Call for Paper for the Second Global Conference on Creating Value

Posted January 14, 2019 by Customer Value Foundation
Categories: Business & Management

Dear Friends,

Do come to the 2nd Global Conference on Creating Value in May 2019 in New York. Please plan to speak also. Details are below:

fordham alliance cvf combined logo

The Second Global Conference on Creating Value

Gabelli School of Business – Fordham University

Lincoln Center Campus, New York City

May 14-15, 2019

Read the rest of this post »


Customer Value Economics: The High Cost of Poor Service

Posted November 25, 2018 by Customer Value Foundation
Categories: Business & Management

This doesn’t make sense, you think. Doing less cannot cost more.
You have to look at the net cost. Many actions that #addvalue do not cost much. Smiling, being courteous, listening to customers, keeping promises, going the extra mile, wanting to help, being on time, not making the customer anxious, not making him wait, not making him spend energy, not insulting his intelligence, not destroying his self-image, being prompt, being knowledgeable, etc. etc. can all #addvalue.
And that adds up to higher relationship, better retention, higher sales, better prices and ROI.
The reverse is not caring and adding less value. The net cost in loss of sales, loss of advocacy, loss of referrals, loss of customers and loss of profits and ROI. This all leads to #valuedestruction. You must manage #valuedestroyers (or what I call DNA, Do Not Annoy factors).
The cost of poor experience, bad service leads to not being able to charge higher prices or loss of sales.

Airlines: Expectations vs. Delivery

Let’s take an example of airlines. Some of them are full fare and some of them are low cost. Note they do not say high class and low class, nor do they say high value and low value. Full fare connotes certain givens like free baggage allowance, free food, faster check in for business class. Low cost means none of these.
So if you do not want the hassle of paying for your luggage or seat, and cost is not that important you go full fare.
Let’s say you travel low cost. Your experience beyond what you expect of poorer check-in and luggage may still be good. I just took a Ryan Air flight. I had prepaid for my luggage. The flight was on time, the seats were ok, the price was great, the staff smiled, the luggage was retrieved fast, all adding to the value.
The other day I took a full fare airline. One bag was a hair over 23 Kg, and the other was 12Kg, and I was asked to take things out of one and put into the other. The food was bad, and my luggage came late. The value was awful and the cost of this poor value is high to the customer and to the airline.
Let’s take a person who flies mostly by high cost airlines. He is used to higher prices. Let’s look at his #valuetree:
Value Score 9
He finds the value is 7 which is about average.
Now imagine this traveler has to use a low cost airline. His expectations are lower. His price is low. But the airline staff is friendly and they handle him well. So he is happy.
Value Score 7
When you compare the value score it is very high at 9 versus 7. It did not cost the airline more to increase the value. They performed better than normal and the cost was low. So he may consider the low cost airline in the future. (Note the importance of cost was less (30%) for him!)
A third example is a low cost person traveling on a low cost airline. His expectations are low, and he is price conscious. On this flight the airline did not insult him or aggravate him. They were ok to him. His score is 8, even though the experience was average. Note price has become 70% in Importance.
Value Score 8
The above example tells you the following:
Segmentation is important to position your product
Much of your offer is based on Customer expectations
When expectations are high, you have to perform better. Poor service, food or unhappy or unsmiling staff lowers the benefits and the value. Cost to airline has not gone up
When expectations are low, performing better (like staff being polite and helpful, which costs nothing) increases value
In this example if the normally full fare flyer found the low cost airline gave more value than his normal high cost airline, he may use the low cost carrier more often than he had in the past, a loss to his full fare airline
Gautam Mahajan, 
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value

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.

Are you Adding Value to Employees, So They Can Add Value to Customers

Posted October 27, 2018 by Customer Value Foundation
Categories: Business & Management

From my recent posts in my column, you know about Total Customer Value Management, how we add value to Customers, and how we help employees manage Customer-Centric Circles, and bring the top brass to focus on the Customer through the Customer Strategy and the Customer’s Bill of Rights you also have to think about adding value to the employee. Total Customer Value Management (and common sense) requires that you must also add value to the employees, and your partners (supply and delivery chain) and to society if you wish to add value to the Customer.

