Posted tagged ‘Customer Value’

The 8 Principles of Customer Value Creation

September 9, 2016

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.

Clearing Misconceptions on Customer Value

May 6, 2016

Here are some common ideas posted in blogs, and what is factually correct. The word Value is often misused and misunderstood. You can relate to some of these. These may help you in business or as a buyer.

  1. Satisfaction is the reason why people buy: People buy because a product or a service is worthwhile to them versus competitive products or services. Satisfaction is a necessary condition but not a sufficient condition for purchase. Sometimes, we buy even when very dissatisfied. An example could be a neighborhood petrol station, where we had a poor experience.
  2. High Value products have low satisfaction: This implies value is price, and that if something is high priced it has low satisfaction. This is confusing value for price. Sometimes, people pay “money for value” which means they buy high priced items. Thus if you buy a BMW, you can be very satisfied.
  3. Low Value products have high satisfaction: This implies value is price, and that if something is low priced it has high satisfaction. This is just not true. It has been proved that at every price point, Customers look for Value. What does that mean: If buying a pen, whether a Mont Blanc or a Bic, the Customer is looking for Value, and buys on Value. You may be very dissatisfied with a low cost ball pen, when it streaks while writing.
  4. Satisfaction measures Customer Value: Customer Value and satisfaction studies are different. Satisfaction measurements are done on transactions and generally right after the transaction by the user. Normally the top two boxes are measured. Customer Value studies are done a few weeks after the transaction and on the decision maker, not necessarily the end user, so as to get embedded perceptions. Customer Value studies are done versus competitive alternatives and are ratios. Thus a Customer Value study always compares you to competition and is not based on your score alone but their score also.
  5. Value means Benefits: Value is what the Customer gets (benefits) vs. cost (price and non-price) versus competing offers. While colloquially we use Value to mean benefit or price, Customer Value is the actual worth of a product versus competing options. Value in the Customer context is not just the benefits, but what you pay versus competitive offers.
  6. Values and Value are the same: Values are what someone stands for: ethics, morals, sustainability. Value is defined above. In fact, Values create Value.
  7. Customer Value is newer than Customer Experience: Both are old concepts. However, the formal usage is more recent. Customer Value as a discipline started in the 1980s with Ray Kordupleski and AT&T, and CX in the 2000’s. Customer experience, Customer emotions, Brand Value are all measured by Customer Value.
  8. NPS is a great measure of what the Customer perceives: NPS only answers a couple of questions on repurchase and recommendation. It does not portray what Customer thinks of the product and whether he has had a good or poor experience. NPS is better used with other Customer metrics

Why are these misconceptions propagated and misunderstood? My take is that most people tend to follow what they are told, rather than delving deeply into the actual meaning of, and truly understand how these concepts should be used. These concepts are used and understood loosely.

My suggestion to the lay reader is to truly understand what each of these terms means, how they are used, and how they should be used. Reflection from one’s own experience will show what I am saying makes sense. (Remember your favorite restaurant or airline, and if you are dissatisfied, will you stop using them?)

One reason why companies and executives are not truly becoming Customer–centric is that such loosely used and understood terms confuse companies, and do not give the Customer true insight into what will really help. Thus just measuring NPS and stating that it tells the company what to do is misleading, and will prevent the Customer from truly improving.

Executives and Consultants can lead this change in understanding.

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.

C2C: Its Importance

February 24, 2016

C2C is normally Customer to Customer or Consumer to Consumer, or Citizen to Citizen

Contextually, it has meant one citizen selling to another, and a company or a portal like eBay supporting this service.

In my article today, I want to go beyond one customer selling to another.

I want to talk about the portals that allow interaction between customers:

Self-help or help: These are apps or bogs that allow people to solve the problems created by products or services, which the company does not solve. Such C2C sites are a great help whether you want to learn about an excel issue, or whether your dialer is hanging on your cell phone, or your computer is getting a blue screen problem. Very often, if it weren’t for these sites allowing C2C interaction, we (and our suppliers) would be in deep s—-.

