Customer Loyalty Programs

1
Customer Loyalty Programs Increasing Customer
Loyalty throughout the customer base!

• Suhail Khan Director of WW Customer Loyalty
  Program FileNet Corporation
• February 2005

2
Why Customer Loyalty?

• Why should we care?
• Whats at stake?
• Customer Loyalty Vs. Customer Satisfaction
• Promoters and Detractors

3
The Big Picture

• Companies With Satisfied, Loyal Customers Enjoy
  Higher Margins, Greater Profits And
  Consequently, Higher Stock Price-earnings
  Multiples.

4
Customer Loyalty Return to Investors
Average P/E Ratio
40
35
35.40
30
25
23.42
23.62
20
19.52
15
10
5
0
6.12
7.14
7.65
8.01
9.03
Customer Loyalty CLI Score
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Current Market Trends

• What Customers are doing differently
• Experience matters
• Positive experience means repeat action
• Vendor selection criteria
• Commitment, not loyalty?
• The Trust Factor
• A 5 increase in customer retention yields a 75
  increase in customer net present value.
• -Fred Reichheld
• Incentive driven model
• Loyalty rewards

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Main Customer Loyalty Business Objectives

• Measure, monitor and improve overall customer
  satisfaction within major product, service, and
  geographical areas
• Increase software revenue through retention and
  growth of profitable customers
• Measure against the Customer Loyalty Index (CLI)
• Use key drivers of customer loyalty to develop
  company-wide cross-functional prioritized action
  plans

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Customer Loyalty Focus

• Working with and complementing the efforts and
  initiatives of each organization at FileNet
• Teaming internally to enable us to partner
  externally with our customers
• Re-focusing on the requirements of our customers
• Managing our customers' expectations
• Building relationships and communicating with our
  customers at various levels
• Placing highest emphasis on our performance - at
  all levels
• Creating cross-organizational partnerships

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Keys to successful Customer Loyalty Program

• Create Customer Loyalty Program goals
• Contract third party organization to conduct
  Customer Relationship surveys
• Agree upon measurement model (CLI)
• Create Tactical and Strategic plans to address
  immediate and future goals
• Tie compensation of all employees to Customer
  Loyalty improvement

9
Company Culture and Focus

• Drive to total satisfaction to build Loyalty
• Customer Loyalty must be a core value
• Gain Top Executive sponsorship
• CEO includes program as top initiative
• Weave through the corporate/management fabric
• Tie compensation to Loyalty goals

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Measuring Customer Loyalty

• What is the Customer Loyalty Index?
• Measurements?
• Why its important?
• Components of the Customer Loyalty Index?
• Overall Satisfaction
• Continue to Buy
• Recommend
• Choose Again

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Customer Loyalty Program

• Strategic
• Form Executive Customer Loyalty Council -
  Stakeholders
• Senior representation from all organizations to
  collaborate and breakdown internal and external
  barriers preventing our company from achieving
  total customer satisfaction
• Tactical
• Form a cross-functional team to resolve major
  tactical issues identified from surveys
• Address Trigger Issues identified through
  surveys

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Key Customer Loyalty Program Activities

• Quarterly Customer Relationship Surveys
• Survey Data connected to CRM Application
• Allow Sales and Field personnel to have access to
  Customer Survey data for their particular
  accounts
• Global Partner Relationship Survey
• North America, EMEA and Asia Pacific

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Sample Customer / Partner Loyalty Plan
Customer/Partner Loyalty Plan
Define Roles for Members Charter for
Council Company wide Engagement Strategy
Performance Metrics for CL related
projects Unique/connected CLOs across company
CL Road show Visits to US District and
International offices Customer Visits CL
Collateral Generation CL Quarterly Workshops for
Management CL information on FileNet.com
Monthly Company wide CL communiqué Monthly CL
Employee Roundtables
Quarterly surveys Contacts pre-defined Reporting
methodology pre-defined
Knowledgebase Project Reference Project
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Key Customer Loyalty Drivers

• Understand Key drivers
• Overall Business Value
• Product Overall
• Sales Relationship
• Responsiveness
• Follow-through
• Calculate Gap scores
• (Stated importance) - (satisfaction) gap score

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Common Key Customer Loyalty Drivers

• Relationship
• Product Knowledge
• Expectation Management
• Understanding Needs

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Change In Satisfaction

• How has our customers satisfaction level
  changed?
• Good gauge to monitor performance of changes you
  implemented

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Loyalty Scoreboard

• What is the Loyalty Scoreboard?
• Significance of the Loyalty Scoreboard?

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Incentives/Rewards

• Why should our customers participate?
• Incentive programs
• What Works
• Do Incentive models have to be financially driven?

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Keeping the Customer Interested

• Measure Response Rates
• Offer Incentives to survey respondents
• Special seminars
• Thought leader forums
• Executive involvement
• SLA discounts
• Points

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Other Focus Areas

• Creating a reference program
• Leveraging customer feedback
• Turning satisfied customers into references
• Creating a knowledgebase
• Best practices
• Case studies

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Thank You