Value added employees can and will add value to Customers. This increases Customer Value, and which in turn, increases loyalty, market share, wallet share and profits as we learnt earlier. To add value to the employee, we must learn what the employee values. Ask yourself what is important to the employee?

One significant way of figuring employee value is to measure a parameter called Employee Value Added. We can just measure employee value with our employees, but it is always desirable to also measure the value your competition adds to its employees. We can then compare the value we add to our employees to the value competition adds to its employees.

Defining Employee Value Added (EVA)

EVA = Value we add to our Employees / Value our competition adds to their employees.

We build attribute trees of Benefits and Financials as follows:


Employe Value Image

Of course, you should modify this for your particular case, and the employee segment you are looking at.

Advantages of Employee Value Added

  1. It is a measure of what your employees value, and what motivates them
  2. Tells you what is most important to them in their work life
  3. Reveals whether you are delivering what they value
  4. Helps you improve Employee Value
  5. By measuring competitive data, tells you whether your company is adding more or less value than competition
  6. If you add less value, employees will migrate to a higher value adding company
  7. Helps you find the causes of employee churn and to reduce it

How to use Employee Value Added for your Benefit

First, employ a Chief Employee Value Creator. The Chief of HRD should be renamed the Chief Employee Value Creator. Value added employees add value to Customers.

The Chief Employee Value Creator or the head of HRD has to learn to add value to the employee and not just police the employee and be the management spy or hatchet person in the eyes of the employee.

Reducing employee churn has high financial benefits (eliminates hiring and replacement costs, training, lost time and efficiency)


You can see that employee value add helps you in your Total Customer Value journey.

It helps create value for employees and thereby improved value for Customers. Customer-Centric Circles creates value for employees and for Customers.

It reduces churn, and increases your company’s efficiency. Lost employees and replacing them costs a considerable amount to the company.

Do it Yourself

Do you consider yourself a value added employee? Why? How much of this has to do with you and how much is dependent on the company?

Are you adding value to your employees? How?

How could the company increase value for you?

How could you increase value for yourself, your colleagues, partners and society? And for Customers?

How will they know that value is being increased?

Do you need to communicate value?


Gautam Mahajan, 

President, Customer Value Foundation and Inter-Link India

Founder Editor, Journal of Creating Value

New Delhi 110065 +91 98100 60368  

Twitter @ValueCreationJ  Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value Investment

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.

Plastics Ban or Big Bang

Posted July 4, 2018 by Customer Value Foundation
Categories: Business & Management

Tags: , , ,

The Big BAN, no Big Bang!

India is fast becoming a country that cannot control many of its day to day issues. Is this because of lack of governance or will, or just a lackadaisical attitude?

The net result is deteriorating services, which when they reach the stage of unmanageable problems, the only solution the government can think of is banning….they cannot think of managing such issues.

The ban on cars more than 15 years old is so ridiculous. We cannot inspect cars for their usefulness and viability? The easiest is to ban.

The ban on plastics is another example. Why don’t we see such huge issues in USA, Japan, Saudi Arabia and Europe. How do they manage?

Our pet excuse is we have a huge population, but our use of plastics is less than in the US. How did they manage plastics waste? What methods did they use, from strict collection policies, to even stricter littering laws?

We just seem to turn a blind eye to problems such as this, till someone in the press talks about it or posts a picture. A few days of seeming activity follow and we are back to the status quo of garbage, filth and plastics waste.

This banning culture instead of leading to big bang solutions will lead to our banning everything:

We will ban pollution. Oh, oh, we cannot, because that is the solution. Let us ban the environment. Then we won’t have to care about clean air, and we can all be banned (read die).

Let us ban old people because we cannot take care of them.

