Creating Customer Value.ppt - Creating Customer Value Business is the activity of creating value That is what you get paid to do Customers do not want

Creating Customer Value.ppt - Creating Customer Value...

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Unformatted text preview: Creating Customer Value • Business is the activity of creating value. That is what you get paid to do. Customers do not want your products and services - they want what those products and services will do for them. Business people must learn to become value creators because those who understand value best will prosper and those who do not will fail. Steps for Creating Customer Value • Focus On Value : Features are what we build in to our products and services but value is what our customers get out of them. Value can be explained by the formula Value=Benefits -Costs. As long as customers believe the benefits they receive outweigh the costs they have paid they will consider they have received value, and they will be satisfied. They are therefore likely to come back with repeat business and they may even tell others about their good experience. Steps for Creating Customer Value • Compete on value not price : In a crowded and competitive market place it is tempting to compete on the basis of price. Obviously this is dangerous because unless you accompany your discounts with cost savings, you are giving away your profits. But not only can discounting destroy your own business, it could destroy the profitability of your entire industry. The trouble is, if you don’t have a value-based competitive strategy, you have no option but to compete on price alone. Steps for Creating Customer Value • Look through your customers’ eyes : Since value exists in the mind of the customer, businesses must learn to see the world through the eyes of their customers. Most of us do not. Our vision is limited, even distorted. Policies, procedures, traditions and businesses practices give us a narrow view of the world and prevent us from providing what their customers are looking for. Successful business leaders make their customers the centre of their universe. They find ways of seeing the world through the eyes of the customer. They bring the world of the customer into the workplace. They make sure everyone knows, and never forgets, how their customers see the world. Steps for Creating Customer Value • Make your customers successful : The aim must be not to service or satisfy your customers, but to make them successful. That means you must get inside your customer’s world and find out what it is they are trying to achieve and then commit yourself to helping do that. If your customers are in business themselves, you must understand their business as well as your own. It is not enough to talk to your customers, you must talk to their customers to find out what their customers want from them. Then you can help them deliver to their customers. Steps for Creating Customer Value • Reduce the costs : You need to be a low cost supplier but this does not mean reducing the price. Three other costs that customers pay, which they consider the be even less affordable than the purchase price - are time, effort and anxiety. If you can reduce these costs customers will not be so price sensitive. In fact, they might even be prepared to pay more. The key to reducing these costs lies in understanding and improving your business processes. Never forget that our society is one that competes on speed, convenience and reliability. We must be able to respond quickly to our customer’s’ needs. Steps for Creating Customer Value • Give them something extra : Businesses must also increase the benefits they provide to their customers. There are three levels at which benefits are created but two of these, the basic product and service and support services, are today just hygiene factors. You must get them right to be in business but you will not get a competitive advantage by doing so. You can delight your customers by giving them something extra and, thereby, gain an advantage over you competitors. ...
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