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CUSTOMER VALUE ANALYSIS A customer value analysis allows a firm to understand how its customers experience value, and gain insight from its customers’ decision making criteria and processes. It maps customer needs and objectives in terms of the customer’s value chains; thus looking beyond end-user and decision maker needs and revealing the net total effect of the customer-vendor relationship on all of the customer’s processes, costs and benefits. At VXTConsulting, we view this enhanced approach of the needs analysis as key to establishing our clients’ competitive positioning and segmentation strategies. Our methodology compiles information that uncovers competitive product and service attributes. We use this data to review and improve our clients’ offer definition, value activities, and processes to address the respective sources from which customers experience value: Ø Intrinsic product and service attributes and platform characteristics Ø Knowledge and information transfer, learning, and solution development Ø Acquisition/purchasing and decision making processes Ø Supplier capability, consistency and dependability Ø Nature of the relationship/business model For each value area, we perform comparative sensitivity and benchmarking analyses to ascertain the customer value perceptions. Results from these analyses are used to assess our clients' competitive positioning options and evaluate the key elements of value creating strategies: 1. Premium value, and/or strategic significance, of value creating activities. 2. Optimization of the service level offering by segment. 3. Basis for performing a value based customer segmentation. 4. Impact of firm’s core competencies on customer value. 5. Business model and product/service platform implications. We show our clients how their customers experience value at various levels within their organizations, and prepare them to effectively contribute to the optimization of their customers’ value chains. We develop strategies aimed at increasing customer value at the lowest possible cost: 1. Identify offer performance gaps based on the customer needs and recommend strategic options. 2. Advise modifications to product/service offerings to meet specific customer needs, broaden market reach, or increase customer satisfaction. 3. Recommend improvements of functions, activities, and processes to improve customer value creation and delivery. 4. Assess partnership and strategic alliance opportunities focused on enhancing our clients' customer value creation and delivery capabilities. 5. Recommend investments supporting core competencies and capabilities that produce the greatest value for customers. 6. Determine our clients' competitive positioning options for each customer segment based on customer behavior and value preferences(1).
(1) This stage is most effective when coordinated with other aspects of the competitive strategy development and value chain management processes, and assumes current or planned value chain capabilities. Hence, we strongly recommend that this analysis be supported by the other steps of the value chain management process, to fully capture the potential of the value chain capabilities and new market opportunities. |
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