CI Barometer 2011: Recovery or Breakdown

CSC

Client Intimacy Barometer 2011

RECOVERY OR bREakdOwn?

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© Copyright CSC 2011. All rights reserved.

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CSC In TOUCH wITH CURREnT TREndS

Within the framework of its I.D.E.A.S programme (Inspiration, Debate, Executive, Annual Surveys). CSC carries out a number of “barometers” every year to analyse trends and perspectives from key roles within the boardroom (human resources, finance, IT, procurement…) at the European or global level. Each of these studies, carried out with the assistance of independent survey institutions (IFOP and TNS Sofres), involve the participation of hundreds of managers from large businesses and public administrations. The results of these studies are revealed during high level events, organised in different cities (Paris, Madrid, Barcelona, Milan, Brussels, Lisbon, etc.), and are also relayed by partners from the media and from academia (universities and elite business schools).



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TESTImOnIalS 32. guSTAvO BARRETO. Coordinating Manager Marketing Department - Ocidental Seguros Millennium bcp Ageas34. PhILIPPE BERNARD. Executive vice President group Sales & Care - Orange36. JEFF BOEkSTEIN. group Sales & Marketing Director - Belron®38. YvES DE BOhAN. general Manager - Laurent-Perrier Belgium40. PASCAL DELORME. Commercial, Marketing and IS Director - SNCF Voyages42. ThIERRY DugNY. International general Director - Parfums Christian Dior44. XAvIER FLAMAND. general Manager - fnac.com46. FRANCESCO FRATES. Managing Director - Roset Italia Srl 48. YANNICk gRéCOuRT. Strategy and Marketing Director - Deutsche Bank Belgium 50. SOPhIE hELLER. vice President Marketing and Communications - ING Direct France52. RENAN LEvY. Chief Executive Officer - ActivePath54. BRuNO LuCAS. Assistant general Manager for Clients, Services and Partners - Employment Centre56. BéATRICE PâquES. Marketing and Sales Manager - Thalys58. MIChEL PhAN. Marketing professor - LVMH Chairholder, ESSEC60. JACquES RIvOAL. Managing Director - Volkswagen France62. kRIS vERvAET. vice President Marketing - Belgacom

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RESUlTS

analYSIS

64. CLAuDE CzEChOWSkI. President and CEO South & West Europe - President, global Consulting / Technology/ ERP Practices. CSC66. Luxury in the era of social media

ClIEnT InTImaCY aS a dIffEREnTIaTIOn STRaTEgY

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TABLE OF CONTENTS

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THE CUSTOmER InTImaCY baROmETER IS a STUdY COndUCTEd bY CSC, In paRTnERSHIp wITH TnS SOfRES, fOR THE fIRST TImE. IT dRawS On a QUanTITaTIVE analYSIS Of IndUSTRY TREndS and THE pERSpECTIVES Of maRkETIng, SalES, dISTRIbUTIOn, and CUSTOmER RElaTIOnS dIRECTORS fROm a SamplIng Of maJOR EUROpEan COmpanIES.

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ClIEnT InTImaCY baROmETERA EUROPEAN SURVEY

APPROACH AND METHODOLOGy

The first edition of the Client Intimacy Barometer was conducted in collaboration with the TNS Sofres independent research firm, based on a sampling of marketing, sales, distribution, and customer relations directors working for European companies that employ more than 1,000 staff members. These executives were interviewed regarding the role, concerns, performance, and perspectives of the marketing, sales, distribution, and customer relations functions within their company.

INTERVIEw METHOD

The questionnaire was administered by the TNS Sofres independent research firm, using the CATI method (Computer Assisted Telephone Interview), in October and November of 2010.

TARGET AND SAMPLE

Private and semi-public companies:

• With a minimum of 1.000 employees • Located in Belgium, France, germany, Italy, Portugal,

Spain and united kingdom.

82 managers were interviewed (with no specific criteria in terms of industry or company size). These managers represent the following target positions:

• Marketing, sales, distribution, or customer relations directors or managers..

In the end, the sample was adjusted to ensure that it accurately represented all European companies in the target sectors having at least 1,000 employees.

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1CLIENT INTIMACY BAROMETER

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A continuously expanding assortment of products and services, increasingly unpredictable consumption patterns, consumer empowerment at the expense of brand image, the development of new technologies that facilitate market access and competition... The list goes on and on. The past ten years have had a profound and lasting impact on consumer behaviour. During the economic crisis, the consumer has become more demanding and less loyal. Customers are in a never-ending hunt for the best prices, convenience, and service. The development of the internet, social networks (Facebook, Twitter, etc.), blogs, and mobile technology (smartphones and digital tablets) has led to the proliferation of potential customer relationship channels. Acting as both the force behind and the observers of these developments, businesses have to adapt to a competitive environment where product innovation and cost control are no longer sufficient. They have no choice but to focus on developing a closer relationship with their customers as a way to differentiate themselves.

CLIENT INTIMACy: A KEy STRATEGIC AREA FOR COMPANy DIFFERENTIATION

The studies conducted as part of the CSC research programme show that companies have a choice between three different customer focused market approaches, all of which lead to very different business models.

Companies focusing on operational excellence seek to be number one in terms of price and convenience. They offer middle-of-the-line products at the best price with few hassles.

Companies focusing on product leadership are constantly innovating in an effort to produce a continuous flow of better and better products and services while staying ahead of the market. These companies serve customers who are less sensitive to price and they benefit from very widespread distribution of their offering.

THE 2011 CUSTOMER INTIMACy BAROMETER HIGHLIGHTS THE CHANGES THAT COMPANIES SHOULD MAKE IN A SITUATION IN wHICH THEy ARE LESS AND LESS IN CONTROL OF THEIR RELATIONSHIP wITH CUSTOMERS

ClIEnT InTImaCY baROmETER

SUmmARY

pUTTIng THE CUSTOmER fIRST In bUSInESS TRanSfORmaTIOn

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Companies focusing on client intimacy aim to satisfy the needs of each individual customer rather than the market as a whole. Constantly adapting their products and services based on an increasingly specific definition of the customer, they cultivate relationships and specialise in meeting needs that are sometimes only apparent to them, thanks to their bond with their clientele. The Client Intimacy Barometer indicates that customer intimacy is an important strategic factor for 53% of the companies surveyed, with a marked difference from country to country. France leads in this regard with almost 60%, far ahead of its northern neighbours such as great Britain (at only 38%) or germany (50%). 30% of the companies base their strategy on operational excellence and only 14% on product leadership. The Client Intimacy Barometer reveals a recent realisation among French companies of the need to put greater emphasis on customer value as part of their strategy.

THE ClIEnT InTImaCY baROmETER REVEalS THREE

maJOR gOalS amOng COmpanIES: SImplIfICaTIOn Of THE ClIEnT EXpERIEnCE,

pERSOnalISaTIOn Of THE COmpanY-

ClIEnT RElaTIOnSHIp, and InCREaSEd

RESpOnSIVEnESS / bETTER ORganISaTIOn and USE Of

ClIEnT InfORmaTIOn.Source : Treacy, Michael and Wiersema, Fred, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, Addison-Wesley.

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IMPLEMENTING A CLIENT INTIMACy STRATEGy ENTAILS MAJOR CHANGES TO A COMPANy'S BUSINESS MODEL

CSC's analysis shows that companies that are industry leaders in the area of client intimacy know how to meet client expectations in two of the three value disciplines while excelling at building a close relationship with their clients. These companies use business models that focus on:• In-depth knowledge of their market environment

(client expectations and needs, competitive positioning, etc.).

• Total fulfilment of client demands at every point in the interaction between the client and the company, not just at the moment of sale (information, customer service before, during, and after the sale, etc.).

• A quest for maximum profitability based on long-term client potential and not just a single transaction (thanks to a firm understanding of the value perceived by clients regarding the product and service offering).

• Continuous adaptation to shorter and shorter design, development, and marketing cycles for products and services, in favour of increased responsiveness to requests and a staunchly interactive approach to direct and indirect client relations.

This closeness with clients also requires that a bond be forged in an environment where the company has less and less direct control over this very relationship. Companies now are responsible for a relationship that is outside of their power and in which they are not the only stakeholder.

For more information on the value disciplines model,see section 5.

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MAIN OBJECTIVES wHEN BUILDING CLIENT INTIMACy

SIMPLIFYINg ThE CLIENT EXPERIENCE

The Client Intimacy Barometer indicates that we have transitioned from the era of marketing to the era of enhanced client experience, in all aspects of client-company interaction. For 43% of the companies surveyed, their first priority is to simplify the client experience and to improve the quality of the interaction with the client. Increased client satisfaction takes precedence over the cost of managing client relationship channels. This satisfaction pertains not only to the quality of the sales process, but also incorporates service quality before and after the sale.

PERSONALISINg ThE COMPANY-CLIENT RELATIONShIP

For 36% of the companies surveyed, simplifying the client experience begins with personalisation of the relationship across all channels. Personalisation of the product/service offering (28%) and multichannel development (27%) are also considered priorities.

INCREASINg RESPONSIvENESS/IMPROvINg ORgANISATION AND uSE OF CLIENT INFORMATION

In keeping with a business model that supports all client intimacy strategies, 33% of companies plan to make short-term investments to improve their responsiveness and the quality of their interaction with clients. Their second priority relates to enhancing the way they collect and structure client information (30%). And their third priority relates to the use of information on clients (24%).

A NEED TO TRANSFORM BUSINESS MODELS

Developing a client intimacy strategy requires the profound transformation of a company's business model.

DEvELOPINg TOOLS TO LISTEN TO CLIENTS

The Client Intimacy Barometer shows that 46% of businesses are attentive to their clients' needs and desires in an effort to improve their offering and provide better service. 33% go even further, anticipating these needs and incorporating them when designing and developing new products and services.

INvOLvINg LOCAL PLAYERS IN ThE STRATEgY Client intimacy requires companies to "act local." The Client Intimacy Barometer demonstrates the importance of involving players who are in the field and truly in contact with the clients; although companies still mainly use

traditional approaches to determine client expectations (periodic or post-purchase satisfaction questionnaires), the human aspect is key when it comes to understanding needs, expectations, and frustrations.In addition to formal feedback from the salespeople in the field (mainly in B2B markets), information from the network (agencies, shops, etc.) helps to make all players increasingly involved and accountable and generates added value for marketing and sales managers. Yet, the Client Intimacy Barometer indicates that these feedback channels are still under-utilised—only 14% of the companies surveyed believe that they use these tools to their full extent.

uSINg ELECTRONIC ChANNELS TO ENhANCE ThE CLIENT EXPERIENCE

Even though we are convinced of the need to develop a strong presence on social networks and electronic channels, the Client Intimacy Barometer illustrates the difficulty encountered by many companies in identifying the added value of projects that focus on these channels; only 16% of respondents are able to quantify a positive return on investment and only 8% are going to launch such projects on a short-term basis. however, 24% of the companies—primarily in B2B industries—prefer to focus their investments on traditional channels and for 23% of companies that have carried out these kinds of projects, it is still too early to assess the added value.

BuILDINg ThE BRAND ON SOCIAL NETWORkS

The rise of social networks is shaking up client relationships. Companies are no longer the only ones talking about themselves. Individuals are able to talk about companies on social networks—sometimes offering their praise, but often criticising. It is only natural for consumers to be more influenced, outside their family, by what their friends or even strangers say than by what a company says in its corporate communications or advertising. The internet is where trust is both built and destroyed; 78% of consumers trust their friends' opinions, whereas only 14% trust advertisements. One out of every five tweets on Twitter is brand-related.

DEvELOPINg AN INTEROPERABLE MuLTIChANNEL STRATEgY

48% of companies favour the development of websites (and B2B extranets) among the channels available to them. Social networks come in second (at 39%), followed by local sales forces (at 29%).

Only 34% of the companies surveyed offer their clients a variety of interoperable channels of interaction. The

CHANGES IN THEIR BUSINESS mODEL, TRANSVERSE TECHNOLOGY INVESTmENTS (ESPECIALLY IN mOBILE TECHNOLOGIES), A SHIFT IN CORPORATE CULTURE TOWARD THE CLIENT—THESE ARE JUST SOmE OF THE mANY ACTIONS BEING TAKEN BY COmPANIES TO mAKE THE CLIENT THE FOCAL POINT OF THEIR STRATEGY.

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implementation of a true multichannel strategy requires a profound organisational transformation and represents a substantial investment. Almost 50% of the companies surveyed admit that there is room for improvement in their multichannel approach—whether they are structurally and primarily single channel while their clients have multichannel expectations or whether they offer their clients various channels of interaction that are not truly interoperable (silo effect).

huMANS REMAIN ThE CORNERSTONE OF CLIENT RELATIONShIPS

The Client Intimacy Barometer shows that the role of humans is key to any client intimacy strategy: 22% of companies anticipate strong growth in this area and 45% believe that it is important to maintain a balanced mix between electronic relationships and human involvement, depending on the phase in the client experience.

DEvELOPINg A SERvICE POLICY TO STRENgThEN BRAND LOYALTY

The Customer Intimacy Barometer shows that companies are still not innovative enough when it comes to services. Only 50% believe that they have developed an effective service policy. however, all companies that excel in building client intimacy have developed service policies that allow them to stand out from the competition by offering services that excite their clients. Furthermore, by integrating these services within their product offering, companies boost their long-term profitability through a price policy that improves the client experience as a whole instead of just the product.

TECHNOLOGy'S LEADING ROLE

Any client intimacy strategy should also draw on robust, interoperable, flexible information systems that support mobility.

gREATER FLEXIBILITY IN ALL OPERATIONAL PROCESSES

The architecture of the information systems should not only promote the free flow and sharing of information throughout the company but also the personalisation of products and services and dynamic production management. The IT department also needs to develop its relationship with all entities within the company—sales, marketing, and finance, as well as operations, production, logistics, and R&D.

DEvELOPINg TRuLY INTEROPERABLE MuLTIChANNEL STRuCTuRES

The number of marketing channels—especially electronic channels—is on the rise (websites, cell phones, social networks, and blogs); these media bring together the essential information expected when a client makes initial contact. Organisations that want to be present across all channels need to make sure that their messages are consistent with regard to the three main aspects of

client relationships (transactional marketing, relationship marketing, and brand experience) and that they are able to reach clients without being intrusive. These various channels must thus be interoperable across multichannel structures that make it possible to:• Combine "client" and "employee" (salesperson, advisor)

roles using web-based architectures, for instance by making outside sources of information available (intelligence gathering, blogs, consumer opinions, etc.)

• Increase the flexibility of client-facing interfaces to support, or even anticipate, changing consumer behaviours

• Eliminate monolithic, silo approaches• have all marketing and sales actions authorised and

prioritised by a central authority to ensure consistency.

STRENgThENINg CuSTOMER RELATIONShIP TOOLS FOR gREATER MOBILITY

The arrival of new distribution channels—such as cellular telephones and smartphones—has also impacted client relationships. Cell phones are quickly becoming the world's leading mode of communication. They make it possible to respond in real time, to directly access services or information, and to take advantage of a relationship based system. Ironically, according to the survey, companies are not giving high priority to future investments in mobile channels, unlike their investments in the internet and social networks. Nevertheless, mobile channels make it possible to boost client intimacy, without being intrusive, and provide clients with value added information and services that are more adapted to their mobile situation; in transportation, tourism, distribution, and entertainment, for example, this technology is being applied in myriad ways and such examples deserve to be examined in detail.

