Maximize the lifetime value of your sales force

Posted in Försäljning / Sales on March 6th, 2019 by admin


Better and more thoughtful ways to measure the potential lifetime value of each member of the sales force can not only improve talent management but also create more value.

Sales organizations invest heavily in data and analytics in order to measure the potential long-term value of their customers. Yet few apply the same discipline to their own internal sales force. This is surprising, given the increasing challenges sales managers face in acquiring and retaining talent in today’s economic environment.

Many sales leaders are unclear about how to identify, attract, and hire reps who have the “perfect” profile, and they have little idea of what motivates such people to stay. Nor do they know how to combat the “performance plateau,” where top performers start to stagnate. They are, however, all too aware that employees vary widely in performance, both in the early stages after they are hired and in the longer term, when the disparity between top and bottom performers can be sixfold.

Beyond sales performance, employee attrition is a permanent headache for many sales leaders. Turnover can often top 50 percent a year and is most heavily weighted with recent hires, meaning organizations never recover recruitment costs for the hires who leave. McKinsey estimates that, in some organizations, the cost of a lost employee can be $25,000 to $50,000 when lost productivity and customer dissatisfaction, as well as recruitment and training costs, are factored in.

Many sales leaders have begun to use analytics for day-to-day performance management, but they haven’t gone beyond such short-term analysis to quantify the lifetime value of a salesperson the way they routinely calculate the lifetime value of a customer. Forward-thinking sales leaders, however, can now take performance management to the next level by using data to directly link talent management to increased financial value. This approach can drive up to a 10 to 20 percent increase in revenue per salesperson and reduce attrition rates by double digits.

Seller lifetime value: A new framework to help raise productivity

Customer lifetime value was established in the 1980s as a framework to forecast the net profit attributable to a customer over the entirety of his or her relationship with a company.

By applying a similar rationale, sales organizations of all sizes and hues can determine how to maximize the lifetime value of their staff—specifically the salespeople themselves (exhibit). This seller-lifetime-value (SLV) model has four inputs:

  • Cost to acquire/hire. Just as companies understand customer-acquisition costs, they can now evaluate and optimize the costs of finding, choosing, and introducing new employees, which typically range from 20 to 50 percent of annual salary.
  • Cost of employment. Companies are familiar with the concept of cost to serve, but it is typically used to address customer profitability, not the profitability of individual sales reps.
  • Gross margin generated (and trajectory of margin). Customers are measured in terms of recurring revenues, and a similar approach helps companies understand the impact of employee performance on revenue. Break-even times—the time when a salesperson generates enough margin to cover his or her costs to date—vary, with the average being about nine months.
  • Length of employment and value creation. Just as companies measure the length of customer relationships, they can assess how salesperson tenure correlates with value creation and thus measure the effects of attrition. Attrition in sales roles is typically much higher than for other functions; 50 percent turnover is not unusual.

Equipped with the data generated by these inputs, sales leaders can then derive actionable insights into where they can improve SLV. There are many tactical steps they can take—finding and hiring the right talent; increasing productivity through tailored development programs, personalized incentives, and defined career paths; managing performance; and, ultimately, retaining proven winners.

From model to action

Due to both organic growth and multiple acquisitions, a large services provider was enjoying exceptional revenue growth—56 percent in three years. Its footprint had grown by a quarter, and there seemed to be no limit to its potential growth in market share.

But its rapid growth was causing headaches for sales leaders around talent. They were finding it difficult to smoothly integrate all the disparate cultures from the acquisition spree, and the sheer size of the combined sales forces was making it harder for senior leaders to manage performance. Minor problems were evolving into major obstacles to maximizing value.

Moreover, sales leaders were finding it hard to attract ideal new talent, given an extremely competitive market. Onboarding processes were fast becoming disjointed and inconsistent across the company and its various acquisitions. Retention was proving a major challenge, with attrition rates creeping upward of 60 percent in some businesses.

It was clear the company needed to adopt a new, fact-based approach to sales talent. It needed to gain deeper knowledge of what makes certain candidates successful and then carefully source and select the right people. In short, it needed to understand how to maximize the seller lifetime value of each member of the sales force.

First, the company aggregated a wide range of data for each sales rep, including HR data such as role, location, education, and personality attributes; sales-activity data harvested from the customer-relationship-management (CRM) system; and business-performance data such as revenue, client-relationship value, and compensation. It then used McKinsey’s Sales DNA tool to gather data on reps’ perceptions of skills, culture, and coaching, and then mined that data to identify the traits that separated top performers from the rest. Finally, it ran a competitive talent scan that included education, skills, and other work experience, measuring its own employees against McKinsey’s Talent Refinery, a database of more than 500 million profiles. This revealed that the organization was hiring individuals who had significantly more professional experience than those its competitors were hiring and who were also, of course, expensive.

The five things sales-growth winners do to invest in their people


Examining this combined data through the SLV lens revealed two clear employee archetypes. The first were reps who quickly got up to speed but then fizzled out and left early. The second were slower to reach peak performance but performed better in the long run. The company realized it had to make a trade-off: it needed to place less emphasis on getting reps performing quickly and focus instead on long-term performance and retention. It also realized that it needed to invest more heavily in campus recruiting to encourage younger, eager-to-learn talent to join the organization.

This insight led the company’s sales leaders to develop a set of tactical initiatives to transform the employee journey in pursuit of maximum SLV:

  • Inject structure into screening and interview processes. Candidates had been subjected to a wide range of interview processes based entirely on individual branch managers’ preferences. Some would hold two rounds of interviews, others four; some hired on a regular basis, others were more ad hoc. The variance made it much harder to assess the best approach. The company established a single process for every candidate and kept statistics on the time between each of its steps. This enabled the executive team to monitor the process and ensure that it was applied to any newly acquired companies to eliminate any variance in hiring approach.
  • Use objective measurements to evaluate candidates. To remove bias from hiring decisions, the company introduced a structured interview sheet that forced managers to give a numerical score to the attributes that mattered, such as forcefulness and sociability. The scores, rather than subjective judgment, then drove the conversation around hiring decisions.
  • Focus on support and rapid development of new hires to limit attrition. The company recognized the need to help new hires get up to speed with day-to-day processes faster and to make them feel valued during the early months when they might struggle to hit their targets.
  • Establish clear career paths. For long-term, high-performing talent, it was important to provide visibility into how they might rise to leadership positions within the organization and to make it clear that a career in sales would also be valued and rewarded with additional financial incentives.
  • Measure and track performance continuously. By tracking performance along four dimensions (HR processes, sales activities, financial outcomes, and employee retention), the company was able to make adjustments in different divisions and branches to ensure that everyone was performing to their full potential.

These initiatives were piloted in select branches before being rolled out nationally. In just six months, the company had gone from concept to a full transformation of its sales organization. By using the SLV model, the company was able to extract significantly more value from its sales talent and bust some entrenched myths around hiring. No longer did sales managers doggedly insist that early performance was the best indicator of long-term performance; no longer was liking someone enough to justify hiring them; no longer did managers assume that experience always equated to talent; and no longer were reps cast as nothing but sales machines with no ambition for leadership.

Over the course of the new setup’s first year, the average revenue per salesperson grew by 30 percent and attrition in the first year of tenure fell by 12 percent. For long-term employees—those with at least three years under their belts, most of whom were already strong performers—revenue increased by an impressive 15 percent, driven by capability building for the skills that were mostly likely to atrophy over time. Finally, attrition for this same long-term employee cohort fell by 15 percent.

To extract the full potential of SLV models, sales leaders need to be cognizant of three guiding principles. First, the model is not a tool to identify or evaluate individual talent, but rather a structured way to understand which phases of the talent life cycle are most ripe for disruption and improvement.

Second, getting started with this type of analysis can be quick. It’s not a multiyear transformation but a project-based sprint that delivers a dynamic outcome that leaders should expect to change as the organization’s population and management practices evolve.

Finally, like all analytics exercises, the model itself does not create impact or value; these come from quick action and continuous improvement.

The analytical tools and methodologies companies have used for years to boost customer lifetime value can unleash tremendous performance when applied to sales-talent management. It just requires a clearer link between investing in talent and driving financial valu

Source:, 6 March 2019
Authors: Eric Buesing is a partner in McKinsey’s Stamford office, Alexander DiLeonardo and Ben Vonwiller are partners in the New York office, and Maria Valdivieso is a partner in the Miami office.
The authors wish to thank Matt Fenton and Emily Field for their contributions to this article.


