Creating Value for Yourself means Creating Value for Others

Posted September 30, 2016 by Customer Value Foundation
Categories: Uncategorized

Creating Value for yourself means Creating Value for others

I gave a talk to BBA and MBA entering students at SGT University in Delhi and then to Model Institute in Jammu a few days ago. I asked the students whom they should create value for? For ourselves was the answer.

I told them to create value for themselves, they must create value for those around them, their fellow students, the teachers and the institute. Then and only then will these people say that the student is creating value, and also he or she will notice the value created for him/her.

This is true for a company. A company that sets out to create value for itself without creating value for its employees, partners, supply and delivery chain, society and the Customers will not create value for the company. All of these together will create value for the company. Creating value for yourself without creating value for others could lead to value depletion.

The company must understand this. Creating value for the company’s stakeholders is a sure way of creating value for the company.

Would love your comments and help. We are happy to help others in education and executive education on courses in Value Creation.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

The 8 Principles of Customer Value Creation

Posted September 9, 2016 by Customer Value Foundation
Categories: Business & Management

Tags: , , ,

To appreciate Customer Value Creation, you must understand the principles of Customer Value Creation. The principles of Customer Value Creation, enunciated by Gautam Mahajan are:

The 1st Principle: Customers tend to buy or use those products or services that they perceive create greater value for them than competitive offers. It is essential for executives and leaders to create higher value for their Customers than competition can.

 The 2nd Principle: Customer Value Creation is applicable in all fields, such as business, service, education and academics, society and government, social work, innovation and entrepreneurship. It impacts humanity.

 The 3rd Principle: Customer Value Creation touches all stakeholders, you, your colleagues, your employees, your partners (supply chain, delivery chain, and unions), and society to create resounding value for the Customer and thereby for the shareholder. It is the source for creating Customers and retaining existing ones, increasing loyalty, market share and profits

The 4th Principle: Customer Value Creation is proactively exceeding what is basically expected of you or your job and is going beyond your functional and routine roles to creating value in your eco-system. Value creation can be planned or spontaneous, and in both functional and emotional thinking

 The 5th Principle: Customer Value Creation leverages a person’s or an organisation’s potential, learning and creativity while making it meaningful and worthwhile for people to belong and perform, both physically and emotionally

 The 6th Principle: Customer Value Creation presents a very powerful decision making tool for companies to decide on actions, programs, strategies for the Customer that can increase the company’s longevity and profitability.

 The 7th Principle: Value Creation must exceed Value destruction or reduce negative value and be done consciously (not just unconsciously)

 The 8th Principle: Values (what you stand for, integrity, honesty, fairness etc.) creates Customer Value (that is Customers Value your Values)

 These principles form the foundation of the Customer Value Creation strategy and implementation, resulting in great value for you and your company.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Don’t Waste Money Blindly Starting Loyalty, CJ, CX, CR, or CS Programs.

Posted August 28, 2016 by Customer Value Foundation
Categories: Uncategorized

Every day I read that some company has started a new program for Customer Loyalty, or for Customer Journey or for Customer Experience or for Customer Response or for Customer Success. How can one program work for one company and not for another? Is there a diagnostic the company use that calls for these programs? Or are business results falling, causing an immediate knee jerk response to do ‘something’?

Do you need programs for Loyalty, CX, CS, CJ, and CR?

I do not know whether you do. Do you? Or is some consultant selling you on motherhood statements? Yes loyalty, CX, CJ, CS, CR are all important. They should be inherent in your company’s DNA. Why aren’t they?

Was there a problem?

I suspect there was one of two problems. One was that you felt you should improve some aspect of your Customer program such as experience. Someone says these are nice (or proper things) to do. Hence let’s start a program on (you name it).

The other is that some business result or performance was wanting. Market share, lower prices, retention etc. The boss asks his people to work on these. The solution is one of the types of programs described above.

What was the base problem?

The base problem could have been loss of market share, falling of Customer retention/loyalty, or price pressure or profit reduction, or that you are not creating enough value versus your competition.

What is the solution to the base problem?