Advice: This is similar to self-help, but goes beyond problem solving to getting advice. Is it a good idea to be in Macedonia in December? Is it good to load SideSync? What is the best treatment for this ailment? The company does not have to field such questions from Customers.

Citizen2Citizen: Citizens can help each other through such portals: What is the best time to transact with the government office, whom to go to for help, where to complain, what is the right rate for land etc.?

Customer Ratings:  Customers tend to give ratings on the net. Basically, the importance of a net based customer rating of a product, place, service or portal is not properly understood, or is underplayed, the primary focus being on traditional methods of getting ratings. Thus often the C2C portal rating takes second place in importance to the traditional brand rating of a company. On the other hand, companies with poorer brand ratings or even unknown companies can become extremely important or as known as “brand-known companies” almost overnight, if they get good scores or they get noticed.

The company’s ability to find and understand the Customer’s ratings on sites like TripAdvisor, Amazon etc. is important. Such ratings help other customers understand various options, and help them buy. One can argue that these ratings are becoming more important than the brand. Dave Aaaker, the brand guru just bought his wife an unbranded laptop based on the ratings!

Customer Journey: Comments, ratings made by the Customer often show the extra Customer Journey that was (hopefully) never intended by the supplier. These C2C sites are places to understand how to minimise the Customer Journey, and make it a happier experience in the future.

The C2C interaction takes place also in social sites, and generally with your extended friend circle.

Companies have to work on getting betterC2C ratings. First they have to analyse why people are saying what they are saying. If someone says he got used or unclean bedsheets in a hotel, the hotel manager cannot just say, no way we always have clean sheets. Should he not check why the Customer said that? Better for him to check on made up rooms to see if all have fresh sheets than to say to the Customer, this isn’t possible, not in my hotel. They have to get to think of eliminating complaints or negative comments. Not by bumping off the guests’ complaints but by actually bumping up their systems and processes

Even branded products need good C2C interaction and scores, or the unbranded people will overtake them.

C2C helps companies, because there is feedback, Customer scores, Customer chats. C2C is a source of communication for companies to Customers, and a way to solve Customers’ problems through a community effort. Companies can find out future trends, and can work towards zero complaints by understanding Customer issues, and ensuring Customer problems do not re-occur. Customer journeys can become shorter and more pleasant. Lastly, by working with these sites, companies can identify Customer advocates who can promote companies through their networks.

C2C and what it means to your company: You could be on an informal C2C interaction, through the social media. Or, you could have a C2C system in place. Or you could have none.

Given that the C2C interaction could be very valuable to you in:

  1. Building a Customer Community
  2. Customer interaction and relationship
  3. Customer self-service taking pressure off you
  4. Causing Customers to offer ideas and new ways or new things to do with your offerings
  5. Getting to know and understand Customers, their needs and in keeping a finger on the pulse
  6. Going beyond building a brand, by using the Customer score

Therefore, you should organise the C2C interaction and build your strategy for giving the most to the Customer and getting the most from it. Let C@C (Customer at your Customer Portal) work for you.

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

 

Gautam Mahajan                                                                                                                              Founding Editor, Journal of Creating Value,

President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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 Companies Loyal?

December 29, 2015

I came across a cartoon at Economic Times, which showed two executives speaking and one saying:

It’s no more about employee loyalty… try winning company’s loyalty…

It got me thinking. Should a company be loyal? Can a company be loyal? To whom? I quickly googled, and there was hardly anything on a company’s loyalty.

The first question is an easy one, a company can be loyal.

Should a company be loyal is more complex, till we answer the question to whom.

I guess we have to scroll through the stakeholders: Employees, customers, partners, shareholders and society. The easy answer is that a company should be loyal to all of these. If this is true, then we have to ask are most companies you know loyal, and to whom? Are companies you buy from loyal to you? I have found that whenever we as Customers have been good and fair to our suppliers, they tend to be more loyal to us than to other customers who are not as fair or good to them.

I would imagine most companies tend to be loyal to their major shareholders. They generally show their loyalty to the shareholder by offering him what he wants most: dividends, stock price, long term growth and market leadership. I suspect most shareholders want either dividends or stock price growth. Thus the loyal management works on these aspects.