Want happy customers? Focus on happy employees

Posted in Aktuellt, Allmänt, Customer care / Kundvård, Försäljning / Sales on October 6th, 2018 by admin

It was 5:18 a.m. – after a five-hour, red-eye flight – when I arrived at the tony Vineyard Resort, where in three hours, I would face 15 participants in a two-day leadership training program. But the receptionist couldn’t find my reservation and didn’t seem to care much. When I got to my room 90 minutes later, a note of greeting read: “Hospitality and service as a way of life.” Oh, the irony!

The incident spotlights that being customer-centric requires a culture where employees must live the inspirational quotes espoused. A decade ago, McKinsey and Egon Zehnder studied the relationship between managerial quality and revenue growth. The analysis found that customer impact – the capacity to grasp the evolving needs of customers – led all leadership competencies.
The degree of customer impact also correlated with a company’s revenue growth and the effectiveness of its top executives across all growth situations, as well as with the senior teams and managers below them. It helps define a customer-centric culture where employees individually and collectively prioritize customer needs in everything they do.

Why are some organizations better than others at creating leaders focused on customer impact? How do you recognize a customer-centric culture? Invariably, a customer-centric organization displays:
– A clear vision that customer experience is a priority.
– Formal mechanisms to co-create that experience with customers and complementary partners.
– Accountability created among employees.

In such organizations, employees at all levels possess the freedom to drive customer service excellence. Customer experience and outcomes are measured, shared and tied to individual performance assessment. These organizations recognize and reward internal cross-functional collaboration and knowledge-sharing because they understand how to serve customers better. The employee experience reflects the customer care the organization seeks to create.

Consider Southwest Airlines, a recognized leader in customer experience. It consistently scores in the mid-sixties in public NPS (Net Promoter Score) benchmarks that measure customers’ willingness to recommend a company’s products or services to others, a score that is higher than any airline and one of the leaders in any industry.
Many travelers are familiar with Southwest crew members delivering safety announcements with humor, thereby personalizing that obligatory inflight duty and making it more enjoyable for passengers. And it goes beyond the safety spiel. Employees are routinely asked to submit ideas for improving safety and hospitality and for paring costs.

Southwest gives employees the autonomy to deliver a premium customer experience and to continuously improve it. When the airline decided new uniforms were needed to match its new logo and image, they asked their employees to design them. Thousands volunteered, and 43 employees were chosen to collaborate. They designed a fashionable, yet functional uniform (even machine washable, a rarity) that employees say represents Southwest’s personality.
Forbes named Southwest No. 12 on its list of America’s Best Employers in 2016. CEO Gary Kelly attributed the ranking to “the passion [employees] show every day for offering the best in hospitality to our customers and to each other.”
This is an example of customer service done well, where employees are empowered to be engaged and passionate about the customer experience.
My reservation at the Vineyard Resort was not in the system; something had gone wrong in the back office. That happens. The next day, resort managers apologized many times. Still, in the end, the receptionist likely was not empowered to go above and beyond. He likely did not feel safe to take a risk and give me a room without following protocol. That single incident left an indelible memory – and it wasn’t favorable.

Source:, 10 September 2018
By: Gila Vadnai-Tolub

Customer meetings: How the best sales reps approach them

Posted in Aktuellt, Försäljning / Sales on March 3rd, 2017 by admin

Don’t worry about what you can’t control. Our focus and energy needs to be on the things we CAN control. Attitude, effort, focus – these are the things we can control.” -Tim Tebow

In selling, there are many areas where sales reps truly have all the say in the level of impact they can make to maximize their chances of winning the deal. Of course, effort isn’t everything and hence Tebow’s call for attitude and focus are especially notable. After all, a flurry of activities doesn’t simply equal progress. So the key is channeling effort to the right areas, whereby your hard work will pay dividends with meaningful impact, resulting in progress and success.

imagesThere is one particular area that is far too often and easily neglected in this regard: Customer Meetings.

In a deal cycle, each meeting with a prospective buyer is a milestone activity and a successful one propels the opportunity forward. The meeting is your live “at bat”. With each one, you’re either moving the opportunity forward or you’re not. You’re either edging out your competitors or being edged out.

We begin by establishing the anatomy of a meeting. In sales, it’s helpful to establish a broader view of what encapsulates a meeting. In other words, it’s not just about what happens during a meeting; what you do before and after the meeting matter just as much. We define the anatomy of meeting in three major parts: BEFORE—DURING—AFTER. In the first part of the series, we cover what you can do BEFORE the meeting to set yourself up for a successful, productive meeting that will propel your deal forward and ultimately win.


5W1H: This is where the good old journalism 101 comes into play: Who – Why – What – When – Where – How. Who are you meeting with? Why are the two parties meeting? What is the objective of the meeting? When and where? What is the agenda for the meeting (How)? For any given customer meeting, you should be able to answer all of these questions well beforehand.

The who entails the company, the persons, and the team you’re meeting with. With the exception of a few products, most of the purchasing decision is a collective effort made as a team.

Understanding the company – its product and market – and the people behind the decision helps to prepare the right set of questions to ask in the meeting and proactively identify any important information you may be missing. In turn, you’ll be equipped to better align and position your solution to the business drivers, the needs, and the objectives that are at the heart of the deal at hand. Furthermore, your research can uncover certain tidbits that can help you connect with your prospects in a more personable way – mutual connections, similar experiences, shared local knowledge, etc.

Ask yourself:
•What does the company do? Where are they based? What are some interesting and notable recent news about the company?
•Who are you meeting with? What are their roles and responsibilities? What personas will be involved in the meeting? What are their prior work experiences? What are some of the interests and hobbies that they have publicly shared – i.e. Linkedin Profile

The why entails the business drivers and the motivations of your prospect. There is a reason why the prospect has agreed to meet with you. If it’s an initial discovery or qualification meeting, you will not have all the answers. However, you have general knowledge of how your solution aligns to certain industries or teams or initiatives. Look to some relevant and similar key customers and partners that will help inform how to best sell to the prospect.

If you’re walking into subsequent meetings having already qualified the prospect, this becomes all the more critical. ALWAYS understand why your solution matters specifically to the company and the people you’re meeting. Remember, your prospect is likely evaluating your competitors with similar features and functionalities. Vendor blur is a real thing. This is your opportunity to elevate the conversation. It’s much more compelling for prospects to buy a product from someone who really understands their goals and challenges.

Ask yourself:
•How have we helped other companies in the same market or with similar challenges and strategic initiatives?
•What part of our solution typically resonates with these types of companies/roles?
•What are some common objections we encounter and what is the best way to handle them?

The what entails the purpose of the meeting. This is a TWO-WAY street. Are you anticipating a discovery call while your prospect is expecting a product demonstration? Having a prospect walk away from the meeting feeling like they didn’t get what they needed can really hurt your chances. More importantly, it’s one you can easily avoid.

A great salesperson will help the prospect accomplish their objective for the meeting while also accomplishing their own without losing control of how the selling is carried out. The first step towards doing this is identifying whether you have a clear understanding of the prospect’s objectives for the meeting.

Ask yourself:
•What is the prospect expecting to accomplish in this meeting?
•What do I want to accomplish in this meeting?
•What is necessary for me to prepare in order to make sure I can meet these objectives?
•Is there an internal resource I ought to involve?

If the above is unclear, consider it a BIG red flag. Thankfully, the remedy is rather simple: ask your prospect via email – “Hey Sarah, given that we have an hour scheduled, my goal in this meeting is to establish a good understanding of your needs and challenges so that I can better tailor our solution to what matters most to you. What are some things that you would like to get out of our meeting on Friday?”

The how entails the tactical elements of how you will execute the meeting. Most organizations have a sales process and best practices to help you maximize your chances of winning the deal. However, one element that is universal to any productive meeting is an agenda that is aligned with the WHY and the WHAT. This also allows for you to gain a clear understanding of what you want to tackle first. We’re all too familiar with people jumping in and out of meetings or having to cut it short. So it’s important to make sure that you have a plan in place to cover the most important items first.

Furthermore, a clear agenda helps you steer the meeting back to the objectives at hand, lest it is derailed by tangents and detractors. It may not always make sense but whenever possible, confirm the agenda with your prospect. Giving them a say is a way to implicitly gain their commitment to stick to the agenda. An agenda that is appropriately aligned to the WHY and WHAT will equip you with the ability to facilitate and execute a productive and successful meeting that results in a Win-Win for all parties involved.

