Capturing customer value
Value gap: case studies
Focusing on valuable customers
A US automotive industry components supplier
Undertaking a business and market strategy review
PA's business and market strategy review for this client found that efforts to enter the European market were destroying significant value, and diluting the efforts of the small management team in developing the profitable aftermarket sector. The modified market strategy is expected to double profits over the next two years.
A major global container shipping line
Analysing customer segments for short-term profitability
PA analysed customer segments for both short-term profitability and strategic importance. As a result, the organisation developed a new perspective on the use of channels for both high-value and low-value customers. This was targeted at dealing with twice the current volume of business with only limited increases in sales and service channel costs.
A life assurance and pensions firm
Developing a new customer strategy
PA developed a new customer strategy for this client, aimed at up- and cross-selling to its existing customer base. In this project, we identified the potential for increasing product cross-holdings by up to 25%, developed the business case, agreed by the executive board, and set out the business processes that will be needed to deliver the strategy.
Major European oil and gas producer
Providing a strategy for growth
This organisation established an electricity retail operation in 1997 with the objective of acquiring 1 million customers in Northern Europe by 2005. By the end of 2000 it had acquired only 100,000 customers in Norway and Sweden. PA was assigned to look at the challenges of growth, profitability, future options in the electricity retail business and develop strategic plan. As a result of our work, the management of the firm had a clear understanding of their strategic options and was able to develop a more detailed plan for implementation.
A meat processing company in Sweden
Positioning a company for future competitiveness
PA developed a group business strategy based on extensive market research. This strategy revealed a gap between both current and future market needs and the company’s present offerings and capabilities. In the light of this 22 improvement projects were identified and subjected to a cost benefit analysis, in addition to an organisational restructure. PA carried out benchmarking study of the Swedish meat industry against best European practice, internal benchmarks, analysis of trends and developments in European retailing and of technology trends in the industry. As a result, the client benefited from: improved yields; more structured project management; a better understanding of industry best practice; a leaner and more profitable product programme; and a much more efficient production planning process.
Danish emergency services provider
Using Managing for Shareholder Value to create value
This Danish company, specialising in the provision of emergency services, had started to explore the concept of Managing for Shareholder Value, aiming to use this as a way to further refine and sharpen its overall strategic focus. PA was asked to assist in this process. By using PA's Value Drivers approach, the client’s managers identified opportunities to create value in the order of 100% of the current market value of the business. Every major business unit now uses the models PA introduced and shareholder value is the clear focus of management.
An Australian network and Internet service provider
Developing a market-related remuneration package
This network and Internet service provider offered a broad range of products and on-line services. The client believed its existing sales force remuneration structure was not appropriate to meet the changing conditions business environment and invited PA to develop a more suitable incentive scheme in a shareholder value framework. Through a series of workshops and interviews with key stakeholders, PA worked with the client to review the effectiveness of the existing incentive and bonus scheme and build an understanding of the high-level shareholder value drivers. PA also developed an understanding of the business and working environment to identify the key requirements for the new incentive scheme.
For a major European mobile telephony operator
Transforming into a customer-centric organisation
PA was asked to help this leading operator identify short- and long-term churn management initiatives. PA identified around HK$200 million per annum bottom-line benefits through full implementation of a number of suggested initiatives. PA’s approach to achieve the necessary objectives was to understand which customers were priorities for churn reduction and build non-price switching barriers for these customer groups. PA helped to implement profitability measures in the customer database as a tool to identify target customer groups for churn reduction initiatives based on customer lifetime value. Further PA developed tools and processes for optimising the portfolio of churn management initiatives and used them to identify quick wins, which were implemented as task forces with the client staff. We also reviewed existing churn related retention initiative processes and performance measurements and suggested immediate and medium term areas for improvement.
A major European mobile telephony operator
Transforming into a customer-centric organisation
With around 10 million customers in the UK, the telephony operator was looking to become a more customer centric organisation. Its plan was to maximise the value added to their customers through the provision of 'life services' using mobile phones as one of many access channels. PA was asked to write a Board paper recommending the way forward. PA identified the way in which customer knowledge was currently generated and used in the organisation, assessed the likely impact of ongoing projects on this and helped the client to articulate their requirements. These were then compared against best practice and distilled into a set of recommendations. These included the use of a chief knowledge officer to lead the overall knowledge management strategy and better co-ordination of projects.
An on-line radio business
Building a business in the e-world
For an on-line radio business, PA developed a plan that captures in a descriptive way the mechanism of accelerating and decelerating forces necessary to build a business in the e-world. The project combined many elements of developing an e-business including brand creation and proposition development, strategic partnership plan development and the external assessment of the drivers of shareholder value in the e-world. The work also had the added excitement of working alongside an extremely innovative client operating with a 'start-up' mentality.
A major US electricity utility company
Conducting a needs-based segmentation analysis
PA market research staff worked with a major US electric utility to evaluate the market potential of several new energy management products and services that had been designed for the client's residential customer market. PA designed and implemented a survey of a random sample of 1000 residential customers. The survey was designed to evaluate interest and likely purchase or adoption of the new energy management products and services. Based on the survey data, PA conducted a needs-based segmentation analysis to identify different market segments that were interested and likely to purchase one or more of the products and services for different reasons. This enabled the client to develop a business case with sales and revenue forecasts for presentation to the utility management. In addition, the segmentation analysis indicated that the two key market segments had different perceptions of the primary value of the products and services: different product positioning and product descriptions were required to attract customers from each segment.
A global financial information company
Understanding the behaviour of key users of market data
This global financial information company faced a dynamic situation where market data volumes were increasing rapidly, and the US markets were about to convert to decimal trading. All its competitors and clients were reconsidering ways to ensure efficient and effective delivery of market data services to customers. To achieve this goal, the client commissioned PA to develop a rich and detailed view of their customers - effectively a segmentation exercise - to help build a deeper understanding of what drives the behaviour of key users of market data. PA managed a rapid research project and developed a robust end-user segmentation, which fed into the client’s key business decision-making framework. The segmentation allowed the client to characterise their end-users and develop service offerings that could be tailored to customer needs and wants.
An on-line cross border joint venture company
Developing, analysing and refining a CRM roadmap
PA worked with this client, specialising in financial products for the consumer market, to analyse, develop and refine a CRM roadmap that would form a framework for future decision-making. PA managed a number of workstreams: developing a customer segmentation model; reviewing client’s market and customer value propositions; formulating a customer experience for each segment, including identification of overlaps between the segments and recommendations for improvements at each stage of the experience; and analysing the IT systems that support customer data management, including the client’s IT environment and third-party data feeds.
PA rapidly helped the client to evaluate and refine its customer strategy, technology and organisation to unite its business around a single view of the customer.
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