CUSTOMER VALUE CREATION: The TAO ( by Vadim Kotelmikov)

Creating Customer Value

New Definitions of Value

In the new rapidly changing economy, the focus must be on the way in which the nature of value is changing, involving new ways to price goods, information and emotion. The implication of these new forms of exchange is a transfer of power from the producer to the customer. There are multitudes of values present in every buyer-seller exchange: economic, informational and emotional. These exchanges increasingly happen so fast that there is no time to translate them into precise monetary terms. Businesses will need to identify these hidden values and think more accurately about their worth before accepting the price proposed. Companies will need to think in terms of offers, which involve merging products and services to exploit their knowledge to give customers a value-added experience, not just "selling them stuff".

Becoming an Easy-To-Do-Business-With (ETDBW) Firm

ETDBW is not about what you give your customer, it is about how you do it. It's about giving your products and services to the customers in a more convenient way:

1. Present a single face to your customers

2. Work in different ways for different classes of customers

3. Know what your customers will ask for before they do

4. Make your customers' experience a seamless one

5. Let customers do more for themselves

6. Measure the things that customers really care about

Add More Value for Your Customer

1. Think of yourself as a provider of solutions, rather than of products or services.

2. Distinguish between what you are selling and what your customer is buying.

3. Take a broad view of your customer's underlying problems that go beyond you and your products.

4. See what your customers do with what you give them, and help them with it.

5. Price in terms of value rather than cost.

Main source of information: "Agenda", Michael Hammer