贝恩-战略分析方法-市场营销-customerloyalty019.ppt

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1、Author:Jennifer McEnroe Tarr,bc,Customer Loyalty,Contributors:Kara Gruver,Ruma Sanyal,March 1998,Copyright 1998 Bain&Company,Inc.,Reviewer:Rob Markey,2,Loyalty,Customer Loyalty,Agenda,What is Loyalty?Evolution of the Loyalty PracticeLoyalty EconomicsHow Bain Helps Clients Maximize the Value of their

2、 Customer BaseExampleLoyalty Tools,3,Loyalty,What is Loyalty?,Loyalty is a perspective on business strategy which emphasizes the delivery of superior value to the best customers and employees.Since their loyalty is key to profit and growth,their acquisition,defection,share of relevant wallet provide

3、 focal points for measurement,learning and improvement.,Customer Loyalty,4,Loyalty,Customer Loyalty,Bain&Company.is responsible for virtually all the economic research,financial analysis and consulting in the field of customer retention and recoveryCouncil on Financial Competition,Loyalty is a Bain&

4、Company Innovation,5,Loyalty,Customer Loyalty,Agenda,What is Loyalty?Evolution of the Loyalty PracticeLoyalty EconomicsHow Bain Helps Clients Maximize the Value of their Customer BaseExampleLoyalty Tools,6,Loyalty,Evolution of the Loyalty Practice,Customer Retention,Customer Loyalty,Keeping customer

5、s:GoodLosing customers:Bad,Customers who buy more:GoodSome customers will never buy more,ROS/RMS doesnt work in servicesQuantification of retention economics,Credit/casualty lossesLow spenders or non-borrowersShare of wallet economics,Maryland NationalMBNACommercialBaxter IVD&IV systems,American Exp

6、ressState FarmBankInterFirst Commerce,Fundamental insights:,What led to the insights:,Some examples:,Over the years,the training on loyalty has evolved from“dont lose any customers”to“how do I maximize the value of my customer base”.,Early in Evolution:,Current View:,Customer Loyalty,7,Loyalty,Custo

7、mer Loyalty,Retention vs.Loyalty,What is the difference between retention and loyalty?,Loyalty is an approach to business strategy that emphasizes the retaining and growing of profitable customer segments.It is particularly powerful in clients who are in low fixed asset businesses(i.e.,service busin

8、esses),Retention is a tool we use in diagnosing and measuring a clients success in maximizing the value of their customer bases.Other tools include share of wallet and customer segmentation.,Retention is often confused with loyalty because the early insights of the loyalty practice were around the r

9、etention of customers.However,using retention rate alone to assess loyalty may mislead clients and not maximize value.Remember,not all customers create value.We want to help clients retain valuable customers.,8,Loyalty,Profitability Drivers-ROS/RMS(Profit vs.Share),Beer Industry,Soft Drinks Industry

10、,Anheuser-,Miller,Schlitz,Pabst,Olympia,Operating Income,10%,9,8,7,6,5,4,3,2,1,0,(Percent of Sales),Relative Market Share,3.0 x,2.0,1.0,0.7,0.4,0.3,0.2,0.1,0.05,0.5,Busch,Cott,Dr.Pepper,R.C.,7-Up,Pepsi,Coke,Relative Market Share,3x,2,1,0.7,0.5,0.4,0.3,0.2,0.1,.05,0,Operating Profit,22%,20,18,16,14,1

11、2,10,8,6,4,2,(Percent of Sales),We start with the empirically based belief that in many industries,market share is the key driver of profitability.,Customer Loyalty,9,Loyalty,Profitability Drivers-ROS/RMS(Profitability vs.Portfolio Size),*Claims and expenses as a percent of premium incomeSource:Best

12、s,Property&Casualty Premium Rankings,Insurance Industry Example,Customer Loyalty,However,many service industries(or other low fixed cost businesses)show no relationship between RMS and profitability.,10,Loyalty,Profitability Drivers(Profitability vs.Retention),For these industries,retention is a bet

13、ter driver of profitability.Companies with higher retention utilize their customer assets more effectively.,*Claims and expenses as a percent of premium incomeSource:Bests,Estimated Retention Rates,Insurance Industry,Customer Loyalty,11,Loyalty,Profitability Drivers(Profitability vs.Retention),Midwe

