Siemens Branding for cross-selling initiatives

Siemens is one of the world’s largest electrical engineering and electronics companies, and one of the oldest industrial brands (see chapter 2). It was founded more than 157 years ago. In fiscal year 2005, Siemens had approx. 461,000 employees, sales of €75.554 billion and a net income of €3.058 billion. Company businesses are focused on six key areas: Information and Communications, Automation and Control, Power, Transportation, Medical and Lightning and Business Services. Siemens activities are influenced by a variety of regional and sector-specific factors, e.g. some businesses are subject to procedures with long lead times (up to 10 years) like Power Generation or Medical Solutions. Other factors are regional adaptation requirements such as electrical standards (UL-listing for the USA, CE in Europe, etc.) and some are subject to short-term business requirements such as the durable consumer goods or mobile phones. The company’s traditional strengths are its power of innovation, its strong customer focus, its global presence and its financial solidity.

The new, the US-trained CEO Klaus Kleinfeld has started a new campaign: One Siemens, a program designed to get company units to cooperate better to win business. At age 40 Kleinfeld got the chance to put the theory into practice. Siemens sent him in January, 2001 to the USA, first as chief operating officer then, a year later, as CEO of New York-based Siemens Corp. Under Kleinfeld, units including Medical Solutions and Power Transmission & Distribution joined together to supply diagnostic equipment, software, telecommunications, and power to a new hospital being built in Temple, Tex., for Scott & White Healthcare System. In 2004, Siemens decided to set up several company programs and initiatives to increase the effectiveness and efficiency of its business. Within these programs, One Siemens is part of the Siemens Management System (SMS) initiative focusing on innovation, customer focus and global competitiveness . Within SMS, One Siemens is a global, company-wide strategy to improve market penetration and drive growth in new fields by enhancing cooperation across the entire organization. Focused primarily on large-scale infrastructure projects, One Siemens bundles the comprehensive expertise in order to create complete, customized solutions for selected industries. It is an integral part of the global cross-selling initiative and builds a framework for regional activities to act as one Siemens by applying:

• a systematic approach
• to generate incremental business
• across business groups.

One Siemens is a globally rolled-out initiative. Local entities had to implement the program in their market. At this point, we want to show how Siemens USA understood the challenge and how they managed to improve communication effectiveness and efficiency.

For the U.S. market an own legal entity under the label Siemens One was founded in 2001 to provide customers with customized, comprehensive solutions. Siemens One is involved whenever a potential project could involve multiple Siemens operating companies. Siemens One provides customers with one interface to multiple Siemens operating companies, facilitating an efficient and cost effective manner for dealing with Siemens. Its purpose is to stimulate incremental sales by a) coordinating efforts to develop and sell integrated solutions under the Siemens brand that involve technologies from multiple Siemens operating companies to current and potential customers (= leveraging technologies and the competence of a solutions provider) and b) systematically realizing cross-selling opportunities within existing accounts across Siemens operating companies (= leveraging the customer base). The customer decides on the level of “single source” he wants from the spectrum of a single point of contact / single contract / single billing / single point of accountability to individual components from separate Siemens’ operating companies and business partners.

Fig. 1 Siemens: framework for a consistent message hierarchy

Main Purpose and Challenges

A joint project with Siemens Corporate Communications and Siemens USA was established with the aim to improve communication effectiveness and efficiency of Siemens USA. The main achievement is to create a stronger impact of communication on Siemens One’s business performance. Siemens USA faced three communication challenges:

1. Increase benefit-orientation of communication vis-à-vis customers and other stakeholders
2. Reduce complexity of existing messaging, sharpen stakeholder adequate message content and leverage global communication concepts (e.g. global value proposition)
3. Develop concepts for effective external and internal communication of cross-group activities (One Siemens)

The process to increase communication effectiveness and efficiency has been set up in three phases:

One: Establishment of message hierarchy to base communication on a consistent communication framework.

A framework with four levels was developed to establish a consistent message hierarchy based on three key requirements, which were clarity, consistency and continuity.

1. level: Corporate statements communicated to all stakeholders describing Siemens USA’s “reasons for being” with its levers vision, mission, business drivers and positioning.
2. level: Siemens USA Value Proposition communicated to the customers.
3. level: Market specific Siemens One sales stories communicated to all customers.
4. level: Specified internal and external Siemens One messaging.

Two: Development of value proposition to reflect Siemens USA ability to bundle individual Siemens’ operating companies’ products, systems and services.

