A company exists to make profit, and everything it does is a step towards that goal. Many firms are trying to get closer to their customers, but few realise how crucial this is to corporate value. Indeed, the long-term value of a company is perhaps best described as the sum of future profits from customers, discounted to a present value. Tackling two hot topics in business - CRM and corporate value - and based on a study undertaken by the Customer Management Leadership Group, John Murphy's new book links customer management directly to company profitability for the first time. By implementing its Customer Management Integration Framework, a company can see cash flows for each customer relationship, and use that information to effectively manage key customers for higher and more resilient levels of profitability.

Table of Contents:
Acknowledgments xiii Introduction xv 1. The Customer Profit Conundrum 1 Common misperceptions about customer profitability 2 An overview of customer profitability analysis 6 How to measure profit 6 The nature of customer costs 8 Customer profitability analysis (CPA) and activity-based costing (ABC) 11 A step-by-step approach to measuring customer profitability 16 Getting started with customer profitability analysis 24 Common barriers to customer profitability analysis 27 Running a CPA project 28 The results of CPA 30 Why do companies have unprofitable customers? 32 Improving customer profitability 34 The customer response 37 Management barriers to making changes as a result of CPA 37 Conclusion 38 2. Segmentation 43 Segmentation incorporating profitability 47 Step 1: Completion of customer profitability analysis 47 Step 2: Macro segmentation 48 Step 3: Verification/Reality check 50 Step 4: Micro segmentation 57 Step 5: Investigate if strategies and operations are aligned 59 Step 6: Align operations and implement tactics 65 Conclusion 68 3. Customer Focus 73 Segmenting business markets 75 Segmenting international markets 76 Each customer wants to be treated as an individual 77 Choosing customers 77 Managing the total customer experience 79 Leading the customer experience 80 Managing the impact of delays 81 Employees connect to the customer 83 Customer retention 84 What if customers charged the organisation for their time? 84 Data collection 87 Action plan 90 Listening to customers 92 Complaint management: customer satisfaction 93 Measures influence behaviour toward (or away from) the DCP 96 The ladder of loyalty 97 Recognise and reward loyal customers 97 Gauging customer loyalty 98 Micro-marketing is the ultimate in customer service provision 99 Monitoring performance 100 Why it is vital to build trust 103 Summary 103 4. Processes and Systems 109 Process reviews/Process improvement 112 Customer requirements 115 Identification of key processes 115 Process review 118 Business process re-engineering 122 Quality in the service industries 123 Management’s understanding of customers’ expectations 128 Complaints 129 Compliments 134 Summary 137 5. Employee Involvement 141 Retention of customers 144 Understanding key concepts 146 Controlling the continuum 147 Recruitment 150 Employee audits 154 Tools for the job 156 The team approach 161 Involve employees in setting performance and service standards 165 Listen to employees 167 Employee motivation 169 Performance indicators 171 Reward and recognition – linked to customer retention 175 What makes a great employer? 179 Employee retention 181 The value of performing exit interviews 182 Summary 184 6. Training and Development 187 Employees are assets 189 There is always a payback 190 Team establishment 192 Identification of training needs 195 Competence-based training 196 Service quality training 199 Teamwork training 201 Coaching 203 Just-in-time training 206 Formal recognition 207 How is the person at the top affected? 208 Managers as trainers 209 Training customers 209 Summary 210 7. Measurement 213 Benchmarking 216 Always measure customer reaction 216 Measurement tool creation 218 All measurements must be followed by actions for improvements 219 Priorities for success 221 How is total measurement relevant to business success? 222 Tracking net promoters 224 Measurement of people 225 Leadership 227 What to measure? 228 Measurement of performance 231 What are the thresholds within which customers decide if an organisation is getting things done right? 235 Managers are judge and jury 237 Who needs to know what? 239 Measurement and response to change 240 Production processes 241 Summary 248 8. Continuous Improvement 251 Advantages of continuous improvement 253 Teamwork takes the strain 253 Problems become opportunities 254 Improvement means shared information and ideas 256 Rewards come from hard work 256 How does one start a service quality initiative and then keep it going forward? 257 Keep outside suppliers of goods and services up to scratch 260 Shopping in the global marketplace 261 Ethical distortion of customer segments 262 Benchmarks 264 Field leaders and their recipe for success 269 How does one measure continuous improvement? 270 Nothing succeeds like success 274 Cost-effective captivity 275 Summary 276 9. Communications 279 Communication can be a response, or it can call for a response 283 Management has an ongoing role 288 Leadership is the key 290 Poor communication is both damaging and unfair to employees 290 What are communications? 291 Body language also sends messages 292 Is every communication necessary? 293 Make it easy for two-way communications 294 To the rest of the world, we are foreigners 295 Effective internal communication 296 Monitor the effectiveness of communication 297 Team briefings 297 Keep it simple 301 Keep the door open to doubters 302 Summary 303 10. Culture 307 What exactly do we mean by corporate culture? 307 Beginning to develop a culture 309 Think Christmas pudding 312 Hussey’s easier approach to fundamental change 319 Rule books 319 Growing and sustaining a customer-focused culture 321 Trust 325 The decline in customer satisfaction 329 Summary 337 Cycle of success 340 Case Study 1: Alfred McAlpine Business Services Limited 341 Case Study 2: Centrica 351 Case Study 3: Eversheds 355 Case Study 4: National Blood Service 359 Case Study 5: Shell 367 Bibliography 373 Index 381