Ask yourself:
•Based on my objectives, as well as that of the prospect, what is the best order of operations? What should I cover first?
•Do I have buy-in on the agenda from my prospect?
•How much time do I have and what should be the appropriate allocation of time for each item on the agenda?
•Am I meeting with a few people or a conference room full of several people? If so, how should I engage in asking questions?

The when and where are pretty straightforward and, therefore, we run the risk of overlooking some critical pitfalls. The last thing you want is for seemingly minor logistical or technical details to cripple or completely derail what would otherwise could have been a productive meeting. Access to internet, proper adapters, and working audio/visual are just a few examples. It pays to be vigilant with the small details.

Ask yourself:
•Will my prospect be able to join the conference call without a problem? Certain meeting tools require a prior install and there can also be security blockers that can keep your prospect from being able to join a screen-share.
•Will there be multiple people sitting in a conference room? If so, will I be heard clearly?
•(if meeting in person) Is the environment at the place of meeting conducive to a focused meeting or will my prospects be easily distracted?

The level of research and preparation may differ depending on the type of meeting and even the type of product you sell. The more we put this into practice, the more it becomes ingrained as a natural part of our workflow and approach to each customer meeting. As we become more efficient in this area, we have more influence in the outcome of the deal than ever before. Plus, we have no shortage of tools today to help automate much of this research work. As mentioned earlier, this is about effort and focus and you have full control., March 2017
Author:Ethan Kim

Kunden i fokus – på riktigt

Posted in Aktuellt, Customer care / Kundvård, Försäljning / Sales, Leadership / Ledarskap on November 30th, 2016 by admin

Alla vet vikten av att ha kunden i fokus vid det här laget. Men hur gör man för att bli kundcentrerad – på riktigt? Det vet Oke Eleazu, grundare av Think outside in.

ceEn tydlig trend inom de allra flesta branscher är att erbjudandena blir alltmer likriktade. Det medför att det inte går att förlita sig på företagets produkter eller tjänster för att nå framgång. Istället blir det olika aspekter av kundupplevelsen som väger in.

Detta konstaterar Oke Eleazu, grundare av den kundupplevelsefokuserade konsultfirman Think outside in!, och nu aktuell med boken The Cult of Service Excellence.
– Till och med inom resebranschen har trenden blivit tydlig. När Ryanair inte längre kunde vara säkra på att alltid erbjuda det lägsta priset, så satsade de på att förbättra sin kundservice – och såg direkt hur vinsten ökade, säger Oke Eleazu.

Större makt åt kunden

Allt fler får upp ögonen för att kunden faktiskt är kung, menar han.
– Starkt bidragande faktor till att kunden har fått en allt större makt är teknikutvecklingen.

Först gjorde jämförelsetjänster att det blev en total transparens när det gäller priserna, och nu har sociala medier gjort samma sak när det gäller kundupplevelser.
– Enstaka missnöjda individer kan definitivt skapa stora problem för ett företag – och det går snabbt, speciellt nu när allt större del av kommunikationen sker via mobilen.

Vill signalera smart konsument
Å andra sidan kan tekniken användas för att förstärka kundupplevelsen, till exempel med hjälp av en egen app. Fast då är det tre kriterier som är viktiga att hålla koll på, enligt Oke Eleazu:
– För det första måste det vara enkelt. Sedan ska man vara medveten om att kunden är ombytlig, och bejaka det genom att exempelvis – som Amazon – komma med rekommendationer om alternativ eller komplement. Till sist gäller det att kunden känner att tjänsterna eller produkterna är prisvärda.

– I Storbritannien ser man allt fler kassar från lågpriskedjan Aldi på stan. Inte nödvändigtvis för att fler handlar där, utan för att det är ett sätt att signalera att man är en ”smart” konsument som ser till att få mycket värde för pengarna.

Det har skett olika förskjutningar när det gäller vad kunderna värdesätter, och nya faktorer spelar in.
– Tidigare har en bra kundupplevelse varit synonymt med att man har medarbetare som är vänliga mot kunderna. Det räcker inte längre. Nu förväntar sig kunden också att företaget och transaktionen ska vara optimalt användarvänlig och effektiv. I annat fall vänder sig han eller hon med några klick till en konkurrent.

Locka fram naturliga leenden
En nyckel till kundnöjdheten är dock fortfarande medarbetarna, och enligt Oke Eleazu handlar det i förlängningen om hur ledningen agerar.
– Det är alltid bra att utbilda personalen, men det går inte att skapa medarbetare som bidrar till goda kundupplevelser. Det måste genomsyra hela kulturen, så att medarbetarna blir engagerade och agerar på bästa sätt för att de gillar det, säger han och tillägger:

– Det är en sak att säga till medarbetarna att de ska le mot kunderna, men något helt annat att bygga upp en kultur där medarbetarna ler naturligt – alltså för att de är glada!

Kä, 30 november 2016

Customer relationship automation is the new CRM

Posted in Aktuellt, Försäljning / Sales, Strategy implementation / Strategiimplementering on November 1st, 2016 by admin

Our digital universe is vast and growing exponentially, expected to swell to 44 zettabytes of data by 2020. (For reference, one zettabyte is 1,000,000,000,000 gigabytes.)

Companies have attempted to use this tremendous amount of data in ways that make our lives better. In the consumer world, retailers analyze and apply data in real time for a number of uses: to predict purchasing behaviors and optimize which products get shown on a page as someone scrolls; to allow financial institutions to pinpoint and stop fraudulent transactions in a fraction of a millisecond; and to help health care companies more effectively diagnose and treat patients, to name just a few examples.

But in the enterprise world, data has traditionally been siloed, unwieldy, and manually entered into database systems such as customer relationship management software, or CRM. And other than moving from on-site to the cloud, CRM has not changed much since its inception in the 1990s.

How robotics and machine learning are changing business.
I run an enterprise technology company, and we’ve seen just how consistently data can be used to help improve sales. But for all its good intentions to provide sales managers with a way to monitor pipeline and sales activity, we all know that CRM is still hugely inefficient. Reps are required to spend time manually entering data, and then spend more time searching through it. While senior management clearly values the ability to monitor reps through CRM, the vast majority of salespeople dislike the extra work and overhead it creates and internet-salesgenerally use CRM begrudgingly — and rarely to its full potential. This administrative work becomes more significant when you consider that, on average, reps spend only 11% of their time actively selling.

This, of course, seems horrendously outdated, given that we live in an era of Amazon recommendations and Siri. What if enterprise workflows were as smart and easy to use as Siri? What if sales reps benefited from suggested next actions, the way that drivers and shoppers do? What if CRM as we’ve known it is dead?

Just as Amazon proactively suggests to someone who has purchased a stroller that they may also want to buy the coordinating car seat, enterprise apps should proactively advise enterprise users on what the highest-value or most-urgent tasks are so they can prioritize them. Artificial intelligence and decision-support algorithms that can offer data-driven suggestions will unleash a new level of productivity among workers, allowing everyone to focus on what matters and to continually help one another improve.

Turning this into reality may be closer than you think, thanks to machine learning and predictive data engines.

For the majority of sales reps, their most frequent tasks right now aren’t necessarily their most important and they waste too much time calling the wrong people with messages that don’t resonate. Harnessing the power of machines to recommend actions and approaches allows every salesperson to become data driven, freeing their time to focus on the human trust and relationship aspects of closing business.

As interactions between reps and customers become more digital – whether it’s an exchange via Facebook, email, or text or a website visit — data analytics is beginning to demystify and delineate what successful sales reps are doing that others aren’t, what’s effective, and how to get others in the sales organization behaving in these same ways.

The profound limitations of traditional CRM are laid bare in today’s automated, predictive world. The days of using CRM merely as a sales tracking tool are over. The future of CRM, and of all software, is in suggested next actions powered by predictive analytics and a deep knowledge of a specific industry and business function’s workflows.

CRM isn’t dead (yet), but reps will cease to use it unless it can get smart and save them time, rather than burden them with time-intensive data entry and lookup. The future of CRM is harnessing predictive data to become a proactive system. Sales reps who are able to leverage robot assistants are the ones who will thrive in this new world.

Source:, October 28, 2016
By: Clara Shih. Clara Shih is the CEO and founder of Hearsay, an enterprise technology company serving the financial services industry, and is a board member of Starbucks Corporation.

Generation Z – hur kommunicerar vi med generationen som föddes med mobilen i handen?

