Situation

A major division of a Fortune 30 financial company faced a daunting hurdle: maintain dynamic, double-digit growth in the range of 20 percent per year. Yet now that revenues were reaching well into billions of dollars this goal was becoming increasingly difficult to meet. Much of the growth to date had come from acquisitions, forays into new markets, and larger financial deals. But many of the acquired portfolios liquidated, new acquisitions were less frequent, and growth in their traditional core business lagged. It was clear that the company needed to build a new foundation for change.

Solution

By analyzing this financing company's division it was clear that new customers represented 59 percent of last year's volume. On the surface this may sound terrific, especially for business development. But the numbers actually revealed that overall growth over the base year was only 12 percent. What happened to the other 47 percent?

After interviewing customers, it became clear that although some customers did not need service that year and others were steered away due to high risk, a portion of the desirable customers took their business to competitors. If the company had captured this group, the division would have been able to grow by 39 percent - not just 12 percent.

Rath & Strong conducted customer interviews that uncovered the behavioral drivers of loyalty and disloyalty. Although the client had predicted that price would be the overwhelming factor, in actuality we discovered that the largest drivers of disloyalty were relationship factors-particularly related to the amount of contact sales representatives had with customers and the lack of continuity caused by frequent turnover and realigned territories. Among disloyal customers, the type of contact they received from sales representatives did not match their preferences-or what the competition was delivering. For loyal customers, the profiles matched. Disloyal customers wanted more frequent contact from their rep-even a phone call.

Results

By combining this information with research about how the customer preferred to be contacted (visit, phone, mail), standards could be established to assure that existing customers were contacted consistently. By reorganizing the field representatives and increasing available resources, this division will reap about $34 million.

This company was actually able to fit the results of the customer analysis into their business planning cycle and quality improvement program, integrating them smoothly with their implementation plans. They also created a way to update and check on the information periodically.