Pursuing Customer Inspired Growth is the third presentation in A.T. Kearney's 2017 IIA series on taking difficult steps towards growth. The presentation focuses on pursuing customer-inspired growth as an answer to companies' growth imperative. It discusses traditional growth approaches and their limitations, and proposes becoming truly customer-centric by focusing on "blockbuster" customer experiences that are critical, frequent, and high in emotional value. The presentation outlines A.T. Kearney's methodology for discovering blockbusters, designing customer propositions around them, delivering proofs-of-concept, and driving organization-wide adoption through change management best practices.
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Pursuing Customer Inspired Growth
1. An answer to the Growth Imperative
IDEAS INTO ACTION PRESENTATION – MAY 2017
Pursuing Customer
Inspired Growth
2. Taking Bolder Steps: The 2017 IIA series present forward-looking
conversations about taking difficult but essential steps
1. February: Digitising Supply Chains: The Fourth Industrial Revolution
2. April: Simplifying Service Operations: Unlocking the Triple Win
3. May: Pursuing Customer Inspired Growth: Our Answer to the Growth Imperative
June Special Event: Amazon is Coming: Are You Ready?
4. June: Making mergers work
5. August: Facing up to the future of Productivity: Productivity and the fully
automated work force
6. September: Resetting Cost: Leveraging Third Party Economics
3. 20% – 50%
THE SITUATION
Corporate share valuations imply an ambitious growth imperative
3
Percentage of Australian Big
4 Bank valuations attributable
to growth
“We are very good at inorganic
growth, but we don’t have the
DNA to enable us to grow
organically”
“There are hundreds of top-line
initiatives in our company but I am not
sure we are investing behind those
which will move the needle and I am
not seeing results”
“Western markets are stagnating
and emerging markets are now
growing at half the rate of a
few years ago.”
4. THE CHALLENGE
Traditional approaches trade-off time and magnitude of impact
Approaches to growth
4
?
M&A
New Product Development
Digital/Omni Channel
Transformation
Enhance Sales Force
Effectiveness
Marketing Campaigns
Impact
Timeframe
SlowFast
LowHigh
5. Rallying around Blockbusters enables the organisation to go big and go fast
THE SOLUTION
Becoming truly customer-centric requires choosing the right
place to start
Three pathways to achieve customer-centricity
5
Objective
Promise
Op model
Enablers
Drive rapid change in the customer
experience by defining the goal-post
then working through the operating
model to the enablers
Align organisation, capabilities and
performance standards first around a
single blockbuster customer proposition,
then expand across other Events
Change the mind-set, culture and
capabilities before then pursuing
alignment across the organisation’s
operating model and promises
Logically robust… Immediate customer impact… More fundamental change…
…but realistically difficult …but requires agility …but pace can be very slow
‘Vision-Led’
Objective
Promise
Op model
Enablers
‘Enabler-Driven’
Objective
Promise
Op model
Enablers
‘Blockbuster’
Order of implementation: First Last
Segments
6. DISCOVER
Blockbusters have three key features – criticality, frequency and value
– and can occur at multiple levels
Drives
Business Value
High Volume;
Frequent
High Emotional
Value to Customer
SME
Market
Leaving
home
Segment
Growing
Family
Event
6
Support work from home
Service disruption
Moving home
Moving abroad
Grow internationally
Child gets 1st phone
CriticalitytoCustomer
Moving business
Growing business
Lost phone
Immigrating
Set up my business
Frequency
Leaving home
Growing family
First professional job
B2C
B2B
Client ExampleBlockbuster Discovery
7. THE SOLUTION
Is being “highly satisfied” enough in today’s market?
7
+25-100%
(avg. 52%)
+13% avg
Fully emotionally
connected
Perceive brand
differentiation
Highly satisfied
Not emotionaly
connected
-18% avg
Relative customer value by level of connectedness
Organisations that optimise emotional
connections outperform competitors
26% higher gross
margins
85% higher sales
growth
8. PCE METHODOLOGY
PCE Labs’ end-to-end approach to customer innovation is rapid,
modular, scalable and in market in less than three to six months
8
DISCOVER
2-4 WEEKS
DESIGN
+4-6 WEEKS
DELIVER
+8-12 WEEKS
DRIVE
+3-12 MONTHS
Identify Blockbusters
and understand
root causes
Design elements of
proposition that
WOW and build the
business case
Bring the design to life
- develop, test,
and deploy a new
value proposition
Implement, scale and
roll-out the solution
across the organisation
Design + Consulting + Analytics + Agile = PCE Methodology
9. DISCOVER
ACTS, our proprietary tool measures full customer value, not
just advocacy or satisfaction
ACTS Captured Customer Value
9
ACTS, our proprietary customer value metric… …can be used in conjunction with NPS
× =% of value potential
captured
$ spent per year
$ sales potential in
near future
Conversion factor Potential value1 Captured value
×
ARE YOU
AWARE
OF THIS
BRAND?
