1. Copyright © 2007 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. October 25, 2007 Winning in a Multi-Polar World: Customer Centricity

2. 2 2 3 1 Customer Centricity imperative… and challenges. High performance Customer Centricity… defined. High performance Customer Centricity… delivered. The Accenture Customer Centricity Perspective

3. 3 Emerging Consumer New Customers & Sources of Growth Multiple Economic Power Centers Unprecedented Competition, Opportunities, & Risks Moving to a ‘multi-polar’ world Winning Talent New Innovation Map  Importance of Market Share  Globalization takes on non-Western characteristics  Rise of Emerging Multinationals  Emerging Global Workforces  Maintaining Culture w/in Fragmented Organizations  Local Execution of Global Talent Management Strategies  New Consumers, Different Needs  Leveraging Local Innovation Networks  Local competitors are a formidable challenge  Flexible thinking is imperative  R&D will become more dispersed Source:‘Rise of the Multi-polar World’, 2007. ImplicationsChange DriversBusiness Impacts

4. 4 Declining Product Advantage More Connected Marketplace Eroding Customer Loyalty Three primary drivers fueling the focus on customer centricity. Shrinking Advantage Windows Top Reasons for Switching Providers Eroding Customer Bases… Percent of Customers who switched providers last year (by Industry) …Valuing Quality Over Price Duration of competitive advantage from product and process innovation Expanding Global Connectivity Increasing technological innovation Growth in the number of products/services offered by your organization in last five years? Rampant Growth in Complexity* *Source: Unravelling complexity in products and services; Wharton University of Pennsylvania; N=424 Source: Accenture CCT Study on Customer Service (U.S./U.K.)

5. 5 More Knowledgeable Internet has made it easier to find relevant offerings, research and compare offerings, and price shop Online consumer created content and communities becoming preferred sources for information and opinions Increasing interest in ethical consumerism More Demanding Rising individualism mean greater value is placed on unique, relevant, or beneficial products and experiences Increasing expectations for 24/7 or on demand support Time compressed consumers prioritize convenience Middle class seeking higher levels of quality, taste, and aspiration The most significant trend impacting the Customer-Centric Agenda is the seismic shift in the balance of power to customers… More Empowered Consumers more likely to specify, create, and customize purchases to their unique requirements Consumers actively filter and tailor communications they receive and publish their opinions on brands Consumers are leveraging self-service and multi- channel options More Diverse Customers comparing global-player experiences against local-market experiences Imported and untailored processes, policies and products suffer disproportionate backlash Consumers easily translate personal experience into their behavior in corporate buying roles Customers have become more elusive than ever before and are moving targets.

6. 6 The result? The core hypothesis behind the need for Customer Centricity is that companies cannot succeed in today’s economy if they don’t react as the market around them evolves. Seller-driven Market Buyer-driven Market Drivers of Change 1. Consumerism 2. Commoditization More Options, Lower Prices Customer Portability Product Ubiquity Shorter Lifecycles for Innovation 3. Convergence Industry & Channel Blurring (Retailization) Category Expansion/Bundling Extended Industry Networks 4. Saturation Over-Stored/Overcapacity Liberalization (Europe and Free Trade) Virtualization (Internet) Product-Centric Competition Customer-Centric Differentiation There are a new set of rules – companies will evolve quickly or face the accelerating spiral from non-relevance to obsolescence…and then to extinction.

7. 7 The prize. The market has shown the impact of Customer-Centric Transformation translates into sustainable Shareholder Value… Journal of Marketing, January 2006Thompson Financial; Yahoo Finance Customer Centricity at scale delivers sustainable results… …and leaders consistently outperform the market.

8. 8 …and the value proposition has material impact on the top-line growth and bottom-line profitability. Poor customer experiences result in customers leaving The economics of customer retention are significant Accenture High Performance Research has correlated the significant and positive impact of designing and delivering the appropriate customer experience to customer loyalty and value creation.

9. 9 2 3 4 1 Customer Centricity imperative… and challenges. High performance Customer Centricity… defined. High performance Customer Centricity… delivered. Next steps The Accenture Customer Centricity Perspective

10. 10 The Accenture Customer Centricity Perspective Customer Centricity Definition: Incorporating the customer’s perspective, value and actions into business and operations strategy, capability development and execution to improve business performance and build customer loyalty.

