Summary: Customer Centric Strategies

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A 15 minute narrated summary of the customer centric profit optimization theory and how to implment it.This applies to ANY industry

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Slide 1:

**Copyright Pending & Portions (*) are Patent Pending All Rights Reserved 1 Steven Pinchuk Profit Optimi z ation Strategies www.profitoptimi z ation.com steve@profitoptimi z ation.com 1 561 623 9677 Customer Centric Profit Optimization ** A Summary

Preface:

2 Preface The concept of a company being “customer centric” is not new. There are a lot of theories. The key is creating a system that incorporate all other existing areas of a company & predicts customer actions for each individual customer A method to systematically accomplish this is new. I have a US/International patent pending on an organizational method. ** Copyrighted & Portions ( * ) Patent Pending All Rights Reserved Companies and customers will benefit from learning the way a progressive company should treat their most valuable asset – their customers! Today’s customer is savvy and understands what is possible. Companies need to improve their relationships with customers – the savvy companies will win.

Introduction :

Top Secret DOD & Intelligence Agency clearances working on future systems projects for Martin Marietta Aerospace 3 Introduction These ideas are a fusion of things learned in some of my past positions Economics advisor to Sr US Senator who ran for President Corporate Vice President Revenue Management and Distribution for Harrah’s Entertainment ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved Vice President Profit Optimization for SAS Software Institute These concepts are from real world experiences and developed to work in the real world in any industry that can track individual customers

Agenda :

4 Agenda Introduction, Focus, Questions & Goals Lifecycles Overview *** C 3 I = Command, Control, Communication & Intelligence ** Copyrighted & Portions ( * ) Patent Pending All Rights Reserved Command, Control, Communications & Intelligence (C 3 I)

Slide 5:

5 Crawl Walk RUN NOT A straight line where you have a long range target and crawl, then walk then run towards that target. NOT a curving path where short term goals are added together to reach a recently defined long term goal Long Term Visions Can Increase Efficiency… ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Introduction: A New Approach is Needed…:

Focused on each customer, where possible, as an individual 6 Introduction: A New Approach is Needed… CRM, Pricing, Marketing, Product Development Distribution Functions must form a new foundation… They must become 100% integrated towards a common new goal Everyone must optimize strategic profits NOT tactical revenues ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved The process must use predictive analytics/automated systems See & control things from each customer’s perspective

Focus:

7 Focus This is not just about traditional CRM. Traditional CRM is a database with customer information, some analytics and today little or no predictive analytics Customer Relationship Optimization ** is the goal of a Customer Centric Profit Optimization ** system Traditional CRM is used by other areas, hopefully…, it does not coordinate and control the actions of all the company’s areas in order to protect the customer ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved This is about Customer Relationship Optimization (CRO) ** Customer Relationship Optimization ** is best accomplished by predicting & leveraging future behavior patterns of customers

Questions –How Well Do You Really Know Your Customers? Applying Customer Centric Strategies..:

8 Questions –How Well Do You Really Know Your Customers? Applying Customer Centric Strategies.. Do you know what your customers will want or will do over their expected lifetimes? Do you have a clue what their lifetime patterns will be? Do you have confidence intervals? How do you spot changes in these patterns ? How fast can you tell if a customer is diverging from the pattern , whether good or bad? Not just the probability of them accepting “the next” offer? Do you know the patterns you want to see? Do you know the different patterns taken by a poor, average and good customer? Would it help to see this graphically and not just as a dump of numbers? Do you differentiate pricing, marketing, etc. based on lifetime customer value and where they are on their lifetime relationship with you? Do you still think you know your customers? Close enough…. ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Questions –Do You Know & Control All Your Customer Centric Strategies for Each Customer – in Real Time, Afterwards, or Not At All? :

9 Questions –Do You Know & Control All Your Customer Centric Strategies for Each Customer – in Real Time, Afterwards, or Not At All? Do you know what you look like to your customers given all the interactions/influences that you have with/on them? Can you select a future date, product, etc & see all the information about it, from multiple systems, in one screen? Or do you have to search through systems (marketing, RM, CRM, distribution, etc.) one at a time, remembering data from each screen/system, to see what you are doing & what the market sees you doing? Do you know how to gain this perspective & what to do with it? Do you have a way to systematically see & control all the influences that you send to one of your customers – from their perspective? Is it based on their individual behavior – past & future? Command, Control, Communication & Intelligence (C3I)… Do we need a system to control all these actions? Sr Management needs this tool to achieve their goals. Yet we build up our silos. Why? ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Goals :

