Implementation of a Global
Customer Loyalty Process
Year 1: Successes and Lessons
Air Products & Chemicals
Air Products and Chemicals
 $5.5B Sales, 17,000 employees worldwide
 Complex, highly matrixed organization
– 2 Business Groups and 4 regions worldwide
• 6 Divisions with sales to >50 countries
– 16 business units with multiple product lines
– Varying size, complexity and autonomy
 Serve multiple markets with a variety of
different business models
–
–
–
–
–
2
Industrial chemicals & gases
Electronics (semiconductor industry)
Petrochemical & energy
Home Healthcare
Performance Materials
Air Products And Chemicals
Customer Loyalty Process
The Challenge (Spring 2001)…
 CEO:
– Develop a single, global approach to
measure how effectively we are satisfying
customers
 Business Units:
– We don’t need a one size fits all corporate
solution but…
– We need actionable information to
support our strategy and the tools to
identify opportunities & take action
3
“Customer Loyalty Process”
Key Elements

Ongoing process to capture and utilize the Voice of the
Customer
1.
2.
3.
4.

Using a company-wide model for “Customer Loyalty”
–

Measures the strength of the customer relationship
Delivers credible, actionable information and is linked
to other key business processes
–
–
–
4
Listen to key customers
Understand the messages
Focus on opportunities
Take Action
Strategy development/validation
Customer segmentation (needs based)
Continuous Improvement
Customer Loyalty Process
Continuous Improvement by using the Voice of the Customer
Listen to
LISTEN
Customers
Understand &
UNDERSTAND
Communicate
External Input
Understand:
•Loyalty Survey
•Strengths & areas of
weakness
•Call Reports
•Complaints
•Customer
Scorecards
•Internal Data
•Accts Receivable
•Retention Rates
Identify Key Drivers
Communications
-Internal/External
Input to:
•Segmentation
•Sales Process &
Business Strategy
•Other Customer
facing processes
5
Focus on
FOCUS
Opportunities
Take Action &
Sustain
ACT
Improvement
Continuous
Improvement (CI)
Key Elements
•Integrate Voice of
the Customer with
an Improvement
Process
•Resources
•Prioritize Customer
requirements with
business objectives
•Identify and foster
organizational buyin
on Critical Customer
Requirements
•Leadership Support
•Meaningful goals &
measures
•Action Teams
Deployed
•Communications
•Accountability
•Apply Learnings
•Sustain Gains
Global Customer Loyalty Survey
Objective: Credible, actionable information
 “Meaningful” sample of existing customers
– Key customers as defined by the business units
– 20 minutes long in “major” local languages
 Rotated through Air Products on a quarterly
basis (12…24 month cycle)
 Survey Components
– “Core” elements utilized globally
• Loyalty, Brand, problem resolution & verbatim
– Business specific performance attributes
• Importance, performance & competition
• Basis for “actionable” information
• As developed by the business units
6
Key Survey Deliverables
 A “relationship metric” (Loyalty) that
distinguishes between business models
 Analysis of performance attributes
 Competitive Comparisons
 Effectiveness at “Problem Resolution”
 Access to verbatim improvement
suggestions
 Account specific issues (“Red Alerts”)
7
Customer Loyalty Model
SECURE CUSTOMERS
Satisfaction
FAVORABLE CUSTOMERS
VULNERABLE
CUSTOMERS
Rebuy
INDIFFERENT
CUSTOMERS
Recommend
AT RISK
CUSTOMERS
8
Customer Loyalty Responses
Metric distinguishes between business models
100%
13%
80%
20%
22%
21% Secure is “geographic” B2B Median
39%
45%
Secure
60%
45%
Favorable
57%
Indifferent
40%
50%
38%
20%
22%
5%
1%
0%
Division A
High switching
costs
9
Division B
30%
3%
Division C
10%
1%
Division D
Low switching
costs
At Risk
Loyalty Driver Analysis
Business Specific Performance Attributes
The correlation
between an attribute
and Loyalty
High
Relative
Strength
Critical
Issues
Attribute Impact
Most Important
to Customers
Maintenance
Items
Secondary
Issues
Low
Low
Performance Gap
The Customers’ perception of our performance relative to their need
10
High
Loyalty Driver Analysis
Business Division H
High
Relative
Strength

