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Execution-MiH ENCYCLOPEDIA →
Execution Making-it-Happen →
SECTION - 'Value' management →
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CHAPTER -
| Customer Value-Maximization |
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Customer can be a great asset for the organization. A customer can provide value in many ways, which includes immediate value, long-term value and life-time value. Customer can have intrinsic and unquantified value for being the ambassador and referrer of your business. A customer value can also be measured from the perspective of topline & bottom line contribution, along with its predictability.
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Topics
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Rationalizing Customer-product-service-price matrix
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As we start with the subject of customer-value maximization, one has to clearly map on 'how and from where?' the customer value comes. Does it come from the value of purchase? Does it come from type of purchase?, Does it come from longevity of relationship?, How do we create hooks for the customer so that we stay as the only or supplier of choice? How do we encourage existing customers to use more of our product portfolio?, and in the end how do we ensure that all the customer purchases are adding a level of acceptable profitability. The first step in this direction is to create a well-thought out matrix for all customer touch-points, where a customer is expected to spend money or where we can promote our products. Once you have made those touch-points, you will be needing to map the touch-points to the potential of maximize top-line and profitability. With the laundry list of these touch points you can get onto the next step of managing these touch points to achieve your customer-value goals.
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Customer-Centric product-service-Price management
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With a list of all possible customer touch-points, where you have a potential of extracting value from the customer, one can start building plans around 'what, how and when?' to do at each touch-point for maximizing that touch point. Each of these touch points of-course will not be considered in isolation. They will tie-up into a holistic customer-value maximization approach. This will lead to specific initiatives and operational goals.
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Customer-Centric revenue and profitability management
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Once you have started implementing the customer-value maximization approach, you will need to track and manage the revenue and profitability coming from customers across customer-segments, products, channels and touch-points. This level of break-up serves a good purpose to ensure that we keep on fine-tuning our efforts. Without making the cost-allocation too complex, an organization can have a decent track of the P& L for a customer segment, customer cross-sell, customer-servicing touch-point, etc....
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Customer-driven positioning
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You may not have different products for different customers, but surely you can have different positioning of the same product with different customer-segments. It always makes more sense for companies to make more universal and configurable products, so that one can promote and position the similar set of products for varied customers.
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All Chapters in "'Value' management ." Section
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