August 2023
ICAA Advisory
the home of
Business | Leadership |Governance
Customer Value Proposition (CVP) Design, Account Planning
and Reporting

ICAA Advisory
ICAA Advisory
FOUNDED IN 2017
Business | Leadership | Governance
Committed to helping our clients build effective business systems, with
sound governance structures, and sustainable leadership acumen.

ICAA Advisory
ICAA Consulting
ICAA Advisory. Has prepared this presentation solely and exclusively for the benefit, information and use
by the participants of the workshop and for the sole and exclusive purposes of communicating material
related to the workshop. These slides cannot be used by the participants of the workshop for any
purposes other than as expressly stated herein; neither can these slides be disclosed to, referred to, or
used by, any other third party. ICAA Advisory accepts no liability or responsibility whatsoever, resulting
directly or indirectly from the disclosure of the presentation contents to any third party and/or the reliance
of any third party on the contents of the presentation, either in whole or in part, and the participants of
the workshop agrees to indemnify ICAA Advisory in this respect.

ICAA Advisory
We are glad to have you in our Customer Value
Proposition Design, Account Planning & Reporting Training
ICAA Advisory

ICAA Advisory
Welcome and Introduction
Name
Role and
Experience
Hobbies
Expectations from
this Training
Let’s get to know each
other a little better!

ICAA Advisory
Ground rules
Participate
Phones on Silent
Keep time
Share experiences
Views
Questions
Any other?

ICAA Advisory
Time keeping
Treasurer – to receive non compliance related fines
Time keeper – to flag off key activities
Set a consequence for non compliance
To help us keep time we need:

ICAA Advisory
15 minutes
PRE TEST

ICAA Advisory
Outline
1. Introduction and overview of a Customer Value Proposition in banking
2. Market segmentation: understanding the customers and their segments
3. Understanding the characteristics of various customer segments and their
unique service/product needs and their price sensitivities
4. Understanding the channel preference for each customer segment
5. The relationship management model as an anchor to customer value
proposition for high value customers
6. Pricing sensitive portfolios – the affluent and high net worth customers
(CVP) Design, Account Planning & Reporting

ICAA Advisory
Outline
7. Aligning benefits of individual portfolio to the specific segment needs
e.g. products, services &channels
8. The place of building partnerships and loyalty programs and in the
overall CVP
9. Implementing a customer value proposition: various challenges and
possible solutions
10. Review of CVP and implementing the learnings
11. Impact of technology or digital banking on CVP
12. Share practical experiences
(CVP) Design, Account Planning & Reporting

ICAA Advisory
Introduction & Overview of CVP in Banking
ICAA Advisory

ICAA Advisory
ICAA Advisory
What is Customer Value Proposition?

ICAA Advisory
Defining Customer Value Proposition Elements
A CVP is a statement defining your promise to your (target) customers, stating:
i. The benefits (value) they will receive by
buying your product/service
ii. It highlights the value that the customer
will receive from the product/service
iii. It articulates the benefits that the
product will offer the customer

ICAA Advisory
Defining Customer Value Proposition Elements
iv. The CVP design is informed by and is aligned
to the Bank’s overall corporate/ business
strategy
v. Starts by defining the target customer segment
vi. The problem/pain point that it will solve for
the customer

ICAA Advisory
ICAA Advisory
Why is Customer Value Proposition
important?

ICAA Advisory
To customers, the CVP is the promise of the value to be received.
It States:
Importance of CVP
• What value you will deliver to the customer
• Method of delivery (elements of value)
• Value messaging is part of the marketing mix –
showing why the customer should choose CBE

ICAA Advisory
To customers, the CVP is the promise of the value to be received
Importance of CVP
• CVP helps define the product roadmap
and guide the product design (in terms
of features, functionality, value-add
services, customer experience)

ICAA Advisory
Example of a CVP in Banking – Absa Premier Banking
Premier Banking is a CVP for HNWI - the highest segment in retail banking
Criteria:
• Monthly income of USD 10K and above
• Or assets of USD 1M
• Or Deposits of USD 200,000 and above
Who are these customers?
Where are they found?

ICAA Advisory
They Are Mainly:
i. Senior executives of large local
companies
ii. Senior managers in multinationals
and international NGOs
iii. Owners of successful SMEs

ICAA Advisory
They Are Mainly:
iv. Directors/owners of corporates in
your bank books
v. Senior government officials in both
central and regional governments
vi. Wealthy property owners

ICAA Advisory
The Proposition Offers:
i. Personalized service
ii. Dedicated premises - Premier Centre's
located in convenient locations with
parking space
iii. Meeting rooms equipped to support
online meetings.
iv. Competitive FX and deposit rates

ICAA Advisory
v. Platinum credit cards (with high limits)
vi. Unsecured loans of up to USD 100,000
with competitive interest rates
vii. Access to business lounges through a
partnership with Kenya Airways and
KLM partners globally

ICAA Advisory
viii. Discounted services in hospitals and
partnering hotels
ix. Dedicated Relationship managers
For all these benefits, the customer is charged a fee of USD 30 per month

ICAA Advisory
Customer Segmentation

ICAA Advisory
What is Customer Segmentation?

ICAA Advisory
Customer segmentation is the
approach of dividing a large
and diverse customer base into
smaller homogeneous groups
with similar characteristics

ICAA Advisory
Most banks segment customers using factors such as:
• Occupation
• Value of loans
• Value of deposits – Lcy and Fcy
• Number of products
• Number of employees
• Number of locations etc

ICAA Advisory
Why do we Segment Customers?

ICAA Advisory
i. Understand the characteristics of various customer
segments and their unique service/product needs
ii. Identify the various portfolios and their dynamics
iii. Better focus our marketing efforts
iv. Develop appropriate pricing strategies
v. Develop targeted customer centric products
Reasons/Benefits of Customer Segmentation?

ICAA Advisory
vi. Understand the channel preference
for each segment
vii. Improve customer experience in
each chosen segments
viii. Build loyal relationships and drive
retention
ix. Mitigate strategic risk
Reasons/Benefits of Customer Segmentation?

ICAA Advisory
Customers may be segmented into:
1. Micro segment
2. Retail & Consumer Banking unit
• Mass market
• Prestige – income USD 500 plus
• Affluent or high net worth individuals
• Islamic Banking – IFB
• Credit cards

ICAA Advisory
3. Small and Medium Enterprises – SMEs
• Small businesses
• Medium sized
• Large SME

ICAA Advisory
4. Corporate Banking
• Large Multinationals,
• Large Domestic Companies,
• Institutional Banking - NGOs and
Religious institutions
• Public Sector

ICAA Advisory
Discussion:
• How is customer segmentation in CBE?
• What factors were considered when
segmenting the customers?
Let us now look at each segment in detail.
Group
Discussion

ICAA Advisory
Micro Segment
These are the smallest business customers in
terms of value and scale.
• Annual turnovers of up to USD 5,000 per year.
• Keen on loans but lack collateral and proper
financial records.
• Characterized by low value transactions.