We should ban traffic because we cannot manage it. Just drive to the airport, and see the many cars parked en route, some next to police stations. Instead of being challaned, they have now encouraged street vendors selling food and drink.

Let us ban till we have nothing to ban other than big government with no big bang solutions other than bans.

Perhaps we should ban them before we ourselves get banned, as the polluters and the source of the problem.

Most of us in business or as users do not think about pollution, ecology, society or any of these things. We think of ourselves and our convenience. The convenience of the company is to make products that sell, and make money. The convenience of users is being able to use something as one desires, conveniently.

Convenience is in a sense, selfishness. What is good for me seems to overtake what is good for all of us, and the earth. Remember, if we abuse, Mother Earth, we will suffer. Mother Earth can survive without us, but we cannot survive without her.

So the first thing is how the user can be brought to curb plastics pollution:

  1. Make it convenient for him to throw the package into bins and recycling streams. Sadly, these do not exist.
  2. Make it inconvenient for him to use the package: This does not mean inconvenient packages, it means a large cost to prevent throwaway packages. Let’s take Sunset point at Naddi, Dharamsala. Once a pristine site, now it is littered mostly with plastics and also with paper, cans, etc.

Can we charge a punitive fee like Rs 15 for a plastics or glass bottle, whereas the cost of the bottle and product maybe Rs 12. At the exit of Sunset point, let the user deposit the bottle and get his money back.

This will send an instant message to the user and also the seller and the manufacturer, that it is not business as usual. Let it be inconvenient to pollute.

  1. Build awareness. Let us use neuroscience to get dreams of being capsized in plastics bottles, or the like. Let us use social media.
  2. A large scale ban can force manufacturers to react. Let them look at pollution when they sell raw materials. What if a GST like tax was added to the raw material and refunded through proper recycling of the end product?

Users can:

  • Bring their own shopping bag. …
  • Stop buying bottled water. …
  •        Bring their own thermos to the coffee shop. …
  • Choose cardboard or paper over plastics bottles and bags. …
  • Say no to straws. …
  • Get the plastics off your face. …
  • Skip the disposable razor. …
  • Switch from disposable diapers to cloth.

All add to inconvenience. Do we have a choice?

The manufacturer has to start a circularity program of:

  1. Using biodegradable materials. For example, millet based spoons are available for ice-cream, and the spoon can be used along with the ice-cream. The plastics technology has to be biodegradable.
  2. The products have to be re-usable, and easily re-cyclable
  3. Encourage users to participate in ecology, as outlined above.
  4. Set up a fund for picking up plastics waste

Plastics pollution, indeed all pollution is a clear and present danger. There is no time for pussyfooting. Manufacturers and users have to become serious about the dangers. Let not the plastics industry hide behind the statement we are only 12% of all solid waste.

The time has come for the plastics industry and individual companies to get together with the Government and set up a time bound program for plastics to shift to biodegradable, to pick up larger percentages of plastics waste, and larger conversion of waste to useful products.

This has to be like the automobile Bharat Stage emission norms and the Euro emission norms. These have to be strict and enforceable. Companies should fear being banned.


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

Founder Editor, Journal of Creating Value

New Delhi 110065 +91 98100 60368  

Twitter @ValueCreationJ  Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great Executive 

Come to the ​Second​  Global Conference on Creating Value, May ​2019 ​ in New York, U​SA

Value Takers Vs Value Makers

Posted July 4, 2018 by Customer Value Foundation
Categories: Business & Management

Tags: , ,

Are You a Value Creator or A Value Taker

I am writing this, because I want readers to think about the future, and not be like me, when I was in middle and senior management to think only about the well-being of the company rather than the well-being of those we were impacting, the world at large, ecology and sustainability. While many might think this is meant for CEOs, this is the right time for all of us to start thinking about serious issues like ecology, corruption, value destruction or being one sided (my company uberalles, the company must win, right or wrong)

In my forthcoming book Value Dominant Logic, I tell the story of my heading a team to bring out and commercialise the one piece PET beverage bottle. We were led by the desire to win, to be ahead technically, and to see our product dominate. We never entered the debate of whether what we were producing could damage the environment, or not be good or sustainable. Why were we like that?

