From customer insight to business growth

From customer insight to business growth Why and how to transform customer insight into action Commercial Excellence Forum, September 20, 2013

Commercial Excellence Forum Planned Meetings in 2013 January 18, 2013 Segmentation and Go-to-Market strategy May 24, 2013 How to create unique value proposition and successful differentiation September 20, 2013 From customer insights to business growth November 15, 2013 Pipeline Management & CRM 2

Agenda Welcome & Introduction From customer insight to business growth Case: Danske Licens Spil Grow the business with strong customer insight How do you ensure proactive use of customer insight? Exercise in groups : How can you grow your business based on customer insight? Summing up the Commercial Excellence Forum event 3

What does it take to drive topline growth? Experience? Competence? Luck? Customer Insight? -can be turned into magic! 4

Topline growth is a customer issue The company is the owner of the cost structure in a company The customer is the owner of the future revenue. That is why understanding customer needs and building customer insight has to be the focal point for developing any business 5

Classic Dilemma 1# - what is the right insight to generate growth? Outside-in growth thinking We are in the market of fulfilling needs not selling products! Mr. and Mrs. Right True value innovation Earning Benefit 6

Classic Dilemma # 2 - How to align company perspective with the customer? Customer value chain is underestimated as key to growth Value adding services in a full (customer) perspective Growth generators often appear outside the existing market definition Customer insight should not be confused with customer journey insight or touch point insight it is much broader. Differentiation and willingness to buy is very often found outside the traditional value chain Consumers value chain Web suppliers value chain Stores value chain Planning Channel Go to Inspire Shopping Transportaion Consume Waste / budget 7

Supplier Value Chain Customers add value to the bank Company vs. Customer value chain Pension securing old age Savings and investment Property financing Daily contact Loan / cash The value chain in a 360º perspective Net banking - transactions 24/7 service Mobile banking - overview Sparring partner Gathering the family s ecoonomy Education in creating an economic profit Comfort and security Lifeline (available) Freedom of consumption Help to self-help Securing the future (proactive planning) The bank add value to the customer Customer Value Chain Danske Bank - tanker til inspiration 8

Case: Danske Licens Spil, Grow the business with stronger customer Insight Head of Business Development Ditte-Maria Heide Kristensen 20/9 2013

Agenda Introduction The liberalized gambling market DLI challenges Driver value chain and target groups Customer promises Cases Results

Introduction me Employed in Danske Spil since 2005, as Project Manager and the last 2½ years as Head of Business Development Background in internet business and education from Copenhagen Business School Cand.Merc.Int (intercultural management) Married, two daughters 4 and 6 years old

Danske Licens Spil

Organisation Danske Licens Spil

1949-50 1951-52 1953-54 1955-56 1957-58 1959-60 1961-62 1963-64 1965-66 1967-68 1969-70 1971-72 1973-74 1975-76 1977-78 1979-80 1981-82 1983-84 1985-86 1987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999 2001 2003 2005 2007 2009 2011 History of the business Turnover 1949-2011 1.000 kr. 12.000.000 10.000.000 8.000.000 Zezam Bingo Keno Plusabonnement Intern Millionlotteriet Danske Automat Spil A/S/Dantoto 6.000.000 Onsdags Lotto/Skrabespil Oddset Joker 4.000.000 Lotto 2.000.000 0 Tips

2012 budget Jan-April budget Jan-April realiseret 2012 budget Jan-April budget Jan-April realiseret The liberalised gambling market From monopoly to free competition Gambling market liberalised 1/1 2012 Many new competitors and fierce competition, BUT we have a strong brand Many were concerned about the future of Danske Licens Spil What happened? Budgetteret ift. Realiseret omsætning og BSI Mio kr. Oms ætning BSI How could we keep on growing? 5.047 Indeks 280+ 4.278 100 mio. EBT? 1.514 690 232 Indeks 170+ 401 2012 2015

DLI what is our mission? Business idea: DLI sells entertainment and thrill through gambling and add on services to gambling. We live off of having the same passion for gambling and entertainment as our customers. Through insight and knowledge about our customers needs and desires we want to expand our position in the market and ensure profitability and growth through continous strengthening of our product and channel supply Ambition: We are the best gambling company in Denmark as well as the best workplace in Denmark.