DEvELOPINg TOOLS TO gAThER AND uTILISE CLIENT INFORMATION

Companies also believe that they will soon have new technological tools at their disposal to help them better understand their clients. They consider their plans to structure the various client databases scattered throughout their organisation and to improve use of this data as top priorities over the next two years.

EVOLUTION OF CORPORATE CULTURE

For companies that develop a client intimacy strategy, it is important that employees at all levels be involved in the development of a client centric culture.

INvOLvINg ALL EMPLOYEES TO DEvELOP A CLIENT CENTRIC CuLTuRE

To do this, companies need to provide their employees with information on client expectations and priorities, as well as their sources of satisfaction. Likewise, they need to listen to what their clients have to say, whether positive or negative, via direct proprietary feedback channels (e.g., their physical network) as well as virtual, non-controlled channels (social networks, blogs, etc.).

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Currently the feedback from physical contacts (local salespeople, physical networks) still plays a predominant role, but this should quickly change to take new consumer behaviours (websites, social networks, mobile technologies) into account. A client centric culture also needs to be supported by client relationship management tools. These tools should allow the company to measure its image and reputation, as well as its performance in the area of client satisfaction, throughout the process of client-company interaction (before, during, and after the sale).

DEvELOPINg NEuTRAL WAYS TO INTERACT

According to the Client Intimacy Barometer, most companies have implemented rather traditional systems to listen to clients and understand their expectations, e.g., satisfaction surveys (34%), visit reports from salespeople in the field (25%), and post-purchase satisfaction questionnaires (23%). Yet there is still progress to be made in order to move from a method that is primarily reactive to a more structured, supervised approach to client intimacy—in the absence of the power to control it—based on neutral systems for listening and responding to clients. These systems should be adapted to the new modes of communication being used by clients. 27% of the companies surveyed use these systems starting from the product design and development phases; 46% believe that they have made major progress in terms of information sharing to improve interactions with clients.

INvOLvINg CLIENTS IN BuSINESS PROCESSES (CO-CREATION, SuPPORT, SALES)

Although a culture of client service is being cultivated by the world's most successful companies, they need to go one step further if they want to involve clients in their business processes:• For marketing, which is traditionally based on the analysis

of market studies, it is necessary to involve clients not only when qualifying ideas or product concepts or when gathering ideas via ideation platforms. It is also important to engage fans throughout the product development and launch processes. In addition, traditional relationship marketing ("push" marketing that may be somewhat targeted based on specific points in the client's life) has limits when it comes to a personalised, interactive dialogue that takes the client’s reactions into account to trigger pertinent messages.

• For client service, the objective is still to transform expert users into a first or second degree form of support on forums or even to create interactive platforms and open knowledge bases for users.

• Lastly, for sales, the objective is to transform truly loyal clients into advocates of the company's products.

It is the company's duty to thus break the glass wall standing between employees and client s in order to benefit from the wealth of ideas and support that consumers have to offer, at all organisational levels.

Client intimacy is key for any company that wants differentiate itself in the eyes of its clients. however, to embrace the changes in today's world, organisations need to fundamentally transform their business model.

Each company needs to become an influencer that acts like the conductor of a symphony orchestra when overseeing its reputation—especially its reputation in the digital world—and that interacts with its environment (clients and suppliers) even via channels over which it has no control.This (r)evolution, which we call "Client Intimacy 2.0", will be the driving force behind the following trends:• A new position will arise—that of the Chief

Reputation Officer—who will be on par with the Communications Director on the executive committee.

• Employees—especially those who interact with clients—will spend as much time interacting and posting on social media as performing their traditional work (responding to direct requests).

• Suppliers and clients—especially those who are most involved in the company and its offering—will have spaces (both virtual and real) and will be assigned tasks within the organisation (support, product design, promotion, etc.), thereby

forming three-part working groups consisting of employees, suppliers, and clients.

• In tomorrow's world, companies will use the word "partners" more and more.

• The boundaries between marketing, sales, and client relations will be broken down in favour of a more integrated model that promotes greater responsiveness and interaction among the players within the organisation.

• All of the company's analytical capacity will focus on understanding the social behaviour of its clients, using a continuous monitoring approach to identify the influence that a client has over their friends and family, their risk of attrition, etc.

• Lastly, the organisation will become thoroughly and socially multichannel by integrating all social media as a new mode of communication and interaction, with its own set of rules and conventions, that enjoys the same status as the traditional media being used today.

For more information on the value disciplines model, see section 5.

wHAT THE FUTURE HOLDS...

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RESUlTS



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BREAKDOwN OF RESPONSES

The interviews were carried out in seven European countries: France, Italy, the united kingdom, germany, Spain, Portugal, and Belgium. The group of respondents was composed solely of people from major corporations. Most of the companies surveyed employ a workforce of between 1000 and 5999 permanent employees. The breakdown of interviews by sector shows that a majority of the companies or organisations hail from the services sector, while industry represents a quarter of the interviews.

82 interviews were conducted in Europe.

Targets: marketing, sales, distribution, and customer relations/customer service directors and managers.

16 questions were asked, focusing on five main themes:• Strategic alignment• Customer processes and organisation• Multichannel approach• use of customer information

COVERAGE

25 %

10 %

7 %

58 %

Industrie

Commerce

Transport

Services

23 %

21 %

15 %

15 %

10 %

9 %

9 %France

Italie

UK

Allemagne

Espagne

Portugal

Belgique

47 %

25 %

6 %

6 %

16 %De 1 000 à 2 999 salariés

De 3 000 à 5 999 salariés

10 000 salariés et plus

Ne sais pas

De 6 000 à 9 999 salariés

France

Italy

UK

Germany

Spain

Portugal

Belgium

Industry

Trade

Transportation

Services

Do not know

10,000 employees or more

From 6,000 to 9,999 employees



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13 %

46 %

33 %

2 %6 %

Clients peu / malconnus, raisonnement entermes de produits/servicesofferts et de transactions réalisées

Clients identifiés,reconnus à chaquecontact

Anticipation des besoinsclients via une écoutesystématique, intégrantleurs attentes d’évolution

Mise en place de dispositifsd’écoute clients afin d’améliorerl’offre et de mieux les servir

Ne sais pas

Do not know

Little-known or unknown customers, focus on products/services offered and transactions completed

Customers are identified and recognised each time contact is made

Implementation of systems to listen to customers in order to improve products/services and better serve them

Anticipation of customer needs via systematic monitoring that includes

their expectations for change

STRATEGIC ALIGNMENT

As consumer behaviour changes, companies need to be more mindful of the need to put customers first when designing and implementing their strategy. Businesses seem to be aware of this evolution and have made customer intimacy one of their top strategic priorities; more than half of the respondents selected customer intimacy as a way to differentiate themselves. Approximately 30% of companies base their strategy on the concept of operational excellence and only 14% on product leadership. For more information on the CSC value disciplines model, see section 5 of this document.

Regarding CSC's value disciplines model, most respondents (53%) consider customer intimacy to be the strategic area in which their company differentiates itself. This figure differs from country to country, with 100% of Belgian respondents selecting customer intimacy as the key factor in company differentiation, while the uk had a greater mix of responses with only 38% for customer intimacy. France is one of the top supporters of customer intimacy with nearly 60%. Another point to take away: almost half of all respondents consider simplification of the customer experience and improvement of customer-company interaction to be major factors in any strategy to promote customer intimacy.

Companies seem to have adapted their organisation to the growing need to integrate the customer in their strategy. Over 75% of respondents are attentive to their customers' needs and desires in an effort to improve their offering and provide better service. One-third are going one step further and carefully listening to their customers and anticipating their changing needs, which allows them to exceed customer expectations. Only 20% still use rather limited approaches to customer intimacy and, at best, content themselves with identifying such needs once the customer enters into a relationship with them.

KEY STRATEGIC AREA FOR COMPANY DIFFERENTIATION

CURRENT COMPANY MATURITY LEVEL

53 %

30 %

14 %

3 %

Intimité Client

Supériorité produit

Ne sais pas

Excellence opérationnelle

Operational excellence

Product leadership

Do not know

Customer intimacy

CLIENT INTIMACY BAROMETER 2011

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STRATEGIC ALIGNMENT

The main objective in any effort to foster customer intimacy is to simplify the customer experience and to improve the quality of the interaction between customers and the company, across all interaction and marketing channels. This helps reduce the cost of customer relationship management, while increasing the customer satisfaction rate. In a highly competitive environment, where it is increasingly difficult to understand the end client, companies are aiming to differentiate themselves by offering customers superior quality and by simplifying relations with the company. quality, at a reasonable cost, is a guarantee of recurrent future revenue.

Over the past two years, strategies focusing on customer intimacy have most often taken the form of efforts to improve the quality of the interaction between the company and the customer. In addition, the personalisation of customer relationships across all channels represents a key action for more than a third of the respondents. Over half of all respondents also mentioned personalisation of their product or service offering, as well as development of efficient, truly interoperable multichannel distribution policies.

however, companies do not seem to have invested very much in projects to unify and enhance their customer databases. This can be explained by a lack of cross-company sharing of customer data, coupled with difficulties in using the information collected in an effective manner. Often, existing databases do not yield the results anticipated due to complex consumer behaviours, multiple customer identities, or boundaries between the different channels of interaction. Similarly, projects related to improving the operational performance of sales teams do not seem to have been a high priority in recent years, even though (as indicated below) local sales forces are a priority for businesses with regard to distribution channels. Also of note is the relatively low—or delayed—priority given to investment in new electronic channels (e.g. social networks).

MAIN OBJECTIVE IN PROMOTING CUSTOMER INTIMACY

MAIN ACTIONS TAKEN DURING THE LAST TWO YEARS TO PROMOTE CUSTOMER INTIMACY

26 %

28 %

43 %

3 %Développer le CA enfavorisant la fidélisation,les ventes récurrentes,…

Simplifier l’expérience clientet améliorer la qualité desinteractions, pour réduireles coûts en augmentant letaux de satisfaction

Améliorer l’offre pour gagnerde nouveaux clients en répondantmieux à leurs besoins

Ne sais pas

Do not know

Boost revenue by building loyalty, repeat business, etc.

Improve products/services to gain new customers by better meeting their needs

Simplify the customer experience and improve the quality of interactions

with the customer to cut costs while increasing satisfaction

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One third of the respondents considered improved responsiveness and interaction quality to be their top priority in regard to customer intimacy. In order to support past projects, companies continue to invest heavily in systems that can turn each interaction with their customers into a positive experience. By improving customer service quality or, better yet, developing self-care systems, companies are able not only to maximise customer satisfaction but also reduce the cost of managing customer relationships.

It is no surprise that companies' second priority is to improve the ways in which they gather and organise customer information. Although companies are not taking any major steps to unify and enhance their databases in an effort to improve customer intimacy, such projects will become increasingly popular with the development of new tools in this area. Structured, shared databases will provide a more comprehensive, up to date view of customers and will facilitate real time responsiveness and interaction, as well as the use of such information "after the fact" to support marketing and sales decisions. Contrary to the trends we would expect as a result of the increasing demand to reduce time to market, increased interoperability of distribution and interaction channels and projects aiming to better integrate marketing, sales, and customer relations do not seem to be a high priority.

HIGH PRIORITY PROJECTS TO BE CARRIED OUT DURING THE NEXT TWO YEARS TO PROMOTE CUSTOMER INTIMACY

Unification et enrichissement des bases clients

Equipement des forces de vente pour améliorer l'efficacité commerciale

Prise de parole sur de nouveaux canaux (réseaux sociaux, blogs,…)

Rapprochement des organisations marketing, commerciale et service client pour assurer la cohérence des actions

Développement de la rétention via des actions de fidélisation

Fluidification et interopérabilité des canauxde distribution (multicanal)

Personnalisation de l'offre pour répondre au mieux aux attentes clients

Personnalisation de la relation avec les clients sur l'ensemble des canaux

36 %

28 %

27 %

24 %

22 %

21 %

16 %

18 %

Renforcement de l'interopérabilité des canaux de distribution / d'interaction clients

Amélioration des relations entre le marketing, les ventes et le service clients

Personnalisation de l'offre pourmieux répondre aux attentes clients

Renforcement des canaux dématérialisés (Internet, réseaux sociaux,…)

Mise en place de programmes d'animation relationnelle

Amélioration de l'exploitation des informations clients

Enrichissement du recueil et de la structuration des informations clients

Amélioration de la réactivité et de la qualité des interactions clients

33 %

30 %

24 %

17 %

17 %

16 %

12 %

15 %

Personalisation of customer relationshipsacross all channels

Personalisation of the offering to better

meet customer expectations

Increasing the fluidity and interoperability of distribution channels (multichannel)

Increasing customer retention through

loyalty-building initiatives

Collaboration between the marketing, sales, and customer service departments to ensure consistency

gaining exposure on new channels (social networks, blogs, etc.)

Equipping sales forces to improve their performance

unification and enhancement of customer databases

Improved responsiveness and quality of interaction with customers

Enhanced customer information gathering and organisation

Improved utilisation of customer information

Implementation of relationship marketing campaigns

greater use of electronic channels (internet, social networks, etc.)

Personalisation of the offering to better meet customer expectations

Improved relations between marketing, sales, and customer service

Increased interoperability between distribution/customer interaction channels


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CUSTOMER PROCESSES AND ORGANISATION

Companies seem not only to have put the customer first when designing their strategy, but also to have aligned their organisation accordingly. As it happens, customer intimacy brings together the goals of the marketing, sales, and customer service departments; personalising the relationship with customers and the products and services offered requires a solid understanding of customers, which is only possible through cooperation among the various business functions that are in contact with consumers.

Furthermore, the development of new channels of interaction and the need for greater responsiveness and interactivity with customers at every step in the business cycle serves to blur the boundary between these functions.

STRUCTURING THE ORGANISATION TO MANAGE CUSTOMER INTIMACY

14 %

44 %

36 %

6 %

Clients gérés par plusieursDirections interagissantselon leurs propres objectifs

Relation clients gérée au seinde plusieurs Directions très fortement intégrées bien qu’indépendantes

Fonctions Commerciale, Marketing et Service Clientsunifiées sous une seule Direction

Ne sais pas

Do not know

Customers are managed by multiple departments that collaborate based on their own interests

Customer relationships are managed within multiple departments that are highly integrated although they are

independent of one another

Sales, marketing, and customer service functions are unified within a single department

23

MULTICHANNEL APPROACH

64% of respondents consider local salespeople to be a major channel for interaction with customers. The importance of this channel depends, to a large extent, on how much control the company has over customer relationships. The more control it has, the more the company will be able to utilise and strengthen the direct relationship with the customer; the less control it has, the more the company will invest in other channels, such as the internet and social media.

57% of companies believe websites are an important channel, mainly because they allow customers to carry out their activities somewhat autonomously before, during, and after a sale, which also helps reduce costs.

