Category Archives: Client News

Is Telstra Australia’s Amazon? – Its Customer Centric Strategy is Paying Dividends

Posted on February 19, 2015 by Dr Chris L. Brown | Leave a comment

While some may argue you cannot compare a telecommunications company with an online shopping mega star like Amazon, I beg to differ.

There is one core element both companies now share – their absolute commitment to being customer centric.

In 2009 when David Thodey took over as CEO of Australia’s largest telecommunications company, Telstra, he was asked what would differentiate his tenure from his predecessors. He said:

“I want to be an agent for the customer”.

It was a time when Australia’s highest profile company was being criticized on all fronts for its arrogance, poor customer service, unjustifiably high prices and monopolistic practices.

Thodey set about changing the culture at Telstra to a customer focused culture and invested heavily in defining and communicating internally a vision, values and strategy that had the customer at its center and customer service as its catch-cry. It included intense training of its 5,000 people leaders in Australia, India and the Philippines as well as new systems and processes that empowered customer facing staff to provide much better service to customers and solve their problems with least fuss. A new division was set up that enabled staff who heard of a friend’s problem at a barbeque to give them a direct line to a solution if they were having trouble getting it solved. Telstra embarked on a program to create advocacy with its customers and its staff. Use of the net promoter measurement system with daily feedback from thousands of customers fed to the areas in Telstra responsible was a trigger for focus on customers. Other customer feedback measures and progressive culture assessments have supported Telstra’s customer-centric journey.

Telstra: Improving Customer Advocacy

Now it is paying dividends. The company has posted seven successive half years of earnings growth to AUD$2.1 billion for this latest half – up 21% on last year. Dividends have been steady, but are now set to increase. Telstra is on a roll with its customer-centric strategy and stronger customer culture proving Thodey’s stance. Stock price is at an all-time high at around AUD$6.50 per share with steady and continuing growth up from around AUD$4.50 two years ago.

Telstra posts 22pc net profit rise

David Thodey is the first to say that Telstra still has some way to go. But his leadership of a strategy and culture in which the customer is at the center of decisions and service delivery is creating a highly sustainable profitable business.

If you want to see how it all began you will find it was originally initiated first in the Finance Group at Telstra and described in a case study about the CFO’s value service culture initiative. See Case Study Highlight: Telstra Transformation.

Telstra’s transformation story can also be found in “The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance”

Why global competition means every company must be more customer focused

Posted on December 26, 2012 by Dr Chris L. Brown | Leave a comment

Global competition is coming to the telecommunications industry in a major way. Yes Skype and others have been around for a long time but direct competition between the telco powerhouses has been slow to evolve.

America’s largest telco, Verizon, is planning to make a push for corporate customers with its secure internet and cloud computing products in the Asia-Pacific region. This move will see it competing head-to-head with Telstra International, the overseas arm of Telstra, the largest Australian telco. Telstra chief executive, David Thodey, recently cited expansion into Asia and more multinational corporate clients as a key strategic priority for Telstra in 2013.

John Harrobin, Verizon Enterprise Solutions chief marketing officer said “We believe that we are positioned to be one of the handful of players worldwide that can serve the mission critical needs of enterprise customers,” The move into the region puts Verizon in direct competition with Telstra, which wants its international arm to sell more global data and telecommunications services to companies with offices around Asia.

Verizon also wants more business with Australian corporations. It already provides telecommunications for some Australian government departments and for companies in the financial services, mining and manufacturing industries. It is also aiming to provide cloud-computing services to medium-sized companies that have only Australian operations,

IT services are moving from an on-premise service to a cloud-based service, and this would be a “massive disruption” in the sector, he said.

For Telstra, this type of heavyweight competition is relatively new and collaboration with new partners in Asia may be necessary. Telstra’s Asian success has been mixed in the past. For Verizon, the Asian markets will pose a new challenge – they will be aiming to sell new disruptive solutions to new customers. This is much tougher and riskier than selling products that everyone understands to customers you already know.

Which company is best positioned to win this battle? Will it be Verizon with its larger infrastructure and resources or Telstra with its traditionally stronger links in Australian and Asian markets? The answer will ultimately turn on the relative strengths of their customer cultures – their understanding of current and future customer needs and the ability of their entire organizations to deliver superior value for corporate customers. Their cultures will need to be resilient enough to understand, adapt to and act on their current and future competitors’ strategies and to have sufficient “peripheral vision” of opportunities that will require product and service innovations.

Do you have a customer culture that enables you to win competitive battles of this type? Does your corporate culture have the “peripheral vision” to identify and act on early warning signals of competitive threats and disruptive market opportunities?

How CFOs can use a customer culture to deliver $15m to the bottom line!

Posted on October 29, 2012 by Dr Chris L. Brown | 1 comment

A lot of the discussion about building a more customer focused organization centers on the customer facing parts of a business. While there is no doubt major improvements can be driven by sales, marketing and customer service, the real turbo boost to organizational performance comes from support functions that creates a culture around their internal customers.

“If your not serving customers make sure you are serving someone that does”

Corporate Support functions like Finance, IT and Operations have the potential for releasing huge gains to the business in terms of cost savings and profit improvement. How? By developing a culture where they see their internal stakeholders – that is those to whom they provide their services – as customers.

