Customer Management 2.

0
Today, Toyota, Tomorrow
Henry Stewart DAM & MOM
November 2006, Amsterdam

Graham Hill
Customer Value Management Guru Associate

1
Three Ages of Customer Management
CUSTOMER 1.0 CUSTOMER 1.5 CUSTOMER 2.0

Source: Adapted from Reed 2006

Brand Management “Toyota Way” Participative P2P

+ve
Direct Marketing Customer Lifecycle Customer-innovation,
Degree of Customer Involvement

Customer Experience Management CGM, Blogs, WOM, Wiki

CRM Suites Lean CRM Technology Internet Web2.0 &
Mobile Technology

Driven by Driven by blend of Driven by

Company Push Company Push & Customer Pull
Customer Pull

1950 1990 2000 2005 2010

-ve

2
Agenda

Customer 1.0
Customer Management Today

3
What is a Brand Really?

Toyota Communications
Recommendation
Awards
All In the Customer‘s Head
Emotions & Feelings
Reputation
Ownership Experience
Seen on the Road

4
Delivering the Customer Experience
Prospect First Time/Repeat Retained/Loyal Defector?

+ve
Changing Needs Moving On
Product Innovation
Loyalty Scheme Defection Modeling
Experiencing Reality Affinity Partners Retention Campaigns
The focus is on
Customer Lifecycle Management
how customer
Contact Optimisation - NBA
value is
Value of Customer

Customer Recovery
maximised at
Customer Self-Service
each touchpoint Winback Campaigns
Cross/Up-sell - NBP
Event Detection
First Sale Campaign Optimisation
Segmentation – Risk Adjusted Value, Needs Fit, Affinity
Potential Value Modeling
Customer Start-up Healthcheck
Pre-Sale Without damaging
Sales–mix Optimisation
future growth
Strong Brands
options
-ve

5
Evolving from Inside-out Marketing
Company Knows Best
Needs Value-at-Sale

1 Market research Multiple sales channels 4

Inside-out marketing 3

2 Product development

R&D
6
Agenda

Customer 1.5
Case Study: The Toyota Way
in Customer Management

7
Insights About Customers …

1.500

Repurchase is driven by an
annual cycle. The highest 100% 100% The bottom 30% of
1.000 peak is at 36 months customers only buy
87.0%
13% of new vehicles
79.6%
Percentage Vehicles Sold
70.3%
61.3%
500
The top 30% of
50% 52.5% customers buy 53% of
new vehicles
39%
0 The top 10% of
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 customers buy 25% of
24.4% new vehicles
Time of Repurchase
10%

8
 … Drives Definition of “Customer DNA”
Comparing HUMAN DNA …
Source: Human Genome Project 2005
approx 50 contacts
„ 24 Chromosomes with
approx. 25,000 genes
„ Genes expressed as and
when required
„ Genes define all aspects
of who we are and how
we will develop
„ Also define how we
respond to changes in
the external environment
„ And control other gene
expression and
interaction of genes
9
KKP
with CUSTOMER DNA
Customer-driven Contact
Time-driven Contact
„ 6 Contact Plans with
approx. 50 contacts
„ Contacts triggered as and
Vehicle-driven Contact when required
„ Contacts define all aspects
of planned contacts and
how they will be carried
out
„ Also define how to
respond to external
customer events
„ And control other contact
triggers and interaction of
contacts
Etc.
… Controls Contacts with Customers
Prospect First Time/Repeat Retained/Loyal Defector?

+ve
Value of Customer

Customer DNA drives which

contacts are made with which
customers at what time
-ve

10
… Proactive Lead Management

Toyota Push Customer Pull

11
… Continuous Customer Dialogue

Push Pull

12
… National Marketing Campaigns

13
… Supported by Online Media

14
Which Generate More Insight

15
 Where Do the Best Ideas Come From?
A simple framework can be used to search for the best ideas
Plus 15x
Spotting customer, vehicle or
contact events that can be Mostly
10x
turned quickly into a campaign Winners

Using what it already has to

target new customers with 13x
5x complete solutions more
winners
than
Ratio Winners losers Winners
to Losers Mostly Losers
Losers
Minus 5x

tio el
nd g

ed g
io al

ar et

en g
tre win

Ne ttin

e v d in
lu ov
nt nt

ns
s
ns

ts
ch
se rk
ve e

Re Ma

so g n

to p o n
o
l lo
in M

Sp
Fo

tin

s
Re
ot
Sp

The framework predicts success 95% of the time

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Harvesting Campaign Ideas
CUSTOMER MANAGEMENT FORUM
Campaign & contact ideas are
identified by the Dealer Advisory Marketing National Customer
Board on Demand Marketing Contact
Campaigns Campaigns Programme

PLANNING &
INTEGRATION
Campaign
& Contact Campaign Campaign Contact
Innovation Idea Idea Idea

Strategic 30% Strategic 50%

Tactical 70% Tactical 50%
Actual Actual
Campaign Contact

IMPLEMENTATION Campaign
& Contact
& LEARNING Learnings

Actual The best ideas are selected,

Campaign developed and implemented by
the Customer Management
Forum

DEALER ADVISORY BOARD

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Active Collaboration is the Key
OTHER
TDG DEALER
TOYOTA