About 40% of companies consider social networks to be an essential channel for interaction with customers, which puts social networks ahead of even call centres. Respondents seem to have abandoned, or de-prioritised, certain direct channels—perhaps because they are overly intrusive, or too expensive—in exchange for interactive channels (the internet and social networks).

Companies understand they need to develop a multichannel approach in order to reach customers who are increasingly volatile, busy, and demanding. A variety of channels of interaction are available to them, but those involving human contact are preferred—especially in B2B industries. When it comes to having a multichannel approach, half of respondents believe that existing processes and IT systems are still too fragmented, hindering true interoperability among the various channels that serve customers.

IMPORTANCE OF THE CHANNELS USED TO INTERACT WITH CUSTOMERS

Top 2 (A+B)

A- Très important

B- Important

C- Moyennement important

D- Peu important

E- Pas du tout important

Ne s’applique pas à mon entrepriseNouveaux terminaux (mobiles, smartphones, pad,…)

Centres d'appels (réception et émission d'appels)

Réseaux sociaux

Réseau physique (magasins, boutiques, agences,…)

Courrier papier, mail

Site Internet (et Extranet en B2B)

Commerciaux "terrain"

64 %

57 %

48 %

47 %

39 %

35 %

17 %

Local sales forces

Website (and extranet in B2B)

Paper mailings, email

Physical network (stores, shops, offices, etc.)

Social networks

Call centres (incoming and outgoing calls)

New terminals

(cell phones, smartphones, tablet computers, etc.)

Top 2 (A+B)

A- Very important

B- Important

C- Somewhat important

D- Not very important

E- Not at all important

Does not apply to my company


24

MULTICHANNEL APPROACH

Companies have two priorities:1 - To account for the increasingly autonomous, proactive behaviour of consumers, by developing tools to automate tasks via the internet or extranets (B2B).2 - To invest in social networks and in blogs, forums, and other community spaces.

In contrast, traditional channels of interaction, such as paper mailings or email, which are costly and may be seen as insufficiently targeted by some respondents, are less popular. The results are surprising in two regards:1 - The low level of investment in new terminals (cellular phones, smartphones, touch pads), although this type of terminal is one of the most widely distributed.2 - The high priority given to local sales forces (especially in B2B industries), which reaffirms the role of humans in the channels to be developed by the companies.

The degree of human contact in relationships with customers should be adapted depending on the business context. For 22% of the companies surveyed, the role of humans is expected to increase significantly, which means they will be strengthening the role of local sales forces and employees within the physical network. Only 2% of respondents felt that human contact will gradually disappear in favour of electronic relationships, and only in accordance with customer demands (avatars, websites, automated tasks, social networks).

The situation that seems most likely is a mix between actual human contact and electronic relationships, depending on the phase in the customer experience (i.e., before, during, or after the sale). Almost half of the companies surveyed support this scenario.

HIGH PRIORITY CHANNELS TO BE DEVELOPED OVER THE NEXT TWO YEARS

ANTICIPATED CHANGES IN THE ROLE OF HUMANS—"PHYSICAL" CHANNELS VERSUS "ELECTRONIC" CHANNELS

Courrier papier, mail

Nouveaux terminaux (mobiles, smartphones, pad,…)

Réseau physique (magasins, boutiques, agences,…)

Centres d'appels (réception et émission d'appels)

Commerciaux "terrain"

Réseaux sociaux

Site Internet (et Extranet en B2B) 48 %

39 %

29 %

18 %

15 %

8 %

15 %

22 %

25 %45 %

6 %2 %

Fort développementdu rôle de l’humain

Hétérogénéité (mix entre contact réel et dématérialisation selonles étapes du parcours client)

Stabilité par rapportà aujourd’hui

Ne sais pasDisparition progressivedu rôle de l’humain au profitdu développement de relationsdématérialisées

Website (and extranet in B2B)

Social networks

Local sales forces

Call centres (incoming and outgoing calls)

Physical network (stores, shops, offices, etc.)

New terminals

(cell phones, smartphones, tablet computers, etc.)

Paper mailings, email

Do not know

Sharp increase in the role of humans

No change, the same as today

Mix between actual human contact and electronic relationships,

depending on the phase in the customer experience

gradual disappearance of the role of humans in favour of

electronic relationships

25

The vast majority of the respondents (71%) have already invested in electronic channels, or at least plan to do so in the short term. however, companies either seem ill-equipped or it is too soon to measure the impact of this type of project; only 16% of the companies surveyed report positive outcomes in the form of increased sales, cross-selling, or increased loyalty. In other companies, either the ROI of such projects has not been clearly shown or it is too soon to assess ROI (23%).

Today, it is no longer sufficient to simply provide customers with multiple channels with which to interact with the company. These various channels must also be interoperable. The companies surveyed demonstrate a certain amount of insight as only one third of them offer their customers multiple channels of interaction that are truly interoperable; customers can switch from one to another seamlessly, according to their situation and desires. The other respondents represent companies that are structurally single channel (even though their customers may have a real need for a multichannel system) or companies that offer their customers multiple, yet non-interoperable, channels for interaction. One possible explanation lies in the fact that the implementation of an inherently multichannel contact / distribution strategy often requires a profound transformation of the organisation and represents a major business investment (change in processes, de-compartmentalisation of information flows, etc.).

MATURITY LEVEL IN TERMS OF PLANS TO PERSONALISE THE CUSTOMER EXPERIENCE THROUGH ELECTRONIC CHANNELS (THE INTERNET, CELL PHONES, ETC.)

COMPANY POSITION REGARDING MANAGEMENT OF THE MULTICHANNEL

16 %

21 %

23 %

24 %

8 %

8 %

Oui - Réponse à deréelles attentes clientset traduction claire en matière de ROI

Non - Orientation des investissementssur d’autres projets avec ROI plusclairement démontrable

Oui - Après analyse desrésultats, ROI de ce typede projet pas clairementdémontré

Ne sais pas

Partiellement - Projetsmenés en ce sens, maistrop peu de recul pour enévaluer le ROI

Non - Projet à court termecar moyen efficace de générerdu revenu additionnel et defidéliser nos clients

15 %

21 %

26 %

34 %

4 %

Est majoritairementmonocanal. Cela correspondaux attentes clients

Propose aux clientsplusieurs canaux d’interaction,interopérables

Est majoritairementmonocanal. Les clientsont pourtant deréelles attentes enmatière de multicanal

Ne sais pas

Propose aux clients plusieurscanaux d’interactions pas réellement interopérables

Do not know

Do not know

Yes – In order to meet actual customer demands; definite ROI

Yes - After analysing the results, the ROI offered by this type of project was clear

Primarily single channel; however, customers expect multichannel capabilities

Primarily single channel; this meets customers' expectations

Partially - Projects carried out in this regard, but too early to assess ROI

Customers are offered various channels of interaction that are not really interoperable

No – Project to be implemented soon because it is an effective

way to generate additional revenue and to build loyalty

among customers

No - Focus on investments in other projects that offer more certain ROI

Customers are offered various interoperable

channels of interaction


26

USE OF INFORMATION

Companies still tend to use fairly traditional systems to receive customer feedback and to track their expectations and needs. For example, 34% of the companies use customer satisfaction surveys and 23% use post-purchase questionnaires. For 25% of the companies surveyed, local sales forces play an important role in listening to customers. As they are in direct contact with consumers, they are perhaps best positioned to identify their demands. however, the results of the Barometer indicate that feedback from channels that are actually in contact with the customer (physical network, call centre, mail) is used quite sparingly, even though these channels often represent the customer's first point of contact. In addition, projects involving the analysis of social networks or the implementation of direct information gathering tools are still rare. Only 12% of marketing and sales directors seem to value these types of systems for monitoring customer needs.

The Barometer shows that the information gathered by companies is actually used both for customer relationships (interaction quality) and for marketing (improved offering). Only 5% of respondents say that they make very little use of customer data.

It is clear that respondents understand that customers have a unified vision of the company that does not always correspond to the company's actual organisation; in almost half of the companies surveyed, the marketing, sales, and customer service functions share the information they collect with other departments within the company, thereby improving the overall quality of interaction between the customer and the company.

THE BEST SYSTEMS FOR LISTENING TO CUSTOMERS AND UNDERSTANDING THEIR EXPECTATIONS

PRIMARY USES FOR THE CUSTOMER INFORMATION COLLECTED

Mise à disposition des clients d'outils de recueil dédiés

Analyse et présence sur les réseaux sociaux

Remontée depuis le réseau physique

Réalisation d'enquêtes ad hoc

Remontée depuis les centres d'appels au service des clients

Traitement des courriers papier, mails

Administration systématique de questionnaires de satisfaction post-achat

Comptes-rendus de visites des commerciaux "terrain"

Administration périodique de baromètres de satisfaction

34 %

25 %

23 %

16 %

16 %

14 %

12 %

12 %

15 %

Très faible utilisation des informations (collecte «au cas où»)

Intégration systématique des informations dans les phases amont de conception de nouveaux produits

Utilisation des informations de manière réactive pour améliorer l’offre

Utilisation des informations collectées à des fins principalement marketing

Utilisation des informations de manière très réactive pour corriger des problèmes d'organisation ou de processus

Partage de l'information collectée avec les autres départements,utilisation pour améliorer globalement la qualité des interactions

46 %

31 %

27 %

16 %

26 %

12 %

5 %

27 %

Periodic administration of satisfaction surveys

visit reports from local salespeople

Systematic administration of post-purchase satisfaction questionnaires

Processing of letters, emails

Feedback from customer service call centres

Ad hoc surveys

Feedback from the physical network

Analysis and presence on social networks

Dedicated information gathering tools made available to customers

The information collected is shared with other departments; the information is used to improve

the overall quality of customer interaction

The information is used in a reactive manner to correct organisational or process-related issues

The information collected is used mainly

for marketing purposes

The information is used in a reactive manner to improve the product/service offering

The information is used systematically in the early stages

of the product design cycle

very little use of information (information collected "just in case")

27

CUSTOMER SERVICE POLICy

There is somewhat of a balance between the companies that strive to provide innovative customer service versus those that merely offer basic services (18% vs. 22%). The remaining respondents (half of the total group) believe that they provide the same services as their competitors, but in a more efficient manner, which allows them to stand out thanks to increased customer satisfaction.

Most companies thus do not believe that service policies are a key factor in differentiating themselves from the competition; instead they seem to be under the impression that they only need to be on par with their competitors so as not to be outdone. We thus see reactive attitudes when it comes to improving service quality, as opposed to true proactive strategies to differentiate the company through customer service.

USING CUSTOMER INTIMACY TO DEVELOP A SERVICE POLICY

22 %

50%

18 %

10 %Proposition de services de base, en ligneavec les concurrents en termesde qualité des prestations offertes

Proposition de services identiquesaux concurrents, mais meilleure performancedu "delivery"

Forte innovation en matière deservices, très en avance par rapportaux concurrents

Ne sais pas Do not know

The services offered are identical to those offered by competitors, except with better delivery

Basic services are offered, in line with the competition in terms of service quality

highly innovative customer service, very much ahead

of the competition


28

SUMMARy

The vast majority of the companies believe that their processes and organisation are consistent and customer-oriented. This shows that companies, whether they base their competitive advantage on customer intimacy (53%), operational efficiency (30%), or product leadership (14%), are putting the customer first and adapting their organisation and strategy accordingly.

Their use of the information collected, development of a multichannel approach, and implementation of a customer service policy are lower priorities; companies that have chosen customer intimacy as the way to differentiate themselves tend to focus more on aligning these strategies than companies that have chosen other value disciplines.

In keeping with the previous question, only 50% of respondents feel that the implementation of an innovative service policy makes it possible to truly stand out in terms of customer intimacy.

COMPANY-WIDE POSITION ON CUSTOMER INTIMACY

Top 2 (A+B)

A- Tout à fait d’accord

B- D’accord

C- Ni en désaccord, ni en accord

D- Pas d’accord

E- Pas du tout d’accord

Ne s’applique pas à mon entreprise

Différenciation des concurrentsvia une politique de services innovante

Développement effectif d’une approche multicanal

Exploitation de l'information collectéeet partage au sein de l'organisation

Alignement de la stratégie sur leconcept d’Intimité Client

Cohérence des processus et del’organisation, orientés vers le client

78 %

73 %

61 %

50 %

56 %

Consistent, customer-oriented

processes and organisation

Strategy is aligned based on the concept

of customer intimacy

The information collected is used and shared throughout

the organisation

Actual development of a

multichannel approach

An innovative customer services policy is

used to stand out from the competition

Top 2 (A+B) A- Agree completely

B- Agree

C- Neither agree nor disagree

D- Disagree

E- Disagree completely


29

In general, the companies surveyed feel they are working in a business sector that is, as a whole, less focused on customer intimacy than they are (this applies to all sectors).

This observation is especially apparent for the item "Strategy is aligned based on the concept of customer intimacy" (only 54% of respondents believe that the sector is aligned, whereas 73% of respondents claim that their company itself is aligned).

In keeping with the previous question, companies give a more positive self-evaluation of themselves in terms of customer intimacy than do their competitors from the same sector, except for the item "An innovative customer services policy is used to stand out from the competition." While it may seem easy to be objective regarding the consistency of the products and services offered by one’s competitors, it is harder to judge their customer intimacy policy in light of one's own efforts.

SECTOR-WIDE POSITION ON CUSTOMER INTIMACY

COMPANY-WIDE VS. SECTOR-WIDE POSITION ON CUSTOMER INTIMACY (COMPARISON OF AVERAGES, ON A 5-POINT SCALE)

Développement effectif d’uneapproche multicanal

Alignement de la stratégie sur leconcept d’Intimité Client

Exploitation de l’information collectée etpartage au sein de l’organisation

Différenciation des concurrents via unepolitique de services innovante

Cohérence des processus et del’organisation, orientés vers le client

74 %

57 %

55 %

50 %

54 %

Top 2 (A+B)

A- Tout à fait d’accord

B- D’accord

C- Ni en désaccord, ni en accord

D- Pas d’accord

E- Pas du tout d’accord

Ne s’applique pas à mon entreprise


Développement effectifd’une approche multicanal


Alignement de la stratégie surle concept d'Intimité Client

Cohérence des processus et de l'organisation,orientés vers le client

33 %4,2

4

4

3,7

3,8

3,6

3,6

3,5

3,8

3,5

Organisation

Secteur d’activité


Développement effectifd’une approche multicanal


Alignement de la stratégie surle concept d'Intimité Client

Cohérence des processus et de l'organisation,orientés vers le client

33 %4,2

4

4

3,7

3,8

3,6

3,6

3,5

3,8

3,5

Organisation

Secteur d’activité

Consistent, customer oriented processes

and organisation

An innovative customer services policy is

used to stand out from the competition

The information collected is used and

shared throughout the organisation

Strategy is aligned based on the concept of

customer intimacy

Actual development of a

multichannel approach

Consistent, customer oriented processes and

organisation

Strategy is aligned based on the concept of

customer intimacy

The information collected is used and shared

throughout the organisation

Actual development of a multichannel approach

An innovative customer services policy is used to

stand out from the competition

Top 2 (A+B) A- Agree completely

B- Agree

C- Neither agree nor disagree

D- Disagree

E- Disagree completely


Company

Business sector


30

31

TESTImOnIalS



32

"THERE IS a pSYCHOlOgICal ISSUE In anTICIpaTIng THE CRISIS, wHICH CaUSEd a CHangE In COnSUmpTIOn paTTERnS."

