Acme CorporationTM

Increasing Customer Valuein Products and Services

A facilitator led training

Group Exercise - Definitions

Define each of the following terms, in one sentence, in your own words:• Customer Satisfaction• Net Promoter Score (NPS)• Customer Value• Customer Lifetime Value (CLV)

Each group should be prepared to report their results to the class

You may use whatever research resources you have at your disposal (workstations, laptops, cell phones, etc.)15 minutes

Customer Satisfaction

Customer Satisfaction: How well your product or service meets or exceeds the customer’s expectations

Net Promoter Score (NPS)

Net Promoter Score: The likelihood that a customer will urge a friend or family member to use a company’s product or service

Customer Value

Customer Value: A combination of what a customer wants from a product or service; the benefit they derive from it; and what they will give or pay for it.

Customer Lifetime Value (CLV)

Customer Lifetime Value: How much a customer is worth to a company over the lifetime of their relationship

INTRODUCTIONS

Time to introdu

ce ourselv

es!

…and our goals.Overall training goal

To learn how to increase customer value, in light of Acme Corporation's strategic goals, when creating and marketing Acme Corporation's products and services

Detailed training goalsUpon completing this course students will

• Know Acme Corporation's strategic goals• Be able to define and describe customer value in their own words• Be able to determine the customer value of a product or service• Know how to increase customer value• Be able to use customer value to strengthen and create

competitive advantage

Speaking of goals…

What are general business goals?• To make a profit• To acquire, retain, and grow relationships

with your target customers

What are Acme Corporation's goals?• To make a profit• To be one of Canada’s dynamic companies• To be a good corporate citizen and operate

a responsible business

Group Exercise - ValueWhen determining the value of a product or service what elements do you have to consider and how do you define them? For example:

Element: Monetary valueDefinition: how much the item or service costs in the store or marketplace Single sentences in your own words

Each group should be prepared to report their results to the class

You may use whatever research resources you have at your disposal (workstations, laptops, cell phones, etc.)10 minutes

Evaluating a Product or Service

Value Element Definition

Technical General contribution to the technical spectrum of society

EconomicWhat is the maximum amount of money a customer is willing and able to pay for the product or service

Service The amount of effort required to use the product or service vs. the result

Social What society in general thinks of the product or service

Perception The positive or negative view held by the customer or their peers

Evaluating a Product or Service

Value Element Definition

Intrinsic The sum of the parts that make up the product or service

Environmental What effect the product or service has on the health of the environment

Production What it costs to produce the product or service

Exchange What a customer is willing to give in exchange for the product or service

Class ExerciseWhat are some value elements that Acme Corporation's products and services bring to their customers?

Where do you see these best illustrated?

Possible Value ElementsMonetary Technical Economic

Service Social Perception

Intrinsic Environmental Production

Exchange

What’s the

difference between:

CostPriceValue

Cost – what a business spends to produce the product or service

Price – what a business charges for the product or service

Value – what the customer believes the product or service is worth

For example:

The cost for a plumber to fix a burst pipe at a customer's home may be $5 for travel, materials costing $5, and an hour's labour at $30. A price of $40.

However, the value of the service to the customer - who may have water leaking all over their house - is far greater than the $40 cost, so the plumber may decide on a price of $100 or more.

Perceived Value"What's the difference between an $8,000 Rolex and a $40 Seiko watch?

For the most part, consumers are unaware of the true cost of production for

the products they buy.

The Seiko is a better time piece. It's far more accurate. The difference is your ability to sell."

Lawrence L Steinmetz

Perception Drivers• Packaging and design• Format - product

differentiation• Uniqueness• Availability• Speed of delivery• Price• Locale - where the product

is sold• Demand• Replacement cost

$

How much!!?

Apple iPhone 6s - $1,000 CAD

Rolex m86348sajor-0002 Pearlmaster Watch - $105,484.00 CAD

DKNY Golden Delicious Million Dollar Fragrance Bottle – $1,303,600.00 CAD

CUSTOMER VALUE

Customer Value

Customer Value: A combination of what a customer wants from a product or service; the benefit they derive from it; and what they will give or pay for it.

Customer Value Example

Two ProductsA social media tool with a sophisticated speech-processing algorithm. It helps you write more interesting status updates and tweets in order to get more shares, likes, and retweets. It leverages huge databases of specialized linguistics research and was engineered by several PhDs over the course of a few years.

A simple hack for an iPhone that lets parents find their children if they wander too far away in a mall, arena, or other crowded venue. It took one college kid a weekend to write.

Highly sophisticated; technical marvel; not really helpful

Worried parents know where their kids are - PRICELESS

Which has more value?

Group Exercise – Determining Customer ValueLet’s say Acme Corporation is launching a life, auto, and home insurance package.Pre-launch you are tasked with identifying the three most important customer value elements in this type of offering to help with the design of the product. What 3 questions would you ask of potential customers and the product creators, and what main value elements would you recommend marketing focus on?

Single sentences in your own words

Each group should be prepared to report their results to the class

You may use whatever research resources you have at your disposal (workstations, laptops, cell phones, etc.)15 minutes

Determining Customer ValueRemember, customers may not

always know what it is they value about a product or service

Determining customer value often requires research and active observation in both pre and post sale.

Determining Customer Value

It means asking the right questions!

What are the right questions?

What are you looking for in this product/service?

What do you expect to be able to do with this product/service?

How much would you be willing to pay for this product/service?Can we produce and sell this product/service at that price?

Assuming our competitors match our price, what will most influence your final decision?

