Many companies face the ‘Trapped-Customer’ challenge. Their customers need their products, however many are not happy with the products or the sales and support services provided. How to engage colleagues and delight customers to generate sustainable and profitable revenue growth?
Shortly after IHS, founded in 1959, became a publicly-traded company in November 2005, the company started to broaden its focus beyond products, to engaging colleagues and delighting customers. Prior to that point, customers
stayed because they had no easy alternative; many were far from satisfied. However, by 2014, the leadership team and colleagues at IHS had successfully transformed the company.
The initial IHS share price was $16.00 and its 2005 revenues were $476 million.
The company defined itself by its products:
. . . one of the leading global providers of critical technical information, decision-support tools, and related services to customers in the energy, defense, aerospace, construction, electronics, and automotive industries. We have developed a comprehensive collection of technical information that is highly relevant to the industries we serve.
During 2007, the IHS leadership team began to turn its emphasis from products to customers and colleagues in its business definition. In its 2007 annual filing, IHS stated:
. . . We provide Critical Information and Insight to meet our customers’ needs, which include providing – insight into global energy market movements, managing product lifecycles, meeting growing environmental challenges, assessing national or corporate security issues, and forecasting the broad economic outlook across the globe.
In order to achieve our vision to be the Source for Critical Information and Insight, we have set four broad objectives ‘our goals’ upon which we focus our efforts. These four goals are:
improving customer satisfaction (“Customer Delight”);
fostering a culture that enables colleague success;
delivering profitable top- and bottom-line growth; and
providing an opportunity for shareholder success relative to our peer group
We are committed to measuring our progress on these four goals using quantifiable, objective metrics.
By 2009, IHS was growing rapidly by acquiring five to ten companies each year. These acquisitions increased the complexity of the company’s processes and systems. The IHS strategic growth plan included a focus on improving Customer Delight and Colleague Engagement as important components of the plan to ensure existing-customer revenue growth and ease of doing business for all customers, both old and new. At the end of 2014, IHS had revenues of $2.2 billion with a compound annual growth rate (CAGR) of 19% since 2009 and adjusted EBITDA of $690 million with a 20% CAGR since 2009. The 52-week high stock price during 2014 approached $144. The equity value of IHS had increased by $6.9 billion or 770% since its initial public offering just 9 years earlier.
How did IHS deliver this profitable revenue and equity growth? The IHS team focused on making acquisitions in well-defined target markets, growing revenues from existing customers, and creating an impactful Customers First program. This white paper will describe how the Customers First program was implemented and how a customer focus helped to drive profitable revenue growth.
The aim of this white paper is to describe some of the key success factors of the IHS Customers First program.
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