33

wHAT IMPACT HAS THE CRISIS HAD ON yOUR FUNCTION?

There was a clear impact in 2010, and I anticipate the same will be true for 2011. But I would say the greatest impact was in 2008, and it was on the underlying financial risks of investment products. We had to adjust our investment policy and the asset mix accordingly; however, this turned out to be a good opportunity to reduce the risk of the portfolios and to communicate it to our customers. We kept our finger on the pulse of the market, and when shifts occurred – for example, when credit spreads significantly increased and deposit interest rates came down – we made sure our customers were able to take advantage of the market environment. In non-life, especially in lines of business such as property, automotive and health, it was important to be very close to our customers. This allowed us to improve our understanding of our customers’ needs, which in turn boosted customer acquisition, loyalty and retention. In fact, there is a psychological issue in anticipating the crisis, which caused a change in consumption patterns. The crisis also resulted in customers paying greater attention to the trade-off between price and perceived risk.

HOw HAS CUSTOMER BEHAVIOUR EVOLVED IN RECENT yEARS? HOw HAS yOUR ORGANISATION ADAPTED TO THESE CHANGES?

There are of course different behaviours and approaches. The concerns of financially aware customers are often related to the risk of the underlying assets, in particular the solidity and safety of the credit issuers. They therefore tend to prefer products with shorter maturities and cash collateral. We thus needed to adjust our investment strategy to this new risk perception and to the corresponding product appetite: our response was to increase the weight of sovereign debt of the strongest economies in our products. And our strategy delivered very flattering results: Ocidental vida was awarded best life insurance company for the second consecutive year, based on criteria such as solvency, profitability, financial strength and solidity. Our

customers also recognise our focus on quality of product and service: in non-life, for instance, we carried out an independent survey on Médis, our health insurance brand, and the satisfaction index of our customers was 97%. We are very proud to have satisfied customers and employees, which is a driver for improving the top line and profitability.

wHICH CONCRETE ACTIONS ARE yOU TAKING TO REFOCUS THE ATTENTION OF yOUR ORGANISATION ON THE CUSTOMER?

In 2011 we are adapting the marketing plan to reflect our commitment to client focus and our ‘Four Ps’ strategy (product, price, place and promotion). We are focusing on the entire customer experience, from prospecting through to purchase and then on to loyalty and ultimately retention. Client focus, at individual or corporate level, is in my opinion the greatest commitment a company can undertake.

wHAT IMPACT HAVE SOCIAL MEDIA HAD ON THE wAy IN wHICH yOU INTERACT wITH yOUR CUSTOMERS?

People interact to a much greater extent today, and I think word of mouth is in fact heavily influenced by the internet. The impact one can have by using email, social networks or blogging is far larger than one can achieve in interpersonal relationships; given this, it is essential that businesses adapt and remain alert to these changes in consumer behaviour. We do this at all levels, not only through the internet but also by examining our brand positioning and what people say about us. Our approach is to build the entire brand structure on solid foundations that we can maintain and reinforce. With this in mind, we ask for independent external surveys every year, we closely monitor results and we take appropriate action. We use a 360° approach to ensure that we evaluate the perceptions of all stakeholders.

gUSTaVO baRRETO COORDINATINg MANAgER MARkETINg DEPARTMENT OCIDENTAL SEGUROS MILLENNIUMBCP AGEASHOW HAVE mARKETS AND CUSTOmERS REACTED TO THE ECONOmIC CRISIS? mANAGERS IN THE BANKING AND INSURANCE SECTORS CAN HELP US ANSWER THIS qUESTION. WE SPOKE WITH GUSTAVO BARRETO, COORDINATING mANAGER OF THE mARKETING DEPARTmENT AT OCIDENTAL SEGUROS mILLENNIUmBCP AGEAS, ABOUT THE FINANCIAL SITUATION AND HOW mARKETING CAN ADAPT TO TAKE ADVANTAGE OF THE OPPORTUNITIES IT OFFERS.

TESTIMONIALS

34

"CUSTOmER InTImaCY, OR CRm 2.0: THE dawn Of a nEw ERa."

35

TESTIMONIALS

pHIlIppE bERnaRd EXECuTIvE vICE PRESIDENT gROuP SALES & CARE ORANGE

PHILIPPE BERNARD, ExECUTIVE VP SALES & CARE AT ORANGE (THE KEY BRAND OF FRANCE TELECOm) SHARES HIS VISION OF CUSTOmER INTImACY, “A NEW PHASE IN CUSTOmER RELATIONSHIPS, mADE NECESSARY—AND POSSIBLE—THANKS TO NEW mARKET CONDITIONS AND NEW USES OF COmmUNICATION TECHNOLOGIES.”

AT ORANGE, wERE yOUR SALES AND AFTER-SALES CARE ROLES INFLUENCED By THE RECESSION?

The recession has not had a uniform impact in the countries we are present in: some were hit hard, such as Romania and Spain, while others, such as Poland, were spared. In the countries where the impact was heaviest, the recession has changed the behaviour of our customers: they have become more attentive to prices and service offerings, and quicker to change carriers. Developing customer loyalty has thus become a major issue. But the recession is not the only cause: more generally, we are in a market that has reached maturity, which means that competitive advantages, such as price and volume, have changed. Today, our customers already have their devices, quite often enabled with 3g technology (smartphones make up 50% of our sales in Europe), and are looking for a service dimension that stands out from the rest. That’s what we’re implementing in terms of sales and care.

AND HOw ARE yOU ORGANISING THIS NEw DIMENSION?

Through all our channels—stores, online, and call centres—we now offer additional, value-added services. This means improving our knowledge of our customers, and that’s where customer intimacy comes into play, particularly for our call centres or online activities. That’s why we’re implementing “hot surveys” just after the customer interaction over the phone or in stores, in order to better understand customer perception of services rendered. We’re supporting this with various means of communication via our sites, particularly “click-to-call” or

“click-to-chat”, to better guide the customer through the process of renewing their account or making a purchase. We’re also implementing more personalised email contact solutions to create greater intimacy between customers and Orange, without falling into the trap of systematic and intrusive communications. It’s just a start, and it’s not easy, but we’re making progress. In fact, developing customer intimacy is a new step in “classic” CRM and profiling as we know it, and we can learn a lot from other industries. From their successes, but also from their failures: a misunderstood web campaign can quickly turn into a nothing better than common spam!

IN yOUR OPINION, IS CUSTOMER INTIMACy AN EVOLUTION OR A REVOLUTION?

It’s a revolution composed of evolutions. Overall, the issue is to put the customer at the heart of our organisation and to consider their experience as a whole. This change in viewpoint is a revolution, in the literal sense of the word. Next, our vision, which is developing a service offering tailored to each customer, requires many evolutions, across our three channels. Thus, online interaction needs to be made more fluid, and sites must also be able to recommend offerings and propose support services as a supplement to physical channels, which is not yet the case. An in-store salesperson must be able to know and offer new services; likewise, call centre staff must be able to further develop the value of the client base…For each of these channels, customer intimacy is an essential component of our success!

36

"SOCIal nETwORkS aRE CRITICal TO OUR fUTURE."

37

TESTIMONIALS

JEff bOEkSTEIn gROuP SALES & MARkETINg DIRECTOR BELRON®

AS THE WORLD-LEADING SPECIALIST GROUP IN AUTOmOTIVE GLASS REPAIR AND REPLACEmENT, BELRON® HAD SALES WORTH 2.4 BILLION EUROS IN 2009. GROUP SALES & mARKETING DIRECTOR, JEFF BOEKSTEIN ExPLAINS ITS STRATEGY FOR FORGING SUCCESSFUL CUSTOmER RELATIONSHIPS.

FOR BELRON®, wHAT ARE THE SPECIFIC BUSINESS RELATED ISSUES INVOLVED IN ENSURING GOOD CUSTOMER RELATIONSHIPS?

The Belron® group, known as Carglass® across Europe, serves over 10 million customers in more than 30 countries and employs 24,000 people worldwide. We have a single-minded strategy across all our companies – we focus on delivering exceptional customer experience. This means delivering high calibre work and also expert handling of the human side of the transaction. Our staff realise that damage could be the result of a major traumatic accident or small irritating experience, and are trained to recognise and meet customer needs. The first thing we do is take the problem off the customer’s hands and put them at their ease.

Our people are integral. In order to deliver exceptional customer service, you need exceptional people. We know what competencies exceptional people need to have and we recruit, train and measure performance against these competencies.

HOw HAVE CUSTOMER RELATIONSHIPS CHANGED IN RECENT yEARS? AND HOw HAVE CUSTOMERS CHANGED?

Customers are now more demanding of their time and less willing to drive to our premises and wait while we perform the work. So, to meet their demands, we now go to them – to their office or home and carry out our service while they continue normally with their day.

Also, an increasing number of customers are choosing to make contact with us through our websites and via smart phones. This has led to us building a customer interface that reflects the same level of care as a customer would receive from a human.

HOw DO yOU TRy TO BETTER UNDERSTAND yOUR CUSTOMER BASE?

Every year Belron® take detailed feedback from over two million customers about our service experience – about fifty thousand a week continually. We use the Net Promoter Score approach to assess how satisfied customers are with the service experience. We ask customers how likely they are to recommend us to their friends and colleagues as a result of the service received from us. We change processes based on customer replies, and where the responses are negative, we send customer comments – verbatim - to the branch involved. This means those responsible know exactly why something was unacceptable and can take immediate action for the future.

wHAT DO yOU DO TO BRING THE BRAND TO LIFE? AND wHAT ARE yOUR GOALS IN THIS?

Our Tv and Radio advertising is designed to bring our brand values alive. We use our own employees and not actors to tell the story - clearly and logically. We use real people to talk about real life situations.

AND HOw CAN NEw TECHNOLOGIES SUCH AS SOCIAL NETwORKING SITES HELP yOU IN THESE EFFORTS?

We realise that social networks are critical to our future, which is why we are on Facebook and Twitter in all the countries we are present in, and other locally popular networks. We encourage customers to use our presence to talk about our service and we monitor all discussions. So, if someone is not happy with us we will offer to make direct contact and take action to sort their problem out. Social networking is a great way to get people talking about us but we do realise that we need to continue to deliver a phenomenal customer experience or people won’t want to talk about us.

38

"COmbInE THE RaTIOnal wITH THE IRRaTIOnal."

39

wHO ARE LAURENT-PERRIER'S CUSTOMERS IN BELGIUM?

If we're talking about consumers, I can tell you that the Belgians are very fond of champagne. Belgium is the brand's number two export destination after the uk! however, in order to reach them, we also have to appeal to our direct customers: via wholesalers, catering sector customers (hotels, restaurants, cafés and night clubs), with whom we have genuine one-to-one relationships, and the retail sector (which dominates the Belgian market, where there are few wine merchants remaining). Whatever we do, we must always think on two, or even three levels: the end consumers, the prescriber (sommelier or supermarket aisle manager) and the buyer.

HOw wOULD yOU DEFINE CUSTOMER INTIMACy FOR A CHAMPAGNE BRAND?

The idea is to create a well-balanced blend of rational and irrational aspects, adapted to each customer. Rational aspects are primarily the brand's strengths: its history, its product range etc. Irrational aspects relate to the dream element, the emotional dimension that links us to our customers. We identify in each of our customers a professional or extra-professional aspect for differentiation which enables us to develop our relationship with them, to understand them better and respond to their expectations. This must be a personalised but also a personified aspect: at any given event or at a dinner party, I am "Mr. Laurent-Perrier", I embody the brand.

KNOwLEDGE OF THE CUSTOMER IS THUS ESSENTIAL?

Of course it is. And there is one golden rule: field work. This is a constant feature in the luxury sector: the more

upmarket the product, the more knowledgeable you must be about all topics – business-related or otherwise. And this can go quite far! In a luxury hotel, for example, you must identify who is responsible for purchases, but also where the "spheres of influence" are. If the sommelier or the bartender has no connection with your brand, they will not serve it. This knowledge takes a long time to develop.

wHAT ACTIONS DO yOU CARRy OUT TO PROMOTE THE BRAND?

We regularly use our customers' hobbies to bring them together: golf, horse riding, festivities etc. or even cars or motorbikes! We organise fewer events than we used to, but we make sure every one of them is a memorable and exclusive occasion. In other words, "less is more". This is illustrated by the Laurent-Perrier "Bubbles" event, our own golf competition, limited to 300 "pampered" golf-playing customers every year. We also organise commercial actions throughout the year, on valentine's Day for example, in conjunction with restaurateurs, centred on the idea of a gift. All these actions have one thing in common: the search for "positive contamination".

wHAT DOES THE FUTURE HOLD IN STORE?

We are working on a daily basis to create a Laurent-Perrier fan club and making greater use of social networks, which we have only done occasionally so far. We also want to improve the way we use our database – fine-tuning, in a way. Our direct mailings, for example, must be increasingly targeted, according to personalised criteria.

ultimately, regardless of their social background or income level, people are always touched by these thoughtful gestures. Attention to detail is our motto. Assuming of course that we have mastered the basics.

YVES dE bOHan gENERAL MANAgER LAURENT-PERRIER BELGIUMFOR CHAmPAGNE PRODUCER LAURENT-PERRIER, PRESENT IN BELGIUm SINCE 1999, CUSTOmER INTImACY IS A TRADITION. IN THE LUxURY PRODUCTS SECTOR, A VERY DETAILED UNDERSTANDING OF THE CUSTOmER IS AN INDISPENSABLE PREREqUISITE FOR DEVELOPING A PERSONALISED RELATIONSHIP VIA CAmPAIGNS AND CUSTOmISED EVENTS.

TESTIMONIALS

40

"COmbInE CUSTOmER InTImaCY wITH VOlUmE."

41

paSCal dElORmE COMMERCIAL, MARkETINg AND IS DIRECTOR SNCF VOyAGES

CONFRONTED WITH COmPETITION FROm AIR TRAVEL, SNCF VOYAGES RELIES ON CUSTOmER KNOWLEDGE AND THE CAPACITY OF VOYAGES-SNCF.COm TO RESPOND TO THE CONTRADICTORY REqUIREmENTS OF AN INCREASINGLY BIPOLAR mARKET.

wHAT ARE THE BENEFITS OF CUSTOMER INTIMACy FOR THE TGV?

With 100 million Tgv journeys every year, we have to reconcile customer intimacy with volume. Customers are increasingly well informed, maybe more so than our analysts responsible for adjusting prices in function of demand… They now have tools to find the lowest prices (comparison sites, low cost offer trackers, price lists, etc.). These are serious issues in light of competition from air travel. They may even become more serious in future with the arrival of new competitors in the stations. Defending ‘taking the train’ is one thing. Defending ‘taking our train’ versus that of a competitor on the next platform is another.

wHAT ARE yOU CURRENTLy DOING TO ENHANCE THIS INTIMACy?

