Customer Value

Exhibit 6.16   Value mapping — drilling down from features to worth using example taken from mining coal.

Ultimately, in the context of customer satisfaction, customer retention is the end goal. Customers in business markets focus predominantly on functionality or performance. They seek to maximize value or the monetary benefit that they may derive. Delivering value to these customers, therefore, is the key to customer acquisition and retention.

Suppliers recognize the importance of value, yet they often lack specific details, estimates or measures to demonstrate the value they deliver. This absence of details creates ambiguity in the minds of customers, leading them to focus more on concrete, unambiguous aspects like cost.

To demonstrate value, suppliers need to drill down from the product or service features and advantages to the benefits and from the benefits to value. Take for example, the case of a company that is about to start mining coal at a new mine where the coal has lower ash and sulphur content. The lower ash and sulphur content is the feature or advantage that their coal has to offer (see Exhibit 6.16). This advantage results in the reduction in cost of ash and sulphur disposal — the benefit. For each of its customers, the mining company should also be in a position to translate the benefit, into value terms, based on the cost of disposing sulphur and ash.