Posted in Aktuellt, Allmänt, Board work / Styrelsearbete, Customer care / Kundvård, Digitalisering / Internet, Executive Team / Ledningsgruppsarbete, Försäljning / Sales on October 3rd, 2016 by admin

Snapchat, Youtube, Jo, det är viktigt att vara där målgruppen är! Hur många gånger har du inte hört det och hur många gånger har du inte känt dig stressad över alla nya appar och tjänster du behöver lära dig?
Strunta i det! Det var budskapet idag på ett frukostseminarium som Cision ordnade med antropologen Katarina Graffman och två representanter från generation Z, 11-åringarna Tilda och Linnéa. De tillhör en mycket integritetskänslig grupp som snarare flyr än följer dig tillbaka när du stalkar dem i sociala medier. De föddes bokstavligen med ipaden i hand. För dem har mobiltelefoner och ipads alltid funnits och de brukar allt det vi vuxna lite slarvigt buntar ihop sociala medier på helt andra sätt än vi gör.

Flyttar sig från medium till medium
Generation Z hänger mest på Youtube, Instagram och just nu på karaoke-appen Instagram används inte främst för att posta bilder utan för att kommunicera med sina kompisar och chatta. Facebook och e-post använder de överhuvudtaget inte, eller väldigt sällan. Ibland har skolan eller idrottslaget en facebook-grupp som lärarna eller ledarna postar information så då måste de gå in där och läsa. I övrigt är Facebook ett medium för vuxna, där föräldrarna hänger och precis som vi inte ville hänga där våra föräldrar hängde, förflyttar sig generation Z från medium till medium när de vuxna hänger efter. Snapchat håller redan på att ebba ut nu när allt fler äldre hittar dit.
Alltid underhållen
Utmärkande för generation Z är att de alltid är vana att bli underhållna. De präglas av det Katarina Graffman kallar paus-beteende. De är vana att kunna sätta saker på paus för att ta upp tråden senare. Det gör att det ibland kan vara svårt att hänga med i en hel skollektion på 40-50 minuter. Det är inte helt ovanligt att barnen pausar för att en timma senare vilja lösa färdigt det där mattetalet men då är lektionen slut sen länge. Det här beteendet visar sig också då de ber sina föräldrar eller kompisar att pausa något för att kunna återuppta senare vilket kan skapa problem i relationer till andra människor.

Ombytta definitioner av utryck
Katarina Graffman har frågat barn och ungdomar i olika samhällsklasser och i olika länder vad medier och sociala medier är och samtliga svarar att media handlar om att ha kontakt med sina vänner och omvärlden. Att koppla appar och tjänster som sociala medier är inga uttryck de använder. I stället är ”sociala medier” när de sitter tillsammans och kollar på TV-teven, eftersom då är man social tillsammans.

Youtube före TV-teve

Att Youtube är den största sökmotorn hos generation Z är länge känt. Gruppen youtubar hellre än googlar. De följer personer som Beyoncé, Messi, Clara Henry, Hampus Hedström och Keyyo och har hög medvetenhet om sponsring och kan skilja på sponsrat material och icke-sponsrat och rör sig obehindrat mellan de båda.
40% av målgruppen definierar sig som gamers och kollar gärna när andra spelar Counterstrike eller Minecraft på samma sätt som vuxna kollar på fotboll eller längdskidor på TV-teven. Att Youtube är det första stället man söker på påverkar såklart också hur man upplever ord och text. Många ser till exempel gärna filmen först (om det finns en sån) för att få större förståelse när de läser en bok.

Stark integritet
Den här generationen har en stark digital integritet. Gruppen är väldigt medveten om hur de framställer sig själva på nätet och föredrar att skicka bilder och texter privat i privata chattar eller i tjänster som Snapchat där bilderna försvinner efter en tid. Den här generationen lägger inte ut särskilt mycket selfies. De hittar nya uttryck för att kommunicera. Ett exempel är smileyn som för den här gruppen är ett urvattnat sätt att kommunicera. Man skickar hellre en bild på sig själv med ett känslouttryck istället för att kommunicera via emojjis och de väljer aktivt tjänster där de får vara i fred och är inte lojala utan byter tjänster ofta. Att då ständigt följa efter dem gör att deras integritet kränks och då förlorar du målgruppen. De har större delen av sin identitet i den digitala verkligheten och istället för att springa efter bör organisationer och företag idag fokusera på hur de blir tillräckligt relevanta för att få dem att komma till dig.

Varumärket är viktigt
När Leksands knäckebröd ville marknadsföra sin knäckepizza och tog de hjälp gaminggruppen Ninjas In Pyjamas för att marknadsföra sin produkt som en nyttigare variant av snabbmat. Det var ett sätt att få målgruppen att identifiera sig med varumärket på ett nytt sätt istället för traditionell reklam. Ett annat exempel är Redbull som istället för att marknadsföra sin dryck, lyfter extremidrottare och extremsport som livsstil och lockar mängder av fans till sin sida. Var lyhörd för hur målgruppen använder just ditt varumärke och var öppen för hur de omtolkar det och gör det till sitt.

Slutligen, ha en inte en digitala strategi för samtliga plattformar. Varje plats eller app fyller olika funktioner och relationer för målgruppen. Våga välja bort kanaler och glöm inte att telefonen är deras viktigaste verktyg och den har de alltid med sig som en förlängd del av kroppen och hjärnan!

Kä, 2016
Av: Petra Jankov

Digital in industry: From buzzword to value creation

Posted in Aktuellt, Board work / Styrelsearbete, Digitalisering / Internet, Executive Team / Ledningsgruppsarbete, Försäljning / Sales, Strategy implementation / Strategiimplementering on August 28th, 2016 by admin

From supply chains to production to customer experience, digitization is transforming the way industry functions—and unleashing global opportunities for value creation.

In the past few years, we have seen digitization bring its first benefits to the industrial sector, particularly in processing and manufacturing, yet enormous untapped potential remains. Digital capabilities such as e-commerce platforms can significantly improve traditional customer-supplier experiences. Additional advances in automation, big data and analytics, and the Internet of Things create additional opportunities for substantial gains along the entire industry value chain.

Another industrial revolution

Early signs of the digital revolution are already here. Amazon Business, a B2B e-commerce platform launched in April 2015, turned over $1 billion in sales in its first year, growing at an going D 1impressive 20 percent per month. B2B buyers increasingly prefer digital, with 94 percent conducting some form of online research before purchase.

Further changing the rules of the game are the decreasing costs of new processing technologies such as additive manufacturing and advanced robotics. For example, 3-D printing costs came down by 60 percent between 1990 and 2014, and industrial robot costs decreased 5 percent annually between 2000 and 2012.

Put concretely, what does digital bring in terms of performance jump across functions? Let’s start by looking at operations, where our experts have recently shown that the impact potential is significant across all functions.

And this is not science fiction! Pockets of excellence exist across industrial sectors that have proven it can be done.
•In the oil and gas industry, predictive maintenance is eradicating unplanned downtime and costly repairs. Connected plants use remote sensors to forecast and report on the condition and performance of machinery. Early signs of problems are detected and corrected, maintenance resources are directed at the areas of greatest need, and machinery availability is maximized.
•The pulp and paper industry has seen significant increases in productivity through the use of remote temperature monitoring. Kiln sensors monitor lime mud temperature, a leading indicator of calcination. Sophisticated tools aggregate and analyze the temperature readings and automatically optimize the shape and intensity of the flame driving heat through the kiln. The process has resulted in fuel savings as high as 6 percent and a lime throughput increase of 16 percent.
•In manufacturing, repetitive, strenuous, and complex tasks are performed by robots working alongside operators on the shop floor. The operators themselves spend less time waiting for goods or processes or filling in routine documentation, because information systems optimize materials flows and track key performance indicators. Real-time analytics and advanced process control enable errors and quality lapses to be picked up immediately, minimizing rework and scrap, and automated inventory systems—such as wireless-connected boxes with cameras that automatically reorder when their fill level drops below a certain limit—ensure that inventories are accurate, goods can be easily located, and safety stocks are adequate but not excessive.

Advanced modeling techniques for optimizing complex manufacturing sites and supply chains

Working with a basic-chemicals manufacturer with complex operations, we designed an end-to-end advanced model that generates a holistic optimization of the entire supply chain from procurement to commercial. By incorporating detailed price and cost curves into this model and leveraging the latest advanced optimization engines, we developed a systematic optimization tool that was embedded into the company business process.

