Management Levers for Improving Value

Changes to a product's price and overall performance are achieved through targeted strategic programs. The challenge in Customer Value Management is to identify programs that have a high likelihood of improving customer-perceived value at a reasonable cost. Such initiatives will typically involve coordinated moves across business functions. These may include:

Product-improvement programs: Programs to make products more rugged or reliable, add features that customers will truly value, improve design for esthetics and for usability.

Product introductions: Add products that fill gaps in the price performance space served by the business, introduce new design themes and updated features, leapfrog existing products and establish footholds on the value frontier.

Service improvements and process redesign: Improve ability to deliver on time, deliver on demand, provide responsive troubleshooting and service, improve customers’ operations, streamline ordering, billing, and other transactions, provide information to help customers use your product effectively, strengthen customer relationships

Factory and “back-office” programs: Programs to simplify work, improve conformance quality, give front-line people access to information and levers they need to serve the customer.

Advertising and sales initiatives: Programs to correct misperceptions about your product, reinforce your comparative strengths, change the way customers evaluate their purchase decision, build affinity for your brand.

Segmentation and differentiation projects: Identify segments of the market that have unique needs and develop products that are uniquely suited to fill these needs, identify customer segments that are particularly well positioned to get value from your offering and focus on serving that segment well.

Pricing: Projects to reset list prices and set pricing policy, erect barriers between segments of the market with different price sensitivity, set prices consistent with worth to customers, offer coherent pricing across product line, price strategically for growth and profitability.

Cost cutting initiatives: Projects to reduce the seller’s cost of making the product by more than they reduce the proportionate worth of the product to customers.

Businesses enjoy a large menu of alternative courses of action. Most organizations are capable of executing only a limited number of strategically significant initiatives. The Customer Value discipline helps you identify the big-impact projects and align the organization behind their successful implementation.