The document discusses the concept of value from the perspective of customers. It defines value as something that satisfies customer needs at a reasonable price while being easy to do business with. To understand value, companies must spend time with customers to observe their problems and priorities. Opportunities can then be identified and scored based on how well solutions fit customer jobs, outcomes and constraints. Quantifying value involves understanding customer importance and satisfaction with current options.

1. What does Value mean to your customers and how can you quantify it?ISSSC Six Sigma User Group MeetingJune 10, 2010© Copyright 2010 by KTS Marketing Solutions, LLC. All rights reserved. June 8, 2010

2. What is VALUE?VALUE: 1) a fair return or equivalent in goods, services, or money for something exchanged. 2) the monetary worth of something: market price. 3) relative worth, utility, or importance <a good value at the price> <the value of base stealing in baseball> <had nothing of value to say>.Merriam-Webster“Value means that someone is willing to pay more for something or is willing to make a change if he can’t get it with the current relationship” The Profit Zone byAdrian Slywotzky“Value is what people perceive it to be, and nothing more”The E-Myth Revisited byMichael E. Gerber

3. What is VALUE?Value is governed by two forcesDesire: Essential to UnwantedDistinction: Unique to GenericValue is delivered in the form of products, services or information to solve customer’s problemsWe must look at value from the customer’s perspective

4. Who is my Customer?External CustomerInternal CustomerIntermediate CustomerUltimate Customer

5. ExerciseBreak into groups and discuss the following questions.What does VALUE mean to your Customers?How can we quantify the VALUE?

6. What is VALUE to my Customers?“It solves my problem at a reasonable price”Solve relevant problems“It’s easy!”Make it easier for them to do business with me

7. How do we get to specifics?Spend time with the customer.Just listening is not enough.We must observe what they are doing and how they are doing it.In mfg, this means spending time with operators – the people doing the actual work.No Longer Enough…

8. “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”-Theodore Levitt

9. Identifying Opportunities

10. Scoring Opportunities, i.e. ProblemsIdentify Jobs, Outcomes & ConstraintsProblems that have been identified from customer inputsScore problems (opportunities) based on Importance & SatisfactionOutcome-Driven Innovation ProcessSource: What Customer’s Want by Tony Ulwick

11. Identifying OpportunitiesSource: What Customer’s Want by Tony Ulwick

12. Scoring Opportunities, i.e. SolutionsProducts & Service OpportunitiesScore based on Fit, Feasibility & AttractivenessFIT is scored based on alignment with the organization & the capabilities and capacityFeasibility is scored based on the ability to identify and manage technical and commercial riskAttractiveness scored based on overall financial expectations of the opportunity

13. Discover VALUE, the process

14. A Map of VALUEFrom “A New Definition of Value and a Revolution in Price Theory”www.endleofon.com

15. Recommended ReadingWhat Customers Want, Using Outcome-Driven Innovation to Create Breakthrough Products and Services Anthony W. UlwickFast Innovation, Achieving superior differentiation, speed to market, and increased profitabilityMichael L. GeorgeSales and Marketing The Six Sigma WayMichael J. WebbDelivering Profitable Value, A revolutionary framework to accelerate growth, generate wealth, and rediscover the heart of businessMichael J. LanningThe E-Myth Revisited, Why Most Small Businesses Don't Work and What to Do About ItMichael E. GerberBlue Ocean Strategy, How to Create Uncontested Market Space and Make the Competition IrrelevantW. Chan Kim & Renée Maubourgne

16. About KTS Marketing Solutions Managing Partner, Tim DeRosett has 20 years experience in marketing, business development, and sales within industrial automation and high-technology companies. With experience in LEAN and Six Sigma methodologies, we bring process improvement to marketing, sales and service. We help high-tech business-to-business companies realize growth and increase share-holder value.

17. Thank YouTim DeRosettManaging PartnerKTS Marketing Solutions, LLC8216 Princeton-Glendale Road, #160West Chester, OH 45069513.407.4908, officetderosett@ktsmarketing.comwww.ktsmarketing.comConnect with us on LinkedInwww.LinkedIn.com/TimDeRosettAlso join the Discover, Develop Deliver Value LinkedIn Group.Robotics Industries Association Memberwww.roboticsonline.com