The company saw a recurring EBITDA margin increase of roughly 5 percent, equal to approximately 6 percent of overall manufacturing, logistic, and raw-material costs. Application of these techniques on more than ten other cases in the process industry suggests a recurring EBITDA margin increase in the range of two to five percentage points, with value creation being proportional to supply-chain complexity.

Let’s not forget the customer: digital has the potential to profoundly reshape the way industrial companies interact with and serve their customers. Let’s have a closer look:
•Where customer access was once constrained by minimum order sizes and the cost to serve in a particular market, e-commerce and web shops allow companies to reach customers they could nevergoing D 2 have reached before; hence cost to serve can be cut by 50 to 70 percent. Online marketplaces such as Amazon Business and Alibaba virtually connect unlimited buyers and sellers, and established players like Grainger are leading the way with their own platforms, capitalizing on 2015’s estimated $1 trillion in B2B digital commerce sales in the United States.
•Suppliers who once relied on subjective analysis and historical knowledge to determine prices can now use faster, data-driven tools to optimize pricing. For example, a leading technical gases company with a large and highly fragmented product portfolio used advanced data analytics and modeling to design a more strategic and logical approach to pricing. The newly developed value-based pricing led to an increased return on sales of 5 percentage points (see sidebar “Pricing”). Emerging markets can tap the potential of digital in the food chain through innovations such as precision agriculture, supply-chain efficiencies, and agriculture-focused payment systems.
•Sales directors can make smarter resource-allocation decisions based on timely inputs from sales reps, individual performance data, and automated recommendations from tools. Reps making sales recommendations no longer have to rely on hunches about what their customers want, but instead make use of targeted insights about products to sell, customers’ success stories, and simulations run with the customer during the sales visit. The ability to attract new customers, improve cross-selling, and reduce leakage can increase revenues by 5 to 15 percent, while customer satisfaction can be increased by 20 to 30 percent.

Digital’s disruptive power

But digital is not only a means to optimize a company’s existing operations. It also gives both attackers and incumbents the power to disrupt value chains, enter new sectors, and create innovative business models. Established companies face threats from new competitors like Amazon Business, which offers millions of products, from automotive components, industrial lifts, and ramps to lab products, protective gear, and electrical equipment.

Impact of value-based pricing

Working with a basic-chemicals manufacturer with complex operations, we designed an end-to-end advanced model that generates a holistic optimization of the entire supply chain from procurement to commercial. By incorporating detailed price and cost curves into this model and leveraging the latest advanced optimization engines, we developed a systematic optimization tool that was embedded into the company business process.

The company saw a recurring EBITDA margin increase of roughly 5 percent, equal to approximately 6 percent of overall manufacturing, logistic, and raw-material costs. Application of these techniques on more than ten other cases in the process industry suggests a recurring EBITDA margin increase in the range of two to five percentage points, with value creation being proportional to supply-chain complexity.

To get ahead of threats like this, industrial companies can use digital to transform and extend their own business models before change is imposed on them by attackers reshaping their industry. Some incumbents are joining digital platforms and B2B marketplaces to aggregate demand and sell direct to end users. BASF, for example, was the first chemicals company to sell products online through Alibaba. Other businesses, such as the 3-D printing start-up Sculpteo, are selling services rather than products. Still others are offering their manufacturing capacity as a service to third parties.

But are companies ready?
Compelling though the opportunities are, our analysis indicates that industrial sectors in general are lagging behind other sectors in terms of digitization: the MGI Industry Digitization shows that while advanced manufacturing and the oil and gas sectors have already gone some way in their digitization journeys, basic goods manufacturing and chemicals and pharmaceuticals are still in the early stages.

Moreover, the McKinsey Industry 4.0 survey of more than 300 manufacturing experts in Germany, Japan, and the United States from January 2016 shows that only 16 percent of manufacturers have an overall Industry 4.0 strategy in place, and just 24 percent have assigned clear responsibilities to implement it.

Five priorities for competing in an era of digital globalization

Five ways to win
Companies that want to get ahead of the digital pack would be wise to take five key steps:
1. Prioritize and scale up. Use structural assessments to determine the customer appetite versus willingness to pay by using mockups to conduct interviews with potential customers and external experts. In addition, weigh the potential impact against the ease of implementation by assessing the degree of innovation or disruption (Is it a substitute? an extension? a breakthrough?), defining the scalability, studying the feasibility of the pilot and full solution, and ascertaining the fit with existing assets and capabilities.

2. Adopt a test-and-learn approach. As technology-driven change accelerates, forecasting and planning are becoming less relevant and reliable. Agility—remaining open to learning and experimentation—is key. And it is crucial when investing in digital solutions to adopt the mind-set of a venture capitalist. This includes trying out ideas quickly with target customers as going D 3soon as they exist to check market interest and price points. It also means being ruthless: if the idea isn’t worth it, kill it immediately. In addition, successful ventures think about monetization potential as soon as interactions with potential customers start, and they proudly copy from other sectors. A focus on scale is also essential, with the ambition being a tenfold increase.

3. Put foundations in place. To maintain the efficiency and stability of existing operations while providing the processing capacity and speed required by new data-driven activities, smart companies move to a two-speed IT infrastructure—overlaying a fast, next- generation cloud-based IT system on their secure, robust, resilient legacy systems. New talent is another priority, especially data and process experts who can connect up various functions, systems, and levels of management; draw insights from all the information generated across the enterprise; and use their knowledge of the whole production chain to help design new products. Meanwhile, job profiles must be rethought to meet new needs, such as maintenance staff who oversee predictive maintenance rather than acting as troubleshooters, and quality specialists who intercept quality issues online rather than detecting faulty parts after production.

4.Treat data as a competitive advantage. Data fuels the algorithms that provide insights into markets, customers, and business processes, so ensure that data management has a clear structure and governance. And considering that even tech giants such as Google have been vulnerable to malicious attacks, be sure to put cybersecurity high on your management agenda. Physical targets such as connected machinery and systems installed for remote access could also be highly susceptible to sabotage by hackers and other attacks.

5. Work across functions, and manage change in the organization. Digitization requires that all departments work together to capture joint benefits for the whole business. Moreover, because these innovations have a major impact on how people work, it is essential to anticipate concerns and build a persuasive case for the employees.
When thinking about digital priorities, identify the technologies and applications that would have the greatest potential impact. But also make sure not to ignore possible barriers to adoption: devise a plan for helping employees use the new technologies and the related new methodologies most effectively. Remember that no organization achieves a successful digital transformation without taking a thoughtful approach to change management, and that it’s the people applying the technology in their daily jobs who will create the additional value.

Digital’s potential in industry is massive, not only in operations, but across all functions of the sector, and the levers that make the most difference to a company’s bottom line vary—from e-commerce to automation to advanced analytics. But industrial companies must begin taking advantage of digital opportunities in order to avoid losing the value to others. A commitment to digitization from top management is critical to succeeding, as is a systematic method of defining priorities and the ability to leverage early success to drive change.

Source:, August 2016
Authors: Paul-Louise Caylar, Kedar Naik and Oliver Noterdaeme
About the authors: Paul-Louis Caylar is a partner in the Paris office and a coleader of Digital McKinsey in France. Kedar Naik is an associate partner in the Brussels office, where Olivier Noterdaeme is a partner.

More than digital plus traditional: A truly omnichannel customer experience

Posted in Aktuellt, Customer care / Kundvård, Digitalisering / Internet, Försäljning / Sales, Strategy implementation / Strategiimplementering on August 25th, 2016 by admin

Adding digital channels requires major efforts, yet payoffs can disappoint. Integrating digital and traditional channels into a truly omnichannel offering is even harder—but multiplies the rewards.

In sector after sector, companies are asking how they can adapt to the digital world—how they can build more digital capabilities, create more digital offerings, and even become “digital first” organizations.

But for institutions that have served customers for decades in person and over the phone, digital too often falls short. After the debut of a new app, for example, a jump in sales may not be as big as expected, while hoped-for operational efficiencies—such as a reduction in expensive call-center and in-store customer-support requests—hardly materialize.

Executives naturally wonder why: aren’t customers demanding digital? Without question, they are. But not to the exclusion of other channels, which remain critically important.

omni 3For example, as much attention (and fear) as Amazon may generate among traditional retailers, as of early 2016 about 92 percent of retail sales in the United States—the company’s home and largest market—were still taking place in person. Furthermore, our analysis of market research confirms that many customers (including large majorities in some markets and industries) want to move freely from channel to channel in an omnichannel experience. Accordingly, the digital end-to-end offerings and internal capabilities that companies are building are important not only in themselves but also in the way they support the other channels (see Driek Desmet, Ewan Duncan, Jay Scanlan, and Marc Singer, “Six building blocks for creating a high-performing digital enterprise,” September 2015).

