Customers and worth. Why it pays to understand what customers really value.
“A Cynic is a person who understands the price of everything and the value of nothing”
Oscar Wilde
Almost all companies understand their costs, yet only 45% actually understand value at a customer level. In fact, over 75% have significant gaps in their understanding of what their customers truly value (Source: CMATTM ). Are you a customer cynic too?
If you don’t understand what customers are worth, how can you know what it’s worth spending on them? Since 20% of your customers probably account for 80% of your customer revenue, a differential approach to customer management can deliver significant returns. In fact, we’ve seen cases where it doubled profitability in just three years…
Look deeper.
Understanding what consumers value is fundamental to developing winning propositions and a distinct experience. Traditional research techniques reveal what’s important to customers within the specific category. But to really understand needs, we need to look deeper. FMCG companies know this well - they regularly spend time in their customers’ homes.
More and more, there’s a widening gap between the individual’s demand for “value-in-my-life” and traditional businesses’ ability to supply that value.
In the past H2X has used the term “customer sacrifice”: it describes
what customers have to do to buy or use products and services. Start
factoring in hassle, wasted time and money and over or under buying, and
you get a different view of what customers actually want.
British Airways Check in from home When British Airways and other airlines recently introduced on-line check-in from home they were addressing a transaction value gap. There was no value to the customer in standing in a line to check in and actually not that much to the company either. Traditional research would have told them to open more check-in desks and improve check-in processing time to reduce queues. But the real solution takes away the inconvenience and time associated with a transaction - at the same time reducing the cost to the brand. |
Want to understand what customers really value? Keen to develop ideas that generate revenue? Fast-track, cost-effective programmes from H2X can help….
• Customer Value – What’s really important? Using H2X’s experience we’ll review your costing and database structure to understand value at a customer level. We’ll then show you how to pull the right levers to improve value across the base.
• Customer Segmentation – Segmentation is one of the most important business decisions. It affects proposition development, channel management and resource allocation, acquisition, customer development and the ways you interact – your customer touch points. We’ll review the various approaches your business uses and recommend practical steps to secure additional value.
• Value Gaps – Do you know them? First, we’ll check if your existing research is correct. Then we’ll immerse you in your customers’ world to truly understand their needs, desires and the gaps that, if solved, would break the category mould. Finally we’ll work with you to review the operational issues that will make the ideas really perform.
For an initial, confidential discussion to find out more, contact David Williams, H2X CEO, on +44 (0)1628 777945 or email davidw@h2x.biz
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