ICAA Advisory
Micro Segment
Micro banking is a high volume low value business
Their needs:
• Savings products
• Small unsecured loans
• Money transfer services

ICAA Advisory
Their most popular channel is Agency
banking due to lower charges and footprint.
This segment is served through:
• Mobile money banking
• Agency banking
• ATMs

ICAA Advisory
What channels do they prefer to
use in CBE?

ICAA Advisory
CVP for Micro Segment
• Group savings accounts (Chama accounts)
operated through mobile money banking
• Differentiated by capability to allow
authorization by more than one signatory
• Loans to groups differentiated by maximum
value of loan

ICAA Advisory
• Financial literacy training through business development officers
• Micro loans to individuals – mainly through mobile money banking
• Pay and graduate method to increase individual and group limits

ICAA Advisory
• Agency banking footprint – ‘the
bank next door’
• Almost 100% mobile money and
agency uptime
AGENT

ICAA Advisory
Retail/ Mass Market Segment:
• The bulk of retail is individual
(personal) customers
• Mainly in employment
• Main products are salary accounts
and savings accounts
• They are keen on loan products

ICAA Advisory
Preferred Channels:
ATMS.
Mobile Banking
Agency Banking
Internet Banking

ICAA Advisory
Discussion:
• How do you serve your retail
mass market customers?
• What is their most popular
product/service?
Group
Discussion

ICAA Advisory
Customer Value Proposition For Standard/ Mass Market Segment
• Transaction accounts – for salaries
• Savings accounts
• School fees savings accounts with
competitive interest rates and bonus
if withdrawals are 3 or less per year
• Digital loans of up to USD 1,000

ICAA Advisory
Customer Value Proposition For Standard/ Mass Market Segment
• Digital salary advance loans
• Personal loan products with fast
turn around time
• High channels uptime

ICAA Advisory
Retail Banking: Medium – Prestige
• These are retail customers with a
minimum monthly income of USD 500
• Are employee in lower to middle
management
• Use more than one product
• Can take higher value products

ICAA Advisory
• Are more knowledgeable and relatively
more demanding
• Can be a source of value in the Retail
banking segment
Channels
Branch, ATMs Mobile money, Internet banking

ICAA Advisory
CVP for the segment
• These customers are more sensitive than
mass market segment
• More demanding.
Initially, the biggest value to the
segment was ‘no queues’

ICAA Advisory
Other Benefits
• Transaction accounts – for salaries
• Savings accounts
• School fees savings accounts with
competitive interest rates and bonus if
withdrawals are 3 or less per year
• Digital loans of up to USD 1,000

ICAA Advisory
Other Benefits
• Mortgages/ home loans with long
tenors
• Personal loan products with fast turn
around time
• High channels uptime
• Dedicated RMs in some banks

ICAA Advisory
Other Benefits
• Bundled products with better pricing e.g.
a salary account + a credit card + loan
is offered as a bundle with lower fees/
interest than taking individual products.
• Loyalty programs through partnership
with various service providers.

ICAA Advisory
Retail Banking: AffluentHigh Net Worth Individuals
These are:
Wealthy individual who may be:
i. Senior executives large companies
ii. Senior managers in multinationals &
international NGOs
iii. Owners of successful SMEs/corporates
iv. Senior government officials

ICAA Advisory
Retail Banking: AffluentHigh Net Worth Individuals
v. Wealthy property owners
vi. They are very knowledgeable and demanding
vii. Use high value products e.g. wealth
management solutions
viii. Normally require relationship management

ICAA Advisory
Discussion
• What is the relationship between this
segment and wholesale banking?
• How do you serve these customers in CBE?
Group
Discussion

ICAA Advisory
Channels of choice for HNWI
• Branch – dedicated service centers served
by highly skilled, highly engaged staff.
• Internet banking
• ATMs
• Mobile money

ICAA Advisory
SME Segment
This segment is made up of business customers
ranging from start ups to big businesses with
high turnovers.
The SME segment may be further segmented
into: small, medium and large enterprises

ICAA Advisory
Small Enterprises - Lower End
Comprising of Small Businesses:
Their businesses tend to be informal
• Have similar dynamics to mass market
customers
• Lack collateral and financial records
• They are more keen on credit facilities
than savings products

ICAA Advisory
Channels
Small enterprises’ owners may not be very
literate. Their channels of choice are:
• Agency banking
• Mobile money banking – Mbirr
• Some graduating from micro may
still be in groups
AGENT

ICAA Advisory
CVP For Small Enterprises
• Savings products operated mainly digitally
• Small, unsecured, short term loans
• Borrow, pay and grow – loans
• Channels uptime

ICAA Advisory
Medium SMEs
Are Bigger & More Formalized
• These are more organized and
structured businesses
• May have operations in more
than one town
• Use more than 2 products
• Keep good records

ICAA Advisory
Medium SMEs
Are Bigger & More Formalized
• Have higher value deposits/
loans and may have more than
one credit facility
• Tend to be fast growing
depending on sector/ industry

ICAA Advisory
Medium SMEs
Channels of choice
• Branch
• Mobile money (merchants)
• POS/PDQs
• Internet banking

ICAA Advisory
Discussion:
• What are their service needs?
• How do you serve this segment?
• What is their choice channel in CBE?
Group
Discussion

ICAA Advisory
Medium SMEs
CVP for Medium SMEs
• Fast turn around time on loans –
Decision (Yes/No) within 24hrs
• Risk based pricing on loans
• Net-working events
• Training on financial, taxation and
labor related matters

ICAA Advisory
Medium SMEs
CVP for Medium SMEs
• Asset/vehicle finance at zero
contribution/deposit
• Unsecured trade finance solutions – bid
bonds, invoice discounting, LPO financing
• Dedicated Relationship managers – to
build relationship

ICAA Advisory
Large SMEs
• These are well structured businesses. They are more sophisticated
therefore, demanding.
• They tend to have similar characteristics with corporate customers.

ICAA Advisory
Large SMEs
Their characteristics include:
i. May be in multiple locations
ii. Use multiple products including:
• LCs, Guarantees both local &
international - forex
• Trade solutions
• Investment solutions

ICAA Advisory
Large SMEs
iii. High Value Deposits
iv. Deposits – High Value
v. Multiple Credit Facilities – line
of credit
vi. Employee Solutions – accounts
& loans for their staff

ICAA Advisory
Large SMEs
vii. Are more quality conscious –
value for money
viii. Tend to be multi – banked
ix. Tend to be more complex in
their service needs

ICAA Advisory
How do you meet their
service needs?

