Archive for Customer Value
Cohesiveness of People and Process drives Profit
Posted by: | CommentsNext weeks Business901 podcast is Vivian Hairston Blade. Vivian is the Founder, President & CEO of Experts in Growth Leadership Consulting, LLC (EiGL Consulting, LLC) based in Louisville, KY. EiGL Consulting focus their energies on helping develop an effective strategy to create customer value. Through a combination of coaching and training, they help you put that strategy into place through change management strategies that create committed leadership and organizational discipline.
I gave the Vivian the perfect opportunity to promote herself in the podcast and instead she continued coaching and adding value:
Joe: What are your plans going forward?
Vivian: Well, our plan is to continue to build on this idea of people and process and that cohesiveness between the two that help companies drive growth. As you look at the environment, the marketplace, the economy, and how it changes and how it will change in the future and how we’ll need to still continue to be conservative in so many ways especially when it comes to money and finances and investments, to realize that people investment is important, that operational process investment is important as it relates to customer focus and serving customer needs.
Helping companies realize that without that connection and that understanding of why you exist and how to operationally serve the why you exist, what your value is in this customer relationship, without this you won’t have a business for very long.
You know, it’s unfortunate that we see so many of these companies in today’s economy who have been icons in the American industry, your Kodak and your Hostess, Hewlett Packard, so many, even Netflix recently who decided to change both their service and their pricing policy and lost millions of customers. They made a 360 degree turn. And, just in the Wall Street Journal in the past few days there was an article about how they are beginning to now recover their customers.
But, without that skill of listening that we just talked about a minute ago, you haven’t a clue what the impact is going to be when you make some of those changes, or do you even really care it’s almost too late? So, we’re helping companies to have a good ear to the ground on that customer connection and building an environment where employees can thrive toward reaching their career goals and helping the company to achieve it’s goals.
Related Information:
Lean Canvas for Lean EDCA-PDCA-SDCA
Lean Engagement Team Book Released
Side Effects of our Desires and Abilities to Empathize
Connecting Continuous Improvement and Appreciative Inquiry
Value can no longer be defined as What a Customer will pay for!
Posted by: | CommentsWhen we use money as the premise for value, “What a customer is willing to pay for” makes sense. We certainly pay for the value of a Ferrari. Using this argument, money can be the determining factor of value. Something about it rubs me wrong and by the way, I am a capitalist at heart, so it is not the warm and fuzzy stuff that is causing me to think this way. The term is widespread but in present day scenarios, it may be fundamentally flawed. We live in a world that has excess supply and as a result we have to start viewing the market from the Demand side. So the connotation what a "Customer will pay for" is problematic for me. That seems to be from an internal focus. 
It stems from the process improvement mindset of the 90’s, stayed with us through the Customer Experience decade and now as the User Experience decade is upon us it is simply not useful anymore (excuse the pun).
Many organizations justify improvements by using the word value and customer, internal or external. In fact, the process at times becomes more important than what the customer values. But if it is not tied to the marketplace and improvement is shown there, why should you do it? The real bugger is that someone shows how much savings they create (Cycle Time, Space, etc. without a demand for utilization) when in fact there was none. I equate it to politicians when they slow down the growth of government spending and proclaim it a cut in spending. What purpose does creating internal value serve? Should value not be perceived and created from an outside-in approach versus an inside-out approach? Is that what pull is all about?
A good dominant marketing logic arguably limits the mind-set for seeing the opportunities for co-creation of value with customers and other stakeholders of the firm. In a similar way, a transactional exchange view ignores customer loyalty and puts constraints on developing the lifetime value of the customer to the firm. The S-D logic proposes broadening the logic of exchange, both social and economic. – Lusch and Vargo Marketing Theory, 2006
I have seen a significant shift in the concept of value. Facebook, Twitter, LinkedIn, Craigslist, software companies and others now allow "use" free of charge. It is not a free trial offer. We derive value from it. If we want to extend that value or increase it we pay; Ads, membership, etc. Value is something (product/service) that someone uses. For example, if I download software or buy a book but do not "use" it, it has no value even though I purchased it.