The value proposition concept helped to increase benefit-orientation and consistency of communication and sales activities. The value proposition first had to be communicated internally as a basis for future communication and sales activities. It had to ensure that the benefit promise was consistent with other communication concepts, i.e. SMS activities and the Global Value Proposition. To increase customer relevance, the value proposition had been translated into market specific sales stories, for vertical and horizontal markets.

Three: Development of internal & external messaging and sales stories to ensure consistent communication to all stakeholders.

The messaging was clearly structured in key elements: idea, characteristics, functionality, benefits and proof points. The market specific sales stories had to be aligned and refined with Market Sector Teams and were to be used as basis for customer-specific activities. For internal messaging the main relevant facts on Siemens One were aggregated as a basis for specific internal communication messages. Moreover, to maximize the impact of the internal messaging, a concept was developed how to best communicate these messages, as e-mail and intranet may not be the best vehicles to convey these messages.

Example of “Airport” Sales Story

Market Specific Challenges

The airport business today is facing an increased number of challenges: On the one hand airports have to differentiate themselves in the marketplace with compelling offers to attract valuable passengers, concessions and airline tenants and thereby secure and increase their revenues; on the other operating procedures have to be optimized to handle the increased number of flights, people, baggage and cargo, to avoid staff overload and to improve cost-efficiency. Moreover, all kinds of safety concerns related to airplanes and the public spaces in the airports have to be addressed successfully.

Relevant Technologies

Technological solutions that meet the increasing end-customer demands and help to realize synergy potentials, require the integration of different technologies: Transportation Systems – to bring people to the airport Parking Garage Guidance Systems – to guide people to free parking lots Electronic Visual Information Display Systems – to provide people with relevant gate, flight & baggage information In-line Baggage Security Screening – to screen all baggage for explosives High-Speed Baggage Transport & Sortation – to move baggage between check-in, planes & baggage claims Baggage Handling Systems – to handle baggage at make-up and baggage claim Graphical Baggage System Monitoring – to control the process of baggage handling Cargo Handling Systems – to move cargo between cargo facilities and airplanes etc.

General Business Drivers

To succeed in this highly complex environment solution providers are needed that can reduce this complexity, integrate different technologies, and ensure that the solutions are compatible with existing systems and pay off in terms of an improved performance. In addition, solutions should not only best fit the business’ current needs, but also facilitate exploi¬tation of future opportunities. Accordingly the solution provider’s commitment has to last for the solution’s whole lifecycle in order to support the utilization of the technology over time and to protect the investment.

Customer Specific Needs

Besides these general needs, challenges and resources largely vary between different players in the airport business, e.g. airport management, airlines and service companies. Each customer requires a tailor-made, best total solution for his specific situation. The example of Siemens One in the U.S. served as pilot in order to guarantee a successful global roll-out of the One Siemens concept in the long-term. In the US two major learning blocks were derived: First, a clear and strong process management is needed and second the content of the global value proposition has to highlight the benefits of cross-group business activities.

1. The process: Strategy development should start with strongly aligning communication, sales and marketing departments with the target group customers and the regional and market specific requirements. The value proposition development should be led by a global implementation team with Corporate Communications, busi¬ness group and regional communication and sales people. The business drivers are then to be validated in each region.
2. The content: The value proposition for Siemens USA aims to strongly reflect the benefits of cross-business leverage. The customer familiarity with relevant product portfolio is the basis for cross-group business. Cross-business communication requires supplying strong examples. Siemens USA could already state a success story: Scott & White Healthcare System. The U.S. healthcare provider’s new 381-bed hospital – slated to open in Temple, Texas in the fall of 2006 – illustrates Siemens’ ability to bundle systems and solutions from Medical, Communications, Building Technologies, Automation & Control and Power/Transportation into one innovative, customized package. These systems and solutions include advanced medical imaging and diagnostic equipment, comprehensive IT systems like Soarian™, fully integrated voice, data, video and nurse call systems, building control technologies and energy supply systems to integrate the Scott & White network.

Only a few years later the overall success of the activity could be tracked. Using the Interbrand brand equity analysis we could prove that Siemens compared with its peer GE had an increase from 2001 to more than 600 index points.

Fig. 62. Siemens, GE and Cisco Interbrand brand equity development 2001-200 (indexed; 2001 = 100) With no taught Siemens had to catch-up, GE extraordinary performance in the last 30 years change the whole situation in the industry, but now Siemens saw its chance and focused on its core competences and the increase of the customer equity. The immediate result could be seen in the brand equity increase. Further readings in:

Philip Kotler, Waldemar Pförtsch Business-to-Business Brand Management, Springer Heidelberg, New York 2006

• USA
• German