First, all of us will agree that Customers have a choice between competing products or offers. Why do they buy from one or the other? What makes them buy?

The answer is the Customer will buy from that competitor he perceives he is getting better value from. This means he balances what it costs him and what benefits he perceives he will get from the competitors, or what the offer is worth to him.

  • What is his perception of cost?The amount of time and energy to buy, to understand, and use the product, and the price and payment terms
  • What is his perception of benefits? The benefits would depend on his perception of the product, the company’s people, the company’s image, the retailer, the service, the loyalty programs if any, etc.
  • If the Customer can perceive benefits and cost, can your company measure these? First the juxtaposition of benefits and cost is called Customer Value and can be measured. Certainly you want to know the value your Customer perceives you are creating. Is that enough? Not really. Because the Customer is looking at competitive offers. And so, too your Company has to look at competitors. What is the value your competitors are creating?
  • Can you compare your company to competitors by measuring Customer’s perceptions? We compare the perception of the value we create and divide this by the value your competitors create. We call this Customer Value Added

       Customer Value Added=       The Value we add to our Customers                                                 The Value your competitors add to their Customers

This Customer Value survey also throws up the relative importance of cost and benefits. How important are the costs, and how important are the benefits (if value is 100, is cost 30 and benefits 70? This depends on the product or service, and whether they are more of a commodity or a niche).

In addition, for each item of benefit or cost, we get a relative importance, and whether we are better or worse than competition.

What should we work on?

There are two criteria to select what we should work on. One is the relative importance of that attribute in benefit or cost (we get this from the survey); and whether we are better or worse than competition (from the survey). So, we should select those items important to the Customer in his purchase decision; and if we are worse, we have to improve on these. If we are better, we have to communicate these to the world.

We have to customise our improvement programs to the Customer’s needs. As we run those programs that increase the value to the Customer, we will find that the Customer gets a better experience, a better response from us, a comfortable and shorter journey, and better service. It has been proven that loyalty and market share will increase, and so will profitability (see data from PIMS (Profit Improvement through Marketing Strategies) based on1000 American companies in my book: Total Customer Value Management, Transforming Business Thinking.)

Unrelated or isolated programs do very little good:

Thus selecting a loyalty program when the Customer Value study shows it has very little influence on buying, then it is a waste of time instituting such a program. On the other hand, if the study shows it is important, and then we need to work on it. Or if the study shows the service is important and we are poor in service, we must start a program to improve service. Or if in cost, the relative importance of the time and energy required to buy is high, we must have a Customer Journey program to reduce the time and energy the Customer spends (only if the survey shows we are poor at it) or tell the world buying from us requires less time and energy (only if we are better). In short customise your program based on Customer feedback.

What programs to run?

Based on the Customer Value survey of your Customers and potential Customers, we will know what programs to run (or what aspects of programs to run). We may need to improve Customer experience only in service and not in buying; we may need to improve the Customer Journey program in buying if the Customer is unhappy with the time and energy it takes to buy. We may wish to improve a Customer response program if the Customer cannot get information or answers readily, and if this is important to the Customer; and so on.

One size fits all does not work. Customised programs based on Customer Value studies are the ones that will work.

Don’t waste your time by running programs because they sound good or others are doing them. Base them on the Customer Value you will create, and help the Customer buy from you because of superior value of your offer.

Would love your comments and help. We are happy to help others in education and executive education on courses in Value Creation.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

How to get a Service Culture Mind-set?

Posted August 20, 2016 by Customer Value Foundation
Categories: Uncategorized

I recently gave a talk to ISSIP (pronounced IZip and stands for International Society of Service Innovation Professionals) on Service Value Creation. Jim Spohrer of IBM asked me how we get the service culture mind-set inculcated.

Here is the answer.

In my previous post on Service Culture versus Customer Culture, I wrote that often frontline service people were very good with Customers. The lack of Customer Culture at the top levels of the company prevented a great overall Customer experience.

Most companies focus on the processes and systems to help the service people become Customeric. Unfortunately the nuts and bolts of these actions do not impact the mind-set of the front line people.

