Customer Value Mapping

And Value Propositions

Introducing GALE Consulting, Value Propositions, And

Implementation For Typical Projects

2012

Copyright GALE consulting, Inc., 2012. All rights reserved.

Confidential Information: This document may not be copied, distributed or shared

outside of your organization without the expressed written permission of GALE

consulting, Inc.

2

Topics

Introduction to GALE consulting

Customer Value Analysis Concepts

Implementation Process

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Introducing GALE consulting, Inc.

GALE consulting helps clients develop and deploy value-based strategies based on Dr. Bradley Gale’s Customer Value Mapping, a fact-based, data driven system for making decisions to profitably improve competitive position in the marketplace.

INNOVENE

Product Management

Value-Based Pricing

Competitive Positioning

Improving Market Share

Value Propositions

Value Based Strategies

Some of our clients:

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GALE consulting helps clients use customer data

strategically

Conformance Quality

- Delivering what we promise

- Meeting standards

Customer Satisfaction

- Providing what customers want

- Responding to customer complaints

Customer Loyalty

- Retaining our customers

- Getting them to recommend us

Customer Value

- Meeting critical needs of targeted customers

- Outperforming competitors

- Creating new, unique benefits

Stage One

Minimum

requirements

Stage Two

Customer

focus

Stage Three

Customer

attitudes

Stage Four

Competitive focus

on targeted markets

21st century

growth company

Source: Adapted from Managing Customer Value by

Bradley T. Gale, (New York, The Free Press)

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Goal of Customer Value Mapping Improve business results through consistent strategic processes

A Market-centric organization that improves business results by:

Selecting the right markets and customers.

(market segments that are attractive and profitable to serve)

Offering Value Propositions that customers perceive to be superior to competition.

Aligning their organizations deliver and communicate the superior Value Proposition.

Process

Value Proposition

Structure

Rewards

People

Superior

Business

Performance Deliver & Communicate Value

That Target Customers Buy

Competitive Advantage

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Topics

Introduction to GALE consulting

Customer Value Analysis Concepts

Implementation Process

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Customer Value Analysis

Dr. Bradley Gale Author, Managing Customer Value

“Arguably the most useful marketing study since the formative works of Peter Drucker, Phillip Kotler and Michael Porter…may shape business thinking for years to come"

Publishers Weekly

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Why use Customer Value as a framework for your

Voice of the Customer work? Satisfaction and loyalty are not enough!

If a competitor offers your satisfied or loyal customer a better value do you think they

will consider switching?

Adapted from Bradley Gale’s Managing Customer Value and a speech given by Raymond E. Kordupleski at the American

Marketing Association’s Customer Satisfaction Congress, 1991.

Customer Satisfaction Score

~90% Satisfied

AT&T Market

Share

March 89 Feb 90

AT&T was reporting 90% satisfaction levels yet still losing

customers…there was no statistical correlation between

customer satisfaction and market share

Worth What Paid For Score

AT&T Market Share

1987 1988 1989

Worth What Paid For Score

Changes in customer value predicted market share

changes

“Value is simply quality, however the customer defines it, offered at the right price.” Bradley Gale

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Companies with a higher Customer Value Ratio

achieve higher ROI and ROS

0

5

10

15

20

25

30

35

0.94 0.98 1.02 1.06

12

18

23

28

4

7 9

11 12

Pro

fita

bilit

y

(%)

Customer Perceived Value Ratio

ROI (%)

ROS (%)

31

Source: Keith Roberts, MD PIMS Europe, at Bradley Gale’s Customer Value Network meeting,

London, October 2000, information from the Compustat and PIMS databases

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Customer Value - A Choice Model that integrates

price and performance relative to competition

Dr. Gale’s works documents:

Customers buy on perceived value

Value = Benefits relative to Cost

Benefits include all non-cost attributes (Key Decision Factors)

Benefits, Costs, and Value are perceived relative to competition

Product Offering

Customer Service

Relationship

Brand/Image

Buy Price

Other costs

Benefits

Total Costs

Customer

Value

Source: Adapted from Managing Customer Value

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Customer Value Mapping provides the framework

for building a Value Proposition

Customer Value

- Meeting critical needs of targeted customers

- Outperforming competitors

- Creating new, unique benefits

Competitive focus

on targeted markets

21st century

growth company

1. What factors are the most important drivers of

customers’ perceptions of overall value and their

purchase decisions?

