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July 2002 Volume 2.11
The Benefits of CVA (Part Five
Continued)
Deciding What to do
by Rodger Gallagher
Selecting the customer value drivers
to work on
In the previous article we started looking at the areas to consider
when determining which Customer Value drivers to work on. In the
following list we covered points 1 to 5. This article looks at the
main points.
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1. Drivers with a high customer impact
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2. Large scope for performance improvement
( Performance under 7.0/10)
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3. Competitive ratio at parity or below
( Relative under 102)
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4. High position on waterfall process
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5. High customer frequency
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6. Low implementation cost
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7. Relatively quick to implement
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8. Competitor vulnerabilities
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9. Your Targeted Value Map position
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6. Low implementation cost
It seems fairly obvious doesn't it? If a customer value driver needs
attention and an action can be taken that doesn't cost much, then
its better to implement a low cost option than a higher cost one.
Often low cost options aren't the exciting ones so teams sometimes
start scoping large-scale costly projects. So it pays to remind
them that low cost options are winners.
7. Relatively quick to implement
If we can implement a change quickly, the customers will begin to
notice it sooner and the business benefits of increased customer
loyalty market share will come faster. In many companies I've noted
that usually any actions to improve value drivers, which require
changes to communication and information systems, take a long time
to implement. There always seems to be a backlog of these small
changes to systems. So it pays to steer away from changes involving
systems if you are wanting rapid gains in business performance.
I remember one customer workshop where it emerged that customers
were having problems contacting the sales reps. While the optimum
fix was a secretarial service used in conjunction with mobile phones
and text messaging, the quick fix was to start using the existing
voice mail system correctly and diligently. Before the workshop
was over, the sales reps. had taken the actions needed to do this.
In another case a phone company identified that customers wanted
their phone calls to be connected quickly. Instead of making slow
to implement changes to the network, they included an item in their
customer newsletter telling people to check the Dialling Mode switch
on their phones and to make sure it was set on Tone, rather than
Pulse. This simple action ensured that the call connection time
was significantly less. Within a month all customers had received
their newsletters, and the next customer value survey showed a gain
for the Call Connection value driver.
When improvement actions are both quick to implement and low cost,
we call these drivers, "the low hanging fruit".
8. Competitor vulnerabilities
If you can make a change and create an advantage which would take
competitors a long time to achieve, then you have taken advantage
of a competitor vulnerability. On the other hand if you make a change
which a competitor can quickly copy, then you have only created
a short-term advantage. e.g. Although Nissan was the first car maker
to add a holder for the petrol cap while a car was being refilled
with petrol, within a short time most cars had this feature.
Many people consider that information systems are able to give them
advantages over their competitors, but a new CRM system can be readily
purchased from a host of vendors keen for any purchaser to buy their
products. So apparent competitor vulnerabilities often don't last
for long. Long-term competitor vulnerabilities occur when your company's
culture allows you to work in ways in which your competitors couldn't
even imagine.
9. Your targeted Value Map position
Here we need to consider where we are aiming for on the Value Map.
If we want to be seen like a pack your own supermarket, then we
would need to focus on a minimal level of service and low product
variety, complemented with low prices and no added benefits. But
if we decide that we want to be like a full service supermarket
then we would need to pay more attention to the drivers of Product
& Service than to the Cost & Price drivers. And of course
given the position of current or emerging competitors on the Value
Map, we need to maintain our current position or move to a position
where we are providing superior value.
Working on what is important
So all of these nine points need to be considered when deciding
on what areas are important for a business, to focus on, when deciding
where to deliver superior value to customers.
Post Offices
 Do
you remember when every city suburb, and every town of any size
had a Post Office? For postal, telephone and banking services, you
had only to go to your nearest shopping centre to find all of this
under one roof. The days of the ubiquitous Post Office in New Zealand
came to an end in 1988, when with one fell swoop, 432 Post Offices
closed on one day.
Postal services were transferred to the local dairy, bookshop or
garage if you were lucky. Otherwise it was a trip by bus or car
to one of the few remaining Post shops, as they became known. Our
local shopping centre in Hamilton at this time, Hillcrest, was one
of the few to retain its Post Office. However, a few years ago this
too closed, and the building was taken over by the local veterinary
practice. Now the vet's nurse, as well as tending to cats, dogs
and other household pets, sells stamps and post bags, as well as
sorting each day's mail into private boxes.
Of course with the closing of 432 Post Offices, most of these buildings
became available for other purposes. Some were sold and moved to
new sites, but many of the buildings have been put to a wide variety
of uses. Driving through a country town, it is an interesting exercise
finding the old Post Office. At the townships of Fox Glacier and
Franz Joseph Glacier, the Post Offices are now tourist offices,
some now house real estate agents and tax offices, but a lot of
them are now restaurants. In fact there is one North Island town
where a new Post Office was built only months before the decision
was made to close it. Now that town has an 'Old' Old Post Office
Restaurant, and a 'New' Old Post Office Restaurant.
On holiday in Northland recently, we passed through the township
of Waipu, on the way to visit friends at Waipu Cove. It was easy
to spot the Post Office, now a restaurant called The Pizza Barn
and Bar. Our friends took us there for dinner, and as expected,
the range of pizzas was magnificent. We ordered a small one as a
starter to share, and ordered other Italian dishes as a main course.
However, the most intriguing part of the evening was a visit to
the ladies' rest room. This has been turned into what I would describe
as a museum of 50s and 60s memorabilia. Remember when no well-dressed
lady would go out without wearing a hat and gloves? And handbags
were a designer item? Well, they are all here on display, along
with clothes, books, underwear and shoes, and other items of every
day life of the period. My friend and I spent some time marveling
at the fashions of the time, a period we both remember well! The
rest of the restaurant has displays of old typewriters, bicycles,
number plates - the list goes on! What a nostalgic evening it turned
out to be, and the Pizza Barn and Bar are definitely on my 'places
to visit' list on our next trip up north. - Virginia
Regards,
Rodger Gallagher
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