Realizing Customer Centricity # Realizing... · 2016-02-27 · „Customer Centricity is concerned...

Realizing Customer Centricity

Prof. Dr. Dennis HerhausenAssistant Professor of Marketing

20./21. May 2014


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© Prof. Dr. Dennis HerhausenUniversity of [email protected]

Customer Centricity – What does it mean?


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Product(Service)

Customer

Customer

Customer

Customer

Customer

Customer

Customer

Product

Service

Product

Service

Product

Service

Product Focus Customer Focus

A Shifting Focus: Customers, not Products!

„Sales Management“„Product Management“

„Customer Segmentation“„Customer Management“

Source: Rust, Moorman und Bhalla 2011


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Value forCompany

Value forCustomer

The Essence of Customer Centricity

„Customer Centricity is concerned with the process of dual value creation, where the paradigm lies on

creating value for the customer and, in the process, creating value for the firm.“

Source: Shah et al. 2006


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Customer Centricity – does it pay off?


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Outcomes of Customer Centricity

All Relationships have been investigated in empirical studies.

Customer CentricityCustomer Centricity

Higher Customer

Satisfaction

Higher Customer

Satisfaction

Higher Customer

Loyalty

Higher Customer

Loyalty

Higher Customer

Trust

Higher Customer

Trust

Higher Customer-Company

Identification

Higher Customer-Company

Identification

More positive Word-of-

Mouth

More positive Word-of-

Mouth

Higher Willingness to

Pay

Higher Willingness to

Pay

Source: Several Customer Centricity Studies


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Increasing Market Value with Customer Centricity

Source: Walker 2012

Companies with the highest customer orientation are much more successful than the average company within the S&P 500.


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Customer Centricity in Switzerland

Source: Survey IfM-HSG (2012)

Survey of 265 Companies (B2B) in Switzerland

Degree of Customer Centricity

Investing into Customer

Centricity pays off!

o = RelationshipCustomer Centricity andFinancial Performanceper Company

– = RelationshipCustomer Centricity andFinancial Performance

Fina

ncia

l Per

form

ance

in C

ompa

rison

to C

ompe

titor

s


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The Degree of Customer Centricity is often Overestimated by Top Managers

92.1

87.7

84.2

81.4

78.2

70

75

80

85

90

95

SupportEmployees

Top Managers

MiddleManagers

Customer-ContactEmployees

Customers

Source: Employee Survey (n=894 Employees) and Customer Survey (n = 544 Customers) at a Swiss Company (2012)


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Customer Centricity – How to get there?


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Levers of Customer Centricity

4. CultureRole Models of

Customer Centricity

2. StructureCustomer-Focused

Organizational Design

1. Strategic Approach

Customer Focus

3. KnowledgeAddressing Latent Customer Needs


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1. Strategic Approach: Customer Focus

1. Our business approach is based on the customer. We always show that we want to meet the customer's requirements as soon as possible.

2. We treat the customers as our partners. We believe that sustainable business success depends on long-term relationships.

3. We aim to clearly understand the needs and expectations of customers and to meet these needs and expectations . We promise only what we can keep, and we always keep our promises.

4. We benefit from our own knowledge and experience and those of our customers in order to meet the needs of our customers with appropriate solutions.

Source: Survey IfM-HSG (2012)


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2. Structure: Customer Centricity requires an Integrated Process Perspective

Pro

duct

Dev

elop

men

t

Pro

duct

Man

agem

ent

Sal

es

Cus

tom

er S

ervi

ce

The customer wants…Th

e O

rgan

izat

ion

thin

ks in

…

individualoffers

high quality

fastsupply

Sourcee: Backhaus 1999


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Hilti puts the Customer First

Source: Hilti 2010

CustomerMarket Regions / Marketing Organizations

Business Areas

Corporate Research & Technology

Supply Chain Corporate Functions

Executive Board

Board of Directors

Hilti Trust


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Hilti: Customer Needs, not Products

Measuring systems

Measure

Drilling and demolition,diamond cutting

Open

Direct fastening,anchor systems,installation systems

Fasten

Cutting, sawing and grinding

Execute

Firestop,construction chemicals

Close

Source: Hilti 2010


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3. Customer Knowledge, not Customer Control!


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3. Knowledge: Addressing „Latent“ Customer Needs

It’s not the customer’s job to know what they

want.This is our job.

Source: Steve Jobs (Apple) 2007


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Successfully addressing „Latent“ Customer Needs

Qualitative Methods

Trend Watching

Scenario Management

Customer Integration

Customer Proximity

Future Focus

+ -

+-

HiddenCustomer Needs

Future Customer Needs

Explanation of innovative Methods of Market Research

Integrate customers into early innovation stages to learn about the use of products and services.

Use future-oriented focus groups with employees, experts and customers to gain insights into customers' latent needs.

Monitor trends in society that signal changes in your customers' needs.

Identify future customer needs with scenariomanagement.

Source: Herhausen 2011


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4. Culture: Customer Centricity comes to life, when all Employees live Customer Centricity!

Customer-Contact Employees

Top Managementand

Middle Management

Support Employees


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A long journey towards Customer Centricity…

Customer-orientation

2004

Customer-processes

2005

BrandMgmt.

2006

Transf.Leadership

2008

Personal-Marketing

2009

Perform.Mgmt

2010

Value-orientedLeadership

20132012

positiveCustomerContacts

MarketingSeminar

Impulses for Management: „Top-Down“

Impulses for Employees: „Bottom Up“

Change Arena I

2007

Change Arena II

2011

CulturalAnalysesI

2009

CulturalAnalysesII

2012

Change Arena III

2014

CulturalAnalysesIII

2015

EM-Impulses

2017

2015

Leader-shipSeminar

2016

Source: Villiger (GKB) 2014


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Impulses for Employees: “The Change Arena”

1. CC Knowledge

2. Making CC Tangible

3. Implement Changes



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Market Valuation of Graubündner Kantonalbank

Since starting the journey towards Customer Centricity, GraubündnerKantonalbank is much more successful than the average company

within SMI / SPI.



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Take-Aways

Customer Centricity… defines value creation from the customer perspective.

pays off (in particular) for B2B-companies.

determines the strategy for the whole organization.

affects all departments, divisions und processes within the company.

pays attention to „latent“ and „future“ customer needs.

comes to life, when all employees live Customer Centricity!


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Prof. Dr. Dennis HerhausenAssistant Professor of Marketing

Tel: +41 (0)71 224 28 59Fax: +41 (0)71 224 28 [email protected]

Institute of MarketingUniversity of St.Gallen HSGDufourstrasse 40a9000 St. Gallen

Contact


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Further Reading (in German):Creating a Customer-Centric Company

Realizing Customer Centricity # Realizing... · 2016-02-27 · „Customer Centricity is concerned...

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