To get a Customer culture, the service culture must also permeate to the top level people, into the C-suite.

How do we do this:

We have to work both with the top level people and the frontline people.

We form Customer Centric Circles, where frontline people along with staff people (from HRD, IT, Finance, logistics. etc.) let their hair down and just talk about their job, their Customers, the difficulty they have with Customers, the opportunities, and what they should do to make the Customer happy. The staff people are there to help them with systems and procedures to allow them to do the right things for the Customer. An example is if the frontline person notices there are many queries on an inaccuracy in the company’s website, they might suggest a change. The staff people and the frontline people discuss the best possible way to change this and then the IT department takes over to improve the website.

The results we see from Customer centric Circles, which we started in 2004 in various companies, include: Tata, Godrej and others.

  1. Increase the self-esteem

Most of these people, particularly in third world countries come from a different class or strata of society than those they serve. They need to feel adequate, and capable of serving in a mental fashion not just a menial fashion. They have to become proud of themselves, their achievements, and their ability to do a good job and provide happiness. Part of this comes from skills training, part from experience. But a big part is just discussing why Customers are so difficult. As they do this, they start to realise many of the causes for the irritation of the Customer are due to the fault of the company, or the frontline people. Examples are the part did not reach on time, or did not work; or the service person has not come on time, or someone had promised to call back and there was no call.

A discussion on why these problems happen, how they can be prevented in the future and action steps are taken.

The frontline people’s awareness of the Customer and his problems increases. The frontline people become more perceptive and having an awareness of resolving Customer issues causes them to become pro-active.

  1. Pro-activeness:

Once we build the employee’s self-esteem and his awareness, the frontline people become more proactive.

  1.      Enabling:

The role of the staff people is to enable the frontline people to become pro-active by giving them the help, the support and the tools to make them pro-active. These are also discussed in the Customer Centric Circles.

  1.       Continuous Customer Improvement Program CCIP

This then leads to an ongoing CCIP and with follow-up meetings of the Customer Centric Circles to see if progress is being made, where the system failed and what further improvements to make.

  1.         The Customers Bill of Rights

The Customer Centric Circles start to look at the Customers Bill of Rights, whether they are valid or should change, whether the rights can indeed be honoured, and if they are not being honoured what prevented them from happening and the preventive action.

  1.        The Circle of Promises

An examination of the Bill of Rights with the staff people shows that many other people in the organisation are involved with making the Bill of Rights a reality. These people are invited to the Customer Circles and often become an important part of it.

The staff people work with higher layers of management in making this happen and in changing the mind-sets.

 Service Culture at top levels:

As we said earlier, the service culture has to be present at the top levels.

What do we need to do?

  1. Build the CEOs self-esteem or self-confidence (self-value):

The CEO has to stand up against the short termism dictated by many shareholders. Just as frontline people have to present the company’s Customericness to Customers, the CEO and the CXO have to present to the shareholder team why long termism is important and why Customericness or the Customer culture will lead to better business results. Only CEOs with a good self-confidence can do this.

  1.      Inculcate the Service Culture at the top levels:

This has to be done with a Customer strategy/service strategy that brings all C-suite and VPs/senior GMs into the Customer strategy building and their sharing various tasks. Thus the head of manufacturing may also be in charge of the Customer First strategy, and the tactics associated with it.

  1.     Lead from the front:

CEOs and CXOs must spend 15% off their time or more on Customers. They should take one call a day coming into the call centre. They will then get a better sense of the Customer and his needs, and whether the call centre response system is adequate or requires changing. They must become part of getting the Customer to love their company.

  1.    Measure Customer scores and report them in to drive bonuses:

By linking bonuses to Customer scores, and reporting them to the Board of Directors along with the financial scores is a great idea. Companies like State Farm and Castrol report Customer Value Added scores, coming from the Customer.

The Customer Value/Customer Centric criteria can form part of the Balanced Scorecard. Many of our clients have Customer Value Management as the top item some as high as 25%

Doing all this will make the service culture emerge as important and the company will become Customer-centric.

Does this make sense, Jim?

