What Customers Value?
Marketing folk use the adage: make what the customer wants, and they will buy it. This has been evolved over time to: do what the customer values, and you'll be profitable.
Essentially, the underlying premise is that if you focus all of your effort on work that the customer wants (i.e. they would be happy to pay for it if they knew you were doing it) and therefore don't do activity that the customer doesn't value, you must inherently be a more profitable business because you are not wasting time, effort or resources.
This is a very purest view, as there is work that a business has to do to be compliant (taxation, health and safety et al) that the customer doesn't necessarily value, but the underlying premise is true.
The first question that we need to answer then is: what does the customer value? This can be resolved in 5 steps:
- Who are your customers?
- What service or product do you provide them?
- What measurable benefit do your customers get from your service or product?
- What do your customers value about your product or service?
- How do your customers measure this value?
From this, a customer value proposition can be created. A customer value proposition is defined as "A clear statement of the tangible results a customer gets from using your service. It’s outcome focused and stresses the business value of your offering."
Once you know your customer value proposition, you can then start to assess your current performance and activity to see how well you align with it.
Next time, I will dig deeper into how you measure your performance agains the customer value proposition and what to do next.