This document discusses moving from a focus on Total Quality Management to Total Customer Value Management. It argues that quality professionals should take on new roles in creating value for customers. Key points include: - Quality processes like quality circles should become more customer-centric to focus on creating value for customers rather than just quality and defect reduction. - Measuring customer value added through metrics like customer value score can help organizations predict future market share gains and reduce customer churn more accurately than financial metrics. - Companies in the top 20% in relative customer value scored significantly higher returns on investment compared to bottom 20% according to PIMS data. - Quality professionals should lead the transition to a customer-focused approach, just

1. From Total Quality Management to
Total Customer Value Management
Gautam Mahajan
Customer Value Foundation
mahajan@customervaluefoundation.com
+91 9810060368
December, 2016

2. Quality Professionals to Consider
Three items
• Quality and Customers
• Value Creation
• The Role of Quality in Customer Value and
Value Creation

3. Leveraging Quality for Customer
Experience
• Going beyond: The role of executives is to
create value for employees and Customers
and thereby for shareholders.
• Creating Customer Value goes far beyond
experience and quality and leads to increased
loyalty and increased market share.
• Measuring Value allows you to create more
value effectively.
• Quality People should become Value Creators

4. Use Quality Thought Processes for
Customers
• Total Quality Management becomes Total
Customer Value Management (Total CVM)
• Quality Circles become Customer Centric
Circles
• Systemic changes and Zero Defects become
Zero Complaints
A new role for Quality People

5. Quality also Stressed the Mind Set
• Quality started this thought with Quality
Circles...
• Unfortunately today everyone remembers the
processes and systems, and thinks of more
automation of the Customer movement

6. People Business
• Two main people to Create Value for
– Customers
– Employees (including Quality People)
And thereby increase shareholder and investor
wealth

7. Customer Value Creation
• Increases Value
• Measure Customer Value Added or Created
• Customer Value goes beyond Customer
Satisfaction
• Customer Influence Value

8. Measuring Customer Value
Customer Value Added
CVA = Perceived worth of your offer
Perceived worth of competitive offer
Adding Customer Value
Creates Competitive Advantage!
To measure Relative Value Added we need to
- Measure market perceptions of value we add
- Measure market perceptions of value added by
competitors
- Define a relationship between the two

9. CVA scores lead Market
Share !
Example from Telecom %age installs
CVA
score
Pts of
Share
Year 1 Year 2 Year 3
Value (-4 Mos.)
Market Share (%)

10. Vodafone’s Managing Director for
Australia, Graham Maher said:
The CVM score was a leading indicator of
Vodafone’s market share. We were able to
predict market share, a quarter out using
CVM data to within 1% accuracy! And it
predicted churn (loss of Customers)
accurately. In fact our Financial Director
said, “the CVM score is more rigid and
correct than any of our financial scores.”

11. ROI Vs. Relative Customer
Value
(PIMS Data over 1000 companies)
Relative Customer Value
0
5
10
15
20
25
30
ROI(%)
Consumer
Industrial Goods
Bottom 20% of
Businesses
Middle 20% of
Businesses
Top 20% of
Businesses

12. Share Of Wallet Vs Relative Customer
Value
%
SHARE
RELATIVE CUSTOMER VALUE
100%
0%
20%
50%
0
20
50
100
90 95 100 130

13. You need
• Customer Strategy,
• Breaking Silos,
• Customer Centric Circles,
– Self Directed/Attitude
– Customers Bill of Rights,
– Continuous Customer Improvement Program
• How can you create Value for People
• And Zero Complaints

14. Make sure
Fundamentals are Right

15. You Quality People to Lead the
Customer Revolution
as you did the
Quality Revolution

16. Move from
COMPANYSTAN
to
CUSTOMERSTAN

19. CVA
.
BCP Telecomunicações
IIT Delhi

20. CVA
CELESTICA
Chambal Fertilisers & Chemicals
Zuari
Coromandel

21. Thank you!!
Gautam Mahajan
Tel : +91 9810060368
E-mail : mahajan@customervaluefoundation.com
Website : www.customervaluefoundation.com