Were we driven by our customers’ needs, or for us to disrupt glass packaging? Or for helping our company make profits for its shareholders? Or for the larger eco-system?

Readers must start to think truly about the Customer (for most, it is what we can get out of the Customer). The Customer just not as a buyer, but the Customer representing us as a user, as part of society, as one who needs to improve the well-being of those around us.

In this article, I wish to debate Customer Value creation (and Value creation in general) versus value extraction. Too many people believe they are creating value whereas they are extracting value. The global financial crisis of2008 makes us rethink the modern capitalist system which is far too speculative: it rewards takers over true makers or wealth creators. It allows the growth of finance, and greater rewards for speculative exchange of financial assets versus investment that leads to new physical assets and job creation.

In the recently completed First Global Conference on Creating Value at Leicester UK, organised by DMU and me, Ashok Ashta, an attendee wrote:

I personally enjoyed the blend with the practical as instantiated by the Fujitsu presentations. The three speakers I found the most thought provocative were: Chris Baker, Scott Sampson and Michael Shafer. If there is one line that will remain embedded in thought, and that I will perhaps reuse is, “students looking to work in financial institutions such as Goldman Sachs etc. are aspiring to work in criminal organizations!”

Debates about unsustainable growth are increasing calling for reforms and rethinking of the financial system. We need the financial system to re-focus on the long term, and sustainable development rather than quarterly returns, and gaining exorbitant executive pay. This includes proper governance and thinking about the future of us, and our planet.

Mariana Mazzucato in her book, The Value of Everything argues that critics of the current financial system remain powerless – in their ability to bring about real reform of the economic system – until they become firmly grounded in a discussion about the processes by which economic value is created. It is not enough to argue for less value extraction and more value creation. First, ‘value’, a term that once lay at the heart of economic thinking, must be revived and better understood.

“Value has gone from being at the core of economic theory, tied to the dynamics of production (the division of labour, changing costs of production), to a subjective category tied to the ‘preferences’ of economic agents. Many ills, such as stagnant real wages, are interpreted in terms of the ‘choices’ that particular agents in the system make, for example unemployment is seen as related to the choice that workers make between working and leisure.”

By losing our ability to recognize the difference between value creation and value extraction, Mariana argues, we have made it easier for some to call themselves value creators and in the process extract value, like the financial services companies.

Thus GDP and corporate annual reports must reflect the quality of life indicators, happiness, caring etc. versus just financial gains.

Value extractors in finance and other sectors of the economy get more emboldened. Here, the crucial questions – which kinds of activities add value to the economy and which simply extract value for the sellers – are never asked. In the current way of thinking, financial trading, rapacious lending, funding property price bubbles are all value-added by definition.

When price determines value, and if there is a deal to be done, then there is value. Therefore, a pharma company can sell a drug at a hundred or a thousand times more than it costs to produce, there is no problem: the market has determined the value.

The same goes for chief executives who earn 340 times more than the average worker (the actual ratio in 2015 for companies in the S&P 500). The market has decided the value of their services – there is nothing more to be said.

Second, Mariana continues the conventional discourse devalues and frightens actual and would-be value creators outside the private business sector. It’s not easy to feel good about yourself when you are constantly being told you’re rubbish and/or part of the problem. That’s often the situation for people working in the public sector, whether these are nurses, civil servants or teachers.

Mazzucato adds that when Apple or whichever private company makes billions of dollars for shareholders and many millions for top executives, you probably won’t think that these gains actually come largely from leveraging the work done by others – whether these be government agencies, not-for-profit institutions, or achievements fought for by civil society organizations including trade unions that have been critical for fighting for workers’ training programs.