Once you’ve bought it, how will you know it was the right decision?

What are the right questions?

It all depends…

Determining Customer Value

Enough with the ‘Zen master’ ‘one hand clapping’ mystery answers…Isn’t there some way we can tell?

What to Look For

Factors in determining increase in Customer Value

• increased sales of a product or service• increased customer use of a product or service• increased customer satisfaction• a higher Net Promoter Score (NPS) • decreased customer support costs• decreased customer training costs• decreased time to market• decreased development/product marketing churn

Group Exercise – Determining Customer ValueLet’s say Acme Corporation is launching a life, auto, and home insurance package.You are also asked to help determine the customer value of the product post-launch. What three questions would you ask to determine customer value?

Single sentences in your own words

Each group should be prepared to report their results to the class

You may use whatever research resources you have at your disposal (workstations, laptops, cell phones, etc.)15 minutes

Class Exercise

What are some ways for a business to increase customer value?

Ways to Increase Customer Value

Customer loyalty

• Demonstrating trustworthiness and commitment to the customer

• Provide customers with evidence of how this trustworthiness and commitment has been carried out in word and deed

Customer education

• Customers tend to “leave” because of another product or service that has a feature which they believe you do not have, even if you do.

• If you have a “moderately complex” product or service, it can be worthwhile to educate customers about it

Ways to Increase Customer Value

Improved customer experience

• Customers often leave because of the experience they receive as customers.

• Continuously improving your customer experience is a key driver of long-term customer loyalty, and starts with putting in place a system to continuously gather customer feedback.

• Encourage all employees that have contact with the public (which is all employees) to keep an eye out for ways to improve customer operations

• Make it easy for employees to float suggestions for improvement

• Provide a clear process for suggestions to be evaluated and, if worthwhile, implemented while publicly rewarding the employee(s) that brought the suggestion forward in the first place

Ways to Increase Customer Value

Build long-term relationships

• Be honest - Have your customer’s best interests at heart; show the customer you see them as more than just a pay cheque.

• Share - You have a plethora of skills and knowledge. Share it for free to boost your client’s confidence in your abilities, while also exposing them to a range of other products and services.

• Be a partner with the customer - Create a strategic partnership or alliance with your customer. A mutually beneficial relationship is the best and easiest way to build trust.

Ways to Increase Customer Value

Create brand loyalty

• Brand loyalty increases your Customer Lifetime Value because it encourages trials of a new product, facilitates repeat purchases and therefore extends the lifetime of your customers.

• Three major determining factors of brand loyalty are• The quality of products• Customer service• Shared values

• Anyone who says ‘brand loyalty is dead’ lives in a world where Apple doesn’t exist. Apple is a leader in brand loyalty because of its consistent quality, customer service, and the values it states in its mission statement.

Ways to Increase Customer Value

Provide multiple touch points

• According to a study by Harris Interactive, 56 per cent of customers would switch to another company if the alternative offered more options to connect with them.

• Having multiple points of contact, whether it’s via face-to-face, telephone, web or social media allows customers to choose how they’d like to interact with the business.

• Sixty per cent of consumers don’t want to be contacted over the phone about special offers, information and upgrades, while 75 per cent prefer contact via email or text message.

Ways to Increase Customer Value

Be aware of current trends and social consciousness

Recognize the multi-cultural nature of the Canadian audience

Understand the influence of religion, social taboos, and cultural preferences

Class Exercise

What are specific ways for Acme Corporation to increase the customer value of its products or services?

Name a product and one way you would increase its customer value.

Using Customer Value

At the end of the day, the sales process comes down to convincing a customer that your product is worth the price you’re asking.

Be Creative!Try things out!

I’m not sure this is working… But who knows???

Using Customer Value

Recognize the importance of flexible solutions

Naked Solution with Options

Use customer value to decide what needs to part of the ‘naked solution’ (meets basic needs identified by a majority of customers) or an option designed to meet the needs of a significant minority

Using Customer Value

Regularly review ongoing products and services to see if they still meet the customer value objective

Using Customer Value

Sometimes all you have to do is put things in terms the customer will

understand.

For example:JibJab increased their conversions when they raised their price from $9.99/yr. to $12/yr.Why was that? Because now, they could say that their product was only $1 per month! This broke the cost down to something that was much easier for people to comprehend — and now it was much easier for them to realize what a fantastic deal it was!

SUMMARY and CONCLUSION

Overall Training Goal

To learn how to increase customer value, in light of Acme Corporation's

strategic goals, when creating and marketing Acme Corporation's

products and services

Know & Understand Acme Corporation's Strategic Goals

• Make money by providing communications and media products and services that customers can rely on and be inspired by

• Build a more sustainable world while making our community and country stronger

Describe Customer Value in Your Own Words

• There are two aspects to customer value: desired value and perceived value.

• Desired value refers to what customers’ desire in a product or service.

• Perceived value is the benefit that a customer believes he or she received from a product after it was purchased.

Be Able to Determine Customer Value

• Market research• Asking good questions• Understanding the factors that

determine the increase/decrease of value

Know how to increase Customer Value

Understand the importance of various value elements in increasing Customer Value:

Monetary Technical Economic

Service Social Perception

Intrinsic Environmental Production

Exchange

Use Customer Value to strengthen and create competitive advantage

• Convince customers of the value of the products and services they buy

• Be creative• Use data• Look for flexible solutions

Questions?

Quiz

There will be quiz for this course, emailed to you, for you to complete and submit.

Please ensure that the facilitator has your email address.