14、st,Gotham,Chesapeake,Liberty,Great Lakes,0%,1%,2%,3%,4%,70%,80%,90%,100%,Profitability(Pre-Tax ROA,5 Year Average),Retention Rate,Omnicom,WPP*,FC&B,Grey,Interpublic,Leo Burnett,0%,2%,4%,6%,8%,10%,12%,14%,16%,18%,Profitability,90%,92%,94%,96%,98%,100%,Retention Rate,Credit Card Industry(Disguised),Ad

15、vertising Industry,Customer Loyalty,12,Loyalty,Source:Bain Survey,Bain&Company,Customer satisfaction was the traditional measure of quality in service businesses.But there is little correlation between customer satisfaction indices and financial measures.,0,1,2,3,4,5,0,20,40,60,80,Customer Satisfact

16、ion Indices,Revenue,100,Revenue,(40),(30),(20),(10),0,0,20,40,60,80,100,10,20,30,40,50,Revenue Change(%),Customer Satisfaction Indicies,Revenue Growth,0,40,80,120,160,200,0,20,40,60,80,100,Customer Satisfaction Indices,Profit,240,Profit,Customer Satisfaction Profitability,Customer Loyalty,13,Loyalty

17、,Customer Loyalty,Agenda,What is Loyalty?Evolution of the Loyalty PracticeLoyalty EconomicsHow Bain Helps Clients Maximize the Value of their Customer BaseExampleLoyalty Tools,14,Loyalty,Customer Value,The first step in viewing customers as long term assets is calculating lifetime customer value.,$1

18、5,000,$15,Single purchase,Retained for 10 Years,No matter how valuable I was telling them a customer was,our people needed to have that magnitude in their mental balance sheet.Phil Bressler,Dominos Pizza,Customer Loyalty,15,Loyalty,Customer Profit Pattern,Customers are costly to acquire.The longer a

19、 customer stays with a company,the more they recover the original acquisition cost and earn additional profit streams.,Typical evolution of profit by customer,Acquisition,Volume,Cost Improvement,Referrals,Price Premium,Acquisition Costs,Customer Loyalty,Methodology,16,Loyalty,Customer Profit Pattern

20、(Credit Card Example),50%,67%,75%,80%,88%,90%,Retention Rate:,Companies with high customer turnover will continually be replacing profitable,mature customer relationships with unprofitable new ones.,Customer Loyalty,17,Loyalty,Source:The Loyalty Effect,Bain&Company,Inc.,Impact of 5%Retention Rate In

21、crease on Customer NPV,Depending on the industry,a 5%increase in customer loyalty can increase profitability by 40-95%.,Customer Loyalty,18,Loyalty,Loyalty as a Growth Driver,0,1,2,3,4,5,6,7,8,9,10,$0MM,$20MM,$40MM,$60MM,$80MM,$100MM,$120MM,$140MM,$160MM,Year,Pretax Net Income(Millions of Dollars),9

22、0%retention rate,95%retention rate,Improved customer retention greatly accelerates growth.,Customer Loyalty,19,Loyalty,Source:Bain Loyalty Practice,Loyalty Leaders Growth vs.Industry,Loyalty Leader,Industry,Company,Industry,Relative Rate,Deere&Co.,Lawn Equipment,5%,1%,5x,A.G.Edwards,Stock Brokerage,

23、26%,7%,4x,Intuit,Financial Software,60%,36%,2x,Lexus,Luxury Autos,67%,4%,17x,MBNA,Bank Card,27%,9%,3x,State Farm,Insurance,8%,3%,3x,USAA,Financial Services,8%,3%,3x,Revenue Growth(1989-94),Companies with the highest customer loyalty rates have typical growth rates 2x to 5x the industry average.,Cust

24、omer Loyalty,20,Loyalty,Customer Loyalty,Agenda,What is Loyalty?Evolution of the Loyalty PracticeLoyalty EconomicsHow Bain Helps Clients Maximize the Value of their Customer BaseExampleLoyalty Tools,21,Loyalty,Strategic Approach to Loyalty,Lifetime Customer Value,Segmentation,Lifecycle Needs,Retenti

