GALE consulting Inc. is a competitive marketing strategy consulting firm specializing in helping clients appraise the price and performance of their products and services the way customers see them – competing head-to-head against the competition. This analysis is used to guide your organization in developing and deploying value-based strategies to profitably win and retain business, and creating the alignment required to be a market-driven organization.
Introducing GALE Consulting, Value Propositions, And Implementation For Typical Projects
1. Customer Value Mapping
And
Value Propositions
Introducing GALE Consulting, Value Propositions, And
Implementation For Typical Projects
2012
Copyright GALE consulting, Inc., 2012. All rights reserved.
Confidential Information: This document may not be copied, distributed or shared
outside of your organization without the expressed written permission of GALE
consulting, Inc.
2. Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
2
3. Introducing GALE consulting, Inc.
GALE consulting helps clients develop and deploy value-based strategies based on Dr.
Bradley Gale’s Customer Value Mapping, a fact-based, data driven system for making
decisions to profitably improve competitive position in the marketplace.
Value Based Strategies
Product Value-Based Competitive Improving Value
Management Pricing Positioning Market Share Propositions
Some of our clients:
INNOVENE
3
4. GALE consulting helps clients use customer data
strategically
Stage Four
Stage Three Competitive focus
Stage Two on targeted markets
Customer
Stage One Customer attitudes
Minimum focus Customer
requirements Value
Customer - Meeting critical
Satisfaction Customer needs of targeted
Conformance Loyalty customers
Quality - Providing what
customers want - Retaining our - Outperforming
- Delivering what customers competitors
we promise - Responding to
customer - Getting them to - Creating new,
- Meeting standards complaints recommend us unique benefits
21st century
growth company
Source: Adapted from Managing Customer Value by
Bradley T. Gale, (New York, The Free Press)
4
5. Goal of Customer Value Mapping
Improve business results through consistent strategic processes
A Market-centric organization that improves business results by:
Selecting the right markets and customers.
(market segments that are attractive and profitable to serve)
Offering Value Propositions that customers perceive to be superior to competition.
Aligning their organizations deliver and communicate the superior Value Proposition.
Process People
Superior
Business
Competitive Performance
Deliver & Communicate Value Value Rewards
Advantage That Target Customers Buy Proposition
Structure
5
6. Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
6
7. Customer Value Analysis
Dr. Bradley Gale
Author, Managing Customer Value
“Arguably the most useful marketing study since
the formative works of Peter Drucker, Phillip
Kotler and Michael Porter…may shape business
thinking for years to come"
Publishers Weekly
7
8. Why use Customer Value as a framework for your
Voice of the Customer work?
Satisfaction and loyalty are not enough!
If a competitor offers your satisfied or loyal customer a better value do you think they
will consider switching?
Customer Satisfaction Score Worth What Paid For Score
~90% Satisfied Worth What Paid For Score
AT&T Market AT&T Market Share
Share
March 89 Feb 90 1987 1988 1989
AT&T was reporting 90% satisfaction levels yet still losing Changes in customer value predicted market share
customers…there was no statistical correlation between changes
customer satisfaction and market share
“Value is simply quality, however the customer defines it, offered at the right price.” Bradley Gale
Adapted from Bradley Gale’s Managing Customer Value and a speech given by Raymond E. Kordupleski at the American
Marketing Association’s Customer Satisfaction Congress, 1991. 8
9. Companies with a higher Customer Value Ratio
achieve higher ROI and ROS
35
31 ROI (%)
30
28
25
Profitability
23
(%)
20
18
15
12 11 12 ROS (%)
10 9
7
5 4
0 0.94 0.98 1.02 1.06
Customer Perceived Value Ratio
Source: Keith Roberts, MD PIMS Europe, at Bradley Gale’s Customer Value Network meeting,
London, October 2000, information from the Compustat and PIMS databases
9
10. Customer Value - A Choice Model that integrates
price and performance relative to competition
Product Offering Dr. Gale’s works documents:
Customers buy on perceived value
Value = Benefits relative to Cost
Customer Service Benefits include all non-cost attributes (Key Decision Factors)
Benefits, Costs, and Value are perceived relative to competition
Relationship
Brand/Image
Benefits
Customer
Value
Total Costs
Buy Price
Other costs
10 Source: Adapted from Managing Customer Value
11. Customer Value Mapping provides the framework
for building a Value Proposition
1. What factors are the most important drivers of
customers’ perceptions of overall value and their
Competitive focus
purchase decisions?
on targeted markets
2. How do customers perceive the overall value of your
Customer products and services relative to key competitors?