10 Goals Systematize customer centric strategies to optimize profits – creating a Customer Centric Profit Optimization (CCPO) ** system Long term multi step strategic goals not short term tactical fixes Goals that change fundamental business models – achieved one step at a time – with a long term target. To implement CCPO we need an integrated system: ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved Basing all demand influencing functions on results of predictive customer lifecycles - not the traditional functional silo approach of traditional CRM, Marketing, Pricing, Distribution, etc. With a new user interface that allows users to see all systems that influence a future date, person, event on one screen with multiple live windows Optimize customer’s lifetime strategic value, not tactical revenues

OVERVIEW - Customer Centric Profit Optimization (CCPO):

11 OVERVIEW - Customer Centric Profit Optimization (CCPO) CCPO is a systematic engine comprised of these integrated main components: Predictive Lifecycles Customer Relationship Optimization (CRO) Command, Control, Communication & Intelligence (C 3) System Interfaces (C 3I SI) * ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Slide 12:

12 RM PRICING . MARKETING, CRM & LOYALTY DISTRIBUTION Channel Manager Demand Mgt C 3 I Interface Distribution Channels Reservations Overview - Customer Centric Profit Optimization 12 Customer Lifecycle Core CCPO Inputs We will see this diagram several times and describe its pieces. For now, just notice that the customer lifecycle models/predictions are the core of the system All FUNCTIONAL areas of the company that impact demand use inputs from the customer centric core and are controlled by a C 3 I interface that is part of the customer centric core. ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Lifecycles examples:

Lifecycles examples 13 Predicting multiple future behavior actions allows better decisions * Future data points allows multiple types of customer valuations for pricing systems- tactical, strategic and lifetime * tactical Strategic Lifetime = total of all actions ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

How Can I Use Lifecycles?:

14 14 This can be used for 2 very different purposes… 1 to 1- Individual Nano Entity Lifecycles Focus on individual customers, their patterns & your actions PLUS 1 to many - Family Meta Individual Nano Entity Lifecycle Understand when to use a lifecycle as the target of an action How Can I Use Lifecycles? Used in algorithms…but adds predictive values and does not just use historical values like the models today… ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Slide 15:

15 15 Develop an analytically derived and continually updated understanding and explanation of nano level lifecycles for each customer * What are they * How do they differ * Which ones are desirable * Which ones are undesirable * How are they changing * Creating a Customer Centric Lifecycle Approach * ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Advanced 1 to 1 Marketing Targets individual behavior versus acceptable deviations & automates marketing reactions * :

16 Advanced 1 to 1 Marketing Targets individual behavior versus acceptable deviations & automates marketing reactions * 16 Patent Pending All Rights Reserved Pa t ent Pend I ng ALL RIGHTS RESERVED ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

Creating a Customer Centric Lifecycle Approach Centered Around The Corporate Lifecycle Core *:

17 Self learning system * Identifies similar customer behaviors trends * applies predicative analytics to develop predictive lifecycles * drives automated MA/MO.. * Interface for customer centric RM/pricing model & other functions * MA/MO Areas * Automates true 1 to 1 marketing based on predictive analytics from lifecycles creation * Tracks individuals and identifies behavioral variances in behavior & sends appropriate actions * Identifies optimum recipients for promotions * Lifecycles can be used to gain new insights into markets & customers * All Rights Reserved Creating a Customer Centric Lifecycle Approach Centered Around The Corporate Lifecycle Core * ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved

C3I::

18 C 3 I: Perspective ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved Protection Integration Alarms & Exception Reports

Slide 19:

19 RM PRICING . MARKETING, CRM & LOYALTY DISTRIBUTION Channel Manager Demand Mgt C 3 I Interface Distribution Channels Reservations Overview - Customer Centric Profit Optimization 19 Customer Lifecycle Core CCPO Inputs ** Copyright Pending & Portions ( * ) Patent Pending All Rights Reserved This is a rare win-win for the: Company Customers

Slide 20:

**Copyright Pending & Portions (*) are Patent Pending All Rights Reserved 20 Steven Pinchuk Profit Optimi z ation Strategies www.profitoptimi z ation.com steve@profitoptimi z ation.com 1 561 623 9677 Customer Centric Profit Optimization ** A Summary A more detailed narrated PowerPoint is available as well as numerous papers on this topic. Please look on www.authorstream.com and search for the “ channel ” called “customer centric”. There are discussions on LinkedIn within groups. Search for contributions made by “Pinchuk”

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