HAVE YOU
CONSIDERED
BUYING THIS
BRAND?
HAVE YOU
TRIED
THIS
BRAND?
WHAT
SHARE
OF YOUR SPEND
DO YOU TRUST
THIS BRAND FOR?
% YES % YES × % YES × %
SPEND
A C T S Missed opportunity
Churn and burn
35
40
25
20
30
15
5
10
0
0,0 0,5 1,0 2,01,5
NPS score
ACTS Score
10. DISCOVER
The ACTS survey identifies areas to focus to turn revenue
potential into revenue growth
Client ACTS by segment (vs Challengers)
10
20%
17%
28%
36%
Competition
56%
23%20%
34%
49%
22%
47%47%
80%
31%
25%30%
49%
21%
26%
43%
n.a.0.3%
ACTS Score
1.8%
0.9%2.3%
1.1%
ACTS ScoreACTS Score
ACTS Score ACTS Score
Branch Retirees
A C T S
Loyalty Benefit Hunters
A C T S
Inertial Online
A C T S
Credit Shoppers
A C T S
Bargain Seekers
A C T S
11. DISCOVER
Blockbusters are critical to the customer and frequent in market
Discovering Blockbusters within a Segment
11
Observations
• The most frequent events for
Credit shoppers are buying or
upgrading a car and staring a
new job.
• The most painful events relative
to its frequency are losing job,
loan for school, and home
downsizing.
• Frequent events which cause
pain and can be potentially
addressed are dream
vacation/special purchase,
buying a first home, and starting
a new job.
Frequency
Purchase investment property
Bought or upgraded car
Bought a first home
Divorced
Moved to a new city
Lost wallet
Planned for retirement
Car accident
Started a new job
Dream vacation /
special purchase
Required loan for school
Lost my job
LevelofPain/Emotion
Recently Immigrated
Downsized home
Married
Had children
12. DESIGN
Having narrowed our focus on a Blockbuster, we think expansively
about designing the proposition and customer experience
Proposition and Customer Experience Design
12
Proposition Architecture
Your signature
domain
Set and forget
(grocery)
shopping
Penny wise,
pound wise
• Shared online
budgeting and
planning tool –
with parents and
flatmates
• New persona
based bundles
with discounts
and ‘Easter
eggs’
• App to see how
furniture will fit in
the room (AR)
and enable joint
purchases, lay-
buys, etc.
• Personalised
checklist
generator for all
grocery needs
(w/ suggestions
based on Q&A)
• Smart shopper
app – smart
shopping list,
reminders, aisle
finder and easy
check-out
• Automated stock
tracking and
home delivery
• Online account
and e-coaching
sessions on
every day
finances
• First job package
– goal saver and
goal deals
• Shared credit
card with parents
with budgeting
and tracking
Core product
/ service
elements and
Price
Value-added
adjacent products
and services
Information
Search
Experience
Purchase
Experience
Service/
Support
Experience
Product Use
Experience
13. PCE ‘DELIVER’
Ideas are tested live for viability, desirability and feasibility in the
LiveFlow lab
13
BOOTCAMP LEADERSHIP VISIT SOLUTION SESSIONTOOLS PRESENTATIONCOMMERCIAL VIDEO
A.T Kearney has used
LiveFlow implementation
methodology in both high
value and high volume
products across geographies
LiveFlow Overview
Representatives from all E2E BUs brought
together, one physical location, for ~8–12
weeks to experiment, diagnose issues,
and determine solutions and
improvements.