All of which serves only to subtract value from the economy and make for a less attractive future for almost everyone. Not having a clear view of the collective value creation process, the public sector is thus ‘captured’ – entranced by stories about wealth creation which have led to regressive tax policies that increase inequality.

This is not only true for the environment where picking up the mess of pollution will definitely increase GDP (due to the cleaning services paid for) while a cleaner environment won’t necessarily (indeed if it leads to less ‘things’ produced it could decrease GDP), but also as we saw to the world of finance where the distinction between financial services that feed industry’s need for long-term credit versus those financial services that simply feed other parts of the financial sector are not distinguished. You can think of other examples: poor road construction leading to increased repairs builds GDP. M&A fees add to GDP. The middleman making more than the producer

So think of becoming a value maker, a value creator and not just a value extractor, the role of many when they are in management. Maybe this is the time for you to think of your role. Are you going to be a blind follower? Can you do something at your level? Examples of what you can do at your level, is to be transparent, caring for your employees and society, not accepting dishonesty from above. You can start to provide an island of ‘goodness’ in your department, and if many do this, the message will be heard at the top. We call this the bottom up approach, versus the top down system we live in. The power is with you.​

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

Founder Editor, Journal of Creating Value

New Delhi 110065 +91 98100 60368  

Twitter @ValueCreationJ  Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great Executive 

Come to the ​Second​  Global Conference on Creating Value, May ​2019 ​ in New York, U​SA

Is Value Co-Creation Always Necessary?

Posted April 18, 2018 by Customer Value Foundation
Categories: Business & Management

Much has been written by experts on value co-creation. Some believe that without co-creation value cannot be provided.

I have a view which is similar to my view on other items. For example, experience is not always necessary for value. A journey is not always desired by a customer, so why put him into a journey?

Co-creation in my view is not important in many cases, and in some cases it is extremely important. I have divided co-creation possibilities into four quadrants. The first quadrant (green) is the best for co-creation. The value creation interactiveness is high and so is the product/service experience. The worst is the third quadrant (red) where the product/service experience is low and the value co-creation interactiveness is low.

Below is my matrix on Value Co-Creation:


Yellow quadrant

Let me start with the yellow box, which is the case for items/service for normal use. Many items are used in a routine, normal fashion. These include salt, soap, a smart phone for a lay user such as myself. I just want these to work for my satisfaction, and I do not desire an interaction with someone in your company. Many of us fall into this category.

Lessons for the company:

Make it simple to understand and use (the user should not need to find a knife to open a soap packet, or to find a button on a smart phone or put a sim card of a different size into the phone (a micro sim to be put into a normal sim slot or have multiple chargers for multiple phones)

Let it work as intended (my smart phone pushes the turn on image for an incoming call into a small inset on top of the phone, which I cannot easily enlarge, and so I have to go through gymnastics to answer a call. I know some of you are sniggering because you don’t have this problem, but those unlucky fellow creatures who have this problem are saying, give us a fix (which requires us to go into the red quadrant, and being made to do an useless task. This is not co-creation, it is destruction of value)

Do not make the user do unnecessary work when using your product (the above is an example)

Let the product/service not let the user down (the salt has coagulated in the packet and does not pour easily) (or my instant coffee from a flexi bag has completely powdered finely from the granules you find in bottles, and the coffee does not taste that good)

Make it easy for the user to contact an intelligent person if the user is unhappy or has an idea (so now you have a problem, whom do you complain to? My salt has coagulated. The call centre guy responds but it is not supposed to…. You idiot customer, how did you let it coagulate…Maybe this lot was chemically different (it cannot be, says the call centre person. Your option is to throw the salt away and re buy, and find a place in your fridge (but first make sure the salt will be ok in the fridge. You don’t know, but you know you should not put the salt in the fridge but you have no choice. You poor sap, you are only a customer)