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Service Culture versus Customer Culture

Posted August 10, 2016 by Customer Value Foundation
Categories: Uncategorized

I often write about service failures. Today I wish to write about service successes.

In this article, by Service Culture, I am referring to the culture of the service people who visit customer homes, offices and premises.

Recently, I had three service encounters (I wonder how I automatically used the word encounter. Have past interactions traumatized me?):

  1. Airtel: My broadband was not working. My experience with the call centre was mediocre, but the person who came to fix the problem was good, quiet and competent. He went about his work without aggravating me or getting in my way. Very happy.
  2. HP…call centre guy. Aggravated me by asking me my name twice and details twice, but once he got control of my computer solved my printer problem fast and without hassling me. Good show. He called me back a week later to check if all was well with the printer.
  3. Chevy Cruze: They were to pick up my car. The person was half an hour late, but polite, showed me his driver license, took my car, and then I was called by the service centre. This is what they would do, and this is how much it would cost. Wanted to do some optional stuff, which I knew was not really necessary, but he explained things and said he recommended them, but if I wanted to wait, no problem. I told him to go ahead. He called me when the car was ready, told me he had dry cleaned the car, and not charged me for a couple of things. The car came back looking newer that it ever did, full marks.

This certainly means the service culture is there. Yet, I have seen failures at Chevy, and now in buying a new car from Honda, and Maruti Suzuki… I would rate them and their follow up as poor. Why?

Just as another example, the Emirates ‘plane caught fire in Dubai. Emirates promptly closed their Kerala office so that the passenger’s families would not hassle them. This is complete lack of Customer culture. This starts from the top. When CXOs can think only of themselves and their companies, and not of Customers, where is the Customer Culture? Superficial, at best.

I keep going back to the Value Creation culture. The lack of focus by top management in this very distinctive and competitive edge issue of taking care of the customer…The top management needs to be re-educated so that they can support the front line people. Are the bosses ready to change their culture and their own mind-set, or they think they know it all?

So even if you have good service people, your company culture can negate their impact.

Would love your comments and help. We are happy to help others in education and executive education on courses in Value Creation.

Join our Value Creation Forums, and our LinkedIn group, Journal of Creating Value.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Invisible Manipulation

Posted August 7, 2016 by Customer Value Foundation
Categories: Business & Management

Tags: ,

Jonah Berger in his brilliant book, Invisible Influence discusses how consumers get influenced. Some have to do with influence which is exerted without meaning to influence. A person wearing a particular necklace may influence you to think about that type of necklace. Some are meant to influence subtly, like the aroma in a store to induce you to buy baked goods. Others are really invisible manipulations, meant to manipulate your thinking and accepting lower standards of service.

Let me give you some examples

Nike and shoe colours: Recently, I have been seeing a few of my fellow walkers wear coloured walking shoes. I told myself I would stick to my white or off-white or light grey non-descript shoes. At the Nike store most shoes were red, orange, blues in all shades, and yellow. A few old design shoes were in my preferred colours (but my size was not available). The shoe that fitted and was comfortable was a vivid blue. I liked everything about the shoe but the colour. I thought, what the hell, others are wearing red too…so blue is ok.

Was this invisible manipulation, by giving me no choice? Yes, you can well say I had a choice of going elsewhere. I had been to Puma, and the same colour problems existed, and I did not like the shoes either (even though lower in price than Nike)…Value would have been further destroyed if I had to go elsewhere. So I decided to buy from Nike.

Now, these coloured shoes will become fashion statements for the fashionistas. Just like the colours for dresses from the fashion houses described by Jonah.

The next day I realised people were noticing my new blue shoes, and an invisible influence was being exerted on them!

Next I come to a more subtle but more frightening invisible manipulation that Amazon, Microsoft, Google have on our habits. They have a one-way policy of being contacted. They can contact us and we cannot contact them. Many of the younger generation are happy with this, but the older generation finds this irksome. In India let’s say I am told a delivery will be on the 20th, I am not told the time. I cannot find out. And if I am not at home, I get a call from the delivery person saying you were not home and we will re-deliver. I am not allowed to give an input. The part, I am told, on the 21stby a text message will be delivered on the 22nd. What if I am not home that day too? And on and on. Totally unacceptable to me but acceptable to the providers of service. In due course of time we will accept this as a norm and a way of doing business. The definition of normal business would have been re-written.

