verde group
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Managing Your Revenue at RiskVerde Group Capabilities
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Who We Are
CUSTOMERLOYALTY RESEARCH
EMPLOYEEENGAGEMENT RESEARCH
• We are a research based consultancy specializing in customer retention research. We have developed a trademarked research process that prioritizes – by economic impact – the specific customer problem experiences that result in decreased loyalty and churn, called Revenue@Risk.
• Verde also provides Human Capital Management consulting. We focus on employee engagement research using a state-of-the art employee engagement survey and benchmark database developed by The Conference Board.
POINTS OF DIFFERENCE • 16 years experience in identifying, analyzing and improving
organizational performance and resolving customer problem experiences across business categories.
EXPERTISE • Senior Consultants with Customer Loyalty, Human Capital Management expertise with a variety of industries.
CLIENTS • We work with leading Fortune 500 companies worldwide.
Strategic Research Partners:
VERDE TEAMVERDE TEAM
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Stakeholder experience is the strongest predictorof behavior
• Trends:
– Introduction of customer-centric service models
– Moving sales team from product selling focus to coordinating value-add experiences
– Addressing the business needs of customers for mutual benefit
• Issues:
– Continued use of traditional sales force effectiveness, general physician satisfaction metrics
– Typical studies do not identify specific experiences, frequency of experiences , how to create value added services from the customer’s perspective.
• The Verde Group has developed 3 key premises around Pharma Stakeholder research that identify the attributes that make customers satisfied and loyal, but more importantly the experiences that create dissatisfaction and possible defection from the brand.
Pharma Stakeholder Research APPROACH TO LOYALTYAPPROACH TO LOYALTY
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Dissatisfaction is not the Opposite of Satisfaction
As a driver of loyalty, dissatisfaction represents a dimension of customer affect distinct from satisfaction.
Dissatisfaction is a very powerful predictor of a customer’s future behavior.
Drivers of satisfactionand loyalty
• Consultative Selling• Business Acumen• Creating Mutual
Benefit
Drivers of dissatisfactionand defection
• No coordination of resources
• Reimbursement Issues• Educational Materials
APPROACH TO LOYALTYAPPROACH TO LOYALTY
Satisfaction Is Not Sufficient For Loyalty
Satisfaction Is Not Sufficient For Loyalty
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Experiences Drive Loyalty
The customer relationship is built with the experiences that customers have with a provider. These experiences lead to the formulation of attitudes and the attitudes drive customer behaviors (loyalty or defection.) The assessment must mirror the customer relationship process.
Satisfaction is an attitude associated with loyalty
Most customer loyalty research focuses on attitudinal measures. However attitudes are not actionable.
What drives loyalty, brand equity and customer value is the Customer Experience
APPROACH TO LOYALTYAPPROACH TO LOYALTY
Satisfaction Does Not Drive LoyaltySatisfaction Does Not Drive Loyalty
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Customer Loyalty Evolves Over Time
• Customer defection is a process of disengagement and not an event
• A customer’s dissatisfaction thresholds are established in part by the attractiveness of competitive alternatives
TRUSTTRUSTTRUSTTRUST
Customer Loyalty Is Not BinaryCustomer Loyalty Is Not Binary
APPROACH TO LOYALTYAPPROACH TO LOYALTY
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The Verde Research Process
Our methodology is designed to move research findings “out of the binder” and into operations in an actionable, efficient and impactful manner.
OUR PROCESSOUR PROCESS
Verde has developed a proprietary research process to measure customer and employee experiences and resulting attitudes and behaviors. The process:
• Identifies the customer and employee experiences that are predictive of market action (recommend, prescribing behavior, value)
• Links market actions to financial impact
• Delivers insights that are highly actionable due to the granular nature of the feedback.
