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GALE consulting Inc. is a competitive marketing strategy consulting firm specializing in helping clients appraise the price and performance of their products and services the way customers see them – competing head-to-head against the competition. This analysis is used to guide your organization in developing and deploying value-based strategies to profitably win and retain business, and creating the alignment required to be a market-driven organization.
Citation preview
Customer Value Mapping
And Value Propositions
Introducing GALE Consulting, Value Propositions, And
Implementation For Typical Projects
2012
Copyright GALE consulting, Inc., 2012. All rights reserved.
Confidential Information: This document may not be copied, distributed or shared
outside of your organization without the expressed written permission of GALE
consulting, Inc.
2
Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
3
Introducing GALE consulting, Inc.
GALE consulting helps clients develop and deploy value-based strategies based on Dr. Bradley Gale’s Customer Value Mapping, a fact-based, data driven system for making decisions to profitably improve competitive position in the marketplace.
INNOVENE
Product Management
Value-Based Pricing
Competitive Positioning
Improving Market Share
Value Propositions
Value Based Strategies
Some of our clients:
4
GALE consulting helps clients use customer data
strategically
Conformance Quality
- Delivering what we promise
- Meeting standards
Customer Satisfaction
- Providing what customers want
- Responding to customer complaints
Customer Loyalty
- Retaining our customers
- Getting them to recommend us
Customer Value
- Meeting critical needs of targeted customers
- Outperforming competitors
- Creating new, unique benefits
Stage One
Minimum
requirements
Stage Two
Customer
focus
Stage Three
Customer
attitudes
Stage Four
Competitive focus
on targeted markets
21st century
growth company
Source: Adapted from Managing Customer Value by
Bradley T. Gale, (New York, The Free Press)
5
Goal of Customer Value Mapping Improve business results through consistent strategic processes
A Market-centric organization that improves business results by:
Selecting the right markets and customers.
(market segments that are attractive and profitable to serve)
Offering Value Propositions that customers perceive to be superior to competition.
Aligning their organizations deliver and communicate the superior Value Proposition.
Process
Value Proposition
Structure
Rewards
People
Superior
Business
Performance Deliver & Communicate Value
That Target Customers Buy
Competitive Advantage
6
Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
7
Customer Value Analysis
Dr. Bradley Gale Author, Managing Customer Value
“Arguably the most useful marketing study since the formative works of Peter Drucker, Phillip Kotler and Michael Porter…may shape business thinking for years to come"
Publishers Weekly
8
Why use Customer Value as a framework for your
Voice of the Customer work? Satisfaction and loyalty are not enough!
If a competitor offers your satisfied or loyal customer a better value do you think they
will consider switching?
Adapted from Bradley Gale’s Managing Customer Value and a speech given by Raymond E. Kordupleski at the American
Marketing Association’s Customer Satisfaction Congress, 1991.
Customer Satisfaction Score
~90% Satisfied
AT&T Market
Share
March 89 Feb 90
AT&T was reporting 90% satisfaction levels yet still losing
customers…there was no statistical correlation between
customer satisfaction and market share
Worth What Paid For Score
AT&T Market Share
1987 1988 1989
Worth What Paid For Score
Changes in customer value predicted market share
changes
“Value is simply quality, however the customer defines it, offered at the right price.” Bradley Gale
9
Companies with a higher Customer Value Ratio
achieve higher ROI and ROS
0
5
10
15
20
25
30
35
0.94 0.98 1.02 1.06
12
18
23
28
4
7 9
11 12
Pro
fita
bilit
y
(%)
Customer Perceived Value Ratio
ROI (%)
ROS (%)
31
Source: Keith Roberts, MD PIMS Europe, at Bradley Gale’s Customer Value Network meeting,
London, October 2000, information from the Compustat and PIMS databases
10
Customer Value - A Choice Model that integrates
price and performance relative to competition
Dr. Gale’s works documents:
Customers buy on perceived value
Value = Benefits relative to Cost
Benefits include all non-cost attributes (Key Decision Factors)
Benefits, Costs, and Value are perceived relative to competition
Product Offering
Customer Service
Relationship
Brand/Image
Buy Price
Other costs
Benefits
Total Costs
Customer
Value
Source: Adapted from Managing Customer Value
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Customer Value Mapping provides the framework
for building a Value Proposition
Customer Value
- Meeting critical needs of targeted customers
- Outperforming competitors
- Creating new, unique benefits
Competitive focus
on targeted markets
21st century
growth company
1. What factors are the most important drivers of
customers’ perceptions of overall value and their
purchase decisions?