In the past 15 years, we have managed to embed a customer oriented philosophy in the company. When competition in rail transport really takes off, this philosophy will definitely allow us to stand out in terms of customer focus and service quality. In the meantime, we are striving to respond to the requests of the most dynamic customer segments: those who mainly want low prices and, conversely, those who want more services and are willing to pay for them (professionals as well as senior citizens and families).

wHAT DO THESE RESPONSES CONSIST OF, IN CONCRETE TERMS?

For the former, we have recently launched entire trains at low cost rates and we are in the process of designing offers providing reduced comfort levels for example. For the latter, our exclusive services rely on one of the Tgv's recognised strengths compared to air travel: enabling time to be used productively to rest or work.

wHAT IS yOUR GOAL FOR 2011?

In 2010, we focused on the very short term. We increased the number of offerings tailored to customer needs. This year, as we come out of the crisis, we will resume the development of long-term customer relationships, notably via the evolution of the loyalty program. One of our objectives in the years to come is to sell 50% of our products via voyage-sncf.com (compared to approximately 30% at the moment). The quality of our customer relationships will be defined by our ability to combine basic functions (accumulation of consumption-related points, exclusive services etc.) with the most efficient online operations.

SUCH AS SOCIAL MEDIA FOR ExAMPLE?

We have started to use social media to test certain offerings among their intended target groups, but the rise of social media is too recent to allow it to be massively integrated into this approach. We have to remain humble and attempt to fully penetrate the web ecosystem, by intelligently applying the rules (online campaigns, viral marketing, buzz etc.) and adopting the best practices of pioneer players such as amazon.com or ventes-privées.com, while respecting the logic specific to a major network company and its thousands of salespeople.

TESTIMONIALS

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"wE fOCUS On ElabORaTE dIgITal mECHanICS, wITHOUT blIndlY SUbSCRIbIng TO THE YOUTH CUlTURE."

43

HOw DO yOU ENHANCE CUSTOMER INTIMACy TO PROMOTE yOUR BRAND?

A brand such as Dior must constantly be attentive to its customers. Our aspirational world is based on the brand's image, the quality of the products but also on the point of sale experience. We must create a strong emotional bond through exceptional expertise and service. We pay special attention to the training and coaching of our advisors so that they can be true ambassadors of the company's know-how and excellence. Providing advice on perfume or beauty products is also designed to create customer intimacy so that we can efficiently fulfil their needs.

HOw DO yOU MAINTAIN THIS APPROACH ACROSS yOUR DIGITAL AND VIRTUAL CHANNELS?

We strive to express the brand's DNA via the design of applications in keeping with its values. Differentiation is achieved by the quality of what we offer, in particular on the brand's website which must be impeccable, down to the most minute details. We focus on elaborate digital mechanics - websites, iPhone, iPad, social networks - and high quality delivery. however, a brand such as Dior cannot blindly subscribe to the youth culture or be overly "Facebook friendly"; the brand's tone must remain coherent while being appealing in multi-format digital mode.

wHAT IMPACT DO SOCIAL MEDIA HAVE ON yOUR BRAND?

It is generally acknowledged that traditional media develop the brand's image and awareness while the web and social media primarily affect buyer behaviour. The truth is more complex, notably amongst certain target audiences or in certain markets where the traditional press plays a limited role. In this case, the web and social networks are major channels for brand communication, all the more so as people generally give more credit to what they hear on social networks than in traditional advertising messages. In this respect, they can significantly influence the perception of the brand.

IN THE CONTExT OF BRAND GLOBALISATION, HOw DO yOU PRESERVE CUSTOMER INTIMACy, wHICH CAN BE INCOMPATIBLE wITH A UNIFORM APPROACH?

What matters for a prestige brand such as ours is to speak to consumers in a coherent manner, focusing on aspects transcending regional and cultural differences. We must subsequently deploy our communication in sales outlets. The use of CRM and the internet enables a more targeted implementation, which reinforces brand sustainability and relevance. however, the consumer is ultimately attracted by the brand (intangible), which is why it is essentially up to the product and the service (tangible) to adopt a differentiated approach and to fulfil the needs of increasingly expert customers.

THIERRY dUgnYINTERNATIONAL gENERAL DIRECTOR PARFUMS CHRISTIAN DIOR

THE EPITOmE OF FRENCH LUxURY AND KNOW-HOW, DIOR HAS BASED ITS BRAND COmmUNICATION ON UNIVERSAL VALUES WHICH TRANSCEND FRONTIERS AND CULTURES. HOWEVER, THE STRATEGY RELIES ON TARGETED PRODUCTS AND PERSONALISED SERVICES, IN STORES AS WELL AS ON THE INTERNET. INTERVIEW WITH THIERRY DUGNY, GENERAL mANAGER, INTERNATIONAL OPERATIONS.

TESTIMONIALS

44

"wE aRE dEVElOpIng CUSTOmER RElaTIOnSHIpS THaT aRE mORE and mORE pERSOnalISEd."

45

XaVIER flamandgENERAL MANAgERFNAC.COM

FNAC.COm, LAUNCHED 11 YEARS AGO, IS TODAY RESPONSIBLE FOR 10% OF THE COmPANY’S SALES AND HAS RECORDED DOUBLE-DIGIT GROWTH FOR OVER 5 YEARS. THE ExPLOSIVE GROWTH OF mOBILE DEVICES ACCELERATED THIS TREND, OPENING UP NEW POSSIBILITIES FOR CUSTOmER RELATIONSHIPS. BROADER REACH, PERSONALISED ADVICE AND A COmmUNITY APPROACH: AS ExPLAINED BY xAVIER FLAmAND, GENERAL mANAGER OF FNAC.COm

The penetration of the web has increased significantly over the last three years. Online purchasing has increased its market share by 1 to 2% per year. Customers have become used to researching products and - of course - comparing prices online. The significant increase in the amount of mobile devices within easy reach has accelerated this phenomenon. This is a fantastic opportunity to communicate offerings to the customer. One of our primary strategies has been to increase the scope of our offerings to satisfy all our customers. We created a marketplace on Fnac.com where certain vendors and professionals can make their own products available, both new and used. Fnac.com now has over 8 million items, compared with 2 million previously. Access to everything we have available has also been made easier with the development of a Fnac.com app for iPhone in 2010, and one for Android, which will be available at the beginning of 2011. There have been 350,000 downloads of our app in six months.

HOw DO yOU PROVIDE PERSONALISED INFORMATION AND CREATE CUSTOMER RELATIONSHIPS THROUGH ELECTRONIC CHANNELS?

We have created My Fnac on Fnac.com, a personal area for each customer. Based on the purchases made, the Fnac.com customer receives personalised advice, information on the authors or products that they know about as well as targeted recommendations and must-haves. They are also invited to provide their opinions so their interaction with the website can be personalised even further. The goal is to provide the customer with personalised information, and this experience continues in-store. With the Fnac.com app, they can simply scan a product’s bar code using their mobile device and get access to all the information about the item.

wHAT IMPACT DOES SOCIAL NETwORKING HAVE ON yOUR STRATEGy?

Social networking has exploded, with over 19 million people on Facebook. The opinions of other internet users have today become the main criteria for making a selection. Many internet users post products on their Facebook page that they are considering buying, so they can get their friends’ opinions. That’s why we launched several communities for fans of comics, jazz, pop/rock and more in July 2010. Each is run by Fnac sales experts. The contents are full of dynamic exchanges, we have received over 3,000 posts in six months, and some have been viewed over 25,000 times. Each store has its own community area online. We use these to announce signings, conferences and meet-ups, and customers can also view videos of previous events. Our strategy is to create synergy between the stores and the internet with the goal of encouraging customers to visit both and to view the editorial content on the website.

wHAT IS yOUR STRATEGy FOR EBOOKS?

We have over 80,000 books available for download. They can be accessed on Fnac.com, or through an iPad or iPhone. We have also developed our own eReader, the FnacBook. Once a book has been downloaded, it can be read on any device as the situation requires.

TESTIMONIALS

46

"pROdUCT RESEaRCH, STROng ClIEnT fOCUS, COnTInUOUS InnOVaTIOn, EnVIROnmEnTal pROTECTIOn, wITH a mIX Of TRadITIOnal COmmUnICaTIOn and InnOVaTIVE CHannElS."

47

wHAT KIND OF INITIATIVES IS yOUR FIRM UNDERTAKING IN ORDER TO STRENGTHEN CUSTOMER INTIMACy AND BRAND VALUE?

Ligne Roset has always been strongly committed to constant product research and to the introduction of relevant innovations, every year. To this should be added a very detailed distribution strategy, which brought us to worldwide single-brand store openings, a great attention to after-sales client service and ongoing customer support. We should also not forget our company-wide, nonconformist and environmentally friendly spirit, which are key elements in every one of our products. In 2011, we are also focusing heavily on launching a brand new marketing campaign. All the above makes Ligne Roset a forerunner in terms of products and communication, which is even more striking in a traditional sector like the furniture industry. Ligne Roset is active in a fast-moving and modern environment, in which virtual communication will become increasingly important, at the expense of traditional methods.

IN wHAT wAyS ARE SOCIAL MEDIA INFLUENCING BRAND REPUTATION?

Social media can substantially affect brand positioning. We thus pay a great deal of attention to the messages conveyed and to providing the best possible balance between new and traditional communication channels. Ligne Roset has dedicated pages on both Facebook and Twitter, and makes use of the most frequently visited blogs in the world to communicate its most important news through viral communication tools. In this context it is of paramount importance for us to directly and attentively monitor information flows and information quality. As one of the most innovative firms in the furniture industry, we want to avoid misunderstandings and also avoid detaching our brand image from our reality.

IS yOUR FIRM PURSUING DIFFERENTIATION STRATEGIES INVOLVING DIGITAL TOOLS AND CHANNELS?

As I mentioned, Ligne Roset is highly active in all the most popular social media environments. One of our top investments in communication is the improvement of our website, which is now dynamic and enables our clients to interface with it directly. key elements in our communication strategy are direct blogs with contributions from our own personnel and real time communication. however, we continue to make use of more traditional tools and ensure only homogeneous messages and visual materials are released.

IN AN INCREASINGLy GLOBALISED ECONOMy, DID yOUR COMPANy HAVE TO ADAPT ITS COMMUNICATION AND MARKETING ACTIVITIES TO THE PECULIARITIES OF NATIONAL MARKETS TO INCREASE CUSTOMER LOyALTy?

Certainly! This was done through the implementation of specific national policies based on our current position in the markets in which we are present. The greatest loyalty is always linked to the product and the customer service offered. This is the real element that distinguishes a company at the forefront of innovation from those that do not value their products, and often assign only a marginal role to communication. In today’s world, clients are increasingly focused on the price/quality ratio. They attach greater value to the service they receive along every step of the purchasing process, a value which can vary depending on the culture of the country in which a company operates.

fRanCESCO fRaTES MANAgINg DIRECTOR ROSET ITALIA SRL

DESPITE THE FUNDAmENTAL ROLE OF SOCIAL mEDIA FOR BRAND POSITIONING AND REPUTATION mANAGEmENT, THE mOST TRADITIONAL COmmUNICATION TOOLS AND, ABOVE ALL, PRODUCT ExCELLENCE AND CUSTOmER SERVICE SHOULD NEVER BE FORGOTTEN.

TESTIMONIALS

48

"gREaTER InTImaCY REQUIRES TRUTHfUl langUagE."

49

IN wHAT wAy HAVE THE ExPECTATIONS OF BANK CUSTOMERS CHANGED SINCE THE CRISIS?

Before the crisis, not many customers asked themselves why they favoured a specific banking institution and what they expected from their bank. The crisis undermined their trust in the sector. Paradoxically, customers have maintained a special link with their financial adviser, even though they have somewhat distanced themselves from the institution. Customers are now exercising more control and wish to understand more. Consequently, identifying their needs is one of the main challenges in terms of creating and reinforcing customer intimacy. Fortunately for us, this is a domain in which we have always stood out in our sector.

wHAT IS yOUR STRATEGy IN THIS RESPECT?

Firstly, we need to set limitations, and specify what can and cannot be done. This can sometimes result in saying things the customer may not want to hear, to protect them against themselves. This is essential for defining their desires in terms of risk and return, but also for advising and guiding them in the long term. As with any social relationship, truthfulness and transparency are the price to pay for greater intimacy. There is also an emerging corporate culture designed to place customers' interests at the heart of the relationship. This requires constantly questioning how we can provide customers with greater added value. Paradoxically, we see customers less often, as the era of queuing at the counter to perform banking transactions is past, yet we need to know and understand them better.

wHAT ARE THE LIMITS TO REINFORCING THIS INTIMACy?

Collecting increasing amounts of data, which we all do, is not necessarily the best way to create customer intimacy. On the one hand, we accumulate factual data whereas emotions often play a key role in the decision making process. On the other, increasing the level of interaction can frustrate customers. We lead them to believe that they will benefit from better service although we have not really examined their needs, let alone organised ourselves to deliver the services required.

IN OTHER wORDS, wE HAVE TO GO BACK TO CAREFUL CONSIDERATION AND ANALySIS?

It is only once needs have been properly identified that we can deploy the resources to satisfy them. Efficient analytical tools are not sufficient. We must first and foremost rethink our product, commercial and marketing approaches as well as the information systems supporting the offering. This takes time - far more time than developing a new offering - as we have to organise ourselves internally and acquire a broad range of skills. This also requires a desire to change, as everything evolves more rapidly. It is ultimately pointless asking customers what they want if we are not prepared to change our offerings and working methods to satisfy them.

CAN SOCIAL MEDIA HELP yOU wITH THIS APPROACH?

These new technologies provide a lot of options in terms of customer intimacy. Businesses no longer need to divide their customers into three or four major categories, as they have done for the past fifty years. It is now the customers themselves who define their own categories, by specifying which community they belong to and, consequently, which customer profile they identify with. It remains to be seen how best to make use of this information.

YannICk gRéCOURT STRATEgY AND MARkETINg DIRECTOR DEUTSCHE BANK BELGIUM

ACCORDING TO DEUTSCHE BANK, CRm TOOLS ARE NOT EVERYTHING. IN BELGIUm, WHERE IT DOUBLED IN SIzE OVER THE PAST FIVE YEARS, THE BANK'S PRImARY CONCERN IS TO IDENTIFY THE REAL NEEDS OF ITS CUSTOmERS.

TESTIMONIALS

50

"wE wanT TO gIVE OUR ClIEnTS THE TOOlS THEY nEEd TO HaVE mORE aUTOnOmY."

51

wHAT ARE IN FRANCE ING DIRECT'S KEy STRATEGIES FOR CLIENT RELATIONSHIPS?

Relationships and trust are central to our industry. Our strategy is based on a two-fold approach: providing high quality services and ongoing support to our clients, together with the independent management of their accounts on a daily basis. The quality of the services we provide is thus a key component. Our advisors are specialists, our business hours have been extended and we’re investing heavily in operational excellence. For example, the quality of our services is constantly evaluated using the NPS (Net Promotion Score) tool, which is based solely on the collection and evaluation of raw customer perceptions. We are thus in a process of continuous improvement that focuses on our clients.

wHAT DOES GIVING yOUR CLIENTS MORE AUTONOMy MEAN?