25、on Impact,Full Potential,Not all customers are equalSegments differ in value based onneedspreferencesbehavior,Capturing 100%share of relevant wallet requiresdynamic vs.static view of purchasestracking and projecting how needs evolve with lifestage,Attrition rate must be used to discount expected cas

26、h flowsAttrition differs by segment and lifestage,Retention Impact,Customer behaviors are changeableValue of customers can be increased through targeted value sharing incentives,Properly capturing customer lifetime value has four requirements.,Customer Loyalty,22,Loyalty,Customer Value Segments,Diff

27、erent customer segments create different levels of value for a company.,Best Customers,Other Customers,Households,Annual Variable Contribution,Fully-Costed Contribution,(50%),0%,50%,100%,150%,Customer Loyalty,23,Loyalty,Customer Value Segments,Best Customer,Other Customer,These best customers tend t

28、o look quite different from the others.,Customer Loyalty,24,Loyalty,Strategic Approach to Loyalty,Lifetime Customer Value,Segmentation,Lifecycle Needs,Retention Impact,Full Potential,Not all customers are equalSegments differ in value based onneedspreferencesbehavior,Capturing 100%share of relevant

29、wallet requiresdynamic vs.static view of purchasestracking and projecting how needs evolve with lifestage,Attrition rate must be used to discount expected cash flowsAttrition differs by segment and lifestage,Retention Impact,Customer behaviors are changeableValue of customers can be increased throug

30、h targeted value sharing incentives,Properly capturing customer lifetime value has four requirements.,Customer Loyalty,25,Loyalty,Customer Corridor(Automobile Example),Customer Entry,Shopping,Purchase,Delivery,Service,Trade-In,Repurchase,Service Retention,Trade-In,Points Where Value is Captured,A lo

31、yalty leaders view of their customer goes beyond the initial product or service purchased to capture the total share of wallet.,Points of Customer Interaction,Customer Loyalty,26,Loyalty,Creating a Loyalty-Based Business System(Lexus Example),Customer Targeting,Customer Experience,Advertising,Dealer

32、 Network,Dealer Training,Measures,Cadillac/Mercedes,Remove the flaws,Loyalty theme,Partner with select few,Loyalty drivers,Percent repurchase and service,Lexus developed a business system that emphasized the customer and removed the flaws customers experienced with competitive products.,Customer Loy

33、alty,27,Loyalty,Automobile Repurchase Rates,45%,61%,78%,0%,10%,20%,30%,40%,50%,60%,70%,80%,90%,Industry,Honda,Lexus(Target),Repurchase Rate,75-80%,Lexus target repurchase rates are 50%higher than the industry.,Customer Loyalty,28,Loyalty,Automobile Repurchase Rates,Lexus is approaching their goal wi

34、th 68%of previous Lexus owners replacing their car with a new Lexus.,Acura,Previous Vehicle,New Vehicle Percentage,Lexus,Mercedes,BMW,Lincoln,Cadillac,Infiniti,Jeep,Jaguar,Volvo,Saab,68,3,4,2,3,2,4,1,-,1,2,14,42,4,2,5,1,7,1,-,1,1,1,13,5,43,-,-,2,4,1,-,3,1,8,4,1,1,64,7,1,2,-,-,-,1,-,3,1,1,8,54,1,1,-,

35、-,-,1,1,7,1,1,2,-,35,4,1,1,1,-,2,9,-,-,-,2,2,53,-,-,-,2,21,5,2,3,-,2,2,1,16,-,2,-,2,5,-,3,-,4,1,4,1,28,5,9,2,1,2,-,-,2,1,-,-,29,2,18,9,6,7,9,-,10,2,2,1,28,2,Audi,Lexus,Mercedes,BMW,Lincoln,Cadillac,Acura,Infiniti,Jaguar,Volvo,Saab,Audi,Customer Loyalty,29,Loyalty,Service Retention:Auto Dealer,Lexus,

36、Honda,Ford,In addition,Lexus service retention is significantly higher than competitors.,Customer Loyalty,30,Loyalty,Strategic Approach to Loyalty,Lifetime Customer Value,Segmentation,Lifecycle Needs,Retention Impact,Full Potential,Not all customers are equalSegments differ in value based onneedspre