ICAA Advisory
CVP For Large SMEs
Banks Offer These Customers:
i. Faster turn around time on loans
ii. Risk based, differentiated pricing
iii. Unsecured trade solutions – bid
bonds, LPO financing etc
iv. Asset/Vehicle finance solutions

ICAA Advisory
CVP For Large SMEs
Banks Offer These Customers:
v. Competitive interest rates on
deposits and forex
vi. Partially secured loans
vii. Dedicated relationship managers
viii. Networking events

ICAA Advisory
CVP For Large SMEs
i. Discounted prices for air tickets, hospital
charges, hotels through Partnerships.
ii. Market making international trips
through the bank’s business clubs.
iii. Long relationship awards – for customers
who have been with the bank for long.

ICAA Advisory
A dedicated RM is a big value driver for the segment
CVP For Large SMEs
iv. Featuring in the bank’s magazines.
v. Succession management, taxation,
marketing and other trainings.

ICAA Advisory
Example of Segmentation in ABSA Bank Kenya Retail Banking
RB
Premier
Banking
Premier
Centres
BMs
RMs
Prestige
Banking
Prestige
Centres
BMs
RMs
Standard
Customer
s
Regional
Managers
Area
Managers
Branch
Managers
Cashiers /
CS
Islamic
Banking
Centres /
Branches
RMs
Credit
Cards
Visa
RMs
MasterCa
rd
RMs
Work
Place
Banking
RMs /
BMs
Support
Functions
Thru
Regional
Mgrs
Business
Banking
Large
Branches
RMs
Medium
Branches
RMs

ICAA Advisory
Corporate Banking
All business clients with T/O’s of over USD
10m, are considered to be corporate clients.
The criteria is decided by individual banks.
• For smaller banks, the qualifying criteria is
much lower.

ICAA Advisory
Discussion:
• What are their characteristics?
• What are their service needs?
• What products do they utilize most?
• What is their channel of choice?
Group
Discussion

ICAA Advisory
Corporate Customers are demanding in terms of:
• Skill and knowledge of the employee serving them.
• Operational excellence – mistakes can be expensive.
• Turn around time – Delay can result to losses.

ICAA Advisory
Corporate Customers are demanding in terms of:
• Pricing/bank charges.
• Interest rates.
• Foreign exchange rates.
• Channel down time.

ICAA Advisory
Corporate Clients Business Customers
When satisfied, they are a major source of income for the bank
Due to their average deal size, they help a bank drive:
Productivity
Income
Deposits both
local & Fcy

ICAA Advisory
Corporate Clients Business Customers
When satisfied, they are a major source of income for the bank
Due to their average deal size, they help a bank drive:
Loans Profitability Reputation

ICAA Advisory
Corporate Clients
• They however take time before trusting
the bank with a large wallet share.
• To drive value from these customers,
relationship management is a must.

ICAA Advisory
Discussion:
What is the risk of putting a customer in the
wrong segment?
Group
Discussion

ICAA Advisory
If a customer is in the wrong segment:
The value proposition will not make sense hence:
i. Low customer satisfaction
ii. Customer complaints
iii. Apathy
iv. Attrition
v. Customer will turn into a terrorist for the brand

ICAA Advisory
CVP For Corporate Banking
i. Creative products – e.g. interest
bearing demand/current accounts
ii. Cash Management solutions
iii. Served at dedicated service centres
iv. System integration
Corporate Banking Segment
Creative Products

ICAA Advisory
v. Large loans/deposits at very
competitive pricing.
vi. Specialised RMs – one RM for the
corporate depending on size.

ICAA Advisory
The key differentiation between banks
is the ability to offer tailor - made
solutions for individual corporates.

ICAA Advisory
Example of Segmentation in ABSA Bank Kenya CB or WB.
CB
Multinational
Corporates
Oil & Gas
RMs
Manufacturing
Relationshi
p Managers
Large
Domestic
Institutional
Banking
International
NGOs
RMs
Churches
Public
Sector
National
Govt
RMs
Counties
Business
Banking
RMs
Financial
Services
RMs

ICAA Advisory
Tewabech Holdings, a customer in Jimma main branch, has written the following letter to the Director,
customer experience:
We opened an account for a new business line and applied for a cheque book 4 months ago. After about 4
weeks I was asked to re-apply as the previous request had been misplaced. The branch promised to the
book would be ready in a week or so. Since then, I have been to the branch, queued for hours only to be
told at the window that the chq book is still not ready. When I call the branch, the call goes unanswered, or
when they pick, they promise to call back then of course they don’t. The queues in the branch and from here
to the moon and I am just fed up. Please help!
i. What could be the cause of this situation?
ii. As the CX Director what immediate action will you take?
iii. How will you deal with this issue strategically to streamline the service?
Case Study

ICAA Advisory
Relationship Management Model as an
anchor to CVP for High Value Customers
ICAA Advisory

ICAA Advisory
ICAA Advisory
What do you understand by
Relationship Management?
Relationship Management Model & CVP

ICAA Advisory
What do you understand by Relationship Management?
Relationship Management is Strategy Used By Banks To:
• Provide a single point of service for the
chosen customer.
• Offer products/solutions designed to
help customers attain their financial goals
while increasing revenue for the bank.

ICAA Advisory
What do you understand by Relationship Management?
Relationship Management is Strategy Used By Banks To:
• Deepen customer loyalty
• Drive customer retention

ICAA Advisory
The Role of The RM Role is Therefore:
More than sales and service.
The RM must ensure that prospective clients are:
Therefore retained to generate returns for the bank
Identified Acquired Satisfied

ICAA Advisory
An Effective RM Must Also:
• Manage a significant number of stakeholders
• Address all service issues in the portfolio
• Is the link between the customer and the bank.
To the customer, the RM is the bank.
• Be the customers’ advocate
• Is the negotiator

ICAA Advisory
• Participate in customer activities and retention
programs to build customer loyalty
• Provide customers with regular updates on new
products and channels
• Build an information database on existing
customers to support up-selling and cross-selling
• Be the brand ambassador for the bank.

ICAA Advisory
Remember:
Customers do not leave the
bank, they leave the RM.

ICAA Advisory
• Plays a key role in retention and wallet share growth
• Drives customer loyalty and market share
• Must comprehensively understand customer’s
financial needs and creatively find ways to address
them
• Match products and service to match the bank’s
customer needs

ICAA Advisory
RMs serve as the single point for
the customer for all his needs.
This makes the customer feel
valued, known and comfortable

ICAA Advisory
RM Model as an anchor to high value customers’ CVP
Discussion
What qualities would you
look for in an RM to serve
your HNI and Corporate
banking segments?
Group
Discussion

ICAA Advisory
Personal Qualities
1. A fast, flexible and independent thinker
2. The ability to think on their feet
3. Commercial and business minded
4. A competitive will to be the best

ICAA Advisory
Personal Qualities
5. A confident and positive presence
6. Has a deep-rooted belief in themselves
7. Shows courage to challenge the sub-standard
8. A burning drive to make a difference

ICAA Advisory
Personal Qualities
9. Natural ability to make others feel better about themselves
10.Sensitive towards the competencies and capabilities of others
11.Always curious to explore and understand more
12.Understands diversity

ICAA Advisory
Personal Qualities
13.Sees the world from others’ viewpoints & respects differing
perspectives
14.Principled in how success is achieved
15.Connects with others

ICAA Advisory
Personal Qualities
And above all…
Have the humility to recognize and address
their own short-comings; Be in charge, with
an air of inner calm and strong sense of
purpose and demonstrates the resilience to
bounce back from set-backs

ICAA Advisory
A Great Relationship Manager
i. Understands their customers business.
ii. Knows the market well.
iii. Knows the customers strategy and where they can add value.
iv. Knows the value proposition to offer each customer from their
products and services.