2. How do customers perceive the overall value of your

products and services relative to key competitors?

3. Which competitors are the most vulnerable and which

are strongest in their ability to gain and retain

customers?

4. What are the areas for improvement that will have the

most impact on your ability to win and retain more

business?

5. What factors should be emphasized in marketing

communications?

6. What are the important customer messages that will

help you sell?

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A Value Proposition must answer this question for your customers

How will I be better off if I buy from you

rather than from your competitors?

Targeted customers and distinct market segments

Benefits to deliver You must be better than competitors

Proofs you will deliver

Tradeoffs Not part of offering or parity with

competition is sufficient

Relative price position

Offers superior total value to customers in targeted segment

End use benefits are explicit and specific enough for: Clear communication to customers

Guiding decisions and actions internally

The company is managed deliberately in terms of the activities and resources needed to deliver the Value Proposition

Characteristics of a

Winning Value Proposition

Elements that Must be Explicitly

Defined in a Value Proposition

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Topics

Introduction to GALE consulting

Customer Value Analysis Concepts

Implementation Process

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GALE’s process to develop and deploy a Value

Proposition

DATA REVIEW

WORKSHOP

Compare

Customer And

Internal

Perceptions

DEPLOYMENT

Integrate Into

Business Plans

And Measures

KICKOFF

WORKSHOP

Document

Business

Objective and

Internal Market

Analysis, Design

Research

CUSTOMER

RESEARCH

Test Internal

Analysis with

Customers

VALUE

PROPOSITION

WORKSHOP

Build Value

Proposition That

Wins Customers

GALE consulting has developed this straightforward process with associated tools for CVM implementation. The process and tools give structure and field-tested rigor to our clients, ensuring a successful program. The major benefit of using our field proven techniques can

be found by examining the output -- more effective CVM projects that reduce your cost and time (compared to developing an effective CV implementation process).

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Deliverables

Facilitated action-learning session on CVA concepts

Internal Customer Value Analysis of your market(s)

Key Decision Factor Model and draft CVA survey instrument

Action plan for CVA project implementation

Firm proposal from GALE consulting to support your implementation of the CVA project

Work Description

Day One – GALE facilitates an internal company workshop where your staff learns the CVA concepts and tools

through action learning. Attendees apply the tools by creating a Customer Value Analysis of their own market(s) and

customers. This aligns internal thinking about customers and produces an organized way to understand your

marketplace.

Day Two – GALE works with those staff members that will be directly responsible for implementing the CVA projects.

An explicit business objective is agreed to; a “Key Decision Factor (KDF)” CVA Model is refined from the work done

on day one; additional drill-down research topics are identified, the research methodology is agreed upon, and a

concrete action plan is developed. The action plan identifies WHO, WHAT, and WHEN for all actions needed to

complete the CVA project defined.

Step 1:

Kickoff Workshop

Benefits:

Speedy introduction to Customer Value Management

Self-discovery, where staff has major gaps in knowledge, and

internal alignment gaps on its approach to the market

Aids internal communication

Business objective for measuring project results

Involvement of key stakeholders in “action learning” increases

readiness to support action on future recommendations

Clear action plan assures timely and effective project results

Transfers knowledge of CVM tools and Process to your staff

Establish acceptance of CVM as a process for continuous

improvement of the business NOT a one time event

KICKOFF WORKSHOP

Document Business

Objective and

Internal Market Analysis,

Design Research

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Deliverables

Actionable CVA market analysis that organizes your customer data to answer key questions around value-based strategy development, competitive positioning, marketing and selling:

What factors are the most important drivers of customers’ perceptions of overall value and their purchase / supplier

selection decisions?

How do customers perceive the overall value of your products and services relative to key competitors?

Which competitors are the most vulnerable and which are strongest in their ability to gain and retain customers?