Red Quadrant

My next quadrant is the red quadrant, which you wish to avoid, but are forced to journey to when you have a problem, and you meet or talk to a company person who knows it all and cannot understand why you are a moron. The soap wrapping is easy to open, and you have spent time in the shower using your teeth to open it. The company guy says you fool you are not supposed to use your teeth…and you say it did open and he says but it does not need your teeth…

Lessons for the company:

No customer is stupid enough to want to talk to you

He must have a genuine problem

There must be something wrong or there is room for improvement in your product or service


Do not make the customer feel like an idiot

Orange Quadrant

This in highlighted grey because the colour drop down box only has main colours and not the orange one (there is a box that says stop highlighting). I know if I complain, they will say you do not know how to use MS Word, which I have been using for a long time, but never needed an orange highlight. Whom do I turn to? I can google and waste more time.

This is the quadrant which can be used for highlighting problems, getting innovative fixes, in co-creating a better mouse trap… I had a conversation with LinkedIn that I could not get my California contacts. I was told that they would help and came back saying there was a problem and they would fix it. Now California works, New Jersey does not.

My wife just got 250 mails from Bharat Matrimony saying she is a registered member. Everyone is introducing himself to her as a potential suitor. The registered member is Radhika and not my wife whose name starts with a V… There is no way to contact them but to unsubscribe, and the messages keep coming…Ugh! I have this problem with a big bank. Some guy who has an email gm@yahoo,com has put his address as gm@gmail,com and I keep getting his mails. I cannot make this go away. Help!

Lessons for the company:

While you had an opportunity to help in the other quadrants, this is the one you can co-create in and make friends. Take this opportunity to shine (P&G would call it Connect and Develop)

You can get ideas not only for improvements but for other products and service

So take the customer seriously, and have innovative, knowledgeable, friendly helpful people service him

Do not make this a value destruction opportunity

Green Quadrant

Here is the real co-creation opportunity, for you to develop a better cell phone. For example, I would like a better search facility that covers the address and the notes. So if I remember you as Jane’s husband, and I have Jane in the contact notes, I want to be able to find this contact.

Or I want my text messages to be easily storable, or I want to get back contacts inadvertently deleted (why can’t there be a cache), and I want all my text message to appear, or I want my call log to be stored on the net so I can pull out the messages I made in Beijing four months ago. I do not want to toggle the on off switch when I cannot activate an incoming call. Everyone will benefit, though most accept the phone for what it is.

Lessons for the company:

Look for opportunities to improve

How can you make it easier for me to use your product and love it

How can you co-create disruptive and creative elements

Friends, companies have an immense possibility to distinguish themselves…but they don’t. They end up antagonising the customer no end, whereas they could make him/her their friend, and learn from them and develop and co-create with them.


Avoid destruction

Seek co-creation opportunities

All opportunities do not mean co-creation

Are you laughing at me or are you with me?


Happy to answer your questions.


Gautam Mahajan,


President, Customer Value Foundation and Inter-Link India

Founding Editor of Journal of Creating Value

New Delhi 110065 +91 9810060368  

Twitter @ValueCreationJ  Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value Investment

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.

Why McKinsey Says Link the Customer Experience to Value

Posted March 10, 2018 by Customer Value Foundation
Categories: Business & Management

“Many customer-experience transformations stall because leaders can’t show how these efforts create value. Patiently building a business case can fund them, secure buy-in, and build momentum.”__McKinsey

Joel Maynes and Alex Rawson, Partner at McKinsey go on to say:

  • “The road to failed customer-experience programs is paved with good intentions. Executives are quick to see the end-game benefits of a customer-centric strategy: more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees. But they often fail to understand clearly what a superior customer experience is worth and exactly how it will generate value.”
  • “Without a quantified link to value and a sound business case, such efforts often can’t show early gains, build momentum among functional executives, and earn a seat at the strategy table. They stall before they ever really get going. When establishing a link to value is done well, it provides a clear view of what matters to customers, where to focus, and how to keep the customer experience high on the list of strategic priorities.”