ICAA Advisory
A Great Relationship Manager
v. Understands their authority, the
organization and internal processes
vi. Knows where to refer any customer issue
within the organization
vii. Creates a trusting sales environment
viii.Inspire confidence and trust

ICAA Advisory
Excellent interpersonal, communication and listening skills
• Research and analyse information
• Attention to detail
• Present complex information clearly
and simply
• Good sales and negotiation skills
• Show drive and initiative
Skills Needed For RM Role

ICAA Advisory
Pricing Sensitive Portfolios
The Affluent & High Net Worth Customers
ICAA Advisory

ICAA Advisory
ICAA Advisory
Who are your most price
sensitive customers?

ICAA Advisory
The Most Sensitive Customers When It Comes To Pricing May Be:
• High net worth individuals
• Some of high value SMEs
• Corporate customers
Pricing Sensitive Customers

ICAA Advisory
What do they object to?
Sensitivity may be:
• Product or service based eg: loan interest rate
• Based on perceived value derived from the
product
• Complexity of service or product – LCs, Bank
guarantees

ICAA Advisory
What do they object to?
Sensitivity may be:
• Where customer feel they are getting more than they
deserve – unsecured/partially secured facilities
• Based on the convenience aspect on a service – less
sensitive for higher convenience. Banking with a more
expensive bank based in the same building with customer

ICAA Advisory
What To Consider
To develop unique pricing solutions you may consider:
• What are the customer’s real needs?
• What does the customer values most?
• What prices are they most sensitive to?
• What products are they least sensitive to?

ICAA Advisory
Price - Sensitive customers are mainly concerned with the cost
• May often prioritize price over other factors in a ‘buy’ decision
Some strategies for effectively dealing with price sensitive customers include:
• Emphasizing value
• Offering promotions
• Effective communication.
• Segmenting price-sensitive customers
• Building long-term customer relationships
• Focusing on understanding their motivations
Let us consider
each of these

ICAA Advisory
It Could Be:
• Perceived value for money
• Issues with service quality
• Need for recognition
Focusing on Understanding Their Motivations
• Why the price sensitivity?
• What is their motivation?

ICAA Advisory
Emphasizing Value
Price sensitivity may be addressed by emphasizing value.
How would you go about this?
• Talk about all the benefits of the disputed product
• Channels that support its distribution/availability
• Emphasize the free services available with the product
Help the customer to appreciate the value for money

ICAA Advisory
Offering Promotions
This works best where it is a charge for accessing services
e.g. Premier/Priority customer centers.

ICAA Advisory
Discuss
The bank has introduced a dedicated
premises for Premier customers. To access
service at these Centers, the customer pays
1000 Birr per month. Your customer
complains that the fee is too much given that
he only comes to the bank 2 times per month.
How do you resolve this?
Group
Discussion

ICAA Advisory
Effective Communication
What do you communicate?
• The value you offer through the service
• The convenience
• The benefits
• The cost
If at this point the customer is unhappy, communicate
in the context of complaint management.

ICAA Advisory
Segmenting Price - Sensitive Customers
How would this help?
• Customer segmentation is part of a
customer value proposition
• May offer high value customers a
dedicated contact person/RM
• Makes customers feel recognized

ICAA Advisory
Segmenting Price - Sensitive Customers
How would this help?
• The feel valued
• The model allows the building of long -
Term customer relationships

ICAA Advisory
Moneyless Pricing
You may consider removing the price tag
and replacing it with value of deposits.
To do so:
• Consider the annual fee foregone
• The spread in your interest income

ICAA Advisory
Moneyless Pricing
• How much extra deposits would
generate same or higher income?
• You may then offer the product/
service free subject to a minimum
deposit value per month.

ICAA Advisory
High Level
Segmentation
(Corp or Retail
Unique Products / Services
Price
Sensitivity
Channel Preference
Corporate
Clients
Cash Management, Payment
Systems, FX, Large Loans,
Service, negotiated pricing.
Very Sensitive
with
bargaining
power.
Service Centres, B2B
system integration,
Specialised RMs.
Institutional
Banking
Cash Management,
Payments, High Depo
Interest Rates, Service.
High
Sensitivity
Specialised RMs,
Service Centres, Online
payments
SME
Quick TAT on Loans,
Payments, Asset Finance /
Leasing
Low Price
sensitivity
Large ones trend
Corporate clients, RMs,
Branches, Online.
Price Sensitivity Per Segment

ICAA Advisory
High Level
Segmentation
(Corp or Retail
Unique Products / Services
Price
Sensitivity
Channel Preference
Premier
High Deposit Interest Rates,
Payment, FX, Investments,
credit cards, Personalised
Service, Recognition.
Medium to
High Price
Sensitivity.
Premier Centres,
Specialised RMs,
Online.
Prestige
Service, efficiency, payments,
credit facilities, credit cards.
Low Price
Sensitivity
Prestige Centres,
Online, Branch RMs
Standard
Efficiency in payments,
standard credit and account
products, online (convenience).
Low Price
Sensitivity.
ATMs, Online,
Branches
Price Sensitivity Per Segment

ICAA Advisory
Discussion
Dereje cafe is a growing SME customer based in a busy area around bole in the same
building with arebesa branch where they bank. They have complained to you about
the newly introduced bank charges on account operation (ledger fees). They are also
unhappy with the branch manager who they say is not sensitive to their needs.
“Yesterday we got to the branch a few minutes after closing time and he completely
refused to let us in. He also refused to pick our calls” they say with bitterness. You also
learn that they have approached the branch for a loan and a bid bond both totaling
50M Birr.
• Identify the root causes of this complaint
• How would you address the pricing issue?

ICAA Advisory
CVP Financials
ICAA Advisory

ICAA Advisory
ICAA Advisory
How do you Conduct a cost/
benefit analysis to increase
portfolio profitability?
CVP Financials

ICAA Advisory
A Strong Value Proposition Improves Profitability
Conducting A Cost/ Benefit Analysis
• "Value" is defined as the worth derived by the
customer from owning and using a service/product.
• customer's perception of the product's quality, and the
expenses incurred by the customer from buying and
using the product.
• The more differentiated your brand is, the stronger its
pricing power and profit margin, relative to its peers.