Are companies loyal to employees? Is this loyalty secondary to the loyalty to shareholders? This makes us think of the Japanese lifetime employment system (only 8.8% of Japanese companies have this now). There were three models: Stationary (governed by a set of rigid rules, and the expectation that some non performing employees would voluntarily leave), Growth (depends on organisational growth, and all grow with the organisation), stagnant (where the company when in bad shape let’s employees go) …Assuming employees were given life time employment, what value was this loyalty? Apart from a somewhat guaranteed employment, this system did not allow employees to easily switch and they became captive employees. Was company loyalty good for employees?

Outside of Japan, I am sure there are examples of companies being loyal to employees. I cannot think of many. We also notice that companies work on making employees loyal. One way is to make the employee feel indispensable. Or by giving golden handcuffs…If you leave you will be worse off or lose bonuses, or stock options.

The less said about true loyalty to customers. As long as the customer can be milked (can buy), he is worthwhile. In this instant gratification society, even this is short lived. Also, as I mentioned earlier, there is some loyalty to customers who are good to them.

I had written about company loyalty to suppliers, and that too is minimal and based on the benefit to the company (sometimes called mutual benefit). This loyalty is generally purchasing department led, though it is true mutual bonds between the supplier and the end user in the company do form.

The company’s loyalty to society and to sustainability has yet to be proved. There are examples of Unilever and others who are trying to be loyal to the environment and sustainability

So, the company is loyal to the Owners…in reality!

How can they change or be otherwise. Others have written that the company has to think of itself first. I think this is true for survival (first put the oxygen mask on yourself, and then on the kids…but not put the oxygen mask on yourself and abandon the kids). So instead of abandoning the other stakeholders, companies try to sustain them to the extent their loyalty to the owner will let them.

Many Customer consultants would want the company to be customer-centric. Does that include company loyalty?

I think company loyalty and customer-centricity is a thought process and requires enlightened owners, and enlightened managers, who look beyond profit being the purpose of a 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                                                                                                              Founding Editor, Journal of Creating Value,

President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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.

8 Reasons Why your Company Isn’t Creating Value

December 16, 2014

Value Creation is a distinctive mind-set. It is a mentality driven by enhanced self-esteem, awareness and pro-activeness. It goes beyond just doing your job, it is doing something extra.

Value Creation is executing proactive, imaginative or inspired actions that increase the net worth of products, services or an entire business to create better gains or value for Customers, stakeholders and shareholders.  Value Creation stimulates executives and business leaders to generate improved value for Customers, driving success for the organization and its stakeholders.

Value Creation creates Customer conscious companies.

If Value Creation is so good and basic a management technique, why is it not being adopted in a universal fashion? Which of these is holding your company from using it (If you are using value creation techniques, you would be aware of this! Are you?) You will find that smart people like you will be able to create more value when you focus on doing so.

There are several reasons:

  1. You are captives to what you have been taught and what you have learnt.

 

  1. You have been taught to be executives, and hard driving at that to create value for the company.
  2. Customer believe that Value Creation for the company means increased profits, typically by reducing costs, increasing efficiency and trying to increase market share
  3. You are taught to forget that you are Customers too. You therefore find it difficult to think like an executive and a Customer at the same time
  4. You have to take advantage of everything in your power to create value for the company. This could mean exploiting the employees, Customers and partners, of society and ethics, if you have to. This concept is undergoing a sea change, as executives now know the importance of employees, Customers and partners and society and ethics (values). But it hasn’t gone far enough.

All these prevent us from adopting Value Creation in the proper manner.

  1. In the last 20 years, CEO compensation has gone up much faster than profits, and is based on short term profits. The lifespan of CEO’s has gone down, making them look for quick wins.

 

  1. More and more of the executive bonuses are now being based on short term profits. Stocks and options compensation have gone up sky high. Huge motivation to make more money now. Why worry about the long run? The CEO may not last that long

See the two charts below, showing the lifespan of companies and executives is reducing and executive compensation is going up, especially through stocks and options

 Featured image

Taken from James Montier

Featured image

The short term thinking is against Customer Value Creation and Value Creation in general, except for Value Creation for the shareholder.

