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March 1998 Volume 2.06
London Seminar on
Telecom Management
with Customer Value Added
Rodger Gallagher
Institute for International Research
Forum Hotel, London, United Kingdom
April 30, 1998
The Next Step Up From Customer Satisfaction:
An introductory one-day workshop led by international expert, Rodger
Gallagher (former leader of many customer service & satisfaction
projects at Telecom New Zealand). Early adopter companies are gaining
a competitive advantage through an accelerated ability to retain
customers and attract new ones by using the Customer Value Management
approach.
The Institute for International Research has arranged for Rodger
Gallagher to present this workshop in conjunction with their conference
on Measuring and Maximising Customer Value in Telecoms, April 27-29,
1998.
The seminar is designed for:
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Telecom Executives wanting to put customer satisfaction data
into a context that translates into real financial terms.
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Telecom Customer Service Managers who need to track and improve
their performance relative to their competitors.
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Business Development, Marketing and Product Managers concerned
with increasing profitability though growing customer loyalty
and market share in Telecom markets.
All enquires to: Anna Wisdish
Institute for International Research
Ph. +44 171 915 5017
Fax +44 171 915 5001
e-mail annaw@iirltd.co.uk
The Value Map as a set of scales
Last month we saw how company Z had provided such bad value that
it had gone out of business. It had fallen off the edge of the Value
Map. The question was asked, "What happens to the positions
of the other companies when a competitor falls off the Value Map?"
Well, the Value Map is a zero sum situation. The Fair Value line
acts as the centre point of the scales weighing low value on one
side and high value on the other side. The centre of the Value Map
is defined as market parity. The value provided by companies on
one side of the fair value line must be in balance with the value
provided by customers on the other side of a line just as the weights
on a set of scales or a balance beam must be equal.
Consider a balance beam with two 2 kg weights on
one side and a 4 kg weight on the other side as shown in the following
diagram.
The two 2-kg weights on one side balance the 4-kg
weight on the other side. Now what happens if we remove the 2-kg
weight on the far left?
If we want to maintain the balance the pivot point
must be moved closer to the 4-kg weight.
The market forces depicted on a Value Map work in a similar manner
to the balance beam. When one company goes out of business and leaves
a market, then the centre point of the Value Map and the fair value
line moves, so that the market forces are again in balance. So for
the Internet market we are looking at Company X suddenly finds itself
moved into the low value position as there is now nobody offering
worse value.
The Red Lantern
 During February we had
two visitors from Estonia. Veiko and Andrus are both Marketing Directors
in the mobile phone industry. Veiko works for Ericsson, a mobile
phone manufacturer, while Andrus works for Radiolinja GSM 256, a
mobile network company. Of course they both had their GSM mobile
phones with them, and the phones automatically locked in on the
BellSouth network so they were immediately in touch with the folks
back home. We talked about the types of customer satisfaction research
they used and the service problems encountered in Estonia, where
3 competing mobile networks serve a population of 1.5 million.
But the reason for their visit to New Zealand was not to discuss
mobile phones or marketing, it was to sing. Veiko and Andrus are
members of the Tallin Technical University Academic Male Choir or
TAM for short. Started in 1945 the choir has been a leader in preserving
traditional Estonian music, having received many international accolades.
TAM's performance at the Hamilton Summer Gardens was amazing. A
flawless powerful musical performance demonstrated the Estonian
musical tradition. But standing out in front of the choir was a
red lantern. You know, the type that has a wick, burns kerosene,
and gives off a little light if you are lucky. Was this some ancient
Estonian tradition?
Chatting to Veiko I found that the lamp is given to the last person
to arrive at any meeting of TAM. That person has to carry the lantern
and take it to the next private or public performance of TAM, until
it is handed over to the next late arrival. TAM's Chief Conductor
Juri Rent knows that a choir's performance can only be as good as
the weakest performance of any member. The lantern is a clear symbol
that he knows this and places great importance on it. He wants everybody
to be on time, whether it is being on time for a practice, or keeping
time while they are singing. The lantern plays a spotlight on the
poorest performance. While the average performance is important,
the weakest performance is critical.
Often when I work with managers on establishing the link between
their Customer Value Added (CVAŠ) results and the performance
indicated by internal service metrics, I am shown the average results.
While the average results are important they only have a weak link
to customer needs. A recent example of a company proudly declaring
its average performance was the announcement by Telecom New Zealand's
Xtra Internet company that it had improved average answering times
to its help desk by 76%. To establish a help desk service metric
for answering calls that has a golden thread to customer needs,
Xtra should be tracking the equivalent of TAM's red lantern instead
of an average.
What are the red lanterns for your business?
Regards,
Rodger Gallagher
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