ICAA Advisory
At ABSA premier Banking the profitability of the portfolio was calculated
monthly based on:
Total revenues comprising of:
• Interest income
• Fees and commissions
• Forex income
Less:
Direct and indirect costs:
• Interest cost
• Staff salaries
• Office rent
• Utility bills
• NPLs
Example: Premier Banking

ICAA Advisory
The segment took long to break even due to:
• Teething problems with performance
• High set up cost
• Expensive deposits due to benefits offered in
the CVP
• Lower priced loans – lower margins
• Expensive delivery model – dedicated
premises

ICAA Advisory
The low profitability forced a review of the proposition to increase
income and manage cost.
Changes made included:
• Up - skilled RMs to make them more effective
• Product improvements
• Reviewed loan pricing
• Aggressive recruitment & relationship deepening
This turned the segment round.

ICAA Advisory
In Corporate Banking:
The cost benefit analysis is conducted both at portfolio and account level
At segment level we consider:
• Total income generated by the segment
• Total cost incurred
• Profit/Surplus
Conducting A Cost/ Benefit Analysis

ICAA Advisory
Interest income 140,000,000.00
Negotiation fees 22,000,000.00
Fees and commissions 15,000,000.00
Foreign exchange income 90,000,000.00
Other income 2,000,000.00
Total income 269,000,000.00
Expenses
Interest paid on deposits 50,000,000.00
Salaries and wages 125,000,000.00
Utility bills 4,000,000.00
Rent and rates 10,000,000.00
Marketing 10,000,000.00
Provision for NPLs 55,000,000.00
Total expenses 254,000,000.00
Profit/loss 15,000,000.00
Discussion
From these financials:
• What improvements would you propose
on the CVP to make the segment more
profitable?
What would you focus on to:
• Increase income
• Manage cost
CVP Financials - Corporate Banking

ICAA Advisory
From the financials: the highest income is:
• Interest from lending plus facility fees
• Forex income
To increase this income: Enhance CVP to:
• Grow asset book
• Drive up forex income
• Reduce cost of funds
• Manage NPLs

ICAA Advisory
Improvements Proposed on the CVP may be:
• Build capacity around RMs
• Introduce pre – approved loan facilities
• Free accounts for employees of corporates
• Introduce an interest earning current account
• Risk based pricing on loans – lowest price for highest quality
• A sub-segment for liability rich/only corporates with enhanced benefits

ICAA Advisory
Discussion
As the corporate banking director,
after receiving these proposals on CVP,
What Action Would You Take?
Group
Discussion

ICAA Advisory
At Segment level:
Embed the CVP in KPIs e.g.
i. Introduce measurements for organic growth to drive retention/loyalty.
ii. Work with product team to revamp the product portfolio.
iii. KPI to drive Current and savings account growth.
iv. Work with credit team on pre-approvals.
v. KPI on number of products per customer.
vi. Forex income per RM.
vii. Income per RM.

ICAA Advisory
Measuring The Impact/Appeal of CVP
ICAA Advisory

ICAA Advisory
ICAA Advisory
How do measure the
impact/appeal of CVP?

ICAA Advisory
The ABSA Bank Premier - CVP Appeal Measurement
The head of Premier banking carried out customer focus
group sessions to establish:
• The most important products to the customers
• Their channels of choice
• Customer pain points in the journey
This was coupled with:
• Customer interviews
• Customer surveys to existing and potential customers

ICAA Advisory
The results were then analyzed and the findings were:
• Customers wanted better pricing for their loans and deposits
• They were keen on investment products e.g. government securities.
• At service centres, they wanted the best/most pleasant cashiers to
serve them
• They preferred to be served by knowledgeable RMs located in
specialized centres
• The customers travelled extensively and required loyalty programs
that gave them unlimited access to VIP lounges in all major airports

ICAA Advisory
The findings were then used to:
• Review and revamp the CVP
• Introduce investment and wealth management
solutions by coupling RMs with counterparts in wealth
management unit
• Established partnerships to provide discounts and
access to VIP lounges for Premier travelers

ICAA Advisory
CVP in Business Markets

ICAA Advisory
Example of CVP – For Business Customers/SMEs

ICAA Advisory
Elements of Value for Business Customers

ICAA Advisory
Example of a CVP – Prospa CVP

ICAA Advisory
To Measure CVP Appeal We Can Also:
• Conduct regular customer survey to track customer satisfaction
• Other indicators are market share
• Customers complaints (are we seeing growing, decline
complaints relating to the product?)
• The acid test of CVP appeal is actual growth as intended by
the proposition
• NPS (net promoter score)
Methods of Measuring CVP Appeal

ICAA Advisory
• Crafting a compelling CVP is essential for customer
retention and recruitment strategies
• The CVP is a not static concept, it needs to be regularly
reviewed/enhanced (for each product/service) as customer
needs are continuously changing with rising expectations
• Monitor on a granular basis the strengths/weaknesses of
your CVP relative to competitors to maintain your CVP
appeal in market.
Conclusion

ICAA Advisory
Leveraging CVP to drive
Loyalty & Customer Retention
ICAA Advisory

ICAA Advisory
ICAA Advisory
How do leverage
CVP to drive loyalty
& customer retention?
Leveraging CVP For Customer Loyalty & Retention

ICAA Advisory
Customer value proposition (CVP) summarizes
the benefits and value that you offer to your
target market
To Drive up Customer Loyalty & Retention:
1. Define and set your SMART CVP goals.
2. Choose your CVP metrics: to help you track and
evaluate.

ICAA Advisory
1. Define & Set Your SMART CVP Goals Which May Be:
• To increase customer satisfaction
• Grow customer retention
• Growth in new customer recruitment & referrals
• Lifetime value
• Reduce customer churn
• Reduce complaints
• Manage price sensitivity

ICAA Advisory
2. Choose your CVP metrics: to help you track and evaluate.
• Net Promoter Score (NPS)
• Customer Satisfaction Score (CSAT)
• Customer Effort Score (CES)

ICAA Advisory
2. Choose your CVP metrics:
For Customer Retention Metrics:
• Retention rate
• Churn rate
• Participation loyalty programs
• Monitor performance against the set measurements
• Use of customer experience dashboards
• Performance incentives

ICAA Advisory
Four Key Drivers of Customer Loyalty.
• Great customer experience
• Supportive processes
• Deep understanding of the customer
journey
• Long - term strategy
• Employee engagement, knowledge &
experience

ICAA Advisory
ICAA Advisory
What is
Customer Loyalty?
Customer Loyalty

ICAA Advisory
• People who had a bad experience with a brand, but the
brand fixed it, are more loyal than customers who never
had a problem in the first place.
• Customer loyalty is an ongoing positive relationship
between a customer and a business. It’s what drives repeat
purchases and prompts existing customers to choose your
company over a competitor offering similar benefits.
Customer Loyalty

ICAA Advisory
• Customer may be loyal to a brand because they
associate it with a positive experience, such as great
customer service, feeling connected to brand values
and ideals, or consistently high product quality.
Customer Loyalty