Other
Groups Marketing Groups
TDG

CRM
Manager
Collaborative CRM Group
Marketing CRM Strategy
roles (shaded red)
Manager Planning
C&C
Manager

BUSINESS AS USUAL
CAMPAIGNS & CONTACTS Sales
Coordination Manager
CRM CRM Collaboration
CUSTOMER Coordinator DEALER
Coordinator Implementation
MANAGEMENT ADVISORY
FORUM BUSINESS AS UNUSUAL Data BOARD
Field Centre
CRM PROJECTS
Force
Coordination
Collaboration Data Mgmt
Implementation Data Analysis
Marketing Mktg Support
Service +
Providers CRM PROJECTS
Implementation

18
More Sales, More Often, At Lower Cost
e.g. National Marketing Campaigns
Spring 2004 Spring 2005 Diff.
MORE SALES, MORE OFTEN
Target Customers 150,000 Although
25,000the 2004
– 83%
Participating Retailers 402 campaign 482sold 2x +more
20%
Customer Mailed 61,500 vehicles,
20,800the 2005
– 66%
Vehicles Sold 2,235 campaign can be run 4x
1,190
Response Rate 3.63 for the same cost.
5.72 + 57%
ROI 1,917% A net doubling +of57%
4,227%
AT LOWER COST vehicles sold
Campaign Costs €220,000 €55,000 – 75%
Cost Per Sale €100 €46 – 53%
Campaign Design Time 8 weeks 4 weeks – 50%

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 Leaning Campaign Management
NATIONAL MARKETING CAMPAIGNS
Customer Customer
Value-added

Create campaign Update planned Finalise & approve Print & distribute
ELIMINATED Run campaign Close campaign
ELIMINATED
brief
IMPACT OF LEAN CRM
contact list campaign campaign mail
TOYOTA

Create planned Before

Receive updated
ELIMINATED
After Saving
Distribute campaign
ELIMINATED
Manage campaign Report on
contact list report report to dealers responses campaign
TOTAL TOTAL
150d 35.5d
Distribute contacts
to dealers
(inc 100d
campaign TOTAL
duration) 114.5d VALUE-
Return updated (inc 100d ADDED
Receive campaign Manage campaign
Review contacts ELIMINATED ELIMINATED
Dealer

contacts to Toyota campaign) 2.5d

report responses

Add additional VALUE- VALUE- Customer

vehicles ADDED ADDED
Duration: 26d 15.5d
Duration: 8d 12.5d
Duration: 2d Duration: 8d Duration: 100d Duration: 4d
Value Add: 4.5d Value Add: 2.5d Value Add: 0.5d Value Add: 2.5d Value Add: 5d Value Add: 0.5d

Duration: 8d Duration: 2d Duration: 0d Duration: 4d Duration: 100d Duration: 0.5d

Value Add: 4d Value Add: 1d Value Add: 0d Value Add: 2d Value Add: 5d Value Add: 0.5d

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Agenda

Customer 2.0
The Future of Customer
Management?

21
Customers are the Future of CRM
BROADCAST TARGETED COMMUNITY

Source: Reed 2006

One-to-Any One-to-One Many-to-Many

+ve
e.g. TV, print, e.g. direct mail, e.g. events, online
website newsletter, search communities, blogs

Compete based upon Compete based upon Compete based upon

Power of Influence

Best Content Most Members Best Facilitation

Customer-driven
How big does “N” Innovation
have to be for Marketing
value to tip? Sales
Service

Value f(N2) Value f(2N)

-ve

Value f(N)

Number of Customers

22
Customers Are Your Best Salesmen
100%

Source: Cap Gemini 2006

Manufacturer
Expected Use of Information

The most widely used

75%

and useful sources of

Internet Ad information are WOM
Friends & Family
and the Internet
50%

Print Ad
Dealer Ad Auto Press
Manufacturers
25%

TV Customer hugely overestimate

the importance of
Finance Ad their own marketing
0%

0% 25% 50% 75% 100% to customers

Influence of Information on Choice

23
Evolving to Customer Co-creation
Customer Co-creation
Outcomes Value-in-Use

1 + Customer outcomes + Social-marketing 8

2 Lead customers + Customer-generated media 7

3 Open innovation Marketing „Lab“ 6

4 + Continuous ßeta Test early, test fast 5

Innovation Experiments
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Go Where Customers Congregate

www.buschtaxi.de
The premier portal for
Toyota Land Cruiser
owners in Germany
Ranked 10th in Google
search on “toyota”

25
Let Customers Build their Own Cars

26
… On-line as well as Off-line

27
Let Customers Build their Own Ads

28
Let Customers Recruit Other Customers

29
Recommendation is Critical

Net Promoter Score strongly

Source: Marsden 2005

predicts Sales Volume Growth
15
£300k
2004 Sales Volume Growth (%)

Honda
10
BMW
Renault
5
Toyota
VW
Vauxhall (Opel)
-15 5 25 45
Fiat Ford
-5

Peugeot
Net Promoter Score

30
… And Not Just in Automotive

Source: Marsden 2005

O2 15 Honda
Asda
Virgin Tesco BMW
2004 Revenue Growth (%)

10 Renault
Vodafone
Fiat VW
Waitrose
Sainsbury Orange5

-45 25 15 35
T-Mobile
-5
Safeway

Net Promoter Score

3131
Who Do “Your” Customers Believe?

Marketing?... Or Customer Evangelists?

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