  1. MBA and professional schools teach students to become executives, and teach them that shareholder wealth is the real purpose of the firm, then that is what they will practice. They do not understand that shareholder wealth is a result and not the purpose of their existence

 

  1. Shareholder value is not necessarily shareholder wealth. It can mean much more than that. It could be a focus on employees and Customers or even societal value
  2. Shareholder Value (read Profits) grows by increasing Customer Value Creation because it grows loyalty and market share
  1. There is an overemphasis on efficiency, systems and processes. Not enough thought is given to mind-set and attitudes, which are required to increase employee and Customer Value.

 

  1. Mind-set comes from education and awareness, and wanting to create value rather than being forced to do so
  1. More time and emphasis is paid to correcting problems and settling complaints, rather than to get to Zero Complaints

 

  1. Every time there is a complaint, it takes away the value you are providing. What are you doing to prevent complaints from happening?
  2. This requires a mind-set that works systemically to avoid complaints, driving the business to a Zero Complaint state
  3. There is a feeling that complaints give you the opportunity to interact with a customer. Surely, there are better ways to do so! Imagine, the waiter drops soup on you; a true cause for a complaint. Is this what you want as an interaction? Better to find more positive ways of interacting with customers
  1. Competition is doing the same thing, why change. Let’s all make merry and get our bonuses.

 

  1. Why do we need to be different? Because we will gain competitive advantage and be ahead of competition, rather than be followers

 

  1. Customer concepts apart from being executive led are also embedded by consultants who in a race to get ahead come up with niche phrases like CRM, CX, Customer Journey, Customer Effort etc. but all focused on processes.

 

  1. There is confusion on basic definitions. So work is done in bits and pieces instead of a real sea-change as outlined in my book, Total Customer Value Management: Transforming Business Thinking.
  2. You may not realise a customer journey requires an effort. You may not realise that the basic product and the service should provide the experience, and other experiences other than delightful ones are unnecessary. Thus, a good experience is when you are upgraded by an airline or being allowed to get free miles for lower points.

The reverse is having an experience such as cancelled flights. We do not want this experience. If it does happen, the Customer journey to get the problem solved should be minimal.

 

  1. Employees and departments such as HR and IT are not taught to create true value and remain staff functions

 

  1. Owners or managers or employees must realize that company’s place a value on their positions (what the company will get vs what it costs them to have the employee). Value is created when employees do something extra and go beyond what is expected of them. Employees add value by doing things better than others. If actions are worse employees destroy value. Those that add value get promoted and get better raises.
  1. Employees destroy value sometimes. Why would one wish to destroy value? But value gets destroyed, too, unconsciously
  1. Put your Customers at the centre of your business decisions on making organizational changes

Destruction of value happens unconsciously just as creation of value. If you created value consciously and you understood this you would work differently.

And companies, if they understood the true intent of shareholder value and that there is a strong connection between creating value for employees and employees creating value for Customers to increase profits will embrace Value Creation.

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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.

Training vs. Mind-set in Value Creation

August 29, 2014

What we want to create is a H2H environment in our company and with our customers and partners.

Is it the mind-set or the training that is more important to our Customers and in Value Creation?

While both are extremely important, I believe mind-set changes are overlooked, not because they are not important, but because conventional training does not focus, indeed is not capable of changing mind-sets. Often it is said training is for dogs (sit, bark, roll!) and education for human beings. Mind-set changes are best impacted by self-introspection.

Why do customers get angry? Why are they happy? What is my role in the customer behavior? Realistically, to change mind-set, we must first build the self-esteem of people.

Once we have done this, we will find they are more open to ideas.

Then, we have to build their awareness, which will allow self-evaluation, and self-improvement.

Once we have done this, we can embark on a Continuous Customer Improvement Program (CCIP) led by front facing employees, not executives. We also let the front end employees examine the Customers Bill of Rights. We ask them to comment on how they will ensure this will work and what support they need.

For making this happen, we start Customer Circles, which are led by front facing employees working with Customers and on the CCIP.

During the Customer Circle sessions, these employees will also figure out how to keep the promises made by the company and its Bill of Rights (and also by the employees).

