12 January 2012

Customer Value As The First Principle of Lean Marketing

Customer value is the core of lean management. Paradoxically, exactly this basic principle too often is lost in lean organizations. As a customer, sometimes one has the impression to stand in the way of the processes of the company; as the saying goes: "Business would be easy, were it not for the customers!"

Those annoying customers, …

Quite to the contrary, specifically sales and marketing departments are needed to thoroughly understand customer value and to transform these insights into specific requirements. Unfortunately, many sales and marketing organizations fail at this task. Following symptoms reveal gross shortcomings in grasping customer value:
  • Lost in translation: the customer asks for a ball pen, however, sales delivers a laptop
  • Over engineering: a multitude of additional bells and whistles leads to solutions that are expensive and too complex for handling
  • Customer complaints: price, conditions, dates, or attributes of the offer were not clearly agreed upon, get not delivered and are the cause for frustration
  • Buyer´s remorse: marketing and sales people create unrealistic expectations that lead to disappointment
  • Branding mistakes: weak and confusing messages blur the brand and damage the reputation
  • Sub-optimal investment: old products and declining markets devour high marketing expenses at the expense of innovations and new initiatives
  • Obsolete sales strategies: sales people deliver information, but could be done more efficiently through the internet.
These examples show the waste generated because customer value has not been understood clearly. Customer value here refers to the whole buying and usage experience of the customer, not only to the service or product itself; this reaches from the first information on the offer, to the purchase, to the use and up to the disposal of the product.

Customer value across the whole buying cycle

The task of lean marketing and sales consists precisely in creating a useful and valuable experience for each and every customer. This experience can be captured with process steps like these:
  1. First acquaintance of offer
  2. Interest on the benefits
  3. Detailed information about the offer
  4. Development of buying intent
  5. Weighing of cost and risks / queries
  6. Negotiation of conditions
  7. Purchase and order
  8. Delivery and payment
  9. Usage of service / product
  10. Request and receipt of customer service
  11. Recommendation
  12. Re-purchase and disposal of product
In every of these steps marketing and sales can prove themselves valuable or not. With a clear understanding of customer requirements they can increase the benefits each and every time. However, when service and support are lacking or bad, these benefits are lost.

The task of lean marketing & sales consists then in the set up of specific standards and to deliver on these ever better. In this effort the size of the product assortment, the complexity of the channels, the multitude of customer segments and the range of media (off- and on-line) describe formidable challenges.

Thus, these marketing and sales organizations will win, which not only package the principle of customer value in slogans and as lip service, but who implement it in practice. Because, they win the most valuable: content customers.

For questions and comments, post here or write an e-mail to asattlberger@gmail.com