Value
- Meeting critical
3. Which competitors are the most vulnerable and which
needs of targeted are strongest in their ability to gain and retain
customers
customers?
- Outperforming
competitors
4. What are the areas for improvement that will have the
- Creating new, most impact on your ability to win and retain more
unique benefits
business?
5. What factors should be emphasized in marketing
21st century communications?
growth company
6. What are the important customer messages that will
help you sell?
11
12. A Value Proposition must answer this question for
your customers
How will I be better off if I buy from you
rather than from your competitors?
Elements that Must be Explicitly Characteristics of a
Defined in a Value Proposition Winning Value Proposition
Targeted customers and distinct market Offers superior total value to customers in
segments targeted segment
Benefits to deliver End use benefits are explicit and specific
You must be better than competitors enough for:
Proofs you will deliver Clear communication to customers
Guiding decisions and actions internally
Tradeoffs
Not part of offering or parity with The company is managed deliberately in
competition is sufficient terms of the activities and resources
needed to deliver the Value Proposition
Relative price position
12
13. Topics
Introduction to GALE consulting
Customer Value Analysis Concepts
Implementation Process
13
14. GALE’s process to develop and deploy a Value
Proposition
VALUE
DATA REVIEW PROPOSITION
WORKSHOP WORKSHOP DEPLOYMENT
KICKOFF Compare Build Value Integrate Into
WORKSHOP CUSTOMER
Customer And Proposition That Business Plans
Document RESEARCH
Internal Wins Customers And Measures
Business Test Internal
Perceptions
Objective and Analysis with
Internal Market Customers
Analysis, Design
Research
GALE consulting has developed this straightforward process with associated tools for CVM
implementation. The process and tools give structure and field-tested rigor to our clients,
ensuring a successful program. The major benefit of using our field proven techniques can
be found by examining the output -- more effective CVM projects that reduce your cost
and time (compared to developing an effective CV implementation process).
14
15. KICKOFF WORKSHOP
Document Business
Objective and
Step 1:
Internal Market Analysis,
Design Research Kickoff Workshop
Work Description
Day One – GALE facilitates an internal company workshop where your staff learns the CVA concepts and tools
through action learning. Attendees apply the tools by creating a Customer Value Analysis of their own market(s) and
customers. This aligns internal thinking about customers and produces an organized way to understand your
marketplace.
Day Two – GALE works with those staff members that will be directly responsible for implementing the CVA projects.
An explicit business objective is agreed to; a “Key Decision Factor (KDF)” CVA Model is refined from the work done
on day one; additional drill-down research topics are identified, the research methodology is agreed upon, and a
concrete action plan is developed. The action plan identifies WHO, WHAT, and WHEN for all actions needed to
complete the CVA project defined.
Benefits:
Deliverables Speedy introduction to Customer Value Management
Self-discovery, where staff has major gaps in knowledge, and
Facilitated action-learning session on CVA concepts internal alignment gaps on its approach to the market
Internal Customer Value Analysis of your market(s) Aids internal communication
Key Decision Factor Model and draft CVA survey Business objective for measuring project results
instrument Involvement of key stakeholders in “action learning” increases
Action plan for CVA project implementation readiness to support action on future recommendations
Firm proposal from GALE consulting to support your Clear action plan assures timely and effective project results
implementation of the CVA project Transfers knowledge of CVM tools and Process to your staff
Establish acceptance of CVM as a process for continuous
improvement of the business NOT a one time event
15
16. CUSTOMER
RESEARCH
Test Internal
Step 2:
Analysis with
Customers Market Research With Customers
Work Description
Customer research is used to validate and refine the internal Key Decision Factor (KDF) model used by customers
when selecting between suppliers in the target market. Gale consulting will work with staff members directly
responsible for implementing the CVA project to develop a survey instrument based on the outputs from the Kickoff
Workshop. This ensures we incorporate industry knowledge into the research process. GALE will assist your team in
selecting the appropriate research technique. For markets with a limited number of targeted customers GALE
consultants may conduct in-depth interviews to gather CVA data. In some B2B cases we recommend our hybrid
quantitative/quantitative technique where numerical data provides basis for comparison while in-depth probing
provides a framework and context for action. In applications requiring larger sample sizes, GALE will work with a
market research firm to ensure valid data is collected for an effective Customer Value Analysis.