It is in the use of the product/service that value is derived. I think of value in 3 ways: Functional, Emotional, Social. Thinking of a Ferrari (Example from my esteem colleague Graham Hill) …I use it to drive (functional), makes me feel good (emotional) and what others think – I am successful (social). All provide value but without the latter two, I could buy a bike. Using this as a guideline for value (Functional, Emotional, Social), value is embedded in the use of the product rather than the price.
Forrester predicts that by 2012 half of all consumer purchases will either be transacted online or driven by online research and word of mouth. To succeed in the digital marketplace, it’s no longer customers that matter most, but users—anyone who interacts with your company digitally. Keep users happy, and customers follow.
If we only leave price be the governing factor, would value only be a commodity? I think it is more about users and the use of the product that determines value, Facebook being a prime example. The value was enormous before they ever monetized it.
Today’s most successful companies organize their business around users and building user satisfaction," writes Aaron Shapiro CEO of digital agency HUGE in his book Users, Not Customers: Who Really Determines the Success of Your Business.
Today’s most critical driver of success is usability excellence. Users are your growth engine for your customer base and for your entire organization!
Related Information:
It’s the Who, not the Why @simonsinek
It’s not about the things we make, it’s how we use the things we make
The Zappos Culture Defined!
Do you understand where demand comes from?
Who Really Determines the Success of Your Business
In love with your products more than your customers?
Posted by: | CommentsOnly the customer can determine value. Your product or service has zero value in it. You cannot build value or even create it through clever marketing. Value is only created when a customer puts it into use. This is Service Dominant Logic Thinking (Vargo and Lusch (2006).
If you take this they approach and view your product or service as enabler of customer value a different world opens up for you. Companies like John Deer, P & G, Crayola and Mar’s M & M’s have re-invented themselves by understanding value in use. Each of these companies has taken it a step further and included their customers in the co-creation of products.
When we think about co-creation, we have a tendency to think only in the terms of innovation. Most of us are not ready for that step. In fact, it is a rather large one. However, Janet R. McColl-Kennedy Professor of Marketing UQ Business School, University of Queensland, Australia recently published a paper where she discussed the 7Cs of Co-Creation:
- Co-operate (compliance)
- Collate (sorting, assorting, synthesizing)
- Combine complementary skills, knowledge, expertise
- Connect eg with family, friends, service providers, support groups
- Co-learning
- Co-produce (self-service, co-design, new service development)
- Cerebral activities (eg positive thinking, reframing, emotional regulation)
These as not earth shattering revelations but better yet they allow you to start working with customers in the co-creation space. Something as simple as a checklist designed around these 7 Cs could enable you to review sales and marketing material or presentations. If you start asking questions like:
- Does this comply 100% with what the customer requested?
- Can we sort our information to make it more meaningful?
- Can we group our material differently for the different customer departments?
- What complementary skill does the customer have that will facilitate the problem solving?
- Who do we need to connect with internally or externally (downstream or upstream)?
- What can we learn together that will assist to move forward?
- What changes may be required to our product/service that provides better use?
- Is the customer using our product/service differently than intended?
- Does the customer modify our product/service?
- How could we reframe our proposal/offer to allow our customer to change it?
Changing our mental model and making that great leap to co-creation is mind boggling for most. Starting simply by starting to ask the right questions around are existing procedures and content, the perspective begins to change. It’s a lot like dating. Start slow; ask the right questions, listen and the next thing you know, you just might be walking down the aisle.
Related Information:
The Service-dominant Logic of Marketing: Dialog, Debate, And Directions
If all of us need to be marketers, what’s the framework?
7 Principles of Universal Design & Beyond
The Common Thread of Design Thinking, Service Design and Lean Marketing
Janet R. McColl-Kennedy: Co-creation of Value and S-D logic
