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Presentation Objectives
Define customer value management
(CVM),
Understand the difference between
customer value and customer
satisfaction,
describe key CVM concepts and tools,
and
communicate the importance of
measuring quality in the eyes of your
clients.
VALUE
Quality
Price
Source: Adapted from Customer Satisfaction in Practice by the American Productivity & Quality Center, 1998
O v e r a ll
Q u a lity
P ro d u c t
Q u a lity
S u b -a ttr ib u te s
S u b -a ttr ib u te s
C u s to m e r
S e rv ic e
R e la tiv e P r ic e
C o m p e t it i v e n e s s
M a r k e tin g
S a le s
O r d e r F u lfillm e n t
Quality
Attributes
Performance Rating
Importance
Weight
ABC
XYZ
Product Information
50
20
20
Customized Solutions
10
100
Stage One
Minimum
Requirements
Conformance Quality
Delivering what we
promise
Meeting standards
Stage Two
Customer
Focus
Customer
Satisfaction
Providing what
customers want
Responding to
customer complaints
Stage Three
Customer
Attitudes
Customer
Loyalty
Retaining our
customers
Getting them to
recommend us
Stage Four
Competitive Focus on
Targeted Markets
Customer
Value
Meeting critical
needs of targeted
customers
Outperforming
competitors
Creating new,
unique benefits
21st Century
Growth
Company
Source: Adapted from Managing Customer Value by Bradley T. Gale, (New York, The Free Press, 1994)
Value
=
Improve Your
Competitive Position
Attract and Retain
Targeted Customers
Satisfaction
Value
Current
Service
The Entire
Customer
Relationship
Lag Indicator
Lead
Indicator
Company
Performance
Company Vs.
Competition
Tenuous Link
to Business
Performance
Proven
Relationship to
Business
Performance
DEFINITION
Customer Value Management is a process designed to develop and execute
value-based strategies which impact marketing, strategic planning, competitive
positioning, branding, pricing, and selling.
GOAL
To establish CVM as a core competence for the
Canada Post Group of Companies.
INPUTS
OUTPUTS
Customer Value Management Council
KEY MEASUREMENTS
Customer Loyalty
Market Share
Profitability
Customer Retention
CUSTOMER-CENTRIC
Ideal
Customer
Value
Process
Capabilities
Performance
Improvement
Assess Market
Opportunity
2. Conduct
Analysis
3. Commit to a
Value Proposition
Value Map
A ve rag e
C la rio n
B rite
Walter
200
High
Cost
Attrib. Value
Chloroform Removal
Lead Removal
Taste
Clogging
Service
Reliable supply
Technical spport
RelationshipRelationship
Weighted benefit scores
10.0
10.0
8.0
8.0
5.0
2.0
7.0
7.0
10.0
10.0
10.0
2.0
5.0
1.0
9.0
5.8
2.0
10.0
8.0
10.0
7.0
3.0
5.0
6.7
10.0
8.0
6.0
4.0
9.0
1.0
5.0
5.8
2.0
10.0
6.0
8.0
9.0
7.0
9.0
7.5
6.8
9.6
7.6
6.4
7.0
2.8
7.0
6.6
12.0
10.0
9.0
25.0
16.0
14.0
14.0
Costs
17
120
137
40
160
200
30
54
84
37
85
122
25
130
155
30
110
140
100.0
100.0
220
180
160
Price 140
($)
98.3
Clarion
Filto
Brite
120
100
-1.7
Envir
80
60
5.6
6.0
6.4
6.8
7.2
7.6
Performance
Chloroform Removal
Lead Removal
Attribute
B rite
C la rio n
Benefits
Dimension
E n vir
Reliable supply
W a lte r
Clogging
Product
Chloroform Removal
Lead Removal
Taste
Clogging
Reliable supply
Technical spport
Relationship
22
2
2
23
-19
-7
0
25
22
2
13
-64
-19
-15
16
-44
-34
2
2
53
0
2
-16
9
22
-9
-8
-35
19
-15
-16
-43
-34
2
-8
23
19
34
16
53
0
0
0
0
0
0
0
0
Capital cost
Disposibles cost
13
-10
3
-10
-50
-60
0
56
56
-7
25
18
5
-20
-15
0
0
0
Technical spport
Relationship
Service
Capital cost
Relationship
(a) Total differential worth of benefits
Disposibles cost
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Head-to-Head Comparisons
Costs
A ve ra g e
Taste
F ilto
Benefits
Weights for:
E n v ir
Dimension Attribute
W alte r
F ilto
Performance Scores
Selling price
Other costs
(b) Total cost advantage
Value Scorecard
Benefits
Product
Average
C larion
B rite
Weights for:
E nvir
Attribute
W alter
Dimension
Filtro
Performance Scores
Attrib.