This leads to massive mind-set changes and taking over of ownership of the Customers by the employees. This also means a change of mind-set of the bosses, to let go and instead of always telling people what to do and training them. The bosses then let the employees tell them what the employees are going to do and what help they need from the bosses.

(As an aside, people are more likely than not, told what to or not to do.

As children, we are told not to reach for the cookie jar, we are told to wipe our faces, not to put our elbows on the table, not to talk with our mouths full, to eat the spinach, and, and, and and. This continues in school, when teachers tell us to stand up and say ‘Good Morning, Teacher’, or to do our homework.

Being told what to do continue at work.

Our boss says you will see four customers today. Why would you see a fifth Customer if you had time?)

As mind-set changes occur, we also have to ensure that the employees understand the mission of the company and whether they understand the importance of and how the mission can guide them.

Earlier, I mentioned that for executives to work on mind-set changes, they too have to change, and learn to let go, and let the employees handle Customers. The executives have to learn that they have to stop directing and ordering (and saying thou shalt…), but actually providing a supportive platform for the employees to perform.

Another reason for not working on mind-set changes is that we tend to manage what we measure….the tangibles.

We have difficulty in working on intangibles because we cannot measure them. We have to learn what is important to Customers, not measure only things that companies wish to measure.

What does a Customer want from a billing process? Accurate bills that are easy to correct if they are not accurate. What does a company wish to measure? Are the bills being paid, and Past due payments. These do not measure the Customers concerns. Worthwhile to measure is percentage of wrong bills, and percentage corrected in one call.

Chip Conley (founder of Joie de Vivre Hotels and author of the New York Times bestselling, EMOTIONAL EQUATIONS) uses the Maslow hierarchy to describe this. He believes Survival, Success and Transform is the Maslow for the corporation. Transform leads to mind-set changes. I believe at Customer Value Foundation, that success often means doing your job and Value Creation means going beyond your job to transform.

I have a number of stories of wonderful experiences in airlines and hotels and in other service renditions and I also have a number of horrible stories. I am sure you, the reader has similar great and horror stories.

Why is there no consistency? Is it the training or the mind-set? I believe with mind-set changes, the number of horror stories will go away. The routine experience we get as Customers is based on training. But when there is a crisis mind-set has to creep in.

Top on my horror stories is when employees feel that their role is to protect the company. The company is always right.

And so they lie. They say that (not in so many words) it is not our fault (implying it is the customers fault). Horror stories include not wanting to help the customer especially during crises hiding behind policies and rules.

An example is when I was downgraded in Brussels on a flight from New York changing planes in Brussels for Delhi, I was told we do not know the rules for a partial refund for a downgrade! Or when we want your money for a flight, you have to pay at once (and no refunds) but when we have to refund, our rules are 30 days.

Don’t companies know this is not right? Do they care or don’t their mind-sets allow them to change?

Customer service departments are trained to solve a customer’s problem. When they solve a less than usual problem, their mind-set does not allow them to initiate a systemic change so that future customers will not face the same issues. Examples of Tata Sky when you want to change an annual plan, you cannot do so without closing and reopening the account. Why can’t their system allow the change of a set box serial number? For or without a fee?

But these companies feel they have a customer centric mind-set, and the Customers do not agree. In fact 56% of all companies feel they are Customer centric and only 12% of Customers agree. Whose mind-set needs to be changed?

One mind-set I wish to change in companies is to get to Zero Complaints.

Executives are ‘trained’ to believe that Customers will always complain and so they cannot move to Zero Complaints (or at least attempt to get there).

They are trained to forget they too are Customers, and training transforms them from being Customers and behave like and become executives! The executive mind-set is often not a Customeric mind-set. And if they start to think like Customers, the conversation they will have is Customer to Customer, not B2C.

Most of us will agree It is true that intangible of happy employees builds the tangible of business success. Moreover while we cannot always make everyone happy, we can set the environment and mind-set to try to make everyone happy

What counts?  H2H: human to human!

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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) transform 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.

56percent of businesses claimed to be customer-centric while only 12 percent of their customers agreed: Your thoughts?