11. 11 The Accenture Customer Centricity Perspective Challenge: Customer Centricity is a common element of a business strategy, but execution and readiness to deliver sustainable results remains the largest gap

12. 12 C-Suite leaders are struggling to deliver the required growth. 30% Strong Implementation Ability to execute quickly and stay ahead of competitors Strategy Ability to develop growth initiatives 63% Strong Planning Ability to plan end-to- end implementation 41% Strong Senior executives rated their ability to develop, plan, and execute strategies for growth... Source: Innovation & Growth Survey, March 2006; The Economist Intelligence Unit

13. 13 Customer-Centric Transformation: Strategy through Execution – The Key Questions to Ask How are you responding to the buyer-driven market? – Responding to the Seismic shift of power to the customer How well do you know your Customers? – Customer segmentation that works and data warehouses that don’t Just how loyal are your Customers? – Impact on margin from Transactional relationships Your Customer-Experience - Differentiating or Diluting? - Fragmented customer service & disconnected customer interactions How is your brand and your experience (stores, products, metrics) tailored around the world? - Profitable Entry into New Markets Who’s accountable for the customer experience across fragmented organizations? - Emergence of the Chief Customer Officer Multiple Channel or Multi-Channel? - Integrated management of the overall customer experience How do customers participate in & own the innovation process? - Customer-Centric Innovation Important Project or Strategic Program? – Where to place the CC bet

14. 14 2 3 4 1 Customer Centricity imperative… and challenges. High performance Customer Centricity… defined. High performance Customer Centricity… delivered. Next steps The Accenture Customer Centricity Perspective

15. 15 The Accenture Customer Centricity Perspective Mastery in select capabilities is required to build Customer-Centric Organizations

16. 16 Three common characteristics of Customer-Centric Leaders Customer RelevanceExecution Excellence Enterprise Agility Market leaders convert advanced customer insight into value through products, services, experience and marketing. High Performers implement people & business process and technology capabilities to deliver a tailored customer experience. Companies foster the organizational agility required to effectively value, execute and sustain customer relevance.

17. 17 8 Required Capabilities of Customer-Centric Transformation Delivering Customer-Centric benefits comes from an integrated set of new and adapted business capabilities – tailored to notably differentiate the value proposition to customer segments. Customer Relevance Imperatives 1.Customer & Product Strategy Convergence 2.Actionable Segmentation 3.Customer Experience Design & Management Execution Excellence Imperatives 4.Marketing, Sales & Service Synchronization 5.Adaptable Supply Chain 6.The New Workforce Ecosystem Enterprise Agility Imperatives 7.Customer-Centric Performance Management 8.Customer-Engaged Innovation

18. 18 Customer Centricity Imperatives: Actionable Segmentation – Move from academic to actionable Predictive Based on past behaviors but addresses future needs Uncovers distinctively counter-intuitive opportunities Rooted in past economic value but maximizes lifetime profitability Highlights value propositions Recognizable Attributable to a majority of the customer database Identifiable in the contact channels: “Three clicks or three questions” Conducive to distinct personas from the board room to the bricks Leveragable in the prospect universe Executable Readily standardized, institutionalized and repeatable Operationalized cost-effectively Scalable through people and processes, not just technology Measurable contribution to overall business performance

19. 19 Expectations Playbook Requirements Management Customer Impact Brand Alignment Dominant Customer Value Proposition Harmonized Marketing and Sales Messages Intentional Customer Experience Designs Differentiated Offers and Treatments Intention and Needs Based Channel Options and Availability Organizational Roles and Responsibilities Service Levels and Metrics Executive Sponsorship and Responsibility Cascaded Performance Metrics Iterative and Responsive Voice of the Customer Economic Impact Operational Performance Customer Centricity Imperatives: Marketing, Sales & Service Synchronization - Alignment and Integration

20. 20  Smarter customers.  Increasingly shorter product lifecycles.  Shift from product manufacturers to solution providers w/ service offerings.  Integrated service model that includes location based services, web-based services, and in-house customer care (all from different providers).  Market and Channel evangelism is required to launch new products/services Key Issues  Employees  Customers and Consumers  Channel Partners  Others... Workforce Ecosystems Customer Centricity Imperatives: Managing New Workforce Ecosystems – A broader View

21. 21 Customer Centricity Imperatives: Customer-Centric Performance Management – Tools to plan and manage formula for success Performance Management Impacts  Metrics for customer growth and profit (e.g., retention, penetration, segment P&Ls)  Planning models must adjust to test cause and effects on these metrics  Organizational understanding of behaviors and actions required to move the needle on these metrics  Ability to vary the formula by market through target-setting and portfolio approaches (i.e., not one size fits all)  Reliable data management to foster management confidence in decision-making

22. 22 Crowd Sourcing: “Innovation Grapevine” ProcessSocial Networking Wisdom of the Crowd Moments of Truth Customer-Engaged Innovation Customer Centricity Imperatives: Customer-Engaged Innovation – Initiating, Listening, Synthesizing

23. 23 The Accenture Customer Centricity Perspective How does this align with today?

24. 24 The Accenture Customer Centricity Perspective Thank You