Retailers have increasingly recognized this reality, with some folding one-time web-only subsidiaries back into their larger businesses. But in other consumer-facing industries, such as financial services or telecommunications, digital efforts often end up becoming just another channel—in effect, a whole set of subchannels including mobile, social, and chat. Given that channel conflicts have bedeviled large companies for decades, with competition among channels sometimes more intense than with the outside world, adding even more to the list is not ideal. The result? More complexity (and cost) for the company and a less-than-optimal experience for customers.

By contrast, integrating digital into an omnichannel experience breaks down barriers for customers—and for performance, allowing companies to hone their digital skills in a way that takes advantage of their strength in traditional channels. But first, companies must break down their own internal barriers, initially by developing a more sophisticated understanding of how their customers think about all of the channel options. Mapping out the journeys customers follow among the channels reveals the most important opportunities for channels to cooperate, forming a list of changes for the company to roll out. Finally, to ensure the changes last, each major journey will need its own leader and cross-unit team—supported by revamped incentive structures to facilitate cooperation, new performance dashboards, a road map for transformation, and clear communications and governance from top executives.

Getting these steps right provides new opportunities to make customers happy—for instance, by letting them start a loan application on their phone before bed and finish it at a branch the next day after asking a few questions via the call center. Capturing moments such as these turns omnichannel into a major growth platform.

After it tightened the links between its digital and traditional channels, a large regional bank increased sales of current-account and personal-loan products by more than 25 percent across all channels. And a European telecommunications company saw a 40 percent increase in usage of its online service channel, reducing its costs by more than 20 percent while increasing customer satisfaction by more than five percentage points.

The obstacles to omnichannel

Companies are starting to understand the omnichannel imperative. But getting there is proving unexpectedly difficult.

A bias toward bigness. Part of the reason is a misplaced belief that omnichannel’s massive implications require equally massive actions, such as an entirely new IT platform or organization structure to bring all channels together. Too often that “silver bullet” mentality leads only to a massive misallocation of resources. Instead, the companies that are most successful in making the digital and omnichannel transition concentrate on a long, prioritized list of pragmatic initiatives that, as they are implemented, unleash the value trapped in the intersections among poorly coordinated channels. Collectively these initiatives counter two larger problems:

Disregarding diversity. In our experience, most companies tend to build their digital and omnichannel experience believing that most customers have basically the same needs and follow basically the same journeys. In reality, customers are far more diverse, not only in their needs but also in how they want to meet those needs. For example, a recent survey of North American mobile customers showed that while approximately 35 percent would turn to digital channels first in dealing with an administrative issue, such as a change of billing information, only 24 percent would use digital channels for solving a technical problem. And, of course, even with administrative issues, more than half of customers preferred either in-person or phone resolution, illustrating how many different pathways are possible within the same basic journey. Accommodating these different behaviors will require organizations to understand their customers better while becoming more flexible in allowing for more options to reach the same end point.

Curbing cooperation. But the need for greater flexibility usually bumps into a hardened reality. Despite decades of discussion aboutoni 2 conflicting channels, many companies still operate each channel as a separate organization, expecting it to optimize its own performance and service model while showing its own results. Incentives ostensibly designed to encourage performance unintentionally reinforce the channels’ isolation—such as revenue-generation targets that push each channel to increase its own sales volume regardless of any impact on sister channels. Competition becomes even more brutal internally than with the outside world.

The better breakthrough: Start small, from the customer

A better outcome is possible, but only by taking a more disciplined approach to understand how different customers think and behave at each step of their individual journeys. By revealing customers’ most important pain points, the resulting analysis helps the organization see which changes to make first, gradually making an entire process simpler and more effective for customers from beginning to end.

1. Discovering ‘personas’

The first step, describing how customers act, sounds daunting. But it’s actually less so because customers’ behavior usually coalesces around a few major variables. These become the basis for creating “personas” describing major segments of the customer population in a richer way than traditional demographic-based segmentation allows.

For example, in wireless services, the major variables could include customers’ comfort levels with mobile technology, the role mobile technology plays in their lives, their financial sophistication, their occupation, and the way they shop—how much comparison shopping they do and what information sources they use. A “work and play” persona would be a professional who relies heavily on her mobile phone both for her job—communicating with clients, managing her calendar, and making travel arrangements—and for personal activities, such as paying bills, shopping for groceries, and making investments. Her busy schedule leaves little time for shopping, so for major purchases she relies on quick Internet searches to understand features and prices. Her ideal is to buy online and then pick items up in the store on her lunch break, rather than wait for delivery.

By contrast, a “social enthusiast” is a bit younger, less likely to have a job requiring a mobile device, and instead uses his phone mainly to keep up with friends and play multiplayer games. He may be more likely to be on a tight budget, so he researches purchases extensively, looks to social networks for a consensus on the best option, tests it out in person, and sends victorious tweets when he “scores a great deal.”

The same basic patterns repeat across industries—in small-business banking, for example, technology and financial sophistication both matter, as does a business’s size and its financial goals. Describing four to six major personas is usually enough to cover about 80 percent of the customer base.

2. Charting a journey’s map

The next step is to understand the personas’ different needs and follow the steps, both offline and online, that the each persona takes along a given journey. The crucial requirement is to identify the important (and often hidden) pain points that the persona encounters and the resulting areas of opportunity for redesign.

Some of the opportunities may be visible just by mapping all of the current journeys customers can follow across all channels and displaying them together. For the regional bank, two points showed particular problems. In the online channel, about 80 percent of customers dropped out rather than fill in a registration form. And in call centers, more than 98 percent of customers did not ask for an offer. A similar map for the European telco found that regardless of which channel customers started in, if they ended up on the online shop, they abandoned their purchases fully 99 percent of the time. Furthermore, across all channels, 30 percent of orders were never activated.

The reasons for these outcomes tend to differ by persona. The work-and-play user’s main challenges center on time: there’s not enough of it. She may grow impatient at sorting through too many options and give up when a form asks for information that she knows the company already has (“They know where I live—my statement arrives every month like clockwork. This is wasting my time.”) Meanwhile, the social-enthusiast user wants to get the best service and product he can get for the lowest price, without committing to a long contract in case a better option comes along later. He may keep getting timed out of his purchase while looking at his social feeds to figure out if the option he’s considering is really the right one.

3. Designing a portfolio of omnichannel initiatives for each improvement area

These findings lead directly to a multipronged improvement strategy comprising several dozen initiatives, ranging from better data links to prepopulate online order forms to revamped offers and new performance-measurement practices. The goal is for each of the initiatives to be pragmatic and achievable, while together they deliver profound and lasting change.

The most urgent changes typically concern the digital channel, where customers often face a vast range of choices with complex pricing provisions and business rules that make it almost impossible to find the right combination (see sidebar, “Becoming more agile—in IT and in processes”). Instead, a new structure would change the experience from the moment a user arrives on the page. Rather than show the same page for everyone, the new page would vary depending on the user’s persona, which typically could be assigned based on a combination of existing customer data and the user’s prior browsing behavior on the site.

The customer therefore has a much more customized experience. A work-and-play user would be taken directly to two or three simple product options based on phone features and service limits. After choosing one of the options, the user would see a second page of add-ons, such as purchase-protection plans and international coverage. Social enthusiasts, by contrast, would get a more detailed interface that allows them to make separate decisions for the phone and for the service levels, so that they can understand the trade-offs and feel like they’re getting the best bang for their buck. The page they see also would provide user-generated product reviews from other clients, social-network links, a chat feature staffed by sales representatives, and a tool to set up in-store appointments.

4. Enabling continuous refinement and improvement

The effort these changes require is too great for an organization to watch the returns fade away and then repeat the exercise a year or two later. Revisiting its internal governance, performance, and capabilities becomes critical to support essential cultural changes and ensure that the organization’s performance continues to improve as the market evolves.

Although difficult, restructuring the traditional governance approach—in which channels operated almost as separate businesses—is the best defense against the most immediate threat to the omnichannel model’s long-term health: the reemergence of silos. During the transformation process, the organization forms cross-unit teams with representation from each channel and from supporting functions such as IT, marketing, and compliance. Each team operates as a work cell, with accountability for the design and implementation of a set of initiatives. As the changes take hold, the cells become the basis for a new organization structure that continually reassesses how the omnichannel model is functioning, identifying improvement opportunities and translating them into new rounds of initiatives for implementation.