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Revenue@Risk and Engagement@Risk Analysis
OUR PROCESSOUR PROCESS
Obtain buy-in, commitment of leadership
team
Involve employees in identifying customer pain points and opportunity
Identify interactions and experiences customer has
with the company
Pinpoint actions with greatest impact to
produce ROI
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Project Planning• Facilitated Decision Making Meeting• Sets Up The Project
Diagnosis• Qualitative Research with employees and customers• Customer experience measures developed from input
Baseline Measurement• Quantitative Research• Measures Performance Against Expectations
Action Planning• Facilitated Meeting• Uncovers Actions Needed To Drive Customer Behavior
Continuous Tracking• Periodic Measurement• Tracks Improvement On Key Loyalty Drivers
Our measurement program will provide actionable and robust results for every key stakeholder group
Project Steps OUR PROCESSOUR PROCESS
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Outputs From “Revenue At Risk” Study
“Revenue At Risk” Problem Analysis
• Ranking of Stakeholder experiences: the most prevalent, the most important to the Stakeholder
• Identification of the key problems placing the greatest revenue at risk • Key Drivers analysis to measure impact of problems on behavioral outcomes
Drivers of Loyalty Analysis
• Identification of those superior service and relationship attributes most important to sustaining and growing the loyalty of the Stakeholders and differentiating the company from competitors.
Brand AttributePerformance
• Performance of company and competitors on the key brand attributes that create competitive advantage.
ServiceRecovery
• Analysis of Stakeholders who contact the company about problems vs. those who do not.
• Impact of company’s Stakeholder contact handling on satisfaction, and loyalty.
Economic Impact Analysis
• ROI impact of problem experiences on Stakeholder’s revenue impact. Analyzed by overall impact and by individual problem impact.
OUR PROCESSOUR PROCESS
Revenue@Risk prioritizes the economic impact of the problem experiences that degrade customer loyalty, and then creates detailed insight on the actions necessary to grow the value of the customer base through improved retention, product penetration, and word-of-mouth market.
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Problems & Service Recovery
When problems are solved completely, customers with problems are as loyal as those without problems
Loyalty is lower for customers who do not have their problems resolved than for those who never call at all
Loyalty is four times greater when problems are resolved to a customer’s complete satisfaction
I II III IV
No ProblemExperience (52%) %
Completely Satisfied (28%) %
Resolved(68%) Acceptable (28%) %
Less than Acceptable(41%) %
Contacted(50%) %
Not Resolved(32%) %
ProblemExperience (48%) %
Did NotContact (50%) %
Market Impact
Question/Problem
Experience
Service RecoveryContactBehavior
Customers(Base=2311)
Definitely Recommend
Pharma
%
44
18
10
17
8
25
26
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Impact of Service Recovery on Loyalty and Word of MouthFor each Customer group the survey data will yield:
(I) % with problems
(II) % who will/will not contact the company
(III) % with problem resolution and satisfaction with resolution:
(IV) Recommendations
EXAMPLE CHARTSEXAMPLE CHARTS
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Impact of Most Serious Problems
MOST SERIOUS PROBLEMS
0
1
2
3
4
5
6
7
8
0% 5% 10% 15% 20% 25% 30% 35% 40%
Incidence
Cust
omer
s At
Ris
k
Lack of business acumenCompany’s products
are not cost competitive
Patient education materials not up-to-date
No coordination of resources to service us
Unresponsive to requests
Inability to track marketplace trends
50% 60%
Example Chart showing the impact of experiences on customer behavior by identifying the problems that are the most serious in terms of both incidence and defection risk:
This analysis provides an analysis of the most serious problem as well as the combination of problems on customer risk: negative word of mouth, decreased spend.