The market time/value and needs

The perspective The Perspective New products and service concepts will be developed and initiated upon the customers and their needs. Growth can not be predicted by analyzing the customers behavior they can only have the behavior we provide them!! We will explore the limits of the market we are in We want to reach our objectives and KPI s from the strategic plan But. We will follow customers and their needs, also when this will implicate that we have to operate on other markets than the traditional market

New demands to meet.

Driver value chain and groups Engaging Relax/wind down New worlds The objective is the game itself On-line community Creates community Good gaming habits for kids Cosiness/ community Games as a conversation opener Challenge/To be challenged Quality time with the family No risk High quality games Influence the game 24/7 access to games The game is catchy Develop own skills Interacting The game develops me Appealing Instant joy of playing Tactically challenging Excitement Earn points Access to the big prize Recognition Prize and Security Influence my odds Supplyer Security Danish supplyer A good cause Hot topics Adult time I am interested Influence winning chance

Target Groups insights

Our prioritized drivers Appealing Instant joy of playing Cosiness and community Easy and foreseeable Relax/wind down No risk Interacting Influence winning chance High quality games Develop own skills Challenge/to be challenged Creates community Good gaming habits for kids Games as a conversation opener Engaging 24/7 access to games New worlds Prize and security Supplyer security Access to the big prize A good cause

Our customer promises Appealing: You can always find and play entertaining games on your grounds Interacting: You can develop and compete against others at your level Create community: You get something to share with us Engaging: You get engaging experiences with us when and where you want Prize and security: You can win the big prize with small stakes for both enjoyment and benefit Overall promise: To be decided...

The Event Coupon Easy access Low risk Develop own skills Area Appealing Engaging Fellow-feeling Involving Fulfillment of promise Easy & understandable Instant joy & entertainment Develop own skills No risk Community Challenge / to be challenged Relaxing

Between Friends Easy access Community building Challenge and be challenged Wind down

New app games Easy access Community building Wind down New worlds 24/7 acces

New Zezam universe Easy access Community building High quality games Wind down

The Poker School Easy and foreseeable Low risk Develop skills

Januar Februar Marts April Maj Juni Juli August September Oktober November December How are the results? Is DLI the best gambling company in DK? BSI Millions Realiseret 2013 Realiseret 2012 Budget 2013 Budget 2012 1.200 800 400 0 Total Marked DLI Markedsandel Væddemål 1,175 878 75% Onlinekasino 870 336 39% 2,045 1,213 59% Is DLI the best workplace in DK? Antal svar: 72 Relationsstyrke Meget tilfreds Tilfreds Utilfreds Meget utilfreds Svarfordeling Ikke besvaret 2012 60% 39% 1% 0% 0 2011 47% 53% 0% 0% 0 Attraktivitet Mere attraktiv Lige så attraktiv Mindre attraktiv Svarfordeling Ikke besvaret 2012 61% 36% 3% 0 2011 57% 43% 0 0 Relationsstyrke A. Hvor tilfreds er du generelt med at være ansat i Danske Spil koncemen? Attraktivitet B. Hvor attraktiv mener du, at din arbejdsplads (Danske Spil koncemen) er sammenlignet med andre virksomheder, du har kendskab til?