The traditional banking model was built around the relationship between a client and their advisor, who had all the knowhow. There was a certain amount of dependence. Our approach to information sharing is just the opposite: we want to “emancipate the client in managing their savings, their account and their investments”. This is achieved by way of simple communication, products and processes, and a willingness to provide information. We have also launched the Moneytime channel, in partnership with the Yahoo web portal. This information channel is designed to help individuals improve the management of their finances. On the other hand, for major services (such as mortgages, insurance contracts, etc.), we still hold face-to-face meetings, mainly at our INg Direct café in Paris.

wHAT IMPACT DOES SOCIAL NETwORKING HAVE ON yOUR STRATEGy?

Social networking is a fantastic opportunity for us. 56% of those looking for financial information do their research online, and in particular through the use of social networks. INg Direct clients are also a community, not in the socioeconomic sense, but rather based on the philosophy

that drives them. They are the kind of people who question established methods, who want to be treated as adults, who are open to change, and who value transparency and clarity – these are the characteristics that unite them. We have created a page for them on Facebook, to encourage users to share their experiences and stimulate discussion. We also receive plenty of feedback on our solutions, which is very valuable. The tone varies, and is sometimes harsh but at the same time very humorous. The community’s enthusiasm is more important to us than the number of fans – contributions are rich and frequent.

ARE BLOGS A FUNDAMENTAL ELEMENT OF yOUR POLICy?

Blogs allow us to create the INg Direct of tomorrow, together with our clients. For example, we started a blog for ideas about defining a mobile application. 70 clients took part in the discussion, which was based on structured and organised exchanges. Their contributions not only influenced the type of device the application would be for (iPhone), but also the services offered, the usability and the design. Clients also tested the application before its release. When it was released, it was widely acclaimed and quickly became the number one financial app, with one of the best ratings in the market. Our clients who helped create the product felt highly valued. We created 3 blogs in 2011, and we will launch more to help define new services and solutions.

HOw DOES MOBILITy FIT INTO yOUR STRATEGy?

Time is a scarce resource, and people are becoming more mobile. It is up to the bank to adapt. Now that we have launched apps for iPhone and iPad, we will launch an app for Android in early 2011. Mobile devices that can be used anywhere are also a single point of access to bank accounts, information, management tools and real time alerts. This is the everyday bank of tomorrow – simple, safe, and at the client’s fingertips, combined with face-to-face meetings for the more important services.

SOpHIE HEllER vICE PRESIDENT MARkETINg AND COMMuNICATIONS ING DIRECT FRANCE

THE LEADER IN ONLINE BANKING, ING DIRECT CURRENTLY HAS 23 mILLION CLIENTS THROUGHOUT THE WORLD. UNLIKE THE TRADITIONAL BANKING mODEL, THE REmOTE BANK USES AN INNOVATIVE RELATIONSHIP APPROACH BASED ON INFORmATION SHARING AND ENABLING CLIENTS TO BE mORE INDEPENDENT. SOPHIE HELLER, VICE PRESIDENT mARKETING AND COmmUNICATIONS, RECENTLY ELECTED CLIENT mARKETER OF THE YEAR IN FRANCE, SHARES HER INSIGHTS.

TESTIMONIALS

52

"CUSTOmERS nO lOngER wanT TO bE OnlY nUmbERS —THEY nEEd pERSOnalISEd SERVICES."

53

wHAT ARE THE STRATEGIC ISSUES FOR CUSTOMER RELATIONSHIPS IN THE BANKING SECTOR?

Retail banking is changing. Today, 95% of all banking transactions are conducted electronically. Behaviours have completely changed. Customers no longer go to their local branch: they use the internet, ATMs, call centres and their smartphones to carry out transactions. The traditional banking model, dominated by the physical teller window will evolve to what Brett king* calls Bank 2.0, i.e. banking based on Web 2.0 technologies, social networking, and mobile telephony. Banking that is both interactive and accessible anywhere, at any time. In this digital universe, the customer is at the centre, not the bank.

HOw IS ACTIVEPATH INVOLVED IN THIS EVOLUTION?

We have developed a fully secure email solution that enables exchanges and transactions between the bank and its customers directly in the body of the email. The solution works in both directions. The customer no longer needs to connect to the bank’s website - they can conduct their transactions directly via email. The objective is to offer customers a maximum degree of simplicity and flexibility. The solution is also designed to be used over multiple smartphone platforms and from Facebook. Social networking will increasingly become a multifunctional nerve centre for users, and will soon integrate a commercial platform. In the near future, generation generation Y customers will manage their contacts, purchasing and banking from this platform. It is a real added value for the customer as everything is centralised and is evolving into a genuinely personalised environment.

HOw CAN TRUST BE RESTORED BETwEEN BANKS AND THEIR CUSTOMERS?

I think there is a real gap between services offered by banks and customer expectations. For example, usually a bank will charge customers when an account is overdrawn, but does not provide the account holder with any solutions. These days, customers want banks to be genuine partners, banks that are more attentive to their needs and that don’t treat them as if they are nothing but numbers. 64% of customers say they want new services. The biggest challenge ahead lies in being proactive. Banks that stand out will be those that know their customers and can proactively offer solutions and better protection to support them in life’s big steps: student loans, having children, coping with losing your job…This is the price of trust.

*Brett King, author of BANK 2.0, consultant in financial services, customer relationship management, and distribution network strategy. Blog: www.banking4tomorrow.com

REnan lEVY ChIEF EXECuTIvE OFFICER ACTIVEPATH

FOUNDED IN 2007 IN ISRAEL (AND NOW ALSO OPERATING IN THE UNITED STATES), ACTIVEPATH HAS DEVELOPED AN INNOVATIVE TECHNOLOGY THAT ALLOWS FOR INTERACTIVE ExCHANGES AND TRANSACTIONS BETWEEN BANKS AND THEIR CLIENTS DIRECTLY VIA EmAIL, IN A COmPLETELY SECURE ENVIRONmENT. THIS ADDS VALUE TO THE CUSTOmER ExPERIENCE, KEEPING PACE WITH CHANGES IN RETAIL

TESTIMONIALS

54

"OUR CURREnT STRaTEgY IS THE COnQUEST Of EmplOYERS."

55

HOw wAS THE MERGING OF ASSEDIC AND ANPE CARRIED OUT?

The merger was intended to simplify the steps that jobseekers had to take while at the same time incorporating expertise from both Assedic and the ANPE. The goal was to provide more services and to make each of them more personalised. The onset of the crisis and the arrival of 500,000 additional jobseekers in 2009 however put considerable strain on the organisation, which was already operating at full capacity. Our primary objective was thus to consolidate the services most in demand: registration, compensation and personalised support. We improved our telephone services, which are in great demand from clients, by optimising the procedures and the organisation thereof. Our response rate is about 80%. The services offered include pre-registering, updating their information, consulting their file, and receiving job search advice.

HOw ARE yOU IMPROVING yOUR RELATIONSHIPS wITH JOBSEEKERS – RELATIONSHIPS THAT ARE OFTEN SEEN AS IMPERSONAL AND POORLy ADAPTED?

We are currently consolidating our support and personalising the monthly follow-up. The counsellors have a broader knowledge base today, allowing them to provide more comprehensive responses. They are in regular contact with companies, which is crucial for providing proper support to jobseekers. We are also looking into other ways to personalise our services, in particular by continuously improving the Employment Centre website. It is accessible for all users 24/7, and offers jobseekers information adapted to their needs and the field in which they are searching. Jobseekers can also sign up for targeted offers and to receive alerts and reminders.

wHAT ARE THE KEy ELEMENTS OF yOUR STRATEGy REGARDING EMPLOyERS?

Our strategy is one of conquest, with the goal of attracting new companies as clients. Our first step is to simplify the process for them. We have set up a new helpdesk number, which puts companies directly in contact with an employment advisor, who provides them with all the information they need. Their job offer is posted the same day. They are offered personalised recruitment support and advice on qualifications, salary level, etc. The companies also have access to all the information related to employment subsidies and various employment stimulation measures. We have developed a proactive prospecting system for targeting employers and have made substantial efforts to segment our client base (according to company size, dynamism of the sector, recruitment volume, etc.) so as to maximize the results of our actions.

bRUnO lUCaS ASSISTANT gENERAL MANAgER FOR CLIENTS, SERvICES AND PARTNERS FRENCH EMPLOyMENT CENTRECREATED FROm THE mERGER OF ASSEDIC AND ANPE, THE FRENCH EmPLOYmENT CENTRE'S GOAL IS TO ImPROVE THE RANGE AND CUSTOmISATION OF SERVICES PROVIDED TO JOBSEEKERS AND EmPLOYERS. THIS SERVICE PROVIDER WHICH mANAGES 4 mILLION JOBSEEKERS AND 3 mILLION JOB OFFERS ANNUALLY HAS OPTED FOR SImPLIFICATION AND CUSTOmISATION.

TESTIMONIALS

56

"alwaYS mORE RESpOnSIVE."

57

wHAT HAS THE CRISIS CHANGED FOR yOU?

The crisis affected us reasonably late, since 2008 was still a very good year. For the “city breaks” offers, the short leisure trips which are our niche, there was no impact as far as private clients were concerned. however we have felt a decline in business activity since the first quarter of 2009. Our business clients travelled less or started implementing tighter procurement policies: for example, the number of second class trips in particular has increased at the expense of first class trips, which are more profitable.

wHAT wERE MANAGEMENT’S ExPECTATIONS DURING THIS PERIOD?

The crisis has undeniably shortened decision-making cycles. Everything happens much faster. Clearly, management pays close attention to results, and expects responses to be faster and efficient solutions to be found. This short-term monitoring has meant that projects are reconsidered almost constantly, and that corrective actions must be implemented very quickly.

HOw HAVE yOU REACTED TO THIS SITUATION?

To keep our existing first class business clients and to attract others, the first thing we did was to improve the products and services. We included Wi-Fi in the ticket price, improved the catering service, and focused our communication more on the idea of ‘useful time’, which is an advantage we have over airlines. We also launched the ‘lounge’, a private area for four people that allows them to travel in a private and confidential environment. In parallel we reviewed our discount policies for key accounts, to increase the attractiveness of first class.

wHAT IS yOUR UNDERLyING PLAN FOR BUILDING LOyALTy?

Our goal is to maintain our strong position on service while being inspired by best practices, particularly those relating to distribution and technology. We were thus the first transport company, other than airlines, to offer our clients paperless ticketing to all our destinations (Ticketless Thalys). We also updated the loyalty card programme for private customers, which now includes, in addition to the usual services, a long-awaited miles programme. The necessity of doing this became even greater when we found ourselves in direct competition with Air France, kLM and Lufthansa once the high speed lines to Cologne and Amsterdam were opened in 2010.

HAS THE EMERGENCE OF SOCIAL MEDIA STIMULATED yOUR THINKING?

We are very attentive to the opinions about Thalys that are circulating on social media. We have created an opinion tracking system to monitor exchanges on blogs and on social networks. We take them into account, even though these comments are most often made by dissatisfied clients, and are far from reflecting public opinion in general. however, going from that to creating our own blog or Facebook page is a big step… A step we will only take when we’re sure it will add value.

béaTRICE pâQUES MARkETINg AND SALES MANAgER THALySHIGH SPEED TRAIN OPERATOR THALYS RESPONDED qUICKLY TO THE DECLINE IN BUSINESS IN 2009. THE COmPANY EmPHASISED ITS FOCUS ON SERVICE AND APPLIED BEST PRACTICES FOR BUILDING LOYALTY.

TESTIMONIALS

58

"CREaTIng CUSTOmER InTImaCY alSO mEanS SURpRISIng THEm bY dEmOnSTRaTIng CREaTIVITY."

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THERE IS A LOT OF TALK ABOUT CUSTOMER INTIMACy; IS IT DESTINED TO PLAy AN INCREASINGLy STRATEGIC ROLE?

In light of globalisation, brands tend to distance themselves from their audience. Dialogue and products tend to become standardised. Within this mass process, consumers feel like they are nothing but a number, hence the increasing need for differentiation and personalisation. In this respect, the importance of customer intimacy should grow in future and should play a decisive role in brand commitment. Although technology offers numerous opportunities, there is still a long way to go. Take the issue of recognition for example. Most luxury brands have no consolidated customer databases. A vIP customer in a given country will not be recognised and treated accordingly in a store of the same network abroad.

HOw CAN GLOBALISATION BE EFFECTIVELy RECONCILED wITH THE NEED FOR PERSONALISATION?

If the message is global, it must be adapted at local level. Asia constitutes a market with great potential, but many Chinese do not speak English, for example. They often do not understand the tagline of a campaign and can't even pronounce the name of the brand. They too need an identity for themselves. Certain international

brands are well aware of this and use Chinese models. Social media are not a favoured means of support in China due to censorship. To preserve customer intimacy, I believe services must be better adapted to local markets. Take hong kong for example, a very popular shopping destination in Asia because of its competitive prices. As a lot of customers are tourists, the geographic localisation of services consists of providing immediate fitting services or delivering purchases to their hotel to respond to their expectations in the best possible way.

HOw CAN THIS CUSTOMER INTIMACy BE MAINTAINED IN VIRTUAL MEDIA?

As you would in a store: by providing a personalised welcome, with an online recognition system and vIP treatment for the best customers. Technology offers a lot of solutions which can be capitalised upon. The customer's purchase history can be used to differentiate the way they are welcomed via personalised messages, targeted advice and information. The IkEA website has an avatar that responds to internet users' questions with a smile and remembers them for their next visit. Innovation also seems crucial; creating customer intimacy also means surprising them by demonstrating creativity: Chanel's mobile application is very good and Stella Artois makes skilful use of augmented reality.

mICHEl pHan MARkETINg PROFESSOR LVMH CHAIRHOLDER, ESSECWHAT WILL THE ROLE BE OF CUSTOmER RELATIONSHIPS IN DETERmINING BUSINESS PERFORmANCE? WHAT WILL THE ImPACT OF TECHNOLOGY BE? HOW CAN SOCIAL NETWORKS AND mOBILITY BE USED EFFICIENTLY? KEY qUESTIONS FOR PROFESSOR mICHEL PHAN, mARKETING SPECIALIST AND LVmH CHAIRHOLDER AT ESSEC.

TESTIMONIALS

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"COnVEY OUR ValUES TO EnHanCE lOYalTY."

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JaCQUES RIVOal MANAgINg DIRECTOR VOLKSwAGEN FRANCEIN LIGHT OF THE DIFFICULTIES FACING THE AUTOmOTIVE SECTOR, VOLKSWAGEN IS STRIVING TO PROVIDE EACH CONTACT WITH A RESPONSE WHICH IS ALIGNED WITH THE BRAND'S VALUES AND ENHANCES CUSTOmER LOYALTY.

wHAT ARE THE BENEFITS OF CUSTOMER INTIMACy FOR A CAR MANUFACTURER?

Our products are sold in high volumes, and are eminently complex both in terms of purchase and repair. That’s why we have multiple contacts with customers who naturally tend to compare the experience we offer to their perception of that offered by other sectors (the hospitality sector, travel, etc.).

SO THIS IS A CRITICAL ISSUE FOR yOU?