Deliverables
Actionable CVA market analysis that organizes your customer data to answer key questions around value-
based strategy development, competitive positioning, marketing and selling:
What factors are the most important drivers of customers’ perceptions of overall value and their purchase / supplier
selection decisions?
How do customers perceive the overall value of your products and services relative to key competitors?
Which competitors are the most vulnerable and which are strongest in their ability to gain and retain customers?
What are the areas for improvement that will have the most impact on your ability to win and retain more business?
What factors should be emphasized in marketing communications?
What are the important customer messages that will help you sell?
Please contact GALE consulting, Inc. for sample deliverable exhibits.
16
17. DATA REVIEW
WORKSHOP
Compare
Customer And
Step 3:
Internal
Perceptions Data Review Workshop
Work Description
GALE facilitates a one or two day meeting with key stakeholders. In the meeting stakeholders develop a clear
understanding of the customer data, the degree of alignment between customer and internal perceptions, and the
options for improving your competitive position. The workshop is an exercise in focus and consensus building to
narrow the list of improvement options to those most likely to win and retain customers.
Deliverables
Shared management understanding of customer Benefits:
information and ownership of strategic options for Narrow the list of Strategy and Improvement
improvement options to those key factors most likely to win
Consensus on key drivers of customers’ supplier customers
selection decisions Reach consensus on your most important
Consensus on your current level of performance; gaps improvement options, and plans to close gaps and
to close, strengths to leverage leverage strengths
Consensus on KDFs to include in your Value Promote likelihood of action through involvement
Proposition of key stakeholders to assure their ownership of
decisions
Narrowed list of improvement options likely to win
customers Transfers knowledge of CVA tools and process to
your staff
Plan for evaluating feasibility of improvement options
17
18. VALUE
PROPOSITION
WORKSHOP
Build Value
Step 4
Proposition That
Wins Customers Value Proposition Workshop
Work Description
GALE conducts a two day workshop in which internal stakeholders define your “Value Proposition” that explicitly states
1. The Benefits you will deliver better than competitors
2. The Tradeoffs your company is willing to make
3. The pricing position your company will offer targeted customers vis-a-vis the competition.
Key marketing messages and “proofs” of a superior customer experience are also developed along with internal
communications and action plans for implementation.
Benefits:
Deliverables Promotes consistent and effective strategy
Strategy decisions execution and resource allocation
Clearly stated Value Proposition Establishes explicit priorities based on value to
deliver AND trade-offs to make
Distinctive marketing messages
Promote likelihood of action through involvement of
Action plan to communicate and implement the Value key stakeholders and process owners to assure
Proposition their ownership of decisions
Transfers knowledge of CVA tools and process to
your staff
18
19. DEPLOYMENT
Integrate Into Step 5
Business Plans
And Measures
Deployment
Plan/Do/Check/Act
Integrate Build Process & Changes Internal
Business Plans Commitment Organization Tracking
To Deliver Tracking
To Gap Market
& Value
Value &
Impact
Measures Analysis Proposition Measurement
Proposition
Plan/Do/Check/Act
Internal External
Management/
Staff
Distribution/
Suppliers This is the point where most value initiatives fail.
GALE optionally offers services to support Value Proposition deployment and track you Customer
Value Index and Customer Feedback through time. Tracking data can be displayed on your intranet
site in a custom dashboard that can be updated in real-time as feedback is collected.
19
20. Contact Information
GALE consulting, Inc.
24803 Meadow Oaks Dr.
Katy, TX 77494
281-392-4930
Steve Raschilla
Phone: (001) 281.392.4930
e-mail: sraschilla@galeconsulting.com
20