This document discusses customer value studies and their benefits. It explains that customer value studies measure the perceived value that companies provide customers compared to competitors. This helps identify attributes to improve or leverage for communication to increase market share, loyalty, and profitability. Customer value is determined by evaluating the costs and benefits of a product or service from the customer's perspective.
Customer Value Study Reveals Improvement Opportunities
1.
2. This Study and Customer Value
• This is a summary of a Customer Value Study
of banks in Brazil: It tells you which banks are
better and how share of wallet, cross selling
and reducing migration can be effective
• We help companies with Value Creation and
improving Customer Value, market share,
loyalty, share of wallet, and increased
profitability
• Customer Value studies start with Value trees.
Value is a juxtaposition of costs and benefits
3. Differential CVA Solutions
• Measure and diagnose the Perceived Value in comparison with market
competitors. The metrics can be used for building Action Plans that will impact
market share and profitability – where CVA Solutions can facilitate this
changing process.
• A “Value Tree” is developed based on inputs from interviews with end users
and stakeholders. From the Value Tree (Perceived Cost-Benefit Tree), a list of
major attributes is generated in order of impact, where attributes with
competitive advantage is can be used for “communication” and attributes that
need to be improved can be used for action plans.
• With a list of Perceived Attributes to improve, CVA experts with client’s
executives will study internal metrics that best correlate with the attributes and
set objectives for improvement, timing and leaders. This is the baseline for the
Action Plan phase.
• The increase of Perceived Value generates improvement in market share and
profitability, according to our experience with more than 3.800 cases in the last
3
14 years.
6. Value
Value is the relation cost-benefit perceived in the acquisition and /
or usage of a product and / or service.
COST BENEFIT
Money Product
Time Service
Energy Emotional Benefits
Cost of opportunity Brand
… …
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7. Objective: sustainable and profitable growth. How?
New clients •Attract New Customers
•Brand Attractiveness = Net share less rejection Attraction
•Increased attraction via communication with the marke
•Diminish rejection providing good experience for
current clients (current value perceived by customers)
•Increase business with existing customers
•Perceived value reflects the experience of current customers
•Perceived value is the cost-benefit of your company compared
the cost-benefit of their competitors
BASE OF •Tree Value diagnose what are the critical attributes
CLIENTES Current Clients
to implement improvements
•Loss of customers. Why?
•Perceived Value worse than competitors / rejection of former clien
•Net attractiveness of competitors / promise of competitors
EX-Clients
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8. CVA Ratios
DEFINITION VALUE COST BENEFIT DESCRIPTION
Products and services are perceived
Bellow average < .98 < .98 < .98 as being inferior to competitors
Products and services are perceived in
Parity (average) .98 - 1.02 .98 - 1.02 .98 - 1.02
parity with competition
Products and services are perceived
Above average 1.03 - 1.10 1.03 - 1.08 1.03 - 1.15
as being superior to competitors
Products and services are perceived as
World Class > 1.10 > 1.08 > 1.15 offering exceptional superiority vs
competition
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9. Impact Weight: Declared X Econometric
IMPACTO
Declared
DECLARADO
Impact
+
Non Attribute =
differentiator High
Attribute Importance
IMPACTO
Econometric Impact
ECONOMÉTRICO
+
Attribute = Differentiator
Low Attribute
Importance
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10. Prioritization – VPI e VPC
High
Alta
VPI VPI VPC VPC
Highprioridade de melhoria
Alta priority for improvementHigh priority comunicação
Alta prioridade de for communication
Importância Relativa
Relative
Importance
Low
Baixa
1,00
Low
Baixo High
Alto
Performance (CVA)
Desempenho (CVA)
10
11. VPC and VPI
VPC – Value Priority for Communication: Prioritize the
attributes which good performance most leverage the
Communication effort = attributes with high impact weight and
high CVA
VPI – Value Priority for Improvement: Prioritize the
attributes which improvement most leverage the Perceived
Value = attributes with high impact weight and low CVA
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12. Why we should increase CVA?
Increase of CVA leads to increase in MARKET SHARE*
CVA (-4 Months)
MARKET
SHARE
Year 1 Year 2 Year 3
*Based on the study PIMS (PROFIT IMPACT OF MARKET STRATEGY) RESEARCH PROGRAM prepared by
the STRATEGIC PLANNING INSTITUTE (CAMBRIDGE, MASSACHUSETTS, USA)
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13. Why we should increase CVA?
Increase of CVA leads to increase of ROI* (return on investment)
ROI
%
Low Average High CVA
*Based on the study PIMS (PROFIT IMPACT OF MARKET STRATEGY) RESEARCH PROGRAM prepared by
the STRATEGIC PLANNING INSTITUTE (CAMBRIDGE, MASSACHUSETTS, USA)
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34. Market Place
1. Measuring Customer Value Added, the ratio of the value you add to
your Customers, versus the value your competitors add to their
Customers
2. Why people buy from you and not from your competitors, and vice-
versa, Predicting loyalty, market share, and improving business
results. Increase market share, and reducing pressure on price
3. Total marketplace assessment: Voice of the Customer and Voice of
the Competitor
4. Increased referrals, word of mouth sales, sales per salesman (as
much as 30%), less pressure on pricing, pricing from a Customer
Value perspective
5. Reduction of complaints (by 70% at one clients’) in the quarter
following the TOTAL CVM intervention. Customer satisfaction scores
have improved by over 10%
6. Changing the rules of the marketplace, and making price less of an
issue
7. Converting call centres to Action Centres
8. Using social media, social marketing and digital media for improving
value
35. Employees
1. Measure Voice of Employee, increase employee self-esteem and
awareness. Using value to reduce employee and Customer churn. Build
individual promises to ensure Customer’s Bill of Rights
2. Equate improvements in employee value, business processes, and
customer products and services to increased customer loyalty and bottom
line business benefit.
3. Helping CxO’s align better with Customers. For example:
o For CFO’s, measuring Customer Capital, Customer Assets, correlation between value
and share price, pricing techniques based on the Customer and perceived Value,
segmenting Customers from shareholder value viewpoint, reporting CVA scores with
financial data, looking at financial systems and billing/credit from convenience of
Customer etc.
o Or for HRD heads, assessing Customer needs, and providing education based on
this, hiring based on Customer value, measuring and adding employee value added,
correlating employee value to shareholder and Customer value, reducing employee
churn etc.
4. Providing education to all levels of employees including touch points, and
certifying them for their ability to handle and work with Customers
5. Increase of teamwork and employee happiness, building of employee self
esteem, awareness. Building a pro-active Customer focused organisation
6. Putting a Customer Performance Management System into place.
7. Using Customer Value metrics for rewards and recognition. Often Total CVM
forms a major part of the Balanced Score Card
• End result is employee engagement and commitment
36. Within the Company
1. Improving service quality
2. Better teamwork and internal Customer focus
3. Building Customer centric circles, Customer conduits.and the
Circle of promises among employees to deliver the
Customer’s Bill of Rights. This also builds a continuous
Customer Improvement Program
4. Understanding competitive strategies and pre-empting
competitive moves by competition. Building Customer
strategies to drive business strategies
5. Using Customer value to decide on product and technology
offerings Using Customer Value for valuation in M&A
6. Understanding the deterioration in touching and Customer
Value in the delivery chain Improved Customer focus and
Customer Value by channel partners, leading to an increase
of value in the distribution chain.
7. Using Customer Value for product decisions
37. Shareholder Value
1. Increasing profits and shareholder Value
2. Correlating Employee Value to Customer
Value to Shareholder Value