Customer value measurement for success

  • Thriving companies can articulate, “How does our product or service provides value and/or solves a problem for our customers.”
  • There are generally three steps to measuring the value you bring to the table;
    • Identify all the benefits your product or service can offer.
    • Discuss these benefits with your customer and add any additional value-adding opportunities they identify.
    • Develop ways to measure this value from your customers’ perspective
  • If you look at customer value from the customer's perspective, they likely care about your “say/do” ratio. In other words, do you deliver as promised? Do you over-deliver for their value-add? Beyond this, a customer will then consider price, quality, and other intangibles.
  • Consider this for other stakeholders as well. What does your Board of Directors value, how about regulatory agencies, employees, community members and suppliers? Anyone directly or indirectly impacted by your organization could have value for what you provide.
image36

Questions to ask yourself

  • What makes a good value proposition for your customers?
  • Does your product or service deliver specific results that are tangible and measureable?
  • How often do you meet your “Say/Do” ratio?
  • Which of your existing customers are repeatedly using your product or services, and how often?
  • Can you segment customers by frequency, volume and variety?

Success Stories

image37

Consumer Products company re-aligns their on-time measurements to mirror customers’ changing business environment

Problem: A national consumers products manufacturer was measuring itself on the key customer requirement of “on-time delivery”. This manufacturer was giving itself ‘credit’ for on-time delivery if product shipped any time within the day promised to the customer. The customer, who had built their production processes around delivery at a certain arrival time on a particular day, did not agree with the manufacturer’s on-time rate of performance. As a result, the customer and manufacturer had differing views of performance.

  • Manufacturer implemented a piloted (trial version) change with a few manufacturing facilities supporting this specific customer. In the pilot, the manufacturer changed the measurement system to measure on time to the HOUR instead of the DAY. This meant that shipping personnel had to input shipping information into their system of record as the truck left their dock, not as part of a batch process at the end of the day for all shipments.
  • Shipping and customer service personnel found the new procedure improved accuracy and their ability to communicate with their customer(s).
  • The pilot’s success encouraged the manufacturer to replicate the process for all customers at all locations and expand the measurement process to be consistent across all industries they supported.

Results:

  • The new procedure resulted in a more precise measurement system that agreed with their customers’ requirements and perspectives. The change caused several customers to increase their rating of this manufacturer on their “supplier quality scorecards”.
  • Shipping personnel procedures and accounting compliance improved with the change as shipments were transacted exactly as they occurred. This lean approach reduced errors and provided more accurate and up-to-date information for customer service personnel and customers.