Chloroform Removal
Lead Removal
Taste
Clogging
Service
Reliable supply
Technical support
Relationship Relationship
Weighted benefit scores
10.0
10.0
8.0
8.0
5.0
2.0
7.0
7.0
10.0
10.0
10.0
2.0
5.0
1.0
9.0
5.8
2.0
10.0
8.0
10.0
7.0
3.0
5.0
6.7
10.0
8.0
6.0
4.0
9.0
1.0
5.0
5.8
2.0
10.0
6.0
8.0
9.0
7.0
9.0
7.5
6.8
9.6
7.6
6.4
7.0
2.8
7.0
6.6
12.0
10.0
9.0
25.0
16.0
14.0
14.0
Costs
17
120
137
40
160
200
30
54
84
37
85
122
25
130
155
30
110
140
100.0
100.0
Value
98.3
-1.7
58.5032
Value Map
High
Cost
Walter
200
180
160
Price 140
($)
Filtro
Clarion
Brite
120
100
Envir
80
60
5.6
6.0
6.4
6.8
Performance
7.2
7.6
Value Scorecard
Attribute
Walter
Envir
Brite
Clarion
Average
Benefits
Dimension
Filtro
Product
Chloroform Removal
Lead Removal
Taste
Clogging
Reliable supply
Technical support
Relationship
22
2
2
23
-19
-7
0
25
22
2
13
-64
-19
-15
16
-44
-34
2
2
53
0
2
-16
9
22
-9
-8
-35
19
-15
-16
-43
-34
2
-8
23
19
34
16
53
0
0
0
0
0
0
0
0
Capital cost
Disposibles cost
13
-10
3
-10
-50
-60
0
56
56
-7
25
18
5
-20
-15
0
0
0
28
-104
64
-25
38
137
165
28
200
96
-104
84
148
64
122
97
-25
155
193
38
140
140
0
Service
Relationship
(a) Total differential worth of benefits
Costs
Selling price
Other costs
(b) Total cost advantage
(c) Total value advantage = (a)+(b)
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Identify
Value
Drivers
Develop
Action
Plans
Measure
Value Creation
After
Transaction
Measure
Market
Perception
feedback
Conduct
Baseline
Study
Business
Process
Improvement
On-going
Transactional
Surveys
On-going
Market
Surveys
Plan/Do/Check/Act
Define/
Refine
Value
Proposition
Build
Process &
Commitment
Organization
To
Gap
Value
Analysis
Proposition
Internal
Management/
Staf
Internal
Changes
Tracking
To Deliver
&
Value
Proposition Measurement
Plan/Do/Check/Act
Group of
Companies
Tracking
Market
Impact
Underground Mining
Equipment
Manufacturer /
Distributor
International Health
and Leisure Firm
50% reduction in
customer churn
Improved equipment
delivery time from 10
days to 2 days
Doubled profits in a
single year
Moved from being a
market nicher to the
market leader
Wireless Telecom
Company
Source: Adapted from Customer Satisfaction in Practice by the American Productivity & Quality Center, 1998
The Right
Workforce
MODELING
EMPLOYEE VALUE
Acquisition
Retention
Positive
Turnover
Employee
Value
Relative Job
Quality
Relative
Compensation
Base
Salary
Pay
Equity
Bonus
Benefits
Manager
Quality
Brand
Equity
Work
Life Balance