Real-World Example
Design and Implementation of a New Goodwill Policy
Background
Companies in the automotive and commercial vehicle industries are often characterized by established structures and processes in after-sales and quality management. Rising customer expectations regarding product quality present ongoing challenges for internal warranty and goodwill processes and the personnel responsible for them.
Examples of Challenges
- Failure to derive the goodwill strategy from the corporate and quality strategies.
- Lack of customer focus (tendency to focus solely on the budget).
- Complex goodwill policies and processes that are not optimally tailored to the customer and often require significant internal resources.
- Due to interdependencies and the specific criteria associated with different types of goodwill gestures, comprehensive management is often complex and difficult.
- Heterogeneous analysis, forecasting, and decision-making processes in goodwill cases make it difficult to continuously reduce goodwill costs while simultaneously focusing on customer retention.
Since goodwill is a voluntary service provided by companies, there are often well-established structures, processes, and corresponding opportunities for optimization in this area in particular.
Specific Task Description
- Analysis of the current goodwill policy and development of an objective external profile to identify specific areas requiring action.
- Development of a concept for the future goodwill strategy and the associated processes, tasks, and responsibilities.
- Coordination and preparation of specific implementation recommendations for the conceptual scenarios that have been developed.
KBC Approach
- Conducting a current state analysis based on interviews to identify strengths, weaknesses, opportunities, and risks.
- Analysis of strengths, weaknesses, opportunities, and threats to identify specific needs for action, options, and scenarios.
- Preparation and conduct of conceptual workshops on the future goodwill strategy and potential solutions for possible goodwill models and associated processes.
- Presentation and coordination of the recommended concept, including the identification of specific implementation measures.
- Business analysis and validation of the implementation costs and benefits to develop a decision-oriented business case.
Our client’s previous goodwill policy model resulted in significant internal administrative burden. Based on our analysis, we worked with our client to identify and agree on nine different thematic clusters (goodwill strategy, types of goodwill, goodwill management, impact measurement, etc.). These were detailed in a concept and implementation recommendation for the future goodwill policy model. The implementation recommendation included 25 specifically described implementation measures (objectives, effort, benefits, timeline, etc.) to address the analyzed strengths, weaknesses, opportunities, and risks.
Impact Achieved
Overall, the current goodwill policy was revised, simplified, and specifically tailored as part of the redesign to enable goodwill activities to be carried out more quickly, transparently, and efficiently. This is to be achieved through the following key points and will have a positive impact on the company’s overall strategy:
- Introduction, communication, and training regarding a globally defined goodwill strategy (including the phased implementation of a cause-based allocation or targeting of issues within the value-added areas).
- Consolidation of central discretionary payments, including management and control mechanisms, through a single committee.
- Implementation of a mutually agreed upon (cross-functionally recognized), standardized, and predictive business case methodology.
- Introduction of a portfolio approach (from the company’s and customer’s perspectives) or a prioritization approach (KPI-based) as a basis for decision-making and a control mechanism for concessions (enabling continuous and flexible management) to increase customer loyalty.
- Establishment of ongoing data transparency regarding long-term quality (particularly types of goodwill repairs) and a consistent exchange of information between headquarters, regional subsidiaries, importers, and service centers/partners.
- Implementation of clear communication mechanisms and rules between headquarters, country subsidiaries, the workshop, and the customer.