Yes, insofar as intimacy creates loyalty, and that loyalty in conjunction with price and design is among the main criteria for selecting a vehicle. It could almost be said that the bulk of the work is done once a customer has become strongly attached to a brand… given the competition, in particular from low cost offerings, we are convinced that only the brands that manage to assert their identity will retain their customers and be successful.

wHAT MEASURES HAVE yOU TAKEN TO REINFORCE THIS LOyALTy?

Before focusing on products and customer experience, we did significant work on the brand, redefining our values (responsibility, sustainable value and innovation) and adopting a new signature: Das Auto. The idea is to establish the vW brand as a generic name, a reference used for the products of a sector, like Frigidaire was synonymous with refrigerator (fridge). And only then can we convey our values, by examining how all our products and, more generally, the experience we offer to the customer.

wHAT DID THIS wORK CONSIST OF, IN PRACTICAL TERMS?

We defined different types of standard customer experience applicable all the time and everywhere. We had to train and coach the dealerships and above all ensure the strict application of this experience. We put tremendous pressure on the dealer network by linking rewards and sanctions to satisfaction indicators developed on the basis of systematic customer surveys and ‘mystery shopper’ visit reports.

HOw DO yOU PLAN TO ENHANCE CUSTOMER INTIMACy IN FUTURE?

In addition to our qualitative and quantitative statistical knowledge, we are trying to improve our understanding of our customers' experience of our vehicles, notably by increasing the number of tests in real-life and extreme conditions. We also intend to respond to their search for meaning with the launch of Think Blue. This sustainable development label reflects our ability to produce cleaner cars (BlueMotion) and above all the group's commitment to environmental protection. Finally, to fulfil our customers' new expectations, we have recently renovated our online loyalty program (http://www.volkswagen-et-moi.fr) and we are in the process of setting up a Facebook page dedicated to the vW community.

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"makIng OUR CUSTOmERS' lIVES EaSIER."

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HOw HAVE CUSTOMERS' ExPECTATIONS EVOLVED?

Basically, in two directions. They either want more simplicity with all-inclusive offers, or more freedom with a maximum choice of products and services. On the other hand, the one thing they all have in common is being demanding. Which, in the end, is the price you have to pay when you enter more deeply into people's lives, as Belgacom has done, for example, with its television offer (Belgacom Tv). In a highly competitive environment shared with cable operators and subsidiaries of foreign operators, increasingly demanding customers means the business must be able to continuously adapt.

HOw ARE yOU RESPONDING TO THIS TREND?

By trying to strengthen ties with customers in order to get to know them better. We have often travelled that road since the middle of the 90s. Our culture at that time was markedly "public sector", and we were hampered by a certain level of rigidity. We had to make major efforts to reduce the distance between the customer and us, and communicate using a language that inspired trust. Even today, our goal is to remain humble in our communication and to make it pleasant for the customer to interact with us.

PRACTICALLy SPEAKING, HOw DO yOU ESTABLISH AND MAINTAIN THIS TyPE OF DIALOGUE?

We invest in data collection, which enables us to sustain the most authentic conversation possible, far removed from mass marketing, slogans and undifferentiated promotions. Actually, it has been much easier since the launching of

Belgacom Tv. Our understanding of our customers’ habits and tastes continues to improve. This is the type of data that our customer intelligence department analyses methodically.

CAN SOCIAL MEDIA CONTRIBUTE TO ENRICHING OF THIS DIALOGUE?

undoubtedly. Since last April, a small team of social media gurus has been studying how to use these tools better. We were already able to observe the power of a simple casting call, which in very little time sent the number of our fans on Facebook rocketing from 600 to 100,000! We will obviously use these new media for future marketing campaigns or to collect feedback.

wHAT OTHER PLANS DO yOU HAVE FOR 2011?

We're going to make life even easier for our customers. In particular, we will make our pricing structure more comprehensible, and generally simplify all points of contact: boutiques, publications, call centre, website, etc. We will continue to communicate more about our services, rather than our rates or promotions. We will communicate about innovative services – like free 3g internet access in case of a modem breakdown, which will soon be launched – but first, in order to avoid any adverse announcement effects, we’ll communicate about more basic services (such as call centre waiting times).

kRIS VERVaET vICE PRESIDENT MARkETINg BELGACOMTHE Ex-PUBLIC TELECOmmUNICATIONS mONOPOLY HAS LEARNED THE LESSONS OF mARKET LIBERALISATION AND CAREFULLY mAINTAINS THE DIALOGUE THAT IT HAS ESTABLISHED WITH ITS CUSTOmERS.

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4analYSIS

CLIENT INTIMACY BAROMETER


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ANALySIS

Every day in our business, we assess the changes taking place in companies' relationships with their customers. Mobile technologies are set to become the number one media: buyers think in terms of immediacy and want products and services that are accessible any time and anywhere, via multiple channels. The emergence of social networks and blogs has reinforced customers' position in relation to brands. As a customer, it is now easier to be heard. As they become more powerful, they also aspire to be actively involved in the definition of the products and services they use. Thanks to technology, they are also better informed and are able to compare everything in real time and consult targeted opinions in a global and ultra competitive environment. All these changes are indicative of the central role customer relationships will play in business performance in future. The company's ability to take into account customers’ need for mobility, but also to respond to specific expectations, will be a decisive factor. We promote a personalised approach based on continuous dialogue with the customer. This interactivity is key to understanding everyone's needs and providing a targeted response. This revolutionary relationship could be called "Customer Intimacy 2.0".

HOw BUSINESSES COPE wITH CHANGE

The objective of this first Customer Intimacy Barometer is to comprehend how companies deal with these transformations, the role of customer relationships in their strategy and the major differentiation processes implemented. Carried out in several countries and multiple sectors, it provides a wealth of information. One key figure should be highlighted in particular: despite their differences, 53% of companies have integrated "Customer Intimacy" into their priority strategies. Promoting customer experience is becoming a key issue, but its development requires the in-depth transformation of the company's culture and organisation. It relies on a transverse approach integrating all departments (marketing, sales, after-sales service etc.) and everyone in the field. In this respect, technology offers enormous potential, with regard to the knowledge of each customer, the personalisation of relationships or the assessment of the resulting satisfaction. And this technology is dependent on interoperable and mobile information systems.

OPPORTUNITIES AND RISKS

These transformations are a great source of opportunities for businesses. They however require perceptiveness and pragmatism. Customer Intimacy 2.0, characterised by interactive exchanges and the emergence of social networks, can either increase brand value exponentially or undermine it. Each customer is more actively involved and can be an advocate or a detractor of the brand: the richer the relationship, the more interesting and complex it is to manage…

ClaUdE CzECHOwSkI PRESIDENT AND CEO SOuTh & WEST EuROPE PRESIDENT, gLOBAL CONSuLTINg/ TEChNOLOgY/ERP PRACTICES

CSC

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ANALySIS

lUXURY In THE ERa Of SOCIal mEdIa

One in five telephones sold in the uSA is a smartphone; Facebook boasts 19 million members in France and 2 billion videos are viewed worldwide on YouTube every day. These figures illustrate the increasing importance of social media. Nowadays, from the public to the private sector and from convenience to luxury goods, companies that have not integrated them into their brand strategy are rare. Being present seems to be a prerequisite, but Michel Phan wanted to put this to the test. Last October, the marketing professor carried out a precursor study on social media and luxury brands. According to his conclusions, we are still in the early stages of this phenomenon "with a current return on investment relatively limited for businesses," although the survey was conducted among a target group of advanced users, regular online buyers and daily users of social media. Far from challenging the validity of using these media, Michel Phan urges businesses "not to be too hasty, and to adopt a targeted and coherent strategy".

ADOPT A LONG-TERM STRATEGy

Social media have not yet delivered on all their alleged promises. According to Michel Phan, the survey even highlights "surprising, even disappointing results". Firstly, it seems that there is no "automatic correlation between online activity and the brand's image. This is the case for Burberry, for example. This company has invested a lot in social media to rejuvenate its image. As a result, it broadcast its fashion show live and in 3D in five different countries. however, two years later, it is still perceived as old-fashioned by internet users". The same applies to the intention to purchase. Stella McCartney, albeit very active in social media, benefits from limited intention to purchase among internet users, unlike leather goods manufacturer hermès who – although not as involved in these media – achieves the best score in this domain. Michel Phan draws several conclusions: "investments in social media bear fruit in the medium and long term". Above all, their efficiency depends on the quality of the strategy implemented, as

"social media are merely tools: what matters is how they are utilised. Simple presence is not enough; the approach must be relevant and coherent with the entire brand strategy".

CREATE PUBLICITy

A key finding of the survey is that the website remains the number one point of contact with the brand, even though those interviewed use social media on a daily basis. Online stores also attract a lot of attention. however, internet users are less used to looking for brand information via social media. "While more than one third of those surveyed consult the Armani website and one in four visits the store, only 16% look for information on this brand on Facebook and only 7% via their smartphone". Michel Phan believes that "it is therefore essential to promote one's activity on social media, otherwise one can only rely on chance or word-of-mouth". According to the survey, not all brands are aware of this, far from it: "while gucci highlights its online social activity on the home page of its website, this is not true of Chanel, for which the links to social platforms are hidden in a sub-section difficult to access, despite the high quality of the application". According to the marketing specialist, "brands must communicate their presence on social media via their websites, catalogues, shopping bags and so on". It should also be pointed out that an online strategy, even global, must be geographically localised. Thus, while in the uSA, Myspace and Twitter are essential elements of any web strategy, they are mostly ignored by French people.

THE KEy ROLE OF INTERACTIVITy

Another finding of the survey is that the number of fans or followers of each brand varies dramatically depending on the media. While gucci is prominent on Facebook, it is not often viewed on YouTube. Similarly, there is no direct link between the brand's popularity and its success

FACEBOOk, YOuTuBE, TWITTER: SOCIAL MEDIA ARE PROFOuNDLY TRANSFORMINg ThE RELATIONShIPS BETWEEN BRANDS AND ThEIR TARgETS AND ARE BECOMINg AN INCREASINgLY IMPORTANT PART OF ThEIR STRATEgY. BuT WhAT IS ThE ACTuAL IMPACT OF ThESE MEDIA ON ThE IMAgE OF BRANDS? DO ThEY MODIFY ThE BuYER BEhAvIOuR OF INTERNET uSERS? MIChEL PhAN, MARkETINg PROFESSOR AT ESSEC, FOCuSED ON ThEIR INFLuENCE IN ThE LuXuRY SECTOR. AN EXTREMELY INFORMATIvE PIONEERINg SuRvEY.

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in social media. hermès and Dior are among the brands most appreciated by the internet users surveyed, and yet they have fewer followers in social media than other, less popular brands. According to Michel Phan, the regularity of online strategy implementation is a prerequisite, as "it is impossible to enhance loyalty with an intermittent activity. The brands that demonstrate creativity and encourage interactivity and dialogue with internet users are far more likely to distinguish themselves".

FURTHER INFORMATION

• Date of the survey: October 2010• Format: online questionnaire• Response rate: 65%• Respondents' profile: 58% women, 42% men• Age: 87% of respondents are 19- 29 years old,

and regular users of social media

A kEY FINDINg OF ThE SuRvEY IS ThAT ThE WEBSITE REMAINS ThE NuMBER ONE POINT OF CONTACT WITh ThE BRAND, EvEN ThOugh ThOSE INTERvIEWED uSE SOCIAL MEDIA ON A DAILY BASIS. ONLINE STORES ALSO ATTRACT A LOT OF ATTENTION. hOWEvER, INTERNET uSERS ARE LESS uSED TO LOOkINg FOR BRAND INFORMATION vIA SOCIAL MEDIA

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ClIEnT InTImaCY aS a dIffEREnTIaTIOn STRaTEgY



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CHOOSIng a TRanSfORmaTIOn STRaTEgY

BETTING ON CHANGE: A MUST

In the first few months of the crisis, there was one question on everyone's lips: how do we to react? Many companies were tempted to adopt the cost killing approach. Caution is in order, however: although cost management is more crucial than ever, blindly slashing costs can cripple the company later when business picks up again, or cause it irreparable damage. In other words: companies must reef the sails to survive the storm, but must also prepare the ship to move forward again when calmer seas return. They must make the necessary savings in the short term, but guard against sacrificing investments that are essential for the medium term.

Preparing for the post-crisis period is without a doubt the greatest challenge companies are facing in 2010. “The companies that adapt today will be the first to bounce back and will be well ahead of their competitors in the new economic environment," says Claude Czechowski. The other major challenge lies in managing change in times of economic slowdown. Failing to act is not an option. It is therefore important to have created a process for instigating change – preferably before the crisis hit.

ALL TRANSFORMATION NECESSARILY ENTAILS A BREAkAWAY OR A RADICAL REFORM. FOR ThOSE AT ThE hELM, ThE BIggEST ChALLENgE IN PERIODS OF TRANSFORMATION LIES IN CLEvER hANDLINg OF BOTh ThE MAgNIFYINg gLASS (TO SAvE MONEY AND IMMEDIATELY FIND ROOM TO MANOEuvRE) AND ThE TELESCOPE (FOR STRATEgIC LONg-TERM vISION). ThIS IS A DIFFICuLT BuT CRuCIAL EXERCISE. PROvIDED, OF COuRSE, ThAT ThE TELESCOPE IS PROPERLY FOCuSED ON ThE CLIENT AND ThAT ThE DIFFERENTIATION STRATEgY IS FOuND, SINCE FROM ThIS WILL STEM ALL ThE MAJOR DECISIONS ThAT FOLLOW.

Different customers seek different kinds of value. Because a company can't be the best at everything, it must choose its customers, properly identify the value offered to them, and constantly increase this value by choosing a business model that is uniquely linked to it.

According to Michael Treacy & Fred wiersema, in their the book The Discipline of Market Leaders*, by refusing to choose, companies adopt a hybrid business model that does a little of everything at once and is a source of confusion, stress and misspent energy. This equates to steering a ship without a rudder, with no clear way to resolve conflicts or set priorities. Looking out for the company first, instead of the customers, complicates management and wastes time. This is how a business can find itself adrift on the stormy seas of new competition.

THE NEw RULES OF COMPETITION

Setting a new course and bringing new impetus during the crisis without any prior preparation is extremely dangerous and in all likelihood even impossible. If teams have already begun a process of change before the economic downturn, it will be easier to speed up or slow down the rate of change according to the company's situation. And it will be even easier to choose a transformation strategy, starting with a clear differentiation strategy.

DECIDING ON A DIFFERENTIATION STRATEGy

When faced with shifts in the environment, companies must prepare their own strategic change. This doesn’t mean changing everything, of course, but rather clearly defining the company’s products and services in order to stand out from competitors and maximise performance. To do this, a clear differentiation strategy must be developed along one of the three following lines:

Operational excellence (cost): products positioned in line with the market average, at the best price, with a minimum of hassle. The operational excellence product range is above all simple. The hard-discount sector or IkEA, for example, have led the way in this area: it can be profitable to reduce service levels if the price/quality ratio of the products remains attractive, if purchasing is made easy and if the system is infallible.

Product leadership (creativity): putting technology to new uses, inventing new services, focusing on user-friendliness or the environment – rational (but genuine) innovation makes all the difference as long as the company always stays one step ahead. For instance, Apple competes on performance, not on price.

