Customer Loyalty Programs –

Increasing Customer Loyalty throughout the customer base!

Suhail Khan – Director of WW Customer Loyalty Program –

FileNet Corporation
February 2005
Why Customer Loyalty?

 Why should we care?

 What’s at stake?
 Customer Loyalty Vs. Customer Satisfaction
 Promoters and Detractors
The Big Picture

 Companies With Satisfied, Loyal Customers Enjoy

Higher Margins, Greater Profits – And Consequently,
Higher Stock Price-earnings Multiples.
 Customer Loyalty: Return to Investors
Average
P/E
Ratio

40
35
35.40
30
25
20 23.42 23.62
15 19.52

10
5
0
6.12 7.14 7.65 8.01 9.03

Customer Loyalty CLI Score

Current Market Trends

 What Customers are doing differently

 Experience matters
 Positive experience means repeat action
 Vendor selection criteria
 Commitment, not loyalty?
 The “Trust Factor”
 “A 5% increase in customer retention yields a 75%
increase in customer net present value.”
-Fred Reichheld
 Incentive driven model
 Loyalty rewards
Main Customer Loyalty Business Objectives

1. Measure, monitor and improve overall customer

satisfaction within major product, service, and
geographical areas

2. Increase software revenue through retention and growth

of profitable customers

3. Measure against the Customer Loyalty Index (CLI)

4. Use key drivers of customer loyalty to develop

company-wide cross-functional prioritized action plans
Customer Loyalty Focus

 Working with and complementing the efforts and initiatives of

each organization at FileNet
 Teaming internally to enable us to partner externally with our
customers
 Re-focusing on the requirements of our customers
 Managing our customers' expectations
 Building relationships and communicating with our customers
at various levels
 Placing highest emphasis on our performance - at all levels
 Creating cross-organizational partnerships
Keys to successful Customer Loyalty Program

 Create Customer Loyalty Program goals

 Contract third party organization to conduct Customer

Relationship surveys
 Agree upon measurement model (CLI)

 Create Tactical and Strategic plans to address immediate and

future goals

 Tie compensation of all employees to Customer Loyalty

improvement
Company Culture and Focus

 Drive to total “satisfaction” to build Loyalty

 Customer Loyalty must be a core value
 Gain Top Executive sponsorship
 CEO includes program as top initiative
 Weave through the corporate/management fabric
 Tie compensation to Loyalty goals
Measuring Customer Loyalty

 What is the Customer Loyalty Index?

 Measurements?
 Why its important?
 Components of the Customer Loyalty Index?
 Overall Satisfaction
 Continue to Buy
 Recommend
 Choose Again
Customer Loyalty Program

 Strategic:
 Form Executive Customer Loyalty Council -
Stakeholders
 Senior representation from all organizations to
collaborate and breakdown internal and external
barriers preventing our company from achieving total
customer satisfaction
 Tactical:
 Form a cross-functional team to resolve major tactical
issues identified from surveys
 Address “Trigger” Issues identified through surveys
Key Customer Loyalty Program Activities

 Quarterly Customer Relationship Surveys

 Survey Data connected to CRM Application
 Allow Sales and Field personnel to have access to
Customer Survey data for their particular accounts
 Global Partner Relationship Survey
 North America, EMEA and Asia Pacific
 Sample Customer / Partner Loyalty Plan

Customer/Partner
Loyalty Plan

2005 Customer/Partner CLOs for FileNet

Loyalty Council Organizations

Define Roles for Members Performance Metrics for

Charter for Council CL related projects
Company wide Engagement Unique/connected CLOs
Strategy across company

CL Customer Communication Customer Loyalty

Customer/Field Loyalty Initiative for 2005 Projects
Outreach Plan Quarterly
Surveys

CL Road show – Visits to US Monthly Company wide

District and International offices Quarterly surveys Knowledgebase Project
CL communiqué
Customer Visits Contacts pre-defined Reference Project
Monthly CL Employee
CL Collateral Generation Reporting methodology pre-
Roundtables
CL Quarterly Workshops for defined
Management
CL information on FileNet.com
Key Customer Loyalty Drivers

 Understand Key drivers

 Overall Business Value
 Product Overall
 Sales Relationship
– Responsiveness
– Follow-through
 Calculate Gap scores
 (Stated importance) - (satisfaction) = gap score
Common Key Customer Loyalty Drivers

 Relationship

 Product Knowledge

 Expectation Management

 Understanding Needs
Change In Satisfaction

 How has our customers’ satisfaction level

changed?
 Good gauge to monitor performance of changes you
implemented
Loyalty Scoreboard

 What is the Loyalty Scoreboard?

 Significance of the Loyalty Scoreboard?
Incentives/Rewards

 Why should our customers participate?

 Incentive programs
 What Works
 Do Incentive models have to be financially driven?
Keeping the Customer Interested

 Measure Response Rates

 Offer Incentives to survey respondents
 Special seminars
 Thought leader forums
 Executive involvement
 SLA discounts
 Points
Other Focus Areas

 Creating a reference program

 Leveraging customer feedback
 Turning satisfied customers into references
 Creating a knowledgebase
 Best practices
 Case studies
Thank You