Nortel Hbs Case

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HBS 9-501-050
Customer Value Measurement at Nortel Networks '' Optical Networks Division

Nortel Networks was a global player in telephony, data and wireless and wireline Internet solutions. Maureen Conroy and Nathalie Sauve, members of the Customer Value Management (CVM) Team at Nortel Networks Optical Networks, must recommend one of three customer value measurement methodologies to ON President Greg Mumford. In December of 1997, ON took a “right-angle turn” '' innovative cultural, operational and organizational changes to realign its resources almost entirely towards the Internet-related business.

A customer satisfaction and loyalty measurement program was designed to assess Nortel Network’s responsiveness to the needs of its customer base and the value it delivered to customers, employees and shareholders. This program, started in 1992, was created in response to intensifying competition in the telecommunications industry.

Over time, Nortel developed at least three methods for gathering data for the customer value program. They used customer satisfaction/loyalty survey results, a qualitative research report, analysis from the pilot Relative Customer Value study, as well as feedback from key CVM stakeholders. Each choice provided different results in different formats.

There are five different stakeholders in the customer satisfaction and loyalty measurement program, each expecting to see updates on the issues they have been addressing in the format which they were familiar. There are optical networks customer value, corporate customer loyalty and value, account teams, process owners and executive customer loyalty council.

The Customer Satisfaction and Loyalty Survey (CSAT), based on Bradley Gale’s approach, linked product questions to business processes. These survey results were collected and tabulated by a third-party to maintain objectivity but ON would follow up with the customer on the top five issues. This methodology was very...
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