Thank you Ditte-Maria Heide Kristensen Forretningsudviklingschef Head of Business Development dmhk@danskespil.dk www.danskespil.dk

The key is to think outside-in In Company focus Outside Bonds Drivers Motivations 32

The process of implementation starts with the customer and ends with the customer 33

Customer insight as a game changer in the business development - Guiding principles Transform insight into a action Broaden the perspective beyond existing market definition by looking at how customers react today in the market Understand the underlying needs and validate in large scale to reduce risk in business development Define quick wins, projects and transform into strong go to market approach 34

#1 -Topline growth is about meeting the right customer needs Developing new break-through ideas is all about matching a product attribute with a customer need in order for it to transform into a strong consumer benefit A need is like a coat rack. It is the carrier of a product (feature). If a product (feature) does not fit, it falls to the ground 35 35

#2 Needs are a motivator not a solution A need is not the same as a solution: People has no need for an internet bank. They have a need to access their money when ever and how ever The need is the fundament of any successful innovation: A product becomes a success BECAUSE there is a need for the product. A need may not follow the definition of a market: Customers do not think in branches and businesses Their needs are typically evolving by mixing experiences together. 36

#3 Choose the right research method A strong research method is a fundament for reducing risk in decisions making Do s Qualitative research methods reveal the underlying motives Qualitative techniques are matched to the market dynamics Dont s Qualitative research is not suited for final decisions and ready-made solutions to be implemented Do s Qualitative findings can be validated in a strong choice test The research should be based on disclosure of needs formulated as positive benefit statements. Don t s Conjoint tests is not suited for mapping needs and many variables 37

#4 Give the customers voice sufficient focus and priority Accept a survey to be comprehensive. The more details the better decisions PART 1: IMPORTANCE PART 2: PERFORMANCE PART 3: BACKGROUND Ranking of customer benefits by disclosing the least important needs (found in the qualitative process) Identify the customers views on needs fulfillment Using importance module together with back ground information Maps the customers needs structures Reveals the customers preference and how well a product category is perceived Profiling segments based on their needs 38

#5 Prioritize ideas after customer impact Quick wins are often ideas that haven t been communicated sufficiently Customer Impact High Projects Quick wins Walk away Wait for now Low Ability to implement High 39

#6 Markets standards should meet the needs in the market Implementation plan focus on leverage and increasing performance perception INCREASE PERFORMANCE ON MOST IMPORTANT NEEDS High BY REDUCING FOCUS ON LESS IMPORTANT NEEDS Performance Low Most important Less important Importance of needs 40

Exercise Discuss in groups From business insight to action: What are the 3-5 main barriers in your company to exploit all the business insight you have about customers needs. Discuss and write down 3-5 barriers each on yellow cards. Overcome the barriers: Discuss how to overcome the barriers please challenge each other and write your ideas on green cards. 41

Exercise: Main barriers and how to overcome these The identified barriers CEO need to believe in customer insight Quantify the insight value vs. traditionel excel business cases Too little insight about the end user Perception vs facts To gather real insights cross silo s Thinking the 360 perspective To get the organization to act upon the insight The resistance towards change IT systems Lack of knowledge as regards the total value chain Harder to change existing proiduct/service areas as new ones Transfer of insights to real specific value Complex buying center many stakeholders Risk aversion The real understanding of customers customer Internal competencies Information overload Strong culture Do we ask the customers in the right way? Wrong customer segmentation How to overcome the identified barriers Create organisational structures se leadership model Insights and customer promises on segment level not one size fits all Create local ambassadors Holistic plan & execution Focus on the burning platform Commitment in top management Create mini-projects Use cases as proof of concept show the value Use reference stories Balance between tailor-made products and the internal procedures Focus on the value drivers of the customers Specification of customer oriented activities cross functions Measure and management follow up New capabilities and create the right team Cross functional involvement in all customer oriented changes Stress the burning platform or explain what s in it for me Focus on long-term activities 42

Commercial Excellence Forum Planned Meetings in 2013 January 18, 2013 Segmentation and Go-to-Market strategy May 24, 2013 How to create unique value proposition and successful differentiation September 20, 2013 From customer insights to business growth November 15, 2013 Pipeline Management & CRM 43