37、ferencesbehavior,Capturing 100%share of relevant wallet requiresdynamic vs.static view of purchasestracking and projecting how needs evolve with lifestage,Attrition rate must be used to discount expected cash flowsAttrition differs by segment and lifestage,Retention Impact,Customer behaviors are cha

38、ngeableValue of customers can be increased through targeted value sharing incentives,Properly capturing customer lifetime value has four requirements.,Customer Loyalty,31,Loyalty,Customer Lifecycle Profits(Insurance Example),Annual Profits,($300),($200),($100),$0,$100,$200,$300,$400,$500,Age 18-24,A

39、ge 25-34,1,2,3,4,5,6,7,8,9,10,Year,Looking only at customer lifetime value,this insurer would conclude that both segments could be profitable.,Customer Loyalty,32,Loyalty,Customer Retention Rates Vary Widely by Age Segment(Insurance Example),35%,36%,37%,41%,45%,52%,61%,70%,85%,9%,13%,17%,23%,28%,36%

40、,45%,58%,72%,100%,0%,20%,40%,60%,80%,100%,1,2,3,4,5,6,7,8,9,10,Percent of Customers Retained,100%,Year,Age 18-24,Age 25-34,Cumulative Retention Rates,However,the 18-24 year old segment had much higher defection rates.,Customer Loyalty,33,Loyalty,(Customer NPV)Insurance Example,$450,($70),($100),$0,$

41、100,$200,$300,$400,$500,Age 18-24,Age 25-34,Net Present Value,Unless the 18-24 year old retention could be improved,they would not be a profitable segment to target.,Customer Loyalty,34,Loyalty,Root Cause Analysis:Why Customers Drop Out,Convenience,Service,Employees,Mistakes,Processing delays,Unavai

42、lability of exclusive service,Speed of service(Long lines),Location of branch or ATM,Hours,(Inconvenient),Far,Bad access,Home,Work,Drive-thru,Parking,Walk through,Charges and fees,Fees,Fines,Too high,Not reversed,Interest rates,Versus the competition,Minimum balance,Unfriendly,Problem-solving,Dont k

43、now me,Takes too long,Knowledge and demeanor,UnprofessionalUnknowledgeable,Policy not waived in certain circumstances,Concerns about check coverage,Special treatment,Safe deposit boxes,Direct deposit,Price,Depositor root causes of defection,Root cause is typically utilized to determine causes of def

44、ection.It,too,must be analyzed on a segmented basis.,Customer Loyalty,35,Loyalty,Different Customer Segments Defect for Different Reasons,A segmented view will lead up to develop different strategies for best versus other customers.,Customer Loyalty,36,Loyalty,Strategic Approach to Loyalty,Lifetime

45、Customer Value,Segmentation,Lifecycle Needs,Retention Impact,Full Potential,Not all customers are equalSegments differ in value based onneedspreferencesbehavior,Capturing 100%share of relevant wallet requiresdynamic vs.static view of purchasestracking and projecting how needs evolve with lifestage,A

46、ttrition rate must be used to discount expected cash flowsAttrition differs by segment and lifestage,Retention Impact,Customer behaviors are changeableValue of customers can be increased through targeted value sharing incentives,Properly capturing customer lifetime value has four requirements.,Custo

47、mer Loyalty,37,Loyalty,Optimizing Customer Base,All other customers strategy,Best customer strategy,Identify the most valuable customers to retain and penetrateDevelop a robust value proposition to sustainably meet these customers needs better than competitorsFind and attract more of these customers

48、internal candidatesexternal prospects,Reduce the costs to servetransition to alternative delivery vehiclesprocess/product redesignbusiness system redesignselective automationoutsourcingpartnershipsPrice products and services for profit,Maximizing the value of the customer base requires prioritizatio

49、n of segments,and the development of tailored approaches.,Customer Loyalty,38,Loyalty,Value Proposition-Right Customers(Bank Example),At each point of contactplatformtellerATMstatementsteleservice,Higher service levelsBetter pricing,Rethink qualifying balances for discounts,bundled productsloans and

50、 deposits and investments balances,Infrequent overdraft feesCheck order fees,Consolidated statementsPlatform identifiersTeller/ATM identifiers,Dedicated personal bankersSeparate teller linesSeparate teleservice phonelines,Grace period to requalifyTotal vs.deposit balance criteria,Free checksOverdraf