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Customer relations and delivery reliability are essential

We want the dealers and users of our products to be the most satisfied customers in the tyre industry. Delivery reliability is one of the prerequisites for success in this industry, which is heavily affected by the peak seasons.

We want to be our customers’ first choice. Accordingly, customer satisfaction and good partnership are specified in our strategy as development needs. Long customer relationships based on trust provide mutual opportunities for improvement and success. We support our customers’ success through commercial collaboration and our pricing policy, among other things.

We aim at continuously improving customer satisfaction in the annual customer satisfaction index by one percentage point, at a minimum. Our customer satisfaction survey was conducted over the phone in 14 markets and 264 customers responded. The survey comprised 13 sections, with a new section on availability in general and during the peak seasons.

In 2017, overall customer satisfaction was up by 2.6%, being 8.3 on a scale of 0 to 10 (8.1 in 2016). 77% of the respondents gave us an overall score of 8, 9 or 10. The Net Promoter Score (NPS), which tracks customer loyalty, grew to 40 from 31 in 2016. This was the result of more good scores and fewer poor scores. For instance, this year, 31% of the respondents gave us a 10 (compared to 19% in 2016). Similarly, we received a 6 from 3% (5% in 2016) and a 3 from just 1% of the respondents (2% in 2016). We will improve our operations further based on the feedback.

Along with our annual customer satisfaction survey, we have introduced an online survey that focuses on our supply chain, logistics and customer service performance. The purpose of this survey is to track customer satisfaction with our service, wherein delivery reliability is one essential component. We will continue developing our operations further based on the results. Going forward, we will conduct the survey two times per year, after each peak season.

Delivery reliability is critical for success

Nokian Tyres’ products are sold in 59 countries by thousands of customer companies as well as our own sales organisation. By delivery reliability, we mean delivering the right products according to contract in terms of the product quality, method of transport, delivery location, delivery time and price.

One special characteristic of our core market is that the sales of passenger car tyres are heavily built around two peak seasons. Succeeding during the peak seasons is essential for our business. We sell most of our summer tyres to consumers a few weeks before and after Easter. Consumer sales of winter tyres peak between September and November depending on the weather conditions, and we sell about 20% of our winter tyres in the first 10 days after the first snowfall.

Our key success factors include our extensive distribution network and flexible and efficient logistics. Nokian Tyres and Vianor have worked for a long time towards improving and streamlining their logistics. In many cases, forecasting delivery volumes to partners is the only way to ensure sufficient capacity during the peak seasons. Tyre transports are planned 1 to 6 months in advance, and inventory forecasts are made up to two years ahead.

By maintaining an extensive network and building long-term partnerships, we can ensure good readiness to respond to changes, for instance by using alternative delivery routes or delivery partners.

Digital services bring us closer to the customer

Digital services bring us closer to the customerFor our business, it is essential that our customers know our company and the products we produce. Establishing strong product and company knowledge and earning mutual trust in all aspects make it easier for the customer to sell our products and conduct profitable business operations.

In 2017, we launched a new digital service for our customers where they can order products, download marketing materials, complete training courses and contact our customer service. We started rolling out the service in the Central European market last spring and in North America at the end of the year. We intend to introduce the service in the Nordic countries in 2018.

The online concept was developed based on a need identified in our customer satisfaction surveys. Our major goals with the service include increasing interaction and reaching all of our customers digitally. The service enables us to offer our customers relevant content and support their business. This is also a way to improve our customer relationship management model.

The service responds to digitalisation that changes customer behaviour and the way the markets function. Tyre manufacturers must be able to quickly provide customers with information on product pricing, availability and technical details, among other things.

The cost-efficient online service improves the availability of information and reduces the need to travel. It also enables everyone to access the same information and makes it easy to implement changes and updates.

This page is included in KPMG’s assurance scope. Assurance report can be found here.