ICAA Advisory
ICAA Advisory
What is Share of
Wallet (SOW)?
Share of Wallet (SOW)

ICAA Advisory
• Share of wallet (SOW) is the percentage of
the customer’s income/sales that comes
through our bank
• Wallet share concept takes into account that
customers are mainly multi-banked
• Most HNWI have more than 3 bank accounts

ICAA Advisory
Loyal Customers Will:
• Understand your product/brand
• Believe your proposition to be good value
for money
• Identify with the bank at a personal level
• Make the account at CBE their main account
growing your share of wallet

ICAA Advisory
i. The effort of retaining a customer is substantially less than the effort of
acquiring a new one.
ii. Repeat customer have a 60% - 70% chance of buying a new product
iii. New customers are much harder to convince as they can not trust your
business yet
iv. This means that you need a comprehensive marketing strategy to
convert them to buy your products
v. Existing customers are know the bank and a lot easier to convince to
take another product
Importance of Customer Loyalty

ICAA Advisory
i. That means the more existing customers you have, the less you’ll have to
spend on customer recruitment
ii. Customer loyalty means your customers will keep coming back for more
iii. They also spend more and they refer the bank to friends and family
iv. Loyal customers are the bank’s brand champions
v. Net Promoters and heroes of word-of-mouth marketing
vi. They share positive opinions about the bank on social media
Loyalty Customers become Branch Champions

ICAA Advisory
Customer Loyalty is measured:
i. Net Promoter Score (NPS) that asks: "how likely
are you to recommend us to family and friends?
ii. Customer Engagement through social media
iii. Number of products per customer
How to Measure Customer Loyalty

ICAA Advisory
i. Provide great Customer Experience - 86% of customers will
pay more for a better customer experience.
ii. A true understanding of the customer journey – along various
channels at all touch points
iii. Working on customer pain points
iv. Personalised service – through an RM for high value customers
How to grow Customer Loyalty

ICAA Advisory
v. The RM model has a big impact on customer retention
vi. Customer loyalty programs
vii. Promotions for sustained upsell and cross-sell. The more
the products enjoyed by a customer, the harder it
becomes to leave the bank
viii. Long-term strategy to attract and retain customers.
How to grow Customer Loyalty

ICAA Advisory
Benefits of Customer Loyalty

ICAA Advisory
Factors to Consider in Developing a CVP
ICAA Advisory

ICAA Advisory
ICAA Advisory
What factors does
one consider when
developing a CVP?
Factors to Consider when Developing a CVP

ICAA Advisory
To Develop a Value Proposition:
• Identify your customer's main problem.
• Identify all the benefits your product offers.
• Describe what makes these benefits valuable.
• Connect this value to your buyer's problem.
• Differentiate yourself as the preferred
provider of this value.
• Use a template to help you brainstorm.

ICAA Advisory
A Value Proposition Should:
• Clearly explain how the product/service
meets customer needs
• Communicate the specifics of its added
benefit and the reason why it's better than
similar products on the market.
• The ideal value proposition appeals to a
customer's strongest decision - making drivers

ICAA Advisory
• Relevance: Explain how your product solves customers'
problems or improves their situation
• Quantified Value: Deliver specific benefits.
• Differentiation: Tell the prospective customer why they
should buy from you and not from the competition.

ICAA Advisory
Remember, before coming up with a CVP for the
segment the bank carried out interviews, surveys
and focus groups comprising of:
• Existing high net worth individuals. They were
all in the standard segment
• Prospective HNWI
Factors to Consider – Absa Premier Banking Example

ICAA Advisory
The Bank Discovered That
• Many HNIs felt underserved by the bank
• Those banking elsewhere felt the same about the
banking industry
• They were lamped together with standard customers
• Subjected to long queues in branches
• They wanted to feel valued, recognized and treated
differently

ICAA Advisory
The HNI customers had many pain points including:
• Products – they felt the loan limit for the segment was too low
• Credit card limit too low to meet their need when out of the country
• Service too slow with long waiting times
• Service delivery – staff not knowledgeable
• Their position in the society was not recognized
• Channels – particularly branch was too congested
• Benefits to the customer were too few

ICAA Advisory
From these findings the bank developed a new segment with clear
CVP and named it premier banking. Its features and benefits were:
• Dedicated specialised RMs
• Unique well designed Premier centres
• Competitive interest rates on deposits and loans
• Meeting rooms where HNWI can hold meetings with their clients
• Investment and wealth management solutions
• Quarterly special events arranged for customers- Talks on the economy,
wine tasting and networking.

ICAA Advisory
Differentiation
The main differentiator with the
highest impact was dedicated
service Centres for the segment
The CVP resonated well with the market
• Fast segment growth of over 30% yoy.
• Growth in number of centres from ensuing demand

ICAA Advisory
Yesterday as you had lunch at the Sheraton hotel, you bumped into Shumet. He is the owner of
Shummy Limited who are the leading distributors of steel products in the country. He banks with CBE at
the Caramara branch. From the conversation, he loves CBE but does not like going to the bank
because of the long queues and then no one recognizes him. “sometimes I find some of my employees
on the queue and wonder how you expect me to spend time standing on the same queue”. He wishes
the bank had something different for people like him who have worked hard over the years and have
made it.
• What are the customer’s needs?
• What are his pain points?
• What CVP would you design for him & others like him?
Discussion

ICAA Advisory
Discussion
Group
Discussion

ICAA Advisory
The Role of Various Stakeholders in CVP
Development & Implementation
ICAA Advisory

ICAA Advisory
Role Stakeholders in CVP Dev & Implementation
Discussion
When developing a CVP for Shumet:
Who would you consider to be your key
stakeholders in CVP process?
Group
Discussion

ICAA Advisory
The Stakeholders May Be:
• Your customers – like Shumet
• Employees especially in Sales & Customer Service
• Products team
• Credit team
• Channels team
• Source Segment where the customers are
currently served
Any other?

ICAA Advisory
Engage the stakeholders using various methods such as:
i. Surveys
ii. Interviews
iii. Focus groups
iv. Workshops
v. Your own observation.

ICAA Advisory
Employees especially sales and Customer
Service staff will give input into:
• Pain points
• Customer complaints
• Competitor products
• Customer needs.

ICAA Advisory
The Customers Surveyed will share their:
• Specific needs
• Their wants
• Pain points in their customer journey

ICAA Advisory
Validate & prioritize your assumptions based on
the feedback and insights you collected.
Test Your Hypotheses About:
• What value your product or service provides
• How they solve your customers' & stakeholders'
problems,
• How the solutions differ from other alternatives.

ICAA Advisory
Use the feedback and insights to co - create your value
proposition with your customers and stakeholders
Tools like:
• Brainstorming
• Refining
• Validating may be useful

ICAA Advisory
Ensure that your value proposition is clear, concise, and compelling
and addresses the following questions:
• Who are your customers?
• What value do you offer?
• How do you deliver the value?
• How do you differentiate yourself?

