5 Things A Company Must Do Now in a Slowing Economy

The MANDATE for Customer Focus in Challenging Economic Times Nedra Sadorf Hunter Business Group, LLC Hunter Business Group, LLC 4650 North Port Washington Road Milwaukee, WI 53212 414-203-8060 www.hunterbusiness.com

The Customer Imperative: Consequences of “Failure to Act” amount of new sales required just to maintain a 5% YoY gain Last Year Market Contraction (20%) Lost Customers (80% retention) $100M $20M $20M New Sales $45M This Year $105M

Executive Summary ,[object Object],[object Object],[object Object],[object Object],The mandates for customer focus are not “optional” or “nice-to-have” – they are essential to survival

Service Trumps Price Price will always be important in a customer’s purchase decision, but “outstanding service” is the number one reason customers do business with a company. Source: Harris Interactive, Customer Experience Report, March 2006

Business Strategies for Uncertain Economy ,[object Object],In a downturn…HARVEST In an upturn…GROW Savings for efficiency Investment for revenue Customer Objective Add core capabilities Divest non-core businesses Products / Services Optimize current IT Invest in IT Infrastructure / IT Squeeze value Focus on reach Channels Service for current customers Brand and name promotion Marketing Grow existing customers Acquire more customers Business Growth

Is Customer Focus Worth It? 6% 14% 31% 50% 2% % increase needed in customer retention to have same profit impact as cutting costs by 10% Increase in new product penetration from loyal customers Additional share of wallet granted by loyal customers Additional likelihood that a loyal customer will re-purchase or renew, compared to average customer Additional operating margin achieved by industry leads, strictly by having a better understanding of the customer Expected Results Desired Outcome

5 Customer-Focus Mandates for Survival ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],5 4 3 2 1

1 – Strategic Business Development Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Goal Key Process

2 – Coordinate Sales Activities Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Goal Key Process

Field Sales Call Field Sales Call Field Sales Call Direct Mail Inside Sales Rep Call Field Sales Call Field Sales Call Contact 1 $400 Contact 2 $400 Contact 3 $400 Contact 1 $10 Contact 2 $35 Contact 3 $400 Contact 4 $400 = = $1,200 $845 Cost per Contact = $400 Cost per Contact = $208.75 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],How Does The Leverage in The Team Coverage Model Work?

3 – Grading of Accounts Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Goal Key Process

Balancing Your Investments ,[object Object],[object Object],[object Object],$2,000K $1,500K $750K $300K $50K $4,600K 144% $72,000 Mom & Pop: 5% $72,000 K-Mart: 10% $72,000 Kroger: 24% $72,000 Hallmark: 4% $72,000 Walmart: 8% $360,000 Total: Average Sales & Marketing Cost as % of Revenue Average Sales & Marketing Cost per Customer Potential Annual Revenue per Customer

Balancing Your Investments ,[object Object],[object Object],[object Object],$2,000K $1,500K $750K $300K $50K $4,600K 8% $4,000 Mom & Pop: 8% $120,000 K-Mart: 8% $60,000 Kroger: 8% $24,000 Hallmark: 8% $160,000 Walmart: 8% $368,000 Total: Average Sales & Marketing Cost as % of Revenue Average Sales & Marketing Cost per Customer Potential Annual Revenue per Customer

Marketing Integration Media/Web/e-Business $ .01 - .05 Telephone Sales $8.00 - 24.00 Field Sales $40.00 - 400.00 Direct Mail $.25 - 5.00 © Hunter Business Group, LLC In the B 2 B Space, an integrated marketing system is not an event, it is a process. The Process includes the mix of media and content for each customer

4 – Paradigm Shift: Vertical Focus Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Goal Key Process

Conceptual Design: Vertical Market Alignment Group and serve customers who have similar needs into vertical “segments”. Within the segments, provide appropriate level of sales coverage based on expected value of each tier of customer. Strategic Account Managers Field Outbound Phone Outbound Phone Inbound Phone Financial Telecom Public Sector Product Services Key Accounts Tier 1 Proactive Accounts Tier 2 Maintenance Accounts

5 - Capture Customer Pain Points Results ,[object Object],[object Object],[object Object],[object Object],[object Object],Goal Key Process

Customer Satisfaction vs. Loyalty ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Going Forward… ,[object Object],[object Object],[object Object]

5 Things A Company Must Do Now in a Slowing Economy

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