Accountability will also depend in part on new performance targets that encourage collaboration instead of competition among channels. Thatomni 1 means, for example, deciding how to allocate credit for shared sales that start in one channel and end in another, and agreeing on performance indicators that provide concrete evidence the collaboration is occurring. Shared key performance indicators for digital, sales, and IT, such as the speed of change implementation or the level of digital adoption, help show whether the different functions are actually working together or whether they are finding reasons to block new initiatives.

Throughout the organization, people will need new capabilities at every level. Frontline sales and service personnel, for example, will need new and deeper skills in recognizing customer needs, understanding where the customers are in their journeys, and finding the most effective ways to help them depending on which persona they best match and which channels would best serve them. The greater complexity of frontline positions will require more coaching and support from managers, who will need their schedules freed up so that they can spend more time with their teams. And senior executives will need to play a more prominent part in role modeling behavior changes, such as in encouraging problem solving by people closer to the customer rather than imposing solutions from above.

What would it mean for your organization if you could promise your customers that they’ll get the service they need, however they need it? How much more effective would your people be if they didn’t have to worry about losing a customer to another channel? Becoming truly omnichannel is demanding for an organization. But the answers it provides to questions such as these make it worth the investment for organizations willing to make the commitment.

Source:, August 2016
Authors: Raffaella Bianchi, Michal Cermak and Ondrej Dusak
About the author: Raffaella Bianchi is a senior expert in McKinsey’s Milan office; Michal Cermak and Ondrej Dusek are partners in the Prague office.

Listen to your employees, not just your customers

Posted in Aktuellt, Customer care / Kundvård, Försäljning / Sales on August 16th, 2016 by admin

In 2014, Michael Callahan, then head of customer experience at Hulu, had a mystery on his hands. When the big video streaming service surveyed customers who renewed subscriptions, it discovered, paradoxically, that some customers stayed with Hulu even when they didn’t necessarily have a positive perception of the brand overall.

It turned out that some customer service representatives of the third-largest player in the streaming video space were pushing fence-sitting customers too hard, said Callahan in a recent interview. Paid digital TV companies, which also include Netflix and Amazon Prime, face high churn. Like Hulu, they need to ensure positive perceptions among customers routinely up for grabs between the big players.

“We had a gut-check conversation to discover what it meant to truly serve customers,” Callahan remembers. “We wanted employees to act more authentically to achieve a better, more positive experience of the brand overall. We didn’t want them only thinking about retention.”

That’s when Callahan’s team took an unusual step: The team created and linked an employee feedback system to its customer feedback system, in order to flag interactions where customers and employees had different perceptions. The linked system consisted of two short surveys — one sent to employees and the other to customers — right after a transaction. The linked system allowed for more insight into customers, and managers could use the information to coach employees, to assess whether they had the right tools and resources, and to identify people with innovative ideas and leadership potential.

Many companies love customer feedback, but only a handful have devoted as much energy to employee feedback systems. “For every dollar spent on employee feedback, companies spend hundreds of dollars on customer feedback,” said Troy Stevenson, former vice president of customer loyalty at eBay, in a recent interview.

Turning data into action.
Companies rarely connect the two systems. But, connecting them can create powerful feedback loops that engage employees and help companies adapt to fast-changing customer expectations, according to new research I conducted with my colleagues Carolyn Egelman, Julia Markish, Emma Sopadjieva, and Dorian Stone at the Medallia Institute. The research included interviews with more than 25 customer experience and HR executives and a survey of 1,000 frontline employees working at large companies in the U.S. automotive, financial services, retail, telecomm, and hospitality sectors.

Linking feedback systems allows companies to enlist frontline employees as agents of change. In our Medallia Institute survey, 56% of frontline employees said they have suggestions for improving company practices, and 43% said their insights could reduce company costs. Yet, a third said they were surveyed once a year or less, and more than half said employers weren’t asking the right questions.

In the case Callahan described, two screen pop-up surveys were sent to customers and employees immediately following a customer service transaction.

Customers were asked:
Was your problem solved?
Are we easy to work with?
Did you enjoy the experience you just had?

Employees were asked:
Did you solve the problem?
Was it easy to access the tools and resources you needed to solve the problem?
Did you feel proud to represent our brand in the conversation?

The linked feedback system prompted executives to adjust the compensation plan: customer service representatives received a retention bonus only if a subscriber remained on the rolls 30 days after an interaction.

Reducing customer churn by even a small amount can add up to a lot in a subscription-based business. For example, if linked feedback loopsfeedback helped to improve retention by even one percentage point, the savings on a subscriber base of 12 million (Hulu’s current base) with a typical monthly subscription price of $7.99, would generate an extra $11 million in annual revenue.

Why don’t more companies do this? Organizational barriers are often the culprit. At one 170,000-employee big box retailer, linking the feedback systems would require approvals from three different senior executives, the CMO, the chief human resources officer, and the president of retail. The only person who could drive a linked system was the CEO.

Companies that want the insights from linked systems can navigate the organizational complexities with these six steps:

1. Align feedback systems around high-level business objectives. Which needle do you want to move? Hulu wanted to build more authentic relationships with customers. This drove everything from its questions to how it used the data.

2. Design your feedback system to aggregate data at key touchpoints. Most companies build separate, often expensive systems within existing reporting hierarchies. Instead, work backwards from the customer experiences you want to understand. For example, if your customer feedback is organized around touchpoints within lines of business, survey employees who interact with customers at those same touchpoints, such as a call center conversation or an account signup. Companies often make the mistake of organizing customer feedback systems around one structure — say lines of business or channel — and employee feedback systems around another — say geography or function.

3. Establish the right frequency and pacing for employee and customer surveys. Many companies, including Nordstrom, Four Seasons and Vanguard, collect customer feedback on a continuous basis and distribute it in real time (Disclosure: Nordstrom, Four Seasons, and Vanguard are all clients of Medallia). Most executives I interviewed said employees should be surveyed more than once a year but not more than once a month. Match the timing of your surveys to the pace at which you can act, so that you can demonstrate results. Surveying employees on a rolling basis, and using quarantine rules (designated times when you won’t ask for feedback) for customer surveys can minimize survey fatigue.

4. Encourage honest feedback and protect employees who answer candidly. Employees may worry their feedback will get them into trouble. Counter this perception by rewarding and honoring employees for raising difficult issues. After successes become clear, give even more recognition to employees whose feedback helped move the company forward.

5. Let people speak in their own words and capture emotional cues. As companies rely more on technology, relating to customers emotionally and pinpointing what troubles them gets trickier. Open-ended questions, text analytics and sentiment analysis capture interactions more vividly and compel leaders to act. “To hear an employee who’s deeply empathetic to the customer trying to explain a complex policy … to feel them struggle is painful,” says Callahan, who is now at Seattle-based Blueprint Consulting Services.

6. Act on the most important feedback, and communicate what you’re doing and why. In our interviews, we learned that a handful of companies are using feedback to create specific action plans tied to companies’ broader goals. At one company, executives use an internal website to post plans that grew out of employee feedback. Employees can see who’s leading an effort, view timelines, and track progress. They can also share additional feedback or volunteer for projects.

In a world where big data algorithms and technology increasingly dictate the customer experience, linked feedback systems give companies at least two great advantages. The connections help senior managers get a more complete picture of customer-employee interactions, including the behaviors — and emotions — they generate. And, asking employees for their input, not through a pro forma annual survey but as part of the company’s routine operations, sends a signal that employees have useful insights and that they are valued.

Ultimately, well-designed feedback loops enable employees to be more empowered and companies to be more responsive, creating the competitive edge companies need to adapt and thrive.

Source: Harward Business review, August 2016
Author: Beth Benjamin
About the author: Beth Benjamin is senior director of research at Medallia, a global provider of customer experience management software. She applies organizational science to real-world problems, helping companies to adapt to the challenges of growth and market change.

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Maximizing marketing value through smarter procurement

Posted in Aktuellt, Board work / Styrelsearbete, Försäljning / Sales, Leadership / Ledarskap on August 4th, 2016 by admin

Now more than ever, marketing stars need a strong band behind them.

“How come you ain’t ever tried this kind of pickin’, Luther?” asks the musician and songwriter Waylon Jennings in the 2005 Johnny Cash biopic, Walk the Line.

“Well, Waylon,” answers guitarist Luther Perkins, “whatever it is you’re lookin’ for, I’ve already found.”

