Customer Asset Management

Why Customers Are Assets

Why Customers are assets

Do Organisations' view them this way ? No

Organisations obsessed with products, policies & competitions at best

Customers don’t feature in financial statementsBelieve customers belong to the marketing &

the service department at the bestSilo mindset make the management of every

function an end by itself and isolated islands in the organisation

Do Organisations View Them This Way ? No

Multiple management layers completely isolate top management from customer contact

Poor or inconsistent regulatory framework to protect against customers vis-à-vis financial mismanagement

Unlike financial stakeholders customers are not institutionally organised

Do Organisations View Them This Way ? No

Believe that profit is generated through clever financial management and not through customers willingness to pay and sustained goodwill

Believe value is created in factories and not in the minds of customers who has a choice whether to buy the product or not at the price the company derives

Why Customers Are Assets

Only self sustaining long term revenue sourceHas multiplier potential can bring referral

businessNo predefined output potential can consume

multiple productsCost of maintenance goes down with age -

requires lesser handling as tenure of association ship expands

Why Customers Are Assets

Value enhances with age – buys not just for himself but also for dependants

Contribution to profits enhances with age- sunk cost of acquisition gets completely recovered overtime + lower cost to serve due to greater familiarity with the organisation and its products

How To Make It A Reality

• Organisational mindset Change• Data Capturing & Mining• Mass customization• Adapting new marketing paradigm

What Can Change The Mindsets

Severe competitive pressure through massive proliferation of choice

Market saturation: No scope to grow by merely expanding into new geographies

Sustained high customer attrition ratesAttaining financial reporting to profitability by

customer and not by product or product division

What Can Change The Mindsets

• Tougher regulatory framework for consumer interest protection

• Orientation of management academic curriculum towards “Customer orientation” as opposed to the current functional orientation

• Evaluation of corporate performance on the basis of time scale rather than the current snapshot accounting

What Can Change The Mindsets

• Recognising Drucker’s timeless words of wisdom – Profit is the outcome of creating a satisfied customer and not the end adjective of business

• Realising that there are no results in the walls of an organisation. The end result of a business is a satisfied customer : Peter Drucker

What Can Change The Mindsets

• Acknowledging that the only person who pays all the bills/debts of the organisation is the customer

• Understanding that marketing only creates promises and not customer loyalty

• Recognising that loyalty is created only through customer centric behaviour on the part of the entire organisation

What Can Change The Mindsets

• Realising that customer loyalty is not possible without employee loyalty and thus investment in training and development and empowerment of employees is critical towards attaining a sustained competitive edge

• Customer satisfaction sure linked compensation for entire organisation

• Mandating customer facing “time” for all employees at regular intervals

• Recognising and rewarding customer centric behaviour

Data Capturing & Mining

• Investing in periodic customer satisfaction studies

• Investment in analytical tools• Training front – End staff• Rigorous review mechanism for data sanctity• Rewarding customer for furnishing personal

data

Data Capturing & Mining

• Rewarding customer for elongating tenure• Robust time bound escalation mechanism for

unresolved customer issues• Research to understand customer

situations/settings and not just usage behavior

Mass Customization• Extensive use of segmentation tools to

identify affinity groups• Customized products• Customized engagement processes for

adoption of the products by different customer segment

• Understanding that its customer centric people who create effective mass customization and not sophisticated analytical tools

New Marketing ParadigmFocus Means End

Sales Concept

Product / Service

Selling & Promos

Profit thru Volumes

Marketing Concept

Customer needs Integrated Marketing

Profit thru Customer Satisfaction

The New Marketing Concept

Customer needs & Resources

Holistic Marketing

Profit thru customer retention & growth, i.e., CLTV

Marketing needs to now focus on not just “what” the needs is but “how” does the customers go about satisfying that need.

Need to enhance the product definition of a product or service to “providing customer solutions / experience”