RELATIONHIP VALUE MANAGEMENT IN THE SERVICES INDUSTRY
Company: Fujitsu Australia Limited
Type of Business: IT Managed Services.
Timeframe: 2001 to present
Issue: “One on one” management and improvement of the perceived relationship value by “Blue Chip” customers.
Although retention of key customers was good in year 2000 and 2001 Fujitsu wanted to ensure it stayed that way. There was a risk that a significant proportion of customers may go to tender at the conclusion of the contract term therefore raising costs, putting pressure on margins and increasing risk of loss of accounts. In addition a key Fujitsu objective was to grow revenue from the existing customer base.
Customer Satisfaction Surveys were not the answer. Over recent years Fujitsu had conducted customer surveys with key accounts at the executive and operative management levels. These were designed at the enterprise level and had created good value for product development, services management, and marketing. However the results were limited for the “One on One” account relationship. They did not assist the account manager (or the customer) to consistently monitor and improve the relationship.
Balanced Scorecard. In addition the company had decided to implement a Balanced Scorecard methodology and needed more meaningful customer perception measures for select “Blue Chip” customers to complete the “dashboard”.
Analysis: In early 2001 the previous conducted customer surveys were reviewed to determine why they had been less effective than desired. The following key issues were identified:
- The executive surveys were done exclusively by external parties which, aside from being expensive, they insulated the account teams from the full extent of the customer response including emotion and body language.
- The survey methodology was too large and cumbersome and not specific to each customer relationship resulting in lack of buy in from both clients and account management.
- Being annual surveys they were not conducted regularly enough resulting in key issues and trends being identified too late to be addressed in a timely manner.
- There were varying measurement methodologies and questionnaires. This meant it was difficult to benchmark and measure progress one on one with a single customer relationship.
- There were no customer satisfaction KPI’s set for the account and delivery teams therefore it was difficult to hold people accountable for customer satisfaction in an objective manner.
- It was difficult to capture and prioritise customer specific recommendations to improve the relationship.
- The follow through was sometimes lacking therefore the customer often felt they were not being listened too.
Solution: A Customer Scorecard program comprising new process and methodology was implemented to address these issues. It comprised the following items:
- A small value based benchmarking scorecard comprising 15 measures across three categories ensuring that top of mind customer recommendations for improving the score were captured.
- A value scoring methodology that is simple and easily understood ensuring consistency over time for benchmarking purposes.
- All benchmarking scorecards were to be conducted face to face and with the relationship manager (or delivery manager) in attendance as an observer. This proved effective in gaining strong support from the customer and was illuminating for the relationship manager.
- A simple system that captured the scorecard data and provided vivid reports that highlighted exceptions and trends.
- An action planning workshop guide that assisted the account team to develop action plans in response to the customer recommendations.
- A customer communications plan that demonstrated that the company was listening to customers with action (without creating unnecessary work for the account team).
- A six monthly scorecard cycle. This was a short enough period to ensure any negative change in the perceived value of the relationship was captured from individual customers in time to take corrective action. At the same time scorecards were conducted long enough apart to ensure it was not too onerous on the customer or the account teams.
- Incremental revenue from existing key customers lifted by more than 15% each of 2 years
- All participating customers were retained and indicators for customer retention were improved.
- Over four scorecard cycles had been completed at the date of writing and there had been a steady improvement in customer satisfaction scores.
- Two significant enterprise wide issues were identified and addressed resulting in a positive response by customers.
- Customer feedback indicated that they are delighted with the program and see it as a significant one to one channel of communications with their provider and a means to improving the value they get from them.
- Support from account teams moved from skeptical to supportive. The have accepted responsibility and accountability for customer satisfaction and loyalty.
“The Customer Scorecard model we implemented in 2002 has provided Fujitsu Services with a simple but effective tool to continuously measure and improve customer perceptions. At first I was a little sceptical that a short 15 category benchmark would capture all recommendations necessary to address satisfaction however this was quickly dissipated. A good test came when we conducted a Scorecard in parallel with a traditional 150 question survey. The messages from each were almost identical. The scorecard model continues to be a winner for us”
Peter McFarlane, Executive General Manager, Services, Fujitsu Australia.
Custell develop and implement customer intimacy programs for business to business service providers. (Refer www.custell.com ). Contact custell.