Lack of problem solving skills
EXAMPLE CHARTSEXAMPLE CHARTS
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TOTAL PHYSICIANS KEY DRIVERS OF CUSTOMER LOYALTY
Willingness to Recommend
Biologic Company to other Physicians
Willingness to Recommend
Biologic Company to other Physicians
Ability of the Biologic Company to Get Patients Approved for Biologic Therapies
Sales Reps Customer Centric Focus
Problem Solving Skills Provided to Office Staff
(.31)
(.26)
(.21)
(.30)
Collaborative Business Intelligence and Business Acumen
Key Drivers of Customer LoyaltyEXAMPLE CHARTSEXAMPLE CHARTS
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Revenue@Risk Economic ProjectionCredit Card Issuer Customers at Risk and Customers Saved
NOTE: Cardholder Quantities Modified for Client Confidentiality
Note: NLTR = "Not Likely To Recommend"
[CLIENT] REVENUE@RISK PROJECTION
15,000,000
CORE CARDHOLDERS
4,950,000
Problem
10,050,000
No Problem
1,980,000
Contact
2,970,000
No Contact
1,465,200
Problem Resolved 659,340
Complete
336,996
Partial
468,864
Not
19%
NLTR
33%
NLTR
70%
NLTR
125,275
CARDHOLDERS@RISK
111,209
328,205
50%
Percent That Defect
62,637
55,604
164,102
68%
NLTR
350,064 175,032
460,350 31%
NLTR
920,700
3%
5%
7%
10%
2%
% Projected Saved
1,879
2,780
11,487
17,503
9,207
CARDHOLDERSSAVED
$57.94
Cardholder Value
$108,876
$161,086
$665,567
$1,014,135
$533,454
$2,483,117
TOTAL ANNUAL INCREMENTAL NET INCOME
33%
514,800
67%
40%
60%
74%
26%
45%
23%
32%
PROBLEM INCIDENCE CONTACT RATE
PROBLEM RESOLUTION
SATISFACTION WITH PROBLEM RESOLUTION
1,835,452
1 2 8 9 10 113 4 5 6 7
Problem Not Resolved
TOTAL CARDHOLDERS AT RISK
EXAMPLE CHARTSEXAMPLE CHARTS
Economic Impact Analysis
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R@R Applications to common Business ObjectivesPhysician/Customer Perception and Satisfaction
The business objectives we solve for in these types of projects include how experiences drive attitudes and, more importantly, market behavior. The specific research objectives include:
• Which Physician/customer experiences (products, services and interactions) generate the highest levels of Physician/customer satisfaction and loyalty?
• What are the drivers of dissatisfaction and key experiences that may be putting Physicians/customers at risk?
• What actions can the company take to improve the overall experience and therefore, continue to achieve positive economic impact?
Competitive Market Analysis
The specific objectives to be accomplished with this research include developing an in-depth understanding and insight into the following:
• Which companies are considered Best-in-Class in terms of their ability to generate the highest customer satisfaction and loyalty, e.g., willingness to defend, share by word of mouth, brand preference, and willing to pay a price premium?
• How does the company’s performance compare to key competitors on these key customer experiences?
• What are the key sales rep competencies that are creating value-added experiences that meet Physician’s growing needs for information and support?
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R@R Applications to common Business ObjectivesNew Product Launch
We conduct these projects ahead of launch, to help our clients gain an understanding of their target physicians' viewpoint on services and initiatives from competitors to enable them to differentiate beyond the product and create loyalty as quickly out of the gate as possible.
ATU Research
Verde’s R@R approach provides much more in-depth insight into the experiences that shape attitudes and usage, and our approach isolates the effect of the brand loyalty from actual customer satisfaction to enable a company to fully understand the separate experiences and perceptions that drive attitude, usage and brand loyalty.
Monitoring Patient Compliance
Verde also conducts research with patients, mainly to track compliance. The goals of this research are to identify and understand the types of patients likely to be non-compliant. Our research includes the identification of issues with patient education materials, lack of understanding of medication regimens, possible literacy challenges, adverse side effects, impact of physician office visits. We use our R@R methodology to identify the specific issues associated with usage, frequency of problems and the most significant ones impacting compliance.
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R@R Pharma Case StudiesEXPERIENCEEXPERIENCE
Leading Biologic Company – Quest for Non-traditional Physician-Sales Rep Insights
Background: Company had a unique blockbuster drug – crossing multiple therapeutic uses. With a strong late stage pipeline, it had an opportunity to create a strong franchise in the disease states it managed. Yet with increasing competitive pressures, company recognized the need to fully explore and understand the relationship it had with its key customers. Traditional research studies focused on the Physician-sales representative relationship. Given new market dynamics, this wasn’t enough. Company felt it was important to move beyond the physician and explore other constituents that influence brand and company perceptions.
