Customer Value Management Trends Challenges in the Greek

Customer Value Management: Trends & Challenges in the Greek Retail Banking Industry George G. Panigyrakis Professor of Marketing The Athens University of Economics May 24, 2005 Copyright © 2005 Carreker Corporation. All Rights Reserved.

The Changing Customer in Retail Banking Has limited time Wants personalized service Quests for quality Is easily attracted by competitors Does not find important Has high expectations Has various sources of differences among products/services Has a need for convenience information and can and speed whenever - compare wherever 2

Surprises Management Frequency The future is unpredictable Stability Surprise Change Surprise Stability Change Surprise Stability Yesterday High Today Prediction Tomorrow Time Low 3

“About Life. About You. ” Client Information Flexible Product Line Know the client better than anyone Provide what the client needs Create a LEARNING ORGANISATION Consistent Service Help the client achieve goals Distribution Management Offer the client preferred channels 4

Teller Transactions ATM Transactions PC Banking Loans Deposits Investments Marketing Campaigns Customer Calls Mailer Responses Transactions Client Products Interactions Client Demographics Name Occupation Head of Household Data warehouse Measures Psychographics Balances Fees Profitability Buying Preferences Financial Segments Lifestyle Groups 5

The Truth! The major part of the banks’ profits are generated by a small percentage of their customers 10% of the customers generate 75% of the profits ! 20% of the customers generate 98% of the profits ! 47% of the customers are unprofitable Top 10% of customers Bottom 10% of customers Distribution of customers (% percentage), based on the generated profit / loss (Source: “Tomorrows Leading Retail banks” – Pricewaterhouse. Coopers) 6

The Critical Questions : The optimal value proposition for the appropriate market segment, through the appropriate channel. A real multichannel bank 7

The Challenge Increasing customer value and satisfaction while simultaneously lowering costs 8

WHAT IS CVM? C USTOMER VALUE M ANAGEMENT 9

WHAT IS CVM? CVM is not a technology, it is about creating a positive customer experience across every single interaction with a bank. 10

The Strength of the Chain If we compare the service channels of a Bank with the links of a chain… Its strength can NEVER surpass the strength of the chain’s weakest link ! 11

CRM CVM C CRM M V 12

The “Value” of Customer Value The key to attracting, satisfying, and retaining customers. 13

Costs High VALUE = benefits / costs e Low f ao e Ar s Su b ina le lu Va ta Low Banks can revolutionize by creating a different value proposition. High Benefits 14

Customer in Center CVM “Customer in Centre” Organization Structure Corporate Objectives Process Employee Resources Management Agent Customer Government Regulations CUSTOMER IN CENTER! 15

CUSTOMER VALUE CYCLE 1 Understanding Customer Value 6 2 Sustain Customer Value Selecting Customer Value 5 3 Creating Customer Value Delivering Customer Value 4 Organising Customer Value 16

Satisfaction Value Current Service The Entire Customer Relationship Lag Indicator Lead Indicator Company Performance Company Vs. Competition Tenuous Link to Business Performance Proven Relationship to Business Performance 17

Although customer value creation is critical, it is not the only element of value creation. Can the following be balanced/integrated? Ø Serving customers? Ø Making a profit? Ø Increasing shareholder wealth? Ø Good environment for employees? 18

Where’s the Value? Value Creation Customer’s willingness to buy Price of product/service Cost of product/service Employee’s opportunity cost Customer Value Shareholder Value Employee Value 19

Culture & Personnel Added Value § It all depends on people: a consistent quality of service and performance Ø Proven methods of recruitment, training and individual Performance Monitoring Ø Strong career development to decrease turnover Ø Dedicated project teams representing all areas of expertise to prepare the client’s solution Ø Client and knowledge management. Customer centric perception. Ø Every member of the organization is a marketer. 20

Two types of organizations Source Nova Bank 21

Marketing Strategy Basics Create a LEARNING ORGANISATION 22

Marketing Strategy Basics Heightened market orientation and a focus on creating superior customer satisfaction Create a LEARNING ORGANISATION 23

Marketing Strategy Basics Heightened market orientation and a focus on creating superior customer satisfaction Create a LEARNING ORGANISATION Positioning built on exploiting marketing resources, assets and capabilities 24

CVM Strategy Basics Rethink the role of marketing in the organisation Heightened market orientation and a focus on creating superior customer satisfaction Create a LEARNING ORGANISATION Positioning built on Establish close relationships with exploiting marketing key customers and groups resources, assets and capabilities 25

Ideal Corporation “Virtual Corporation” “Is a corporation without boundaries with penetrable and constantly changing intermediate communication systems (interfaces) which link the corporation with the external environment” 26

Experiences Each and every customer contact represents a “Moment of Truth” Giving a chance for expectations to be exceeded, satisfied or disappointed This applies independently of the type of contact (face to face, written, by telephone, or via the internet) 27

Don’t Forget …we can only succeed through our client’s success ! 28