In my office, I hung a newspaper article prominently on my wall. This 2010 article showcases the top 100 government officials in my area. Surprisingly, the university basketball coach was the top official, at over $2 million. Following suit was a short list of athletic coaches followed by highly noted professors and administrators.
This amazing list furthered stimulated my interest in determining the value of individual skill sets. In some other areas of the country, region, or state, someone would probably determine that these same jobs did not warrant the same financial worth. In fact, individuals within the same organization with the same title and similar professional backgrounds can be found making significant differences in salary. Given these realities, it is easy to see that customer value propositions differ.
Today’s companies must become adapted at determining customer value. However, all customers are not the same. In fact, globalization has created all types of problems for businesses. One of the issues is how to stay ahead of the competition by exploring new markets while keeping the same customer base. This action is not easy.
Many businesses build their profitability on this simple equation. Companies seek to reduce their inputs (outsourcing labor, better technologies) to obtain greater profitability. Yet, the process is often pretty self-serving with little regard to the customer and lesser value on employees.
Therefore, many people might insist that some business simply stumble on what customer value actually is and how it affects their business. For this discussion, value is defined as the net bundle of benefits the customer derives from a product of service.
Mark Johnston and Greg Marshall, authors of Relationship Selling, state that the starting point for learning about relationship selling is to understand the customer. A value lesson is learning that the customer is the center point for creating value.
Paul Peter and James Donnelly, authors of Marketing Management, suggest that the starting point in the buying process is the consumer’s recognition of an unsatisfied need. Therefore, the focus must go back to the customer for any sustainable business success. They must be deliberate with their connections with customers and value.
Being strategic conscious about these business relationships is not simple. Ken Favaro, author of Put Value Creation First, further maintains that putting value creation consistently first requires leadership skills, discipline, and perseverance.
He further challenges organizations to demand higher standards from managers who would jeopardize these business relationships. When organizations place value creation as a high priority, organizations will beat their competition.
Given the complexity of customer value, how do businesses stay connected with customers and their ever changing wants and needs?
© 2013 by Daryl D. Green