Principles
Customer Oriented
Focus on ideas to improve end-customer experience, customers actively
engaged as part of the process
1
CEO Visibility and Support
CEO Updates on Progress, CXO visits to LiveFlow
7
Focused on Doing
Subset of live orders identified and tracked to completion
3
Practical Solutions
Issues, ideas, changes identified that can be implemented next business day
4
Collaborative
E2E accountability within the LiveFlow team, champions identified to carry
changes back to BUs
5
Innovative
No sacred cows, no sensitive areas, everything is considered; if doesn’t work,
try something else
6
Forward Looking
Discuss and review changes impacting long term releases
2
14. WHAT ARE THE ADVANTAGES OF A LIVEFLOW
We use LiveFlow to quickly deliver tangible customer, frontline,
organisational and commercial benefits
Typical LiveFlow Outcomes
14
Transformed Customer
Experience
Lift in Sales Force
Productivity
• Build the case for change by
delivering tested and proven solutions
• Drive change through engaging
change agents at the grass-root level
within the business
• Achieve material changes delivered
through simplifying and improving
processes
• Deliver fast and accurate products,
service and billing, and reduce the
back-log of orders "stuck in the pipe"
Lasting Organisational
Change
Improved Efficiency
• Reduce end-to-end cycle times
(in some cases 50%-70% reduction)
• Minimise variation in cycle times to
provide consistency and reliability
• Simplify customer interaction
to minimise customer effort and
reduce rework
• Simplify the frontline role and
streamline interface to operations
• Make it easier for the frontline to
input good request
• Reduce the follow up loops and
inefficiency in dealing with irate
customers
IMMEDIATE
IMPACT &
GROWING
ADVANTAGE
15. Create ‘purpose in the
role’ to build the emotional
commitment at an individual
level that motivates for change
PCE ‘DRIVE’
As sprints progress we embed the A.T. Kearney change
methodology to scale up post proof of concept
The
Vanguard
Group
Sequential
De-Bottle-
necking
Front Line
Advisors
Purpose
in the
Role
Post-
Change
Plan
‘Thinking’
PMO
Define the Vanguard
Group of key influences
to drive viral change;
Requires an in-depth
analysis of the informal
network to identify the
‘right’ group of credible
influencers to shape
opinions and spread
change
Analyse how the
change should be
sequenced to drive major
performance improvement
by understanding cause –
effect mechanisms to define
the most efficient path to
change
Establish a ‘Thinking’ PMO that goes
beyond the check-the-box templates to maintain
the focus of the organisation on the
transformation over time
Establish Front-Line Advisors closest to
the change in a two-way dialogue to identify
roadblocks and understand how to implement
the change at a local level
Define a clear post-change
plan for how the underlying
capabilities will be embedded into the
organisation during and after the
change
1
2
3
4
5
6
15
16. WHERE CAN THIS BE USED?
The Blockbuster approach can be used to achieve multiple customer
objectives
16
Objectives Approach
Launch of Blockbuster
propositions enabled
by PCE methodology
Growth
Cultural
Transformation
InnovationDigital
Transformation
NPSGrowth
Cultural
Transformation
New Business
Build
17. Some questions to consider
• Do you know your Blockbuster Opportunity?
17
What would you lose if you tried?
• Can your organisation benefit from growth?
• Are your blockbusters expansive and emotional, yet
pragmatic and rapid?
• Do your Proof Of Concepts reach their full potential?
• Do you have a Live Lab that delivers significant releases each
Quarter?
GETTING STARTED
18. APPROACH PRINCIPLES
A.T. Kearney has created a dedicated global division, combining the
best of multiple disciplines to build compelling new value propositions
18
Unconstrained
Customer Focus
Commercial
Viability
Tangible
Outcome Staging
Design emotionally expansive
propositions and experiences
Focus on which needs matter
most for each individual customer
Strive to Influencing behaviors
that drive outcomes consumers
desire
Human centered design thinking
Leverage scalable /
automated solution designs
Build business case into
potential solutions
Consider link to existing
product portfolio
Drive investment in the
future
Employ an agile and lean
methodology, focused on
testing, learning, and refining
Engage customers in co-
creation
Help build internal
capabilities around value
proposition design
Our approach and capabilities allows us to rapidly design and deliver market-
beating propositions and experiences
Proposition and Customer Experience Labs
19. OUR TEAM
A.T. Kearney PCE Labs is a global team of designers, data scientists
and entrepreneurs focused on CX innovation
Tatiana Goncharova
REGIONAL LEAD, EMEA
Michael Dunstan
REGIONAL LEAD, APAC
More than 7 years consulting
and industry experience
focusing on digital marketing,
analytics, CX design and
product development.
10 years consulting and industry
experience, mainly across
telecommunications, utilities,
financial services.