2. How do customers perceive the overall value of your
products and services relative to key competitors?
3. Which competitors are the most vulnerable and which
are strongest in their ability to gain and retain
customers?
4. What are the areas for improvement that will have the
most impact on your ability to win and retain more
business?
5. What factors should be emphasized in marketing
communications?
6. What are the important customer messages that will
help you sell?
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A Value Proposition must answer this question for your customers
How will I be better off if I buy from you
rather than from your competitors?
Targeted customers and distinct market segments
Benefits to deliver You must be better than competitors
Proofs you will deliver
Tradeoffs Not part of offering or parity with
competition is sufficient
Relative price position
Offers superior total value to customers in targeted segment
End use benefits are explicit and specific enough for: Clear communication to customers
Guiding decisions and actions internally
The company is managed deliberately in terms of the activities and resources needed to deliver the Value Proposition
Characteristics of a
Winning Value Proposition
Elements that Must be Explicitly
Defined in a Value Proposition
13
Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
14
GALE’s process to develop and deploy a Value
Proposition
DATA REVIEW
WORKSHOP
Compare
Customer And
Internal
Perceptions
DEPLOYMENT
Integrate Into
Business Plans
And Measures
KICKOFF
WORKSHOP
Document
Business
Objective and
Internal Market
Analysis, Design
Research
CUSTOMER
RESEARCH
Test Internal
Analysis with
Customers
VALUE
PROPOSITION
WORKSHOP
Build Value
Proposition That
Wins Customers
GALE consulting has developed this straightforward process with associated tools for CVM implementation. The process and tools give structure and field-tested rigor to our clients, ensuring a successful program. The major benefit of using our field proven techniques can
be found by examining the output -- more effective CVM projects that reduce your cost and time (compared to developing an effective CV implementation process).
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Deliverables
Facilitated action-learning session on CVA concepts
Internal Customer Value Analysis of your market(s)
Key Decision Factor Model and draft CVA survey instrument
Action plan for CVA project implementation
Firm proposal from GALE consulting to support your implementation of the CVA project
Work Description
Day One – GALE facilitates an internal company workshop where your staff learns the CVA concepts and tools
through action learning. Attendees apply the tools by creating a Customer Value Analysis of their own market(s) and
customers. This aligns internal thinking about customers and produces an organized way to understand your
marketplace.
Day Two – GALE works with those staff members that will be directly responsible for implementing the CVA projects.
An explicit business objective is agreed to; a “Key Decision Factor (KDF)” CVA Model is refined from the work done
on day one; additional drill-down research topics are identified, the research methodology is agreed upon, and a
concrete action plan is developed. The action plan identifies WHO, WHAT, and WHEN for all actions needed to
complete the CVA project defined.
Step 1:
Kickoff Workshop
Benefits:
Speedy introduction to Customer Value Management
Self-discovery, where staff has major gaps in knowledge, and
internal alignment gaps on its approach to the market
Aids internal communication
Business objective for measuring project results
Involvement of key stakeholders in “action learning” increases
readiness to support action on future recommendations
Clear action plan assures timely and effective project results
Transfers knowledge of CVM tools and Process to your staff
Establish acceptance of CVM as a process for continuous
improvement of the business NOT a one time event
KICKOFF WORKSHOP
Document Business
Objective and
Internal Market Analysis,
Design Research
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Deliverables
Actionable CVA market analysis that organizes your customer data to answer key questions around value-based strategy development, competitive positioning, marketing and selling:
What factors are the most important drivers of customers’ perceptions of overall value and their purchase / supplier
selection decisions?
How do customers perceive the overall value of your products and services relative to key competitors?
Which competitors are the most vulnerable and which are strongest in their ability to gain and retain customers?
