The philosophy of consistently delivering superior customer value can sometimes challenge classic corporate management thinking. Customer centricity requires organisations to be both strategically and tactically agile in responding to changing customer needs. While this can sometimes run up against the resistance from internal structures and processes it often acts as a vital catalyst for fresh externally driven innovation.
In markets such as health and wellness customer value superiority can often represent a greater potential advantage than expensively acquired market strength.
Unsurprisingly this often flies in the face of shareholder sentiment. Yet increasingly market strength, reputation, brand equity and corporate investment attractiveness can be seen rapidly eroding when companies are unable to demonstrate adequate responsiveness to competitive market signals, innovate effectively to delight customers or handle potential PR disasters expediently.
Monitoring customer value delivery is the best internal alarm call for management, alerting it to complacency, inaction and a loss of faith in its products and services.
Flexibility in approach to business model development can also pay dividends. Business model innovation that improves the choice architecture of customers adds considerable value. Whereby creating inadvertent barriers by locking customers into contracts, creating price penalties or forcing bundling sales of relatively unwanted products or services rarely pays off long-term.
Frequently hyper-competition ensures viable alternatives will always be on offer from competing global suppliers looking to gain an initial foothold in the market. Even if their particular version of customer value is unsustainable in the long-term their longer-term objectives may internally justify a loss making strategy in the short-term if it delivers market share.
An organisation’s delivery of customer value should be monitored continuously. To achieve this considerable time, effort and planning must be invested in the program set-up. The customer value framework should be philosophically sound, rigorously tested and with output that is simple to navigate and actionable.
The early stages of customer value initiatives ideally involve the creation of ‘customer value blueprints’. These blueprints should typically include:
The specific product and service offer components that represent customer value to the organisation’s customer segments
The relative importance of the component to the business across each target customer
The impact of customer value components on customer attitudes, intentions and behaviour.
The customer value components location within the customer journey.
When programs have failed, lack of success can often be traced to the set-up phase where insufficient attention has been paid to ensuring organisational buy-in, robustness of approach and clear evidence of return on investment.