Keith Pigues and Jerry Alderman have found ways to use quantitative data to make concrete plans to make both you and your customers more money as well as predict profit growth for you both. To do this, there are three key steps.
- Discover, where you’ll understand what value you bring to your customer’s business;
- Analyze, where you’ll put all that information together and prioritize the opportunities;
- Execute, where you’ll create a plan to capture that value for you and your customer;
What drives loyalty in a company is the ability to make customers money. The problem with most companies is that they don’t implement the type of rigor needed to accomplish this, or they don’t have a way to measure it. To take care of this second issue, the authors have created a measurement they call the Differential Value Proposition. There are to key parts to this measure:
- The investments you make that create value for a customer that are unmatched by the competition (your Differential Value Attributes)
- The impact of those investments on customer profitability (your DVP percent).
This is essentially how much money you put into your customer’s bank account relative to your competition. In other words, this number represents your competitive advantage. How do we figure out this number? We simply ask the customer. The simplest way is to just conduct interviews.
You could do a number of things with the data you’ve collected through the interviews. But you should make a list. This list will contain the top opportunities identified by your customers to help them make money. It will contain the value attribute that needs improvement, a short description about the nature of the improvement, and the potential dollar impact to the customer’s bottom line.
With the data in front of you, you can now make investment decisions. The list will allow you to answer 3 very powerful questions:
- What is the Value Creation Opportunity worth to the Customer’s bottom line?
- What are the Top 10 investments you can make to build competitive advantage?
- How can customers be segmented based on their needs?
The difference between winning and losing comes down to execution. The authors provide a roadmap for creating the action plan to get these projects done.
First, You’ll want to repeat back to the customer what they said in the interview. You want the customer to know that you heard them and that you’ll be implementing their suggestions. Now, you’ll also want to include the other initiatives that you’ve decided to implement. It’s also important to point out that there are things that you will not be doing. Finally, you want to let the customer know where you are with this project and tell them that you’ll be continuing to follow up with them as time moves on. This should have you well on your way to growing your business with your customers.