25
44

Critical
Issues
43
11
Attribute Impact
45
3
34
38
32
7

15

 36
17

4

 33
42

 39
30
1
2
10
13

 12

8
22

16
Low
11
37
Secondary
Issues

Maintenance
Items
Performance Gap
High
1 Communicate regarding new products
2 Sales reps visit frequently
3 Sales reps have tech knowledge
4 Sales reps take ownership for problems
7 Sales reps effectively coordinate resources
8 Sales reps take time to understand
10 Easily reach a knowledgeable CS rep
11 CS reps resolve problems quickly
12 Provide delivery confirmation
13 Provide complete/accurate invoices
15 Consolidated invoices minimize burden
16 Provide error-free delivery
17 Provide consistent/reliable product
22 Help you operate your site safely
25 Respond to supply problems
30 Easy to reach a knowledgeable TS rep
32 Product increases productivity/efficiency
33 Provide innovative products/services
34 Provide safety experts
36 Ability to place orders online easily
37 Provide needed information online
38 Understand your e-business needs
39 Easy to do business with
42 Help you lower cost of business
43 Products & services are a good value
44 Manage activities in an integrated manner
45 Understand your business needs
Sales Support
Customer Service
Product Supply
Technical Support
E-Business Capabilities
Overall Supplier Relationship
Communicating the Results
via Online Access
 Provided open access* for all results to all
employees (17,000) on line
 Up front filtering tools to focus on “User
Relevant” information
 Advantages:
– Cost effective
– Flexible
– Easily updateable
 Challenges:
– Training & Understanding
12
* Note: We maintain absolute confidentiality of anonymous respondents
Results made available to the
entire enterprise online
13
Turning Data into Action
“Where the rubber meets the road”
 Integrating the Voice of the Customer into our
Continuous Improvement Process
 Critical Success Factors
–
–
–
–
–
Business Leadership support
Accepted improvement process tied to the
annual business operating cycle
Credible customer input
Meaningful tools to focus on opportunities
Measurement & Accountability
•
•
14
Annual individual performance metrics
Scorecards, etc
Customer Loyalty is a Key Input for our
Continuous Improvement Process
Cycle tied to annual operating plan
What
Prepare
Focus &
Prioritize
How
Plan
Do It
Implement
Learn
Start of fiscal year
Customer Loyalty
Voice of the
Customer
•Develop understanding of key
drivers and gaps from the Customers’
perspective
•Align with business strategy and
objectives (financial & non-financial)
•Establish high level plan & identify
resources
15
A Tool to Focus on Opportunities
Quality Function Deployment
Customer Input on their needs &
our performance
Critical
Customer
Requirements
Business Input on goals and the
impact of improvement
QFD that is completed with a cross functional team
And facilitated by an “expert”
Results in a remarkable buy-in for the results
16
QFD/House of Quality
 Used for “turning” customer input into product,
process and organizational direction setting
 Not “new”; around since the 1970’s
Reference: “Quality Function
Deployment, Linking a Company with
its Customers” by Ronald G.Day
Customer
Attributes
Planning Matrix Inputs
•Customer Need
•Our Performance
•Competitive performance
•Business Goals
•Business/sales impact
Contribution
17
Critical Customer Requirement
Organizational
Capabilities
Examples of Customer
Improvement Opportunities
 Division A
– Responsiveness
– Problem Resolution
 Division B
– Lowering Cost of business
– Problem Resolution
 Division C
– Invoicing & ease of order placement
– Problem resolution
 Division D
– Lowering Cost of business
– Flawless execution/Problem Resolution
18
Celebrate the Successes
 Initiated a global, one company Customer
Loyalty Process (Voice of the Customer)
 ~2500 key customers worldwide responded
– Key messages are evident
 Established a leverage point to drive action
– Customer Loyalty & Continuous Improvement
 Demonstrated value to many “in the middle”
“I wish I knew at the start what I know now”
19
The Future direction…
 Evolving the survey content based on
feedback from internal & external customers
 Provide added value by enabling analysis for
customer segments within a business unit
 Examine linkages between :
– Customer Loyalty & Financial Performance
– Employee Engagement & Customer Loyalty
 Improve our ability to collect sufficient, valid
customer contact data (especially in B2B)
 Integrate complaint feedback with survey
 “Remind” the organization that Customer
Loyalty does not equal a survey !
20
TABLE 1.1
Problem Solving Research
Segmentation Research
-
determine basis of segmentation
establish market potential and
responsiveness for various segments
select target markets and create lifestyle
profiles demography, media, and product
image characteristics
Product Research
-
21
test concept
determine optimal product design
package tests
product modification
brand positioning and repositioning
test marketing
control store tests
TABLE 1.1 (Cont.)
Problem Solving Research
Pricing Research
-
importance of price in brand selection
pricing policies
product line pricing
price elasticity of demand
initiating and responding to price changes
Promotional Research
-
-
22
optimal promotional budget
sales promotion relationship
optimal promotional mix
copy decisions
media decisions
creative advertising testing
claim substantiation
evaluation of advertising effectiveness
TABLE 1.1 (Cont.)
Problem Solving Research
Distribution Research
-
-
23
determine type of distribution
attitudes of channel members
intensity of wholesale and retail coverage
channel margins
location of retail and wholesale outlets
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Customer Loyalty Process Overall Status