Intimacy (customer): it is vital for every company to know its customers and their needs. Some make this a true asset – with appropriate targeting, efficient management of customer relationships, tailored offers or new distribution networks. Companies that cultivate intimacy with their customers, such as the Accor hotel chain with its exclusive A-Club programme, are not interested in one-off transactions. They build relationships.

*Michael Treacy & Fred Wiersema, The Discipline of Market Leaders, 1997, Addison-Wesley Pub. Co

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AN ESSENTIAL CHOICE

Of course, while reading this, some are already thinking that their company would be better off betting on all fronts (on the basis that to choose means to also to exclude). The Leading Edge Forum, CSC’s strategic planning and research centre, has shown that companies that are unable to choose are unable to reach a level of excellence in any domain. Their efforts are dispersed and their position is threatened from all sides by competitors or newcomers with a clear differentiation strategy.

Furthermore, customers know how to identify the three types of value and generally don’t expect to get them all at once from a single supplier. According to the researchers, “the choice is difficult, because it means concentrating all efforts on what is essential. But the lesson drawn from market leaders is clear: they create a genuine difference in one value discipline while remaining competitive in the two others.”

BUILDING A NEw BUSINESS MODEL AND ADAPTING THE PROCESSES

Choosing a differentiation strategy (or value proposition) naturally leads to business models that are very different in terms of organisation, production processes, customer relationships, management, and of course information systems.

Of course, different value propositions require different business processes. Take distribution policy, for example. The operational excellence scenario (differentiation through cost) requires a single procurement department and standardised retail outlets that are usually self-service. The customer intimacy scenario, on the other hand, requires a more flexible organisation in which the decision making power lies much closer to the end client and where orders are taken by salespeople who have some room to negotiate.

These arguments are valid for all activities in the company – with one leitmotiv: once the model is chosen, it must be adhered to. That is the challenge of the value discipline.

COST, CUSTOmER OR CREaTIVITY: THESE THREE CS dETERmInE THE OpTIOnS aVaIlablE TO bUSInESSES fOR wITHSTandIng THE CRISIS, and bEYOnd THaT fOR OVERHaUlIng THEIR bUSInESS mOdEl. THESE CHOICES mUST bE madE nOw. laTER On THEY wIll dETERmInE wHO wIll bE aHEad Of THE gamE OnCE THE ECOnOmIC ClImaTE allOwS fOR ImpROVEd VISIbIlITY.

4 RUlES FOR TRUE MARKET LEADERS RULE N°1: OFFER THE BEST PRODUCT RANGE ON THE MARKET By ExCELLING IN ONE OF THE VALUE DISCIPLINESMarket leaders start by creating a value proposition that is appealing and unmatched. Only then do they seek to achieve efficiency in the other two areas.

RULE N°2: MAINTAIN A DEGREE OF COMPETITIVENESS IN THE OTHER VALUE DISCIPLINESThere is no need to strive to be the best in all areas – it is wiser instead to ensure that any drop in performance in a secondary value does not damage the primary customer value.

RULE N°3: DOMINATE yOUR MARKET By IMPROVING yOUR VALUE FROM yEAR TO yEAR Market leaders are threatened by both the companies that try to copy their models and those that increase expectations related to the other types of value. The solution? Constantly maintain efforts and raise customer expectations while raising the value standards. To remain a market leader, it is not enough for a company to offer the best product, the best price, or the best overall solution on the market today: it must be able to offer them today, tomorrow and the day after.

RULE N°4: BUILD A BUSINESS MODEL THAT IS DEDICATED TO CREATING UNBEATABLE VALUE Continuous improvement of the business model can make the product range offered by competitors much less appealing – or even ruin it by making it obsolete. The business model is the ultimate weapon of the leading company that wants to dominate its market.

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adHERIng TO a ValUE dISCIplInE ChOOSINg A vALuE PROPOSITION IS AN ACT OF RENEWAL. IT IS NOT MERELY A NEW COMMuNICATION STRATEgY, BuT A gENuINE MOvEMENT ThAT MuST DRIvE ThE WhOLE COMPANY. ThE vALuE PROPOSITION gIvES MEANINg TO ThE COMPANY’S STRATEgIC ORIENTATION AND TO ALL SuBSEquENT DECISIONS, BY IMPOSINg A ROAD MAP OR DISCIPLINE ON ALL AREAS OF ThE BuSINESS. ThIS “vALuE DISCIPLINE” PERvADES ThE ENTIRE COMPANY, FROM ITS SkILLS TO ITS CuLTuRE. IT DEFINES WhAT ThE COMPANY DOES, AND ThEREFORE WhAT ThE COMPANY IS.

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THE OPERATIONAL ExCELLENCE DISCIPLINE

Operational excellence has an historical model: henry Ford. Shaking up the pre-existing standards of cost and performance, this famous manufacturer built his industrial empire on a simple idea that he instilled throughout his company: production must be efficient. Of course, nowadays Ford has been surpassed in many areas. But the core of his model remains the key to success: simplicity, collective discipline, and of course the ability to break away from established rules to accomplish what many (and sometimes even the customers) thought was impossible.

CuSTOMER vALuE: PRICE, RELIABILITY, SPEED

Operational excellence is based on cost reduction. But it cannot be reduced to this aspect only. First, today’s (and tomorrow's) companies consider the total cost of their product: in addition to reducing production cost, they aim to reduce cost of usage by also fine tuning the reliability of the product or the speed of service. Their goal: eliminate the material and psychological (inconvenience, annoyance, etc.) costs linked to the purchase.

ThE BASIS OF ThE MODEL: STANDARDISATION

Companies aiming for operational excellence organise themselves around standardised means and highly efficient procedures. It is no coincidence that all Wal-Mart and IkEA stores look alike. But that is not enough. Companies also have to stay focused on the discipline chosen and resist the urge to diversify or upgrade their product range. Tempted to meet the requirements of other customers, undisciplined companies often allow their products and services to proliferate by creating variations for myriad customer segments, and gradually they lose the efficiency that made them unique. On the other hand, disciplined companies know that diversity comes at a cost. And controlling costs is a cardinal virtue of any operational excellence discipline.

hR MANAgEMENT: A FOCuS ON TEAMWORk

“It’s the team that counts.” These companies reward the teams that contribute to keeping the company’s promise. At McDonald’s, the employee of the year is named “best crew member” and, though wages are low, the company knows how to recognise those with potential for the future and helps them progress gradually through a clearly established hierarchy.

TRANSACTION EFFECTIvENESS

Solutions must constantly be found to improve the model. Today, vertical integration is being replaced by virtual integration, where companies and their suppliers pool

their resources (and integrate their information systems) to eliminate superfluous processes and improve the logistics flow from order through to delivery. Purchase approvals, orders and stock replenishing are replaced by new continuous resupply processes. Bills of lading and confirmations of receipt have already disappeared.

INFORMATION TEChNOLOgIES uSED TO ThEIR FuLL CAPABILITY

The new rules of competition make operational excellence necessary for many companies. It is made possible by information systems, which are both the nervous system and the backbone of the company. Decision making tools have become widespread within companies that have chosen this value discipline. Today they are integrating mobile technologies before their competitors, in order to both extend their control and improve their customer service.

CuSTOMER SERvICE: ThE EXCELLENCE OF SIMPLICITY

Because poor service can increase the total perceived cost for the customer, companies aiming for operational excellence have shifted their attention to this new area, focusing on three rules: the service must be accessible, flawless and immediate. If we think back on all the minor hassles that hiring a car once involved (a task that is now extremely simple), we can truly measure the progress made in just a few years.

A word of caution, however: here again, diversity is the enemy of efficiency. The right strategy is thus not to offer the best service, but rather to uphold simple practices. And if necessary have customers adapt themselves to the company: after all, haven’t fast food restaurants managed to have their teenage customers clear their tables even though they refuse to do so at home? Similarly, low cost airline customers have gotten into the habit of eating before or after flights rather than during.

DIVERSITy IS THE ENEMy OF EFFICIENCy. THE RIGHT STRATEGy IS THUS NOT TO OFFER THE BEST SERVICE, BUT RATHER TO STICK TO SIMPLE PRACTICES.

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CuSTOMER vALuE: (gENuINE) INNOvATION!

how many of the “new” products presented each day can really be considered innovations? From new formats to new look packaging and products, through to chocolate-guava perfumes… customers quickly tire of superfluous variations and embellishments without value. To achieve product leadership, a company must be capable of creating a regular flow of genuine innovations, of the type that people wait for with bated breath and that forge lifestyles; innovations that offer a product experience combining pleasure, performance and identification.

AT ThE hEART OF ThE MODEL: vISION AND TALENT

Before starting to develop a new product, Edison would begin by providing an inspiring vision of it. he wasn’t the first to invent a light-emitting device, but he saw further ahead than his contemporaries: he wasn’t looking to invent the light bulb; he wanted to be able to light up an entire city.

Furthermore, Edison had surrounded himself with associates who were naturally curious and motivated by the pursuit of virtually impossible goals. Nowadays, all product leadership companies know that it is crucial to have talented employees with ambitious and visionary ideas; employees who are often driven by a common goal expressed very simply.

BEINg A STEP AhEAD – AND PREPARINg ThE MARkET

Product leadership companies must prepare markets so that they will accept radical innovations. And yet these companies know that history is littered with the debts of inventors whose only mistake was to be right too soon. Their challenge is to both invent and accelerate

the rate at which an invention is taken up. They look beyond the market, but without ever losing sight of it.

FLEXIBLE STRuCTuRES, ROBuST PROCESSES

By trying to box in creativity too much, eventually it runs dry. Innovative companies must therefore adopt flexible structures. Teams must be multidisciplinary in order to plan all aspects of the product as early on as the development phase (production, marketing, after-sales service, etc.).

hR AS AN ESSENTIAL RESOuRCE

Product leadership companies never forget that it is individuals who create innovation. They look for engineers who are creative and capable of easily moving from one project to another. They know how to increase the potential of their staff members by presenting them with ambitious challenges, while providing them with material comforts that stimulate imagination – as illustrated by the google offices, for example.

LIFE CYCLES TO MANAgE

Brilliant engineers on the one hand and experts in launching products on the other: this is the winning combination for product leadership. It is the combination that allows a brand to sell a product that truly promises to bring value to customers. But innovation always ends up being matched. gradually its value decreases, and its price with it. Market leaders don’t hesitate to prolong the life of an innovation by launching extensions and other variations. At the same time, however, they know how to keep one step ahead by quietly preparing the next product that will make the previous one obsolete as soon as it is copied by the competition.

THE DISCIPLINE OF INNOVATION

At the end of the 19th century, Thomas Edison invented the first real product development process – a way to create one invention after another and then transform these into useful and marketable objects. his Menlo Park laboratory has been used as a model by the R&D departments of companies focused on product leadership such as Apple and BMW. They have revised and perfected the model, keeping in mind Edison’s great principle: “genius is 1% inspiration and 99% perspiration.”

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THE CUSTOMER INTIMACy DISCIPLINE

We could trace customer intimacy back to the early days of trading or to the development of tailored services – or to the bellboy of a major hotel, who is willing to go to any lengths to anticipate the requirements of regular customers. But what exactly does this intimacy mean in a time of massive shifts?

ThE CuSTOMER vALuE: ThE SOLuTION TO YOuR NEEDS

The lowest price or the best product is not a guarantee of value for customers if it only addresses part of their requirements: if the low cost flight takes them to an airport that is too far from their destination, if a software application doesn’t allow them to reorganise their management processes, or if they do not have the necessary skills to use the product. Companies focused on customer intimacy know how to remedy these deficiencies better than their competitors. Their main characteristic: an exclusive range of high quality services that allow their customers to use their products in the best possible conditions. This discipline involves optimising the customer experience and, in addition, offering each customer the solution that matches their current needs.

ThE BASIS OF ThE MODEL: kNOWINg ThE CuSTOMER

Customer intimacy has acquired new meaning over the last few years with database development, behavioural segmentation, and all the possibilities for customising products. One-to-one marketing and product co-creation are the new standards of a customer intimacy that still only in an embryonic phase.

A DECENTRALISED ORgANISATION

It’s a tautology: decentralised businesses are closer to their customers. This proximity is also evident in the autonomy given to staff members who are in direct or virtual contact with the customer. It is also the model for any store that focuses primarily on service and where a skilled sales force is therefore essential. Furthermore, a store might welcome its customers royally, but be unable to deliver on time. Where is the value for the customer then? In B2B, just as in B2C, customer intimacy is not only a matter of contact; it is a relationship that involves the whole company.

BALANCED TALENT MANAgEMENT

The key challenge for companies focused on customer intimacy is to gather, coordinate and keep talented staff members at their customers’ service. This challenge is particularly great in the consulting field, for example, where the most sought-after personalities are those who know how to materialise change within the client company. Customer intimate companies prefer to hire versatile candidates who are capable of adapting themselves to each customer and are not afraid (rather the opposite) to stray from their job description.

PRODuCTION SYSTEMS ThAT ARE OFTEN vIRTuAL

value discipline leaders rarely inherently possess the capabilities they put at their customers' disposal. Their strength lies first and foremost in their expertise and their ability to coordinate skills to offer solutions. In a way, their means of production are virtual and therefore potentially infinite. This formula enables these companies to turn to partners on behalf of their customers.

STRONg RELATIONShIPS WITh SELECT CuSTOMERS

Customer intimate companies calculate the value of a customer over the long term. They avoid occasional customers and concentrate their efforts (and therefore their value) on a regular and almost select customer base. When it comes to B2B services, naturally the aim is to strengthen relationships to develop existing accounts. In retail, the key is to foster customer loyalty. Without losing sight of the fact that a satisfied customer is not always loyal: a strong and long-lasting relationship must be built up and a company must sell the relationship as well as the goods.

THE PRICE OF INEqUALITy

“COMPANIES ThAT TRuLY WANT TO AChIEvE INTIMACY WITh ThEIR CuSTOMERS MuST FOCuS ALL ThEIR RESOuRCES ON ONE ChOICE: RAThER ThAN A SuPERFLuOuS SERvICE ‘WITh ADDED vALuE’, ThEY MuST OFFER ThEIR CLIENTS PERFORMANCE ThAT IS ThE RESuLT OF gENuINE EXPERTISE, A WILLINgNESS TO ShARE IN ThEIR RISkS, AND TRuE TAILORINg OF PRODuCTS AND SERvICES. ThEY MuST BE CONFIDENT ENOugh TO SELL ThESE AT A hIghER PRICE, kNOWINg ThAT ThE BILL IS JuSTIFIED DOWN TO ThE vERY LAST CENT.”

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Designed and produced by CSC’s South and West Region Marketing & Communications department.© 2011 CSC. All rights reserved.

About CSC

The mission of CSC is to be a global leader in providing technology-enabled business solutions and services.With the broadest range of capabilities, CSC offers clients the solutions they need to manage complexity, focus on core businesses, collaborate with partners and clients and improve operations CSC makes a special point of understanding its clients and provides experts with real-world experience to work with them. CSC is vendor independent, delivering solutions that best meet each client’s unique requirements.

For 50 years, clients in industries and governments worldwide have trusted CSC with their business process and information systems outsourcing, systems integration and consulting needs.

The company trades on the New York Stock Exchange under the symbol “CSC.”

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