August 20, 2014

CMO Council stated that 56 percent of businesses claimed to be customer-centric while only 12 percent of their customers agreed! Do you agree with this? Why is the thinking so far apart? Is it definitions? Performance? Reality? Or are customers just dumb that they do not recognise customer centricity from self acclaimed customer centric companies?

Your comments are welcome! 

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com 

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) transform 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 real sources of value: Assets and Performance

August 19, 2014

Companies tend to focus on financial assets and financial performance. They measure every aspect of these, and in known periodicity. They report these internally and externally, and are pleased that they are following the really important factors for the company’s success and future wellbeing. These people are sometimes called bean counters aka finance people. They also track investor assets because they feel they have to compete in the market place for the investors’ capital.

Because of this focus, the company loses track of other important assets, and do not get the bean counters to track them well:

Employee Assets

Customer Assets

Partners as assets

Social Assets

Intellectual Property, knowhow, and innovation assets

Brand Assets

Value Creation Assets

Investors as Assets

Note you could use the word Capital instead of assets, although I prefer assets.

Just as an aside, traditional assets in a company have to be maintained. There is a maintenance and depreciation plan for them. Plant and machinery, mobile phones and laptops, furniture, buildings.

The other assets mentioned above are not always maintained well. In fact many of them can appreciate in time (unlike physical assets that might depreciate), unless an employee leaves or a customer leaves. There are poor maintenance plans for them: Just enough for them to stay on and perform. In fact we are more interested in the performance than in the asset itself.

Non-financial assets are often shrugged away as intangible, difficult to measure (and therefore difficult to manage?) Or is our management and focus inadequate? Some will even say these intangible assets form 80% of the investor’s focus of the company value. So if we cared about our investors assets we would care about the non-financial or “soft” assets (and make them as important as “hard” assets).

I think most people understand the various intangible assets and broadly know how they are defined. Value Creation assets are less well understood and developed. Your value creation assets exist in:

Plant and machinery assets: you will certainly overhaul your manufacturing capabilities and watch, analyse and revamp them to create more value

Product offering assets: You work on creating products that will create more value

Employee assets: You create value for employees in order for them to create more value and you invest in teaching your employees assets to create more value for the customers, the partners and society and thereby for the company. You set up an environment conducive to, and encouraging value creation (for example value creation councils)

Customer assets: How do you create more value for the customer, thereby increasing loyalty, market share, prices and profit assets?

Social assets: Where do you put funds that your customers perceive as adding value, thereby making them prefer your company more than competition? Do you understand how Values create value for the company? Values include trust, honesty, and loyalty (to customers), sustainability, safety etc. How do you get employees to create more value here?

Brand assets: As value creation increases, brand assets increase. Value creating employees have brand equity that increases the brand assets of the company

Innovation, proprietary information, know how, intellectual property assets: Value creation in the minds of the employee increases these assets, because they work consciously to create innovation and value

Do your investor assets really know about these intangible assets and the true value of these and how you are growing these, resulting in value for your company? Can shareholders really judge the true source of value creation? Are you giving them the tools to do so?

And are you putting the tools into place to create and measure value: the processes, structure and the organisational skills to do so. Are you creating value for the employees? Do you have a Chief Employee Value creator? And do you have Value Creation councils to bring to the fore Value creation by employees for themselves, their colleagues and other employees, their customers and society? And can you measure this value creation, and the increase in assets and performance? Do we have the competences to create more value, and to encourage value creation?

So let us encourage Value Creation Councils. Let us report our intangible assets and its performance as much as we do the financial performance.

Your comments are welcome! 

Call at (+91) 7838333300

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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) transform 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.

Embrace Customer Value Conscientiously

August 14, 2014

The world and industry is ready for embracing Value Creation conscientiously. Value Creation for employees, customers, partners, society and thereby for the organisation. The role of an executive is to create Value and not just to be a good administrator or an efficiency expert. The old thinking on MBA’s are giving way to MVC (Master’s in Value Creation)

Your comments are welcome!                                                     

Gautam Mahajan, President-Customer Value Foundation

M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

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) transform 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.