I just got a call from Airtel that their technician will be at my house in 15 minutes. This is one hour later. So I called the caller. I got a message saying “incoming calls to this number are barred”. So much for customer service and customer value!

Not so subtle are companies, where you cannot find a way to contact anyone except for investor relations.

Value is being destroyed.

Jonah, we poor consumers need your influence in exerting invisible and visible influence on these companies. HELP!!!

Would love your comments and help. We are happy to help others in education and executive education on courses in Value Creation.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Do Unethical Practices Create Or Destroy Value?

Posted May 21, 2016 by Customer Value Foundation
Categories: Uncategorized

Certainly the answer depends on your point of view. And for whom you are trying to create or destroy value. You could be trying to create value for your company or destroy value for your competitors (colleagues and companies). But your point of view may not be right or ethical.

Definitively, unethical practices and corruption are not correct nor acceptable. They may be convenient. They may be a short cut to ‘success’. They happen because of greed, or laziness or a combination. Sometimes, it is inherent in the character of the executives or the company (read owners). Sometimes executives are pressurised to bend the rules or the law.

Sometimes executives bend company rules, by allowing their employees to take special privileges when the rules do not allow it. As simple as flying when only train tickets are allowed. Or letting the wife travel to a destination where the husband is, instead of his coming home (no extra cost to the company, no harm done). These are minor infractions. Often overlooked. Judgment is required in these (minor) cases.

The major problem is one of being involved in corrupt practices, such as making pay offs for getting contracts, or getting ahead. No one will admit this is correct but hide behind we have to do it, others are doing it, or we have to get ahead, or it is convenient to do so; it happens because of not caring enough, a chalta hai attitude or just being cussed.

My belief is that if businesses, owners and executives decide to fight unethical practices through associations and the press, they will be successful, and value will be created for the larger population than just for the corrupt. It is interesting to read what J. Vinayan in IMJ wrote:

‘Incidence of corrupt or unethical behaviour in an organizational setting is not fortuitous. Whether we are looking at corruption in the HR function or in any other function, it is very often institutionalized, well rationalized and entrenched in the system. Extortion and bribery are much more profitable and entail much less risk when they are organized and disseminated. The vertical and horizontal integration of corruption (at different levels and in different offices) makes for optimal return, reduces the likelihood of being caught and facilitates protection. In addition, corruption is contagious: it creates complicity, it acts as a “demonstration effect” vis-a-vis the other organizational members, provides information about opportunities and the means to exploit them, and creates an atmosphere of impunity. In the end, individual corruption may degenerate into a general situation of favour-currying, subservience, and “protection.’

If the corrupt can gang up, why cannot the non-corrupt?  Are we ninnies, or complacent or at heart, corrupt? Or we just don’t care, and enjoy being bullied and lorded over by corrupt people?

One step is for companies to draw up ethical behaviour rules and enforce them. Industry associations must start programs to fight corruption and corrupt people as a group. It is important for executives not only to know what is right but to do the right things.

A Starwood study suggests that 99% or executives think they are honest.

82% cheat at golf

82% hate those that cheat at golf

72% believe golf and business behaviour parallel each other

Ethical behaviour not only pays, it is the right thing to do and essential to a productive, fair and virtuous society, to paraphrase Archie. B. Carroll in his book, Business Ethics. In reverse, see the cost and destruction of value of unethical people to thousands of employees and society of Tyco, Enron, Arthur Andersen and Indian companies you all can name.

Customer loyalty and trust are linked to the Values of a company and their ethics. Create Value, not destroy it.

Would love your comments and help. We are happy to help others in education and executive education on courses in Value Creation.

 

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder editor, Journal of Creating Value jcv.sagepub.com
K-185 Sarai Jullena, New Delhi 110025
+91 98100 60368, 011-26831226
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
http://www.interlinkindia.net

Twitter @ValueCreationJ

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.