Most managers struggle with an overabundance of tools. So how do you identify which ones are the best fit for your organization's current needs? Our Bain's Management Toolkit (Part 2) collection includes battle-tested frameworks, curated and recommended by one of the world's top consulting firms, that will help you identify, implement, and integrate the optimal tools to succeed.
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A price optimization model simulates how targeted customer segments will react to price changes when you factor in promotions and discounts.
The scenario planning tool allows managers to plan for divergent futures to establish contingent strategies for success.
A zero-based budgeting worksheet can confront conventional thinking to reallocate resources when needed.
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This deck provides more of the top tools leaders can use for every scenario, with built-in explanations on how to use them. Plan for the future, optimize product prices, re-envision company budgets, improve customer relations and satisfaction, or transform your business for the digital age — all in one easy-to-use toolkit.
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Bain & Company compiled this collection to educate managers on the top tools available and how to use them for success. We have prepared the second half of the tools Bain recommends in this collection. For more frameworks like this, check out our Bain's Management Toolkit (Part 1).
We begin with the customer satisfaction system. Measure satisfaction with service across delivery, timeliness, information, professionalism, and staff attitude. Customer satisfaction systems help build customer relationships that last, generate new sales growth, increase referrals, and align the interests of employees, customers, suppliers and investors. When you have a healthy customer satisfaction system, it becomes easier to attract and retain capable and talented employees.
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Let's say you run a quick-service restaurant and its customer satisfaction went down last year. Coincidentally, the overall wait time for customers to receive their food went up. Timeliness is an important factor for QSR companies and slower wait times can cost millions.
You could measure the customer's initial wait at the drive-thru before they order, as well as how long the overall process takes. Then do the same for the in-store experience. You could then conduct a competitive landscape analysis to compare your results. You may find that even though your service is fast, it feels far slower than competitors when compared. With this discovery, you might need to improve kitchen efficiency or add more drive-thru lanes.
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Professionalism and staff attitudes could also be important factors. You might realize that staff morale is lower because customers seem to have a negative experience and complain more due to long wait time. After optimizing for order timeliness, staff attitudes could also be improved. (Slide 2)
When it comes to customer relationship management, there are likely multiple interaction interfaces that build (or in less fortunate cases, destroy) your relationship with customers. In order to support coordination and collaboration across these interfaces, create an information hub so that everyone involved understands and centers your customers. To do this, you need to fully understand customer behavior, user personas, preferences, and history of interaction with your organization, then make that information available to everyone on your team.
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For our quick-service restaurant example, through the measurement of customer satisfaction levels, you know there's room for improvement. The main interaction interfaces with customers are physical locations and in-person customer service.
With the rise of take-out and mobile orders, however, you can explore the launch of a streamlined mobile-order system and allow curbside pick-up for mobile orders. You can then develop a coordinated cross-channel marketing and sales strategy to market this new expediency to customers. (Slide 3)
Customer segmentation can be used to develop customized marketing programs tailored to specific audiences more effectively. This also helps to prioritize new product or feature development. And it can enact better service that works for an intended range of clients.
You can segment customers by demography, like those who are younger, digital native and mobile-first, or those that are mobile-averse and typically in an older age range. For your QSR business, mobile-first order systems would appeal to a younger digital-native demographic, while faster drive-thru could appeal to everyone.
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You can also segment situationally, like between those customers who prioritize convenience, those with an interest in new categories, or those who are interested in low prices and deals. For example, maybe you can win back some frustrated customers with a discount buy one, get one free campaign, while the promotion of new mobile orders and curbside pickups could win new customers.
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Another segmentation type is geographical, which becomes important especially if you are an online or international brand. Geographic segmentation helps to design optimal distribution strategies because if you know your customers and where they are, you can figure out where to serve them. One factor that could aid your timeliness is to open additional locations where demand is highest and remove some of the friction from the wait at busy stores.
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And last you can segment by psychographic profile, which profiles specific personality traits of customers, like early adopters who are attracted to innovation and changes versus those who value customer care or are attracted to recommendations and ratings. Improved customer satisfaction could lead to higher ratings, which could then win new customers. At the same time, new innovations like AI tech can predict surges in demand, or automated order fulfillment could win over more innovation-savvy consumers. (Slide 4)
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Perhaps you need a tool to help integrate digital technologies into your organization's strategy and operations. That's what digital transformation is for. Digital transformation examines how to create superior customer experiences and explore new technologies that can strengthen your core business. For more about digital transformation, we created a whole Digital Transformation deck that you can use to upgrade your company for the 21st century. (Slide 6)
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The scenario planning tool is helpful for when you have identified a specific set of uncertainties and need to make an assumption on what the future business environment of your industry will be when compared between two different realities.
First, you must orient your internal perspective and current knowledge to determine which unknown will become your focal question.
Next, you need to explore different perspectives to determine any driving forces and uncertainties. Your executive team should immerse themselves in these scenarios and even scan the fringe of what could be. This is the predictive stage — what could happen? Identify all possible futures, and what the world could do versus what your organization should do.
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Now, synthesize these ideas into two separate scenarios with their own logic. These scenarios should track with two main impacts. In the case of your QSR company, these would be labor costs and consumer demand. Ask yourself in this stage what is likely to happen to determine the likely future.
With your two detailed scenarios, you can "rehearse the future" to generate options, opportunities, risks, and tentative priorities. In this stage, you want to determine the desired future. Ask yourself what do you want to happen? For instance, should labor costs become untenable, you can supplement with automation and technological advancements. Should consumer demand dwindle, you can focus on customer satisfaction to create recurring transactions, sustain revenue, and hold the bottom line.
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Last, monitor the scenarios. Define early indicators and signposts of the likelihood of a future scenario about to become reality. This process should be an ongoing process and dialogue throughout your organization to keep plans up to date. (Slide 12)
When it comes to the need to plan for the future, a good tool to use is the contingency planning worksheet. A contingency plan helps you prepare for these futures and immediately respond in the first hours, days, or weeks of a crisis. You can fill this out to determine the relative risk level of various scenarios, what could trigger each scenario, and what your organization's actions should be.
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For instance, Scenario A could be a new viral outbreak that triggers a mandatory requirement for restaurants to close down their indoor dining. You could then map out the steps that you would take to ensure your staff and customers are safe and compliant with the new mandate, starting with the first hour steps and then follow to the next day and week.
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Your first-hour step might be to hold an all-hands meeting so all stakeholders and team members know that the interior restaurant will have to close and go over health and sanitation guidelines. On the first day, you will put a notice up for customers, post the new guidelines on social media, close the interior store, and shift your staff schedules to prioritize drive-thru and curbside pickup. Over the first week, you can plan how your sales expectations might shrink while demand on the drive-thru will be higher. The need for timeliness and efficiency has never been more important. Last, you will need to determine the end plan trigger — in this instance, it would be the lifting of restrictions on in-door dining. (Slide 13)
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Sometimes you need to take your business plan back to the basics. A zero-based budgeting worksheet is a tool that looks at all your income sources and focuses on the difference between projected and actual revenue. These costs are periodically analyzed to determine if they are still necessary. Zero-based budgets do not apply incremental budgetary increases or decreases.
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In this model, all expenses must be justified for each new period so the budget can be built around what is needed for the following period. Managers do this through complete financial transparency and alignment with defined strategic priorities. They then evaluate which KPIs will determine success, optimize, monitor, and spend based on values. This optimizes cost and revenue so that you don't just spend frivolously. (Slide 15)
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