customer value mapping

(noun)

A method of measuring how you are doing in general and how you are doing in comparison to your competitors by matching the cost of your product with the benefits your customers receive for it.

Related Terms

Examples of customer value mapping in the following topics:

  • The Development of Value-Driven Firms

    • The values of an organization are just as important as the products they sell; having a strong value driven culture is important.
    • This was the precursor to customer value management, which has been practiced for the last 35 years, being incorporated into corporate thinking.
    • Some people focus on customer service, others on customer experience, others on lifetime value for a customer; many companies believe that having a customer service department is all it takes to create customer value.
    • A new practice called Total Customer Value Management (CVM) involves a total focus upon the customer.
    • Voice of Employee will be captured through the Customer Circles and Employee Value Add, and the Voice of Customer and Voice of Competitor will be captured by Customer Value Added (CVA).

  • Starting the journey

    • Specify what the customer defines as value.
    • Anything that does not add value from a customer perspective should be reduced or eliminated.
    • Draw up a value map.
    • A value map is much like a process map with one distinct difference: a value map starts from the customer end and makes a clear distinction between value-added activities (transformational activities for which the customer is willing to pay) and non-value-added activities (activities that add cost without adding customer value).
    • As flow is introduced, let customers pull value from the next upstream activity.

  • Perceptual Mapping

    • Perceptual mapping is a graphic display explaining the perceptions of customers with relation to product characteristics.
    • Perceptual mapping is a diagrammatic technique used by marketers in an attempt to visually display the perceptions of customers or potential customers.
    • Perceptual maps need not come from a detailed study.
    • There are also intuitive maps (also called judgmental maps or consensus maps) that are created by marketers based on their understanding of their industry.
    • The value of this type of map is questionable, as they often just give the appearance of credibility to management's preconceptions.

  • Basic Map Types

    • Higher values get larger symbols.
    • Range-graded symbol maps have a predetermined number of symbol sizes, each of which represents a RANGE of values.
    • For example, in mapping average summer temperature across the United States, symbols may represent the following values, from smallest to largest symbol size:
    • They use shades of gray or different colors to represent each region's value.
    • A high value within a normally small area means that area will appear larger on the map.

  • Political Values

    • A value system is a set of consistent values and measures.
    • Types of values include ethical/moral values, doctrinal/ideological (religious, political) values, social values, and aesthetic values.
    • Over time the public expression of personal values, that groups of people find important in their day-to-day lives, lay the foundations of law, custom and tradition.
    • The Inglehart-Welzel Cultural Map of the World , created by sociopolitical scientists, Ronald Inglehart and Christian Welzel, is based on the World Values Survey.
    • The Inglehart-Welzel Cultural Map of the World, created by sociopolitical scientists Ronald Inglehart and Christian Welzel based on the World Values Survey.

  • Environmental audits

    • Just as the process of mapping out a work system isn't called process-mapping by waste-minimization practitioners, when setting out to gather and/or check sustainability facts and figures, many practitioners don't refer to what they're doing as an audit.
    • The word ‘audit', however, is appropriate even though most accounting systems fall far short of what an understanding of sustainability requires (e.g. clean air has no financial value, but try living without it).
    • Additional services can include degrees of compliance with environmental laws and regulations, uncovering the expectations of customers, and liability obligations.

  • Reminding and Retaining Customers

    • Authors such as Don Peppers and Martha Rogers discuss the transition from managing products to managing customers, and differentiating customers rather than just products.
    • To retain their customer base and satisfy customer requirements above those of competitors, brands must engage in the following process:
    • Implementing these relationship marketing practices helps companies counterbalance new customers and opportunities with current and existing customers to maximize profit.
    • It also counteracts the theory that new customers must be gained at the expense of losing older customers.
    • Nurturing customer relationships can lead to customer referrals and new business.

  • Customer Relationship Management

    • Without enough good customers, no company can survive.
    • A business must attract new customers; and, perhaps more importantly, hold on to its current customers.
    • Because repeat customers are more profitable.
    • Measuring and valuing customer relationships is critical to implementing this strategy.
    • Discuss how organizations use customer relationship management (CRM) to retain customers

  • Competition Based on Value

    • The migration from product-oriented to customer-oriented strategies is called Total Customer Value Management (TCVM).
    • This requires implementing a customer-focused vision – a major shift in strategic thinking, often including moving the basis for competition from product or price to process or service value.
    • TCVM goes beyond conventional customer value management, which provides a rational set of techniques, methodologies, and strategies to weave the needs and wants of customers into the key process designs and management activities of the enterprise.
    • TCVM also creates value for employees, business partners (customers, delivery chain, supply chain, unions) and shareholders.
    • By assigning customer tasks to traditionally non-customer facing departments like IT, Finance, and HR, a Continuous Customer Improvement Program is created to ensure customer delight.

  • Value-Based Pricing

    • Value-based pricing seeks to set prices primarily on the value perceived by customers rather than on the cost of the product or historical prices.
    • This strategy focuses entirely on the customer as a determinant of the total price/value package.
    • Many customer-related factors are important in value-based pricing.
    • Value-based pricing is predicated upon an understanding of customer value.
    • Value-based pricing focuses entirely on the customer as a determinant of the total price/value package.