ICAA Advisory
During and after implementation obtain
feedback from the same stakeholders –
customers, front line and contact centre
employees etc on how well CVP meets the
meets customer expectations

ICAA Advisory
i. Communicate & your value proposition to your customers and stakeholders
ii. Using various channels & formats such as websites, social media,
presentations, or pitches
iii. By involving your customers & stakeholders in co-creating the CVP, you
create a stronger & more meaningful connection with them
iv. The solution meets their needs and expectations
v. You gain valuable insights, feedback & validation that can help you
improve the proposition and grow your business.

ICAA Advisory
Implementing CVP - BMs, RMs & CVP Officers
ICAA Advisory

ICAA Advisory
Task Description Owner Main Stakeholders Role
Identifying Customers
Main Problems
CVP Officer Customers, Sales Staff
Customer Experience staff,
Branch Managers & RMs
Interview customers, Walk the customer
journey, Process review to identify pain
points
Identify all the
benefits your product
offers.
Product,
CVP Officer,
Marketing
Sales, Customer Experience
Branch Managers & RMs
Marketing
Giving feedback, Comparing with
industry competitors, Crafting a
powerful communication to customers
Describe what makes
these benefits
valuable.
CVP Products,
Marketing
Customers
RMs, BMs, Sales, CX
Link customer pain point to price points.
Connect this value to
your buyer's problem.
CVP Products,
Marketing
Customers
RMs, BMs, Sales, CX
Matching CVP to the customer pain
points in the customer journey.
Differentiate yourself
as the preferred
provider of this value.
CVP Products,
Marketing
Customers
RMs, BMs, Sales, CX
Identifying unique value and
communicating the same to the
customers.
Role of BMs, RMs & CVP Officers in CVP Implementation

ICAA Advisory
ICAA Advisory
What is a brand?
The role of Brand in CVP

ICAA Advisory
Branding is what comes to mind when a person or a company is mentioned.
• Branding helps distinguish the bank, its products,
and services from your competitors
• Creates a connection between the bank and
customers in a visual, emotional, and cultural way.
• Customers tend to turn to companies that they have
branded as good in an area

ICAA Advisory
• When choosing between two similar products at
similar prices, consumers select the brand they
recognize.
• A familiar brand name can shorten a consumer’s
decision time
• Customers are often willing to pay more for a
brand they know

ICAA Advisory
• A familiar brand name increases the consumer’s
level of satisfaction and helps create loyalty.
• A CVP from a trusted brand like CBE finds
faster acceptance by the market

ICAA Advisory
i. TRUST: The brand helps prospective customers trust
easily and try the proposition
ii. PERCEPTION. Brand perception, which is how the
bank is perceived, helps sell the proposition. Positive
perception of the brand increases value & prospective
customer’ eagerness to try the proposition
An effective branding strategy adds value to the CVP in several ways:

ICAA Advisory
i. Value - An outstanding brand lifts the profile of the bank’s CVP higher
than that of competitors.
ii. Awareness - When a consumer is in need of a product or service, they
will typically contact the company with which they are most familiar.
iii. Credibility - powerful branding positions the bank as an industry
leader in the increasing the consumer’s confidence and comfort level.
iv. A Strong Brand is an effective way to increase the value a CVP and
set the bank apart from the competition.
Importance of a Strong Brand

ICAA Advisory
Case Study: KCB in Kenya
KCB had gone through a rough patch posting a huge loss of over 40M USD.
• Customers were losing faith and leaving for other banks.
• New senior managers were hired to drive growth and re-build
customer confidence.
• To try and reverse the trend, a new CEO was appointed to drive
the recovery of the Bank.
• He rebranded the bank to the colors below.

ICAA Advisory
The Bank Reviewed:
• Products
• Channels
• Branches were reviewed and re done to
match the new brand.

ICAA Advisory
Within One Year:
• The bank returned to profitability &
growth.
• Is now the leading bank in Kenya and
is has expanded into the region.

ICAA Advisory
The Place of Building Partnerships
& Loyalty Programs in CVP
ICAA Advisory

ICAA Advisory
ICAA Advisory
loyalty programs?
Benefits of Partnerships in Loyalty Programs

ICAA Advisory
• Loyalty program partnerships are mutually beneficial
arrangements where two or more businesses offer rewards or
incentives to each other's customers or members.
• The bank selects credible partners whose customer service strategy
matches that of the bank.
• The choice of a partner is very important.

ICAA Advisory
Example:
CBE could partner with Ethiopian Airlines or a luxury car dealer/ or a residential estate
developer, to offer frequent flyer miles or discounts to CBE’s HNWI customers.
Such partnerships can help CBE achieve multiple goals such as:
• Increasing customer loyalty and retention by offering additional value & variety
• Reducing marketing and operational costs by sharing resources and data with your
partners
• Expanding reach and exposure to new audiences and markets
• Enhancing brand image and reputation

ICAA Advisory
To Design a Successful Loyalty Program Partnership:
• Identify your objectives - consider what you are
trying to achieve with the partnership
• Target market
• Research and select potential partners
• Negotiate and agree on terms and conditions
• Launch and promote the program
• Embed it in KPIs
Designing a Loyalty Program Partnership

ICAA Advisory
Example of Partnerships to Enhance CVPs
Banks in Kenya have business clubs for High value business customers
• The business club is meant for Large SMEs to medium corporate customers.
• This CVP offers: discounted loan interest rates, competitive rates for
deposits, service in business club centers, networking events, international
trips for market making at discounted prices and access to various
discounts for products and services through partnerships

ICAA Advisory
Some of The Partnerships Include:
• New Toyota vehicles at discounted prices
through partnership with Toyota Kenya.
• Discounted prices at various hotels.
• Discounted consultation fees at leading
private hospitals.

ICAA Advisory
There are 5 Types of Loyalty Program Partnerships as Follows:
Types of Loyalty Program Partnerships
Cause - Related
Partnerships
Co - Branded
Partnerships
Gamified
Partnerships
Data - Driven
Partnerships
Cross - Industry Partnerships

ICAA Advisory
Let us look at each of them
Types of Loyalty Program Partnerships
Cross - Industry Partnerships
Is partnering with a brand from a different industry
that complements your own. e.g. CBE & ET to offer
points or miles for both banking customers and flights.

ICAA Advisory
Cause - Related Partnerships:
Partnering with a cause or a charity that aligns with your brand
values and mission e.g. CBE partnering with Athletics Ethiopia to
promote Marathons in Addis Ababa.
• This shows your social responsibility making your customers
feel good about supporting a cause they care about
Loyalty Program Partnerships

ICAA Advisory
Co - Branded Partnerships:
Partnering with a brand from the same or a similar industry
that offers a complementary product or service. e.g. CBE
can partner with a fintech to offer loans on mobile money.
• This way, you leverage each other's strengths, create a
unique value proposition, and enhance the customer
satisfaction and retention

ICAA Advisory
Gamified Partnerships:
Partnering with a brand that offers a fun and engaging way
to earn or redeem points or rewards.
• For example, CBE can partner with a gaming app to offer
points or prizes for winning games or completing challenges
• This way, you create excitement and brand visibility,
increase customer engagement and differentiate yourself
from the competition

ICAA Advisory
Data - Driven Partnerships:
Partnering with a brand that offers insights or
recommendations based on data or analytics.
• For example, a bank could partner with a financial
app to offer personalized advice or tips for managing
money or savings goals.
• This provides value - added services and optimize
brand marketing and sales strategies.

