyalty Drivers

Understand Key drivers Overall Business Value Product Overall Sales Relationship

– Responsiveness– Follow-through

Calculate Gap scores (Stated importance) - (satisfaction) = gap score

Common Key Customer Loyalty Drivers

Relationship

Product Knowledge

Expectation Management

Understanding Needs

Change In Satisfaction

How has our customers’ satisfaction level changed?

Good gauge to monitor performance of changes you implemented

Loyalty Scoreboard

What is the Loyalty Scoreboard?

Significance of the Loyalty Scoreboard?

Incentives/Rewards

Why should our customers participate?

Incentive programs

What Works Do Incentive models have to be financially driven?

Keeping the Customer Interested

Measure Response Rates Offer Incentives to survey respondents

Special seminars Thought leader forums Executive involvement SLA discounts Points

Other Focus Areas

Creating a reference program Leveraging customer feedback

Turning satisfied customers into references

Creating a knowledgebase Best practices Case studies

Thank You