1. Implementation of a Global Customer Loyalty Process
Year 1: Successes and Lessons
Air Products & Chemicals

2. Air Products and Chemicals
$5.5B Sales, 17,000 employees worldwide
Complex, highly matrixed organization
2 Business Groups and 4 regions worldwide
6 Divisions with sales to >50 countries
16 business units with multiple product lines
Varying size, complexity and autonomy
Serve multiple markets with a variety of different business models
Industrial chemicals & gases
Electronics (semiconductor industry)
Petrochemical & energy
Home Healthcare
Performance Materials

3. Air Products And Chemicals Customer Loyalty Process
The Challenge (Spring 2001)…
CEO:
Develop a single, global approach to measure how effectively we are satisfying customers
Business Units:
We don’t need a one size fits all corporate solution but…
We need actionable information to support our strategy and the tools to identify opportunities & take action

4. “Customer Loyalty Process” Key Elements
Ongoing process to capture and utilize the Voice of the Customer
Listen to key customers
Understand the messages
Focus on opportunities
Take Action
Using a company-wide model for “Customer Loyalty”
Measures the strength of the customer relationship
Delivers credible, actionable information and is linked to other key business processes
Strategy development/validation
Customer segmentation (needs based)
Continuous Improvement

5. Continuous Improvement by using the Voice of the Customer
Customer Loyalty Process
Continuous Improvement by using the Voice of the Customer
LISTEN
ACT
FOCUS
UNDERSTAND
Key Elements
Leadership Support
Resources
Meaningful goals & measures
Action Teams Deployed
Communications
Accountability
Apply Learnings
Sustain Gains
Take Action & Sustain Improvement
External Input
Loyalty Survey
Call Reports
Complaints
Customer Scorecards
Internal Data
Accts Receivable
Retention Rates
Listen to Customers
Understand:
Strengths & areas of weakness
Identify Key Drivers
Communications Internal/External
Input to:
Segmentation
Sales Process & Business Strategy
Other Customer facing processes
Understand & Communicate
Continuous Improvement (CI)
Integrate Voice of the Customer with an Improvement Process
Prioritize Customer requirements with business objectives
Identify and foster organizational buyin on Critical Customer Requirements
Focus on Opportunities
Key message that this is not just about a survey. The Loyalty survey is just one tool to collect customer data and the leverage point that we are starting with in Customer Engagement. Ultimately this needs to be linked with other ongoing customer voices that include ongoing data. One can thereby monitor this ongoing “surrogate” metric to gauge the ongoing impact on the customer relationship.

6. Global Customer Loyalty Survey Objective: Credible, actionable information
“Meaningful” sample of existing customers
Key customers as defined by the business units
20 minutes long in “major” local languages
Rotated through Air Products on a quarterly basis (12…24 month cycle)
Survey Components
“Core” elements utilized globally
Loyalty, Brand, problem resolution & verbatim
Business specific performance attributes
Importance, performance & competition
Basis for “actionable” information
As developed by the business units

7. Key Survey Deliverables
A “relationship metric” (Loyalty) that distinguishes between business models
Analysis of performance attributes
Competitive Comparisons
Effectiveness at “Problem Resolution”
Access to verbatim improvement suggestions
Account specific issues (“Red Alerts”)

8. Customer Loyalty Model
Satisfaction
Rebuy
Recommend
SECURE CUSTOMERS
FAVORABLE CUSTOMERS
VULNERABLE
CUSTOMERS
INDIFFERENT
CUSTOMERS
AT RISK
CUSTOMERS

9. 21% Secure is “geographic” B2B Median
Customer Loyalty Responses Metric distinguishes between business models
21% Secure is “geographic” B2B Median
Division A
Division B
Division C
Division D
High switching costs
Low switching costs

10. Loyalty Driver Analysis Business Specific Performance Attributes
High
Most Important
to Customers
Relative
Strength
Critical
Issues
The correlation between an attribute and Loyalty
Attribute Impact
Maintenance
Items
Secondary
Issues
Low
Performance Gap
Low
High
The Customers’ perception of our performance relative to their need