Objectives: Identify key drivers of dissatisfaction versus those of satisfaction and loyalty for each customer touch-point including:
• What is the relative importance of each touch-point in maintaining current relationships and growing new ones?
• Which specific touch-point issues are impacting customer loyalty behaviors and associated outcomes – word of mouth, script writing, and retention – for company and for competitors?
• How prevalent and important are these issues within each customer group? How do the issues differ by customer group?
• How do experiences with company compare to other major biotech firms in this space?
Insights gained and actions taken: • Develop and empower a single point of contact to own the customer issue from “cradle to grave” • Proactively explain roles and responsibilities of customer-facing/resourcing• Simplify and streamline the patient access process • Train and reward for “customer centricity” • Training around customer interactions
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R@R Pharma Case StudiesMedical Device/Automation Company: Requirement to “change the game” in the hospital lab automation space Background: Company is a global leader in the area of pre-transfusion diagnostics. The company has set itself as the industry benchmark for delivering innovative, value-added products. Their success has been attributed to its unwavering focus and execution around several key principles including: excellent reputation among stakeholders and investment in quality improvement and customer satisfaction. But competition is fierce. In order to maintain and build customer intimacy, company needed a comprehensive customer and employee measurement system that assess and projects how experiences drive attitudes and physician behaviors.
Objectives: • What are the critical “moments of truth” for customers; the interactions that are most important for
driving satisfaction and creating loyalty?• What specific problem experiences occur across the sales and service cycle that damage Company
customer satisfaction and loyalty? How often do they occur? • What is the financial impact of these problems in terms of reorders, product penetration, share of
wallet and customer retention? Which are most damaging for Company, and which represent the biggest opportunity for improvement?
• How do problem experience, frequency and impact vary by customer position: Technician, Lab Manager or Director? What are the differences in satisfaction and loyalty to Company between each of these customer types and across Hospitals versus other types of customer sites?
• Insights gained and actions takenEncourage Customers to Contact about Problems. Improve Problem Resolution. Provide Additional Training to Employees. Correct Product Quality Problems. Communicate Departmental Roles and Responsibilities to Employees.
EXPERIENCEEXPERIENCE
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R@R Pharma Case StudiesLeading Pharmaceutical Company – Losing Market Access in Key Regions
Background: Ongoing cost pressures in managed care have resulted in the growing influence of the IDN. Company had a need to better understand who these constituents are and, more importantly, their role and
influence in the network (particularly non-prescribing constituents). Additionally, the needed to understand how other parties, outside the IDN, influence and affect other parts of the network. With this information, the company can then develop a more focused strategy aimed at accessing these stakeholders with relevance and value.
Objectives: • Who the key influencers/decision makers are across/outside the system and how decisions made
within/outside the system affect other parts of the system. • What IDNs need/what are their challenges/what is most important to them in order to understand how a
pharmaceutical or non-pharmaceutical partner may bring additional value? • The IDN’s perspective around what they believe is an effective relationship and why they think it was
successful, with specific examples.• Future trends and how this differs by IDN, specifically knowledge of current business model and how their
business model is evolving over time. What is making them evolve/change?
Insights gained and actions takenEstablishment of focused IDN strategy and go-to-market organizational structure that supported third party
solutions for value-driven outcomes and improved access in difficult markets.
EXPERIENCEEXPERIENCE
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Verde Experience: Overview
In the past decade, Verde has worked with many of leading Fortune 500 companies in a variety of industries.
CLIENTSCLIENTS SPECIFIC CLIENT WORKSPECIFIC CLIENT WORK
• Revenue@Risk Customer Loyalty Tracking• Competitive Benchmarking• Customer Defection Research• Balanced Scorecard Development• Brand Loyalty • Loyalty rewards program development• Product Evaluation and Usage Studies• Segment Specific Positioning • Marketing Communications Strategy
• Our efforts are focused primarily on loyalty, customer value and employee engagement research.
• We have also conducted associated research/ consulting on various marketing and strategy issues directly pertinent to the loyalty challenges our clients faced at the time of engagement.
EXPERIENCEEXPERIENCE
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