ICAA Advisory
Case Study
The bank plans to attract students & entry level employees in
the market place with a view to partly address its strategic
risk. The initial idea is to develop a product for this sub
segment followed by a well designed CVP. You have been
charged with coming up with a loyalty program.
• What partnerships would you propose?
• Which potential partners would you consider?
• How would you propose to launch the partnerships?
CASE
STUDY

ICAA Advisory
Implementing a Customer Value Proposition:
Various Challenges & Possible Solutions
ICAA Advisory

ICAA Advisory
ICAA Advisory
loyalty programs?
Challenges To Implementing a CVP

ICAA Advisory
Discussion:
You have been asked to lead in the
implementation of a new CVP for
corporate banking customers
• What challenges would you expect?
• How would address those challenges?
Group
Discussion

ICAA Advisory
Lack of Customer Insights
Failure to engage existing and prospective
customers
• This means that your solution based on
your own assumptions, opinions,
preferences, or guesses, rather than on
real customer insights.

ICAA Advisory
Lack of Customer Insights
This can lead to creating solutions that:
• Do not match the actual problems,
needs, or desires of the customers.
• Are not differentiated from your
competitors.

ICAA Advisory
To Avoid This Pitfall: Engage The Customers/Prospective Customers
• Identify who your customers are.
• Conduct customer research and validation,
using methods such as interviews, surveys,
observations or experiments.
• Understand their needs, wants &
aspirations.

ICAA Advisory
Lack of Clarity & Focus
Creating a value proposition that is too vague,
complex, or generic that:
• Does not communicate clearly and concisely
the value it creates for your customers.
This can confuse stakeholders and make it hard
to test and improve the proposition

ICAA Advisory
Lack of Clarity & Focus
To Overcome This Challenge:
• Clearly define your customer segments
• Develop a value proposition for each segment
• Develop a compelling value proposition
statement that summarizes the main benefits
and reasons why customers should choose you

ICAA Advisory
Lack of Alignment & Integration
• Creating a value proposition that is not aligned or integrated
with your business model, your brand identity, or your
marketing strategy.
• This can result in a mismatch between what you promise and
what you deliver, or between what you say and what you do.
• This can damage your reputation & your credibility.
Challenges & Solutions To Implementing a CVP

ICAA Advisory
To Avoid This Challenge:
• Ensure that your value proposition is consistent and
compatible with the other elements of your business.
• Align your value proposition with your customer
segments your channels, your revenue streams, your
cost structure, and your key resources and activities.
• You also need to integrate your value proposition with
your brand personality, your tone of voice, your visual
identity, and your marketing messages and tactics.

ICAA Advisory
Lack of Innovation & Differentiation
What do you understand by this?
• Creating a value proposition that is not innovative or
differentiated enough
• Copied from competition or the market without value addition
• Does not offer a unique or superior value to your customers
• This may make you vulnerable to competition, commoditization
or substitution

ICAA Advisory
To Overcome This Pitfall:
• Adopt a creative and customer-centric mindset
• Explore new ways of creating and delivering value to your customers.
• You need to identify the gaps, the opportunities, and the trends in your
market.
• Use techniques such as brainstorming, ideation or benchmarking to
generate and evaluate new ideas.
• You also need to test and validate your ideas with your customers and
use feedback and data to refine and improve your value proposition.

ICAA Advisory
Lack of Iteration & Adaptation
Creating a value proposition that is too rigid or
static and does not evolve or adapt to changing
customer needs, preferences or behaviors.
• This can make you lose relevance, attractiveness,
or satisfaction for your customers, and miss out
on new opportunities or threats.

ICAA Advisory
Lack of Iteration & Adaptation
To avoid this challenge:
• Adopt a lean and agile approach and treat your value proposition
as a hypothesis that needs to be constantly tested and updated.
• Monitor and measure your value proposition performance.
• Collect and analyze customer feedback,
• Use the insights and learnings from your tests and feedback to
iterate and adapt your value proposition accordingly

ICAA Advisory
Review of CVP & Implementing The Learnings
ICAA Advisory

ICAA Advisory
To measure effectiveness, we use the goals and objectives set under
the rationale for the CVP and compare that with the outcome.
We then track the performance using:
• Dashboards
• Financials
• Customer Feedback
Reviewing of CVP & Implementing Learnings.

ICAA Advisory
Review performance against key performance indicators (KPIs)
Track KPIs starting with customer experience:
E.g.
CVP - Post implementation Review
NPS: 35% against a target of 50%
CSAT: 65% against a target of 90%
CES: 55% against a target of 80%
KYC: 70% against a Target of 90%
Remember, all these efforts are aimed at driving growth and market share

ICAA Advisory
We then review financial performance against key performance
indicators (KPIs)
As overleaf…

ICAA Advisory
Income '000' Target
Actual
results
%
Achieved
Interest income 100,000.00 20,000.00 20%
Negotiation fees 22,000.00 400.00 2%
Fees and commissions 15,000.00 3,000.00 20%
Total income 137,000.00 23,400.00 17%
Expenses
Number of savings
accounts
150,000.00 50,000.00 33%
% of customers with
more than 2 products
30% 20% 20%
No of Current account 100,000 5,000.00 5%
No of customer referrals 200,000.00 25,000.00 12.5%
Discussion
From these financials:
• What could have caused this
low performance?
• How would you resolve these
issues and get the CVP on a
growth path?

ICAA Advisory
The issues may have been:
• CVP not well marketed/communicated to customers
• No effective internal communication
• Insufficient customer engagement
• Benefits not resonating with customer needs
• CVP not anchored by KPIs
• KPIs not communicated employees in the business unit
• No follow –up/monitoring of the KPIs
• KPIs were too optimistic
Anything else?

ICAA Advisory
Impact of Technology or Digital Banking on CVP
ICAA Advisory

ICAA Advisory
Digital transformation is driven by the use of channels to deliver
products and services to customers at their convenience
Digital channels can be a big boost to CVP in:
• Meeting the customer need for convenience and unlimited access
• Helping meet the need for access to instant loans
• Improve internal productivity
• Boost overall cost efficiency
• Challenge the norm
The Impact of Technology on CVP

ICAA Advisory
ICAA Advisory
Questions and Comments?

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

More from etebarkhmichale

More from etebarkhmichale (20)

Recently uploaded

Recently uploaded (20)