When they develop a “customer” mindset they think about the value (or lack of) they are providing. They stop delivering reports or services that have no value to their customers and focus on things that will increase value.

John Stanhope, CFO of Telstra, a $25 billion Australian telecommunications business set out to transform his Finance & Administration Group of 2500 people into a support group that would create new value, provide top service and be seen to be valuable by its customers. He painted a vision of what he called a “Value Service Culture” (known as VSC) in which he wanted all his staff to identify their internal (to Telstra) customers and deliver services of value to them. This journey from 2008 to 2012 was an outstanding success.

“We have delivered $15 million per annum in recurring gains from stopping non-value services and activities while creating more value in those services that were needed by our customers. This translates to an additional $55 million added to the value of our business.” – John Stanhope, CFO, Telstra Corporation, 2012.

An investigation by Telstra’s Finance & Administration group of estimated gains and savings conducted in 2010 showed annualized gains and cost savings of $15 million for 2009 representing added value to the business of $55 million.

These gains were derived from analysis of specific initiatives by:

a) Credit Management acting to collaborate with Telstra customers to reduce bad debts, cost savings from less follow-up calls and longer customer retention periods.

b) Risk Management & Assurance collaborating with internal customers through an education initiative clarifying compliance requirements and streamlined processes for reducing work for both parties. Cost savings from labor savings.

c) Corporate Security and Investigations working with Telstra retail shops to provide better processes, follow-up and liaison with those shops most targeted by consumer fraud. Reduction of fraud yielded large cost savings.

d) All finance and administration groups engaged in activities to reduce duplication and eliminate non value-add activities and reports resulting in measurable savings.

Care was taken to attribute only those gains and savings that could be aligned with VSC initiatives to do with understanding customer needs, providing greater value for customers, monitoring customer feedback and collaborating with customers to deliver the Group’s fiduciary responsibilities more efficiently. Later analysis showed these gains were continued over 2010 to 2012.

Stay tuned for my next blog post in which I will summarize the actions vital to Telstra’s VSC success and the lessons learned from this transformation experience.

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Posted in C-Level Quotes on MarketCulture, Case Study, CFOs, Client News, Customer Centric Culture, Customer Service, Customer Value, Customer-Centricity, Internal Customers, Marketing Finance, Uncategorized

Tagged internal customers; customer culture; culture and performance;culture's links to profit;telstra

Finally a breakthrough tool to measure your level of market orientation

Posted on June 25, 2009 by Dr Chris L. Brown | Leave a comment

Breakthrough MarketCulture Innovation

Finally there is a way to measure something we have been working with clients on for the last 30 years. It is what we call market culture or in research circles is referred to as market orientation. This goes beyond the notion of customer centricity although the terms are related. It really is about bringing the outside in and avoiding the pitfalls of working with primarily an internal focus. It is not just about customers but about the external environment, the competitive landscape and how intelligence is distributed and used within the business to create more value.

Why is it important? Because it is a proven driver of business performance, companies that have built a strong market culture have built businesses that are more innovative, profitable and grow faster than their competitors.

Our team is really excited as we have finally completed the development of a new survey tool that will validly and reliably measure market orientation (what we call market culture), connect it to business performance and benchmark our clients against a database of companies from around the world.

For more information see our press release here. We have also set-up a new page on our site dedicated to this new product, we are calling the MarketCulture Benchmark (TM) here.

MarketCulture Strategies Congratulates Telstra on Customer Recognition

Posted on November 13, 2007 by Dr Chris L. Brown | 1 comment

As a first post on this blog, I thought it might be fun to start with a success story. A couple months ago, Telstra, one of our premier clients, was recognized for its efforts to better serve their customers. They were named the Australian telecommunications “Company of the Year,” and their chief executive was named “CEO of the Year.”

We have been working with Telstra over the past 12 months to assist with the transformation and training of their marketing teams and other business units to help realize the needs of their customer. Within the non-marketing functions, particularly the accounting and finance functions, much of our work centered on realizing and owning their role in the end customers’ experiences. For a market culture to work, it must have buy-in from the top down and across all functions.

Comments from our CEO, Chris Brown:

“We are seeing organizations that understand they need to have a strong market culture to improve their performance. With a strong market culture every employee understands how they impact the customer. This drive for a market orientated culture is supported by scores of academic studies that show if a company has a strong market culture then it is much more likely to understand customers deeply, and to align its self to deliver superior customer value, profitably. Telstra has identified this and with Sol Trujillo has begun integrating this customer first philosophy into the way they do business.”

From the lead consultant, Sean Gallagher:

“A company’s culture is very hard for competitors to imitate. Firms with a strong market culture are able to align the entire organization to deliver superior customer value, profitably. This is where MCS services can help. We assist companies in their transition to a strong market culture by benchmarking their current culture and marketing skills. With this data we help senior management increase their organization’s customer focus throughout the firm, with special emphasis on marketing skills. Granted this process doesn’t happen over night, but the pay offs are tremendous. Telstra is only at the tip of the iceberg in terms of reaping the rewards of their efforts to spark a corporate cultural revolution around the customer.”

Thanks guys for the quotes!