Lyn Hunsaker in CustomerThink said Customer experience value creation occurs when you empower customers to achieve their goals with greater satisfaction in a win-win approach

I said in CustomerThink, CX is one aspect of creating value. But in the case of a CVA (Customer Value Added) measurement, the questions are asked of the decision maker, not the user who has been in the transaction. The decision maker may not have had transactional experience, but he has an impression of the difference between competing offers. And the decision maker makes the decision.

Michael Hinshaw in CMO Magazine states for the past several years, improving customer experience (CX) has been rightfully viewed as one of the most important things any organization can do to drive value. And Jim Carrass of Customer Value Creation International ( sent a link to me about Customer Value Creation, making me think about Customer Value (CV).

  • CV tells us why people buy, and why they do not buy from our company
  • Creating better Customer Value will increase your market share. Delivering a great experience should give you a bigger market share. Is your company getting a larger market share with the experience it is delivering? If not, ask why not?
  • Customer Value tells you how to create value faster/better than competitors, a core idea that is missing in CX. You cannot just increase CX for your customers. Your company’s CX has to be better than the CX competition provides to its customers
  • Customer Value gives you implied weights of what is important to the Customer
  • How companies are able to get out in front of their competitors and stay there
  • Customer Value is inclusive. It includes CX, Customer success, Customer effort, customer journey, Value Proposition and so on. It includes cost, benefits, experience, emotions. Great CX enhances Customer Value


Sometimes, we do not have an experience with a product or service, but we still buy it on the basis of the value it delivers. Often we do not notice the experience because it remains embedded. Take salt; we do not directly experience it. We experience it when it is missing, or in excess.

The goal of many organisations is to create value for the customer. Service-dominant logic‘s specific goal is to co-create value for the customer. The goal of the Customer Success Association is to Create Customer Value. Customer Experience impacts customer value and so is very important. Customer experience seeks to increase value through every interaction. Annette Franz, Founder/CEO, CX Journey Inc. states the value that CXPA offers resides in both education and networking.

CXPA says that companies recognize the importance of value as a key ingredient in building and maintaining customer loyalty. CXPA does not mention experience as a key benefit to members.

CX is also a key ingredient in creating Customer Value

Let me give you an example of a pesticide company which had excellent satisfaction scores, and were working on improved customer experience. Over two years, while scores increased, market share and sales did not increase. They then embarked on a Customer Value creation program and started a courtesy system (where their employees started to be courteous to each other in the office). Along with the courtesy system, they started customer circles for frontline people to align them to the customer and deliver greater value. They also started an evening meeting to pick up and discuss issues that customers faced during the day, opportunities with customers and possible new accounts. They found that those people who were setting up appointments for the field staff were not noting down complete addresses, and were haphazard about ensuring that field staff did not have to criss-cross the town to get from one customer to another.

After 3 months, they found sales call per field person had increased from 3 per day to 5 per day; sales per salesperson had increased by 30%; market share had gone up because of new acquisitions; on time support had improved. All this because of a customer value focus on customers, and starting customer circles for frontline people. The customer value-added score before and after the 3 month period had improved considerably. The satisfaction score had improved marginally because of on-time service improvement.

This is exactly what Mckinsey had suggested at the beginning of this article would happen with a greater focus on customers: more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees.

What should business people and companies do?

  • Continue to deliver great experience and satisfaction to your Customers
  • Give a great experience to your employees and partners. Recognise Customer Experience is one aspect of Customer Value
  • Recognise that this is not enough. You have to be better than your competition — You must deliver more customer value to your customers than your competition delivers to its customers.

Remember relative Customer Value Added relates to business results. Customer Value includes the image of the company, the company people, the relationship, the product, and the costs (both price and non-price)


Gautam Mahajan

President, Customer Value Foundation and Inter-Link India

Founding Editor of Journal of Creating Value

New Delhi 110065 +91 9810060368  

Twitter @ValueCreationJ  Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value Investment

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.