What are the areas for improvement that will have the most impact on your ability to win and retain more business?

What factors should be emphasized in marketing communications?

What are the important customer messages that will help you sell?

Work Description

Customer research is used to validate and refine the internal Key Decision Factor (KDF) model used by customers

when selecting between suppliers in the target market. Gale consulting will work with staff members directly

responsible for implementing the CVA project to develop a survey instrument based on the outputs from the Kickoff

Workshop. This ensures we incorporate industry knowledge into the research process. GALE will assist your team in

selecting the appropriate research technique. For markets with a limited number of targeted customers GALE

consultants may conduct in-depth interviews to gather CVA data. In some B2B cases we recommend our hybrid

quantitative/quantitative technique where numerical data provides basis for comparison while in-depth probing

provides a framework and context for action. In applications requiring larger sample sizes, GALE will work with a

market research firm to ensure valid data is collected for an effective Customer Value Analysis.

Step 2:

Market Research With Customers

CUSTOMER

RESEARCH

Test Internal

Analysis with

Customers

Please contact GALE consulting, Inc. for sample deliverable exhibits.

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Deliverables

Shared management understanding of customer information and ownership of strategic options for improvement

Consensus on key drivers of customers’ supplier selection decisions

Consensus on your current level of performance; gaps to close, strengths to leverage

Consensus on KDFs to include in your Value Proposition

Narrowed list of improvement options likely to win customers

Plan for evaluating feasibility of improvement options

Work Description

GALE facilitates a one or two day meeting with key stakeholders. In the meeting stakeholders develop a clear

understanding of the customer data, the degree of alignment between customer and internal perceptions, and the

options for improving your competitive position. The workshop is an exercise in focus and consensus building to

narrow the list of improvement options to those most likely to win and retain customers.

Step 3:

Data Review Workshop

Benefits:

Narrow the list of Strategy and Improvement

options to those key factors most likely to win

customers

Reach consensus on your most important

improvement options, and plans to close gaps and

leverage strengths

Promote likelihood of action through involvement

of key stakeholders to assure their ownership of

decisions

Transfers knowledge of CVA tools and process to

your staff

DATA REVIEW

WORKSHOP

Compare

Customer And

Internal

Perceptions

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Step 4

Value Proposition Workshop

Deliverables

Strategy decisions

Clearly stated Value Proposition

Distinctive marketing messages

Action plan to communicate and implement the Value Proposition

Work Description

GALE conducts a two day workshop in which internal stakeholders define your “Value Proposition” that explicitly states

1. The Benefits you will deliver better than competitors

2. The Tradeoffs your company is willing to make

3. The pricing position your company will offer targeted customers vis-a-vis the competition.

Key marketing messages and “proofs” of a superior customer experience are also developed along with internal

communications and action plans for implementation.

Benefits:

Promotes consistent and effective strategy

execution and resource allocation

Establishes explicit priorities based on value to

deliver AND trade-offs to make

Promote likelihood of action through involvement of

key stakeholders and process owners to assure

their ownership of decisions

Transfers knowledge of CVA tools and process to

your staff

VALUE

PROPOSITION

WORKSHOP

Build Value

Proposition That

Wins Customers

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Step 5

Deployment

DEPLOYMENT

Integrate Into

Business Plans

And Measures

Integrate

Business Plans

&

Measures

Build

Commitment

To

Value

Proposition

Process &

Organization

Gap

Analysis

Changes

To Deliver

Value

Proposition

Internal

Tracking

&

Measurement

Tracking

Market

Impact

Plan/Do/Check/Act

Plan/Do/Check/Act

Internal

Management/

Staff

External

Distribution/

Suppliers This is the point where most value initiatives fail.

GALE optionally offers services to support Value Proposition deployment and track you Customer Value Index and Customer Feedback through time. Tracking data can be displayed on your intranet

site in a custom dashboard that can be updated in real-time as feedback is collected.

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Contact Information

GALE consulting, Inc.

24803 Meadow Oaks Dr.

Katy, TX 77494

281-392-4930

Steve Raschilla

Phone: (001) 281.392.4930

e-mail: sraschilla@galeconsulting.com