In an environment undergoing continual transformation, companies are searching for new ways to assess, increase, and monitor the efficiency and effectiveness of their marketing dollars. But like Cash’s legendary, laconic guitarist, procurement might already have found what marketing is looking for.

These are turbulent times for marketers. The digital revolution is transforming the consumption of media. People under 35 watch as much video content as their parents do, but less than half of it is live television. In the United States, more than a third of all video content is now viewed online, much of it on mobile devices. Millennials spend 15 hours a week on their smartphones, and 89 percent check their work email outside of normal working hours. They are likely to trust the views of their peers and social-network connections over those of media professionals.

images (11)For marketers, the proliferation of digital media creates exciting new opportunities to engage with consumers, but ferocious complexity too. Marketers know they must offer an integrated brand experience across both traditional media and the fast-changing ecosystem of digital devices and channels that their customers use. They want to make better use of digital resources, such as real-time feedback on customer preferences and the ability to tailor and target messages more precisely than ever before. And marketers want to innovate by making the most of new approaches as they emerge—without losing sight of the proven value of established, traditional marketing efforts.

To achieve these ambitions, marketers need to make the right choices about what they buy, how they buy, and whom they work with. Those choices aren’t easy. Human eyes view less than half of all digital ads, for example, and programmatic buying through automated-bidding systems has transformed the traditional relationship between advertisers and media owners. Complexity and rapid change make the right agency partnerships all the more important.

In this environment, big advertisers are going to the market in unprecedented numbers. In 2015, an estimated $30 billion in marketing spend was up for grabs in the so-called mediapalooza as many of the world’s biggest advertisers reevaluated the capabilities, fit, and economics of their agency relationships.

Where’s purchasing?
To meet today’s challenges, marketers need new capabilities. They need sharp analytical skills to pull useful insights from big digital data sets. They need to evaluate the potential of new channels and new service providers. And they need new ways to measure how efficiently and effectively they use budgets that must now stretch across far more categories.

On the face of it, marketing needs precisely the robust, fact-based analysis and decision-making capabilities that a high-performing procurement function provides. And since marketing is the largest indirect-spending category in many businesses, procurement experts should relish the opportunity to help it find new sources of value.

In many companies, however, this kind of mutually beneficial partnership just isn’t emerging—the relationship between marketing and procurement is often cool if not downright antagonistic. Last year, one major global consumer-packaged-goods (CPG) company even announced that it was shuttering its marketing-procurement function altogether.

What’s going wrong? As with any problematic relationship, much of the difficulty stems from mutual misunderstandings. Marketers don’t always recognize how their colleagues in procurement can best assist them, so they tend to relegate its input to the final negotiating and contracting stages of the purchasing process, when there’s less opportunity to add value. Procurement doesn’t always communicate its capabilities clearly, so it is perceived as a barrier rather than an enabler. Sometimes, the lack of a common language even makes it difficult for marketing and procurement to understand each other’s aims and intentions (see sidebar, “Singing from the same songbook”). And the two functions haven’t found processes that allow them to work together effectively and make the most of their individual strengths.

Time for a new start
Companies need to reevaluate the role of procurement in marketing. Critical strategic decisions, such as the selection of partner agencies and the design of campaigns, must remain firmly in the hands of the marketing function. Marketers know their customers’ preferences, and with the right information they can identify the best partners to help them attract their target consumers. But just as Johnny Cash’s unique sound relied on the guitar skills of Luther Perkins, so marketers need the right support around them.

Building that support should begin with a clear understanding of the ways a high-performing procurement function can help fulfill key marketing needs. We have identified six areas of focus, from well-established purchasing capabilities that marketers already know to a few that call for the advanced skills of a mature, high-performing procurement function:

– Manage suppliers. Marketers need to verify that suppliers (agencies, in many instances) are financially viable. They need to negotiate competitive rates and robust contracts, to ensure that suppliers deliver what they promised, and to see that they get paid on time. These activities are what the procurement function does every day across all categories.

– Monitor efficiency. Marketers need to understand the performance of their agencies. The procurement function knows how to track and monitor the efficiency of both the agencies engaged and the media they place. It also knows how to lead supplier reviews. Supervising gross-rating-point/targeted-rating-point audits and holding agencies accountable for the findings should be second nature.

– Play the bad cop. When agencies perform poorly, the procurement function can lead the tough conversations, so that marketing teams maintain close and productive agency relationships.

– Find the right capabilities. Marketers must have agencies that can meet their current and expected needs—and bring them the best of the market by meeting needs they didn’t know they had. For example, can an agency track if and where digital ads are viewable? What is the extent of its programmatic-buying capabilities? The procurement function can scan the industry for new competencies and develop processes to test the ability of partners to meet them.

– Create more value. Marketing efforts must focus both on quality (capabilities and fit) and on cost to deliver maximum value. Using marketing-return-on-investment (MROI) data, the procurement function can do all this by creating balanced scorecards that, for example, track both the efficiency of ad purchasing and the effectiveness of the resulting placements.

– Move quickly. Marketing is changing rapidly, and the digital revolution is a key driver. Marketing teams need to respond. Working closely with procurement allows them to develop rules of the road that permit flexibility and responsiveness while controlling risk.
In it together

To capture value of this kind—especially the more advanced opportunities, in the bottom half of the list above—marketing and procurement need a closer working relationship throughout the entire purchasing process. To show how such a relationship can work, let’s consider the example of a large CPG company that recently conducted a comprehensive review of its agency ecosystem, starting with media-buying activities. As a result, the company not only found the most capable agency with the best cultural fit but also saved on media spend and fees. It reinvested half of the savings in additional media, helping to drive growth. The rest went straight to the bottom line.

The company had long-standing relationships with multiple media agencies. It wanted to consolidate its media purchasing and to ensure that it was getting the strongest capabilities and the best prices for its sizable media budget. To check all this, teams from marketing and procurement embarked on an intensely collaborative five-month competitive-pitch process.

In preparation for the event, procurement conducted a detailed analysis of the company’s historical media outlays. Its team looked at more than 100,000 lines of traditional and digital media-spend data—for example, breaking down TV-ad purchases across nine key attributes (such as network, program, spot length, and dayparts) to create a representative basket of around 300 future media purchases that it would ask potential agencies to bid on. The team mapped the remaining traditional- and digital-media purchases onto the items in the basket so it could estimate the full media-buying cost from agency quotes.

Procurement then worked with marketing to understand exactly what the latter required from its media agencies. Next, procurement scanned the market for trends and for emerging capabilities to address them. With this information, the joint team identified a handful of potential agencies, including a mix of incumbents and new organizations. The selected agencies were invited to participate in a rigorous multistage pitch process, which included written assignments and multiple presentations to the marketing team.

While marketing assessed the capabilities and cultural fit of the agencies, procurement evaluated their detailed media-buying quotations for the items in the representative basket. Again, this was a multistage process, and agencies had an opportunity to adjust their pricing when it was out of line with that of their competitors.

Once the marketing team had chosen its preferred agencies, the two functions jointly entered into a detailed negotiation process. Procurement used clean-sheet techniques to evaluate agency bids for the cost of running the company’s account against the actual cost of the personnel and resources required to do so. In this way, it encouraged the agencies to be clear about the cost assumptions underlying their bids. The negotiation process also included the development of a new incentive model to reward agencies for meeting the company’s strategic objectives while controlling overall costs.

At the end of the process, the joint effort delivered remarkable results. Marketers from the company’s multiple brands agreed on a single agency to consolidate their media-planning and media-buying activities. Yet the new agreements also reduced overall media costs by over 20 percent and agency fees by more than 10 percent.

The procurement team’s initial analysis of those thousands of individual purchases continued to pay dividends, too. The company set price guardrails to help it ensure that the agency was achieving the promised discounts across all categories of media spend. And by comparing the cost of different media slots with their ability to meet strategic goals, the company also identified further potential savings by changing the media mix it bought. For example, it was able to shift spend to more efficient channels or cheaper dayparts that still delivered the right audience quality, reach, and frequency for its brands.

As the changing habits of customers force companies to transform their approach to marketing, they are looking for new tools to help maximize the value of those efforts. High-performing procurement functions have already found many such tools. The challenge for CPOs is to demonstrate to their marketing colleagues that procurement’s contribution is not only useful but also vital and to forge new, intensely collaborative relationships capable of delivering that contribution in a dynamic, rapidly evolving environment.

Source:, August 2016
Author: Cody Butt
About the author: Cody Butt is an expert associate partner in McKinsey’s Denver office.