11. Loyalty Driver Analysis Business Division H
1 Communicate regarding new products
2 Sales reps visit frequently
3 Sales reps have tech knowledge
4 Sales reps take ownership for problems
7 Sales reps effectively coordinate resources
8 Sales reps take time to understand
10 Easily reach a knowledgeable CS rep
11 CS reps resolve problems quickly
12 Provide delivery confirmation
13 Provide complete/accurate invoices
15 Consolidated invoices minimize burden
16 Provide error-free delivery
17 Provide consistent/reliable product
22 Help you operate your site safely
25 Respond to supply problems
30 Easy to reach a knowledgeable TS rep
32 Product increases productivity/efficiency
33 Provide innovative products/services
34 Provide safety experts
36 Ability to place orders online easily
37 Provide needed information online
38 Understand your e-business needs
39 Easy to do business with
42 Help you lower cost of business
43 Products & services are a good value
44 Manage activities in an integrated manner
45 Understand your business needs
Relative
Strength
Critical
Issues
High
Attribute Impact
Secondary
Issues
Maintenance
Items
Low
High
Performance Gap
Sales Support
Customer Service
Product Supply
Technical Support
E-Business Capabilities
Overall Supplier Relationship

12. Communicating the Results via Online Access
Provided open access* for all results to all employees (17,000) on line
Up front filtering tools to focus on “User Relevant” information
Advantages:
Cost effective
Flexible
Easily updateable
Challenges:
Training & Understanding
* Note: We maintain absolute confidentiality of anonymous respondents

13. Results made available to the entire enterprise online

14. Turning Data into Action “Where the rubber meets the road”
Integrating the Voice of the Customer into our Continuous Improvement Process
Critical Success Factors
Business Leadership support
Accepted improvement process tied to the annual business operating cycle
Credible customer input
Meaningful tools to focus on opportunities
Measurement & Accountability
Annual individual performance metrics
Scorecards, etc

15. Customer Loyalty is a Key Input for our Continuous Improvement Process
Cycle tied to annual operating plan
What
How
Do It
Prepare
Focus &
Prioritize
Plan
Implement
Learn
Start of fiscal year
Develop understanding of key drivers and gaps from the Customers’ perspective
Align with business strategy and objectives (financial & non-financial)
Establish high level plan & identify resources
Customer Loyalty
Voice of the Customer

16. A Tool to Focus on Opportunities Quality Function Deployment
Customer Input on their needs & our performance
Critical Customer Requirements
Business Input on goals and the impact of improvement
QFD that is completed with a cross functional team
And facilitated by an “expert”
Results in a remarkable buy-in for the results

17. QFD/House of Quality
Used for “turning” customer input into product, process and organizational direction setting
Not “new”; around since the 1970’s
Reference: “Quality Function Deployment, Linking a Company with its Customers” by Ronald G.Day
Organizational
Capabilities
Customer
Attributes
Planning Matrix Inputs
Customer Need
Our Performance
Competitive performance
Business Goals
Business/sales impact
Critical Customer Requirement
Contribution

18. Examples of Customer Improvement Opportunities
Division A
Responsiveness
Problem Resolution
Division B
Lowering Cost of business
Division C
Invoicing & ease of order placement
Problem resolution
Division D
Flawless execution/Problem Resolution

19. Celebrate the Successes
Initiated a global, one company Customer Loyalty Process (Voice of the Customer)
~2500 key customers worldwide responded
Key messages are evident
Established a leverage point to drive action
Customer Loyalty & Continuous Improvement
Demonstrated value to many “in the middle” “I wish I knew at the start what I know now”

20. The Future direction…
Evolving the survey content based on feedback from internal & external customers
Provide added value by enabling analysis for customer segments within a business unit
Examine linkages between :
Customer Loyalty & Financial Performance
Employee Engagement & Customer Loyalty
Improve our ability to collect sufficient, valid customer contact data (especially in B2B)
Integrate complaint feedback with survey
“Remind” the organization that Customer Loyalty does not equal a survey !

21. Table 1.1 Problem Solving Research

22. Table 1.1 Problem Solving Research (Cont.)

23. Table 1.1 Problem Solving Research (Cont.)