What are the areas for improvement that will have the most impact on your ability to win and retain more business?
What factors should be emphasized in marketing communications?
What are the important customer messages that will help you sell?
Work Description
Customer research is used to validate and refine the internal Key Decision Factor (KDF) model used by customers
when selecting between suppliers in the target market. Gale consulting will work with staff members directly
responsible for implementing the CVA project to develop a survey instrument based on the outputs from the Kickoff
Workshop. This ensures we incorporate industry knowledge into the research process. GALE will assist your team in
selecting the appropriate research technique. For markets with a limited number of targeted customers GALE
consultants may conduct in-depth interviews to gather CVA data. In some B2B cases we recommend our hybrid
quantitative/quantitative technique where numerical data provides basis for comparison while in-depth probing
provides a framework and context for action. In applications requiring larger sample sizes, GALE will work with a
market research firm to ensure valid data is collected for an effective Customer Value Analysis.
Step 2:
Market Research With Customers
CUSTOMER
RESEARCH
Test Internal
Analysis with
Customers
Please contact GALE consulting, Inc. for sample deliverable exhibits.
17
Deliverables
Shared management understanding of customer information and ownership of strategic options for improvement
Consensus on key drivers of customers’ supplier selection decisions
Consensus on your current level of performance; gaps to close, strengths to leverage
Consensus on KDFs to include in your Value Proposition
Narrowed list of improvement options likely to win customers
Plan for evaluating feasibility of improvement options
Work Description
GALE facilitates a one or two day meeting with key stakeholders. In the meeting stakeholders develop a clear
understanding of the customer data, the degree of alignment between customer and internal perceptions, and the
options for improving your competitive position. The workshop is an exercise in focus and consensus building to
narrow the list of improvement options to those most likely to win and retain customers.
Step 3:
Data Review Workshop
Benefits:
Narrow the list of Strategy and Improvement
options to those key factors most likely to win
customers
Reach consensus on your most important
improvement options, and plans to close gaps and
leverage strengths
Promote likelihood of action through involvement
of key stakeholders to assure their ownership of
decisions
Transfers knowledge of CVA tools and process to
your staff
DATA REVIEW
WORKSHOP
Compare
Customer And
Internal
Perceptions
18
Step 4
Value Proposition Workshop
Deliverables
Strategy decisions
Clearly stated Value Proposition
Distinctive marketing messages
Action plan to communicate and implement the Value Proposition
Work Description
GALE conducts a two day workshop in which internal stakeholders define your “Value Proposition” that explicitly states
1. The Benefits you will deliver better than competitors
2. The Tradeoffs your company is willing to make
3. The pricing position your company will offer targeted customers vis-a-vis the competition.
Key marketing messages and “proofs” of a superior customer experience are also developed along with internal
communications and action plans for implementation.
Benefits:
Promotes consistent and effective strategy
execution and resource allocation
Establishes explicit priorities based on value to
deliver AND trade-offs to make
Promote likelihood of action through involvement of
key stakeholders and process owners to assure
their ownership of decisions
Transfers knowledge of CVA tools and process to
your staff
VALUE
PROPOSITION
WORKSHOP
Build Value
Proposition That
Wins Customers
19
Step 5
Deployment
DEPLOYMENT
Integrate Into
Business Plans
And Measures
Integrate
Business Plans
&
Measures
Build
Commitment
To
Value
Proposition
Process &
Organization
Gap
Analysis
Changes
To Deliver
Value
Proposition
Internal
Tracking
&
Measurement
Tracking
Market
Impact
Plan/Do/Check/Act
Plan/Do/Check/Act
Internal
Management/
Staff
External
Distribution/
Suppliers This is the point where most value initiatives fail.
GALE optionally offers services to support Value Proposition deployment and track you Customer Value Index and Customer Feedback through time. Tracking data can be displayed on your intranet
site in a custom dashboard that can be updated in real-time as feedback is collected.
20
Contact Information
GALE consulting, Inc.
24803 Meadow Oaks Dr.
Katy, TX 77494
281-392-4930
Steve Raschilla
Phone: (001) 281.392.4930
e-mail: [email protected]