lfs conveyancing conference treating customers fairly and profitably 26 september 2013 victor olowe...
TRANSCRIPT
LFS Conveyancing Conference
Treating customers fairly and profitably
26 September 2013
Victor OloweDirector, Winzest Consulting
Nagging question
Source: Winzest Consulting
What is treating customers fairly?
Source: Winzest Consulting
Profitability League Table(Hypothetical Profit League Table – Conveyancing Firms)
Source: Winzest Consulting
How businesses are wired?
Source: Winzest Consulting
Treating Customers Fairly Matrix
Source:Winzest Consulting
A B
C D
Treating Customers Fairly
Treating Customers Unfairly
Profit
Loss
Capacity to Experiment
“I don’t think that you can invent on behalf of customers unless you’re willing to think long-term, because a lot of invention doesn’t work. If you’re going to invent, it means you’re going to experiment, and if you’re going to experiment, you’re going to fail, and if you’re going to fail, you have to think long term.”
(Jeff Bezos, Amazon)
Pricing power
• “The cost of being a conveyancer…..- Low fixed fees…”
(Eddie Goldsmith, Conveyancing Association)
Pricing power
“The single most important decision in evaluating a business is pricing power.”
“If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
(Warren Buffet)
Another Roger Bannister?
Source: Winzest Consulting
Treating Customers Fairly Matrix
Source:Winzest Consulting
A B
C D
Treating Customers Fairly
Treating Customers Unfairly
Profit
Loss
Possible barriers to change
Source: Winzest Consulting
Key Drivers of Change
Source: Winzest Consulting
Smarter Competition
Source: Winzest Consulting
Smarter Competition
Source: Winzest Consulting
Smarter Competition
Bad profits
“…Though bad profits don’t show up on the books, they are easy to recognise. They are profits earned at the expense of customer relationships...”
“…Bad profits strangle a company’s growth, primarily through the detractors they create…”
Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
Smarter Competition
Bad profits“…Whenever a customer feels misled, mistreated, ignored, or coerced, profits from that customer are bad. Bad profits arise when companies shortchange customers by delivering a poor experience. When sales reps push overpriced or inappropriate products onto trusting customers, the reps are generating bad profits. When complex pricing schemes dupe customers into paying more than necessary to meet their needs, those pricing schemes contribute to bad profits…”
Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
Smarter Competition
Good profits
“…Good profits are dramatically different. If bad profits are earned at the expense of customers, good profits are earned with customers’ enthusiastic cooperation. A company earns good profits when it so delights its customers that they willingly come back for more – and not only that, they tell their friends and colleagues to do business with the company…”
Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
Smarter Competition
Good profits
“…Satisfied customers become, in effect, part of the company’s marketing department; they become promoters. The right goal for a company that wants to break the addiction to bad profits is to build relationships of such high quality that those relationships create promoters, generate good profits and fuel growth…”
Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
Smarter Competition
Good profits
“..A truly customer-focused company is one that lives up to the Golden Rule. Employees treat customers the way they would want to be treated if they were customers. That means avoiding bad profits entirely…”
Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
Smarter Regulation
Better Tools
Smarter Consumers(How customers pay?)
Source: Seth Godin
Smarter Consumers
•Better Information
•Collaborative Decision Making
• Connection Economy
•Better Information
•Collaborative Decision Making
• Connection Economy
Moving to the next level Treating customers fairly framework
Source:Winzest Consulting
Summary
Are we asking the right questions?
Source: Winzest Consulting
Summary
Source: Winzest Consulting
Summary
Although the next two to three years looks promisingThe long term future is still uncertain
The challenge to find the right talent may continueUnless this sector is perceived to be more sustainable
The new disruptive competitors are unknownBut the regulators may look different
The influence of channel partners may waneBut customers’ expectations will surely change
And the businesses that remain intelligently focused oncustomers will thrive
• Are we making good or bad profit?
Further information
Relevant papers at www.winzest.co.uk
• Setting Profitable Fixed Fees through Value Based Pricing• Developing a Better Customer Service Culture
• Are we making good or bad profit?