Breaking Through: Implementing Customer Focus in Enterprises

212 Pages·2004·1.118 MB·English

by  Sandra Vandermerwe (auth.)

Breaking Through
Implementing Customer Focus in
Enterprises
Sandra Vandermerwe
Breaking Through
Breaking Through
Implementing Customer Focus in
Enterprises
Sandra Vandermerwe
© Sandra Vandermerwe 2004
Softcover reprint of the hardcover 1st edition 2004 978-1-4039-3503-8
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First published 2004 by
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ISBN 978-1-349-51762-6 ISBN 978-0-230-51430-0 (eBook)
DOI 10.1057/9780230514300
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10 9 8 7 6 5 4 3 2 1
13 12 11 10 09 08 07 06 05 04
C
ONTENTS
List of figures vii
List of tables ix
List of boxes xi
Introduction 1
1 First Phase:The Awakening 9
Breakthrough 1: Create Strategic Excitement 11
Why the Mighty Fall 11
Hiding Behind the Numbers 14
Raising Aspirations 20
Finding ‘Points of Light’ 24
Breakthrough 2: Recast the Business Model 28
Grounding Theory into Practice 28
Turning the Product Corner 31
Why Customer ‘Lock-On’? 36
Unifying the Customer Concept 43
2 Second Phase: The Discovery 49
Breakthrough 3: Articulate the New Market Space 51
Broadening Boundaries 51
Deciding on the Market Space 55
Breakthrough 4: Identify the Value Opportunities 61
Value Gaps and Black Holes 61
Creating Customer Value 68
Finding the Hidden Gold 71
Getting Traction 77
3 Third Phase: The Story 81
Breakthrough 5: Build a Compelling Case 83
Stories Versus Business Plans 83
Building the Story Around Customers 88
v
vi Contents
Breakthrough 6: Size the Prize 97
Changing the Arithmetic 97
Unlocking New Customer Currency 102
The Total Value Equation 109
4 Fourth Phase: The Engagement 113
Breakthrough 7: Model the Concept 115
Getting Buy-In 115
Involving Customers 121
Rules for Success 123
Going for the Hot Spots 128
Breakthrough 8: Get People Working Together 132
A Passion for Sharing 132
Mixing and Merging Silos 136
Finding External Partners 143
5 Fifth Phase: The Reward 151
Breakthrough 9: Get Critical Mass 153
Compounding Customer Take-Up 153
Managing the ‘Push/Pull’Rhythm 162
Breakthrough 10: Gather Momentum 166
Leveraging the Investment 166
Outpacing Through Know-How 174
Measuring and Communicating Success 179
Moving Forward 186
References 191
Index 199
F
IGURES
Exhibit 1 Phases and breakthroughs 5
Exhibit 2 Conceptual product curve and returns over time 33
Exhibit 3 Conceptual customer curve and returns over time 34
Exhibit 4 Customer ‘lock-on’loop 35
Exhibit 5 Unified customer view in life phases 43
Exhibit 6 Product focus versus customer focus 48
Exhibit 7 Market spaces and subspaces:IBM 59
Exhibit 8 Generic customer activity cycle 64
Exhibit 9 International Health Insurance (IHI) corporate customer
activity cycle (simplified) 72
Exhibit 10IHI corporate customer activity cycle and value adds
(simplified) 73
Exhibit 11 Home Supply and Care (HSC) (Baxter Germany joint
venture) and value adds (simplified) 74
Exhibit 12 BP subcycles (simplified) 76
Exhibit 13 IHI story built around customer values 91
Exhibit 14 Categories of internal take-up through the various
implementation phases 117
Exhibit 15 The ‘push/pull’take-up 163
Exhibit 16 Conceptual exponential reward curve 170
T
ABLES
2.1 Customer loyalty versus customer ‘lock-on’ 38
3.1 Market space examples 52
4.1 Using the customer activity cycle methodology 70
5.1 Business plans and stories 84
6.1 The new algorithm 102
7.1 Pilot tests and model concepts 121
8.1 Partnering relationships:what doesn’t work and what does 147
10.1 Traditional accounting and cashflow analysis 181
10.2 Summary guideline sheet 189
ix
B
OXES
1.1 Financials to trigger an awakening 18
4.1 How the customer activity cycle gets traction 78
6.1 Total customer value equation 111
10.1 Leading questions 184
xi
We’re looking outside the box,because the box we’ve been looking
into is empty.1
Banking Executive,United States