Nigel Andrade
GLOBAL CO-LEAD PARTNER
Developed the PCE framework
and stepped out of traditional
consulting to build a new way of
supporting clients reinvent and
relaunch propositions across
industries and markets
Steve Mulligan
GLOBAL DESIGN LEAD
Jeroen Lubbers
GLOBAL PARTNERSHIPS LEAD
More than 12 years experience
in designing better ways for
organisations to serve their
customers, staff and key
business partners.
10 years of experience working
with partners and their products
to support clients in achieving
their business objectives.
Vladimir Lukin
GLOBAL DATA SCIENCE LEAD
More than 14 years of
experience in predictive
modelling, business forecasting
and statistical consulting
Diego Casanova
MANAGER, AMERICAS
Proven success record of global
consulting experience across
multinational companies in retail,
utilities and financial services
Ian St-Maurice
GLOBAL CO-LEAD, PRINCIPAL
Senior marketing consultant with
over 20 years experience
advising firms across industries
including high tech, telecom on
their toughest strategic
marketing issues
19
20. A.T. KEARNEY PCE LABS
ATK PCE Labs is a fully integrated part of A.T. Kearney – global
in reach with deep customer and innovation expertise
20
A.T. Kearney is a leading global management consulting firm with offices in
more than 40 countries. Since 1926, we have been trusted advisors to the
world's foremost organisations. A.T. Kearney is a partner-owned firm,
committed to helping clients achieve immediate impact and growing
advantage on their most mission-critical issues.
Editor's Notes
Nigel – Creativity and expansive thinking
Michael – Rapid and make a material difference
First direct was started by Midland Bank in 1989 as an online & telephone only bank. It is now part of HSBC. Their phone lines have been open since 1989, being the first UK bank to offer always-open service
By being built with the purpose of delivering on a customer-centric vision and promise, First Direct avoided the most common pitfall of the “vision first” approach: difficulty driving change
UK’s most recommended bank
1st/200 banks and building societies in the 2015 UK Customer Service Institute report
Share price >2x from 2011 to 2014
In 2011, under a new CEO, Telstra embarked on an ambitious transformation, redefining their purpose and committing to improving customer service as our number one strategic priority
Telstra brought together a cross-divisional group to help roll out a portfolio of customer-centric initiatives, concentrating on minimising customer ‘pain-points’
NPS score improved by 3 pts in 2014
Named most respected company by Australian Financial Review in 2014
CommBank undertook a far-reaching program of change, focusing on creating a culture of customer service, while establishing a decisive lead in banking technology that has helped to revolutionise the customer experience
In 2006, CommBank launched a corporate vision to be Australia’s finest FS organisation through excellent customer services, aiming to be #1 in customer satisfaction across all business areas
In 2013, reached #1 in CS across all business areas
2012, 2013, 2014 Money Magazine bank of the year
#pce #proposition #event
Let me share with you a real example
This is the ACTS output from Challenger financial services firm in the UK
Here you’ll see we’ve prepared the survey output across behavioural segments that we have created based on the customer data
You can see how you could tailor the survey output to identify where value is leaking across segments compared to the competition.
We were able to use this output to identify and prioritise a number of opportunity areas across the company’s most important customer segments
Now, we’ve mentioned before that a blockbuster should be something that is critical to the customer, frequent in market and valuable to the business… This kind of analysis can help identify which segments present the most value opportunity to the company
Having chosen the segment that is most valuable, with this client we then extended the analysis to understand customer events that were critical to the customer and that occur frequently.
We now have an event that is in a valuable segment for the company and is critical and frequent. We now move on to the design phase
As we think about proposition design, one of the frameworks we use is what we call the proposition architecture. We take the customer insights, and, together with the client, generate a long list of proposition element ideas that are then arranged around a set of core customer promises.
We also force ourselves to think in releases, where release 1 ideas are those that can be done without big investment. Release 2 ideas might be sub $100k with peripheral IT, such as apps or delivering through partners. And release 3 are the larger IT changes and bigger investments.
And our experience is that the lionshare of return can come from release 1 and release 2 ideas, where often the thinking is that you need release 3 or nothing at all.
Now, we challenge ourselves to think of 30-50 proposition element ideas arranged in this way, which becomes a powerful way to think both pragmatically and expansively, and then we move into the third phase which is what we call deliver
#pce #deliver #liveflow
What we find is normally 3 key benefits:
Some of the best proposition ideas come from the front-line staff, and
The experiment results become living proof of a transformed customer experience, improvement in sales, reduced costs,
This then creates a very strong business case to take to leadership… to take the case forward into the fourth module which we call Drive