EMC2

• In 1999, 80% of sales were made to repeat customers
• By 2001, EMC cited a 99% customer retention rate
• Became the worldwide market leader with revenues approaching $15 billion in 2009.

Delivering

Customer

Centricity

By Norah Adewumi

to Customer Centricity

Trouble

High Touch vs. High Tech?

from Product Centricity...

Strategic reform towards the next 20 years

• Began with disgruntled customers being offered either a new replacement product from EMC...or their competitor, IBM
• Website makeover: user-friendly, blogs, podcasts, etc.
• Customers became co-innovators
• Product line expansion based on customers' wants and needs
• Customers were even considered part of the EMC family, whereas the need for certain potential customers were questioned.

On the verge of bankruptcy

• After purchases, technical support and after-sales service were virtually non-existent.
• Products were failing at an alarming rate
• Did not have systems or people in place to deal with problems
• Stock dropped to $7 per share
• Businessweek writes, "their engineering and technical support is something they always skimped on"

Question: Could EMC transfer its learnings from EMC One to build an externally focused online community that could bring its employees and customers closer?

Return on investment?

Background

Product -Focused:

• Created an aggressive sales culture and undercutting their competitors' prices
• Built a sales organization populated with bright and competitive college athletes.
• Motto amongst the sales team: "only the strongest survive"
• An intense sales culture with an agressive selling approach of a "take-it-or-leave-it attitude

Before:

• Relied on EMC salespeople to guide them through the buying process.
• Salespeople interacted with prospects face-to-face during the purchase process.
• Promised and delivered a "one size fits all" approach

Source: https://www.slideshare.net/JamiePappas/emc-case-study-jive-get-social-tour

After:

• Physical interactions with EMC were decreasing, digital interactions were increasing
• Prospective customers were getting pre-purchase information from EMC's website and other IT professionals in web forums.

Although achieving success, selling at $29 per share and ranked the 7th hottest company in America...

• Founded by college roommates, Richard Egan and Roger Marino in 1979
• Began by selling office furniture to enter the industry, followed by technology products
• In 1986, EMC goes public to raise capital to expand into new markets

EMC Corporation Annual Income Statement

Period Ended 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006

In millions of USD

Net Sales $17,015.13 $14,025.91 $14,876.16 $13,230.21 $11,155.09

Total Revenue $17,015.13 $14,025.91 $14,876.16 $13,230.21 $11,155.09

Cost of Revenue $6,984.15 $6,281.01 $6,653.79 $6,018.88 $5,241.89

Gross Profit $10,030.98 $7,744.90 $8,222.37 $7,211.33 $5,913.20

Source: Glassdoor

References:

Steenburgh, T. & Avery, J. (2011). EMC2: delivering customer centricity. Harvard Business School. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/69473358.