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February 1998 Volume 2.05
Review/Preview...
It is now nearly two years since we founded Customer Value Management.
I have found the time very enjoyable, working with some of the leading
companies in Australia and New Zealand. Interest in applying these
leading edge techniques continues to build. Towards the end of 1997,
the interest intensified. This month Ray Kordupleski will be visiting
companies in Tokyo, Beijing, Taipei, and Hong Kong on behalf of
one of his North American clients. Customer Value Management was
established as a network using the Internet as our home base rather
than as a traditional 'bricks & mortar' consulting company.
The network style of operating has worked well. A researcher at
Auckland University is including a case study on Customer Value
Management in a paper on this Internet approach to managing a business.
One benefit of the network approach, is that new associates can
be added as demand builds. This month Susan Moore joins Customer
Value Management as a new associate based in Auckland, New Zealand
(Ph. +64 9 379 0069, Email sjm@cvm.co.nz). Susan has implemented
Customer Value approaches at ANZ Banking Group, and Fletcher Challenge.
In April I have been asked by the Institute for International Research
to present a paper at the 'Customer Value Management in Telecommunications'
Conference being held in London. In conjunction with the conference
I will be hosting a one-day workshop on the Customer Value Added
approach.
Rodger Gallagher
Real Life Internet
The case studies we have been looking at over the past year are
based on what is happening in the Australian and New Zealand markets,
complemented by information in the emails that people send me from
around the world on what is happening in a number of localities.
In this issue we look at what has happened to some real companies
since the review of our case study companies on the Value Map in
the September 1997 issue of CVM News. That Value Map is reprinted
below. The ( ') positions are the new positions that the our case
study companies had moved to after the last sequence of market changes.
The comment was made that Company Z had nearly fallen off the edge
of the Value Map.
The Waikato Times of October 20th 1997 carried the headline, "Internet
Company Closes Up Shop". The report followed that Midland Internet
Services, the first Internet service provider to operate in Hamilton,
no longer existed. The General Manager of Midland said, "We
were spending too much time dealing with customer problems which
had nothing to do with our system". Midland was one of the
real companies used to build the case study model for Company Z.
While the service provided by Company Z is far worse than that provided
by Midland, the General Manager's comment is a fair indication of
Midland's approach to customer service. Yes, the Value Map is a
useful tool to work out real life market strategies. The worse value
corner really is the going out of business corner.
In the same September 1997 issue of CVM News we indicated how Company
X had moved a little bit towards a worse value position. This meant
that although it would continue to gain customers it would lose
market share. This would be especially true in relation to revenue
market share. In an earlier issue we looked at how X's positioning
meant that it would only be likely to attract and retain low value
customers.
A New Zealand Internet Company positioned in the middle of the
market is Telecom New Zealand's Xtra. Last year Xtra reported that
it had gained 55,000 customers. This represents a massive 183% increase.
A report in the December issue of Listener magazine indicates that
after customers are trained in using the Internet by Xtra and become
high usage customers, they leave and move to Internet Service Providers
offering better value high usage packages. It appears there may
be some truth in this, as a month later Xtra introduced a better
value deal for medium usage customers. Yes, the Value Map is a useful
tool to work out real life market strategies. Companies lose and
gain market share depending on their relative positions, and the
changes in those positions.
Next month: When one player falls off the Value Map, what happens
to the positions of the other companies?
Reva's On The Waterfront
We had arrived in Whangarei on a Sunday night and were looking
for somewhere to have dinner. My brother Kelvin, was out of town
so we couldn't cadge a meal off him. We cruised central Whangarei
looking for possibilities. Apart from all those good restaurants
like KFC, BK, and McD, there didn't seem to be a lot on offer. A
few years ago my brother had told me about a new complex that was
going to be built near the Town Basin. Perhaps it had been built?
Perhaps if it had been built the complex had a restaurant? We saw
some yacht masts in the distance signalling the Town Basin. We navigated
our way towards the Basin. As we got closer we saw that yes, the
complex had been built, and yes, it did have a restaurant called
Reva's.
Starting life in 1976 as a pizza parlour in central Whangarei, Reva's
has evolved into a world class restaurant where visiting yachties
from around the Pacific tie up alongside for Southern California
cooking complemented by the original pizza. My selection of scallops
accompanied by a bottle of a local Northland white wine was delicious.
The ambience and the location next to the Town Basin boat harbour
is world class.
Service at Reva's is inconsistent. The charismatic Reva Meredith
moves from table to table chatting to everybody and adding the personal
touch. On the other hand the waiters seem to do their very best
to provide an efficient but robotic style of service. It seemed
that they had all just graduated from smile school. Definitely a
strange mix! Perhaps it would have been better for Reva to tell
them to be themselves.
Still, the customers left happy. This is one of those places where
you can have a good time and enjoy life.
Regards,
Rodger Gallagher
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