Customer Reviews
How to establish and then sustain effective customer value management - By: Robert Morris, 07 Nov 2007 
No one will disagree with James Anderson, Nirmalya Kumar, & James Narus that it is important for businesses to deliver "superior value targeted to market segments & customer firms" while getting "an equitable return on the value delivered." Hence the importance of effective customer value management (CVM) that relies on customers' perceptions of value to gain an understanding of what customers' requirements & preferences are. Only then is it possible to determine in economic terms what that means. In this context, I am reminded of Warren Buffett's observation that "price is what you charge & value is what others think it's worth."
The co-authors explain how to:
1. assess customers' perceptions of value
2. conceptualize value
3. formulate an appropriate value proposition
4. substantiate value
5. create "naked solutions" with options
6. sell on value, not price
7. earn an equitable return
8. become a value merchant
9. leverage information from various sources
10. continue to be a value merchant
The CVM program the authors recommend in this volume is comprehensive, cohesive, & cost-effective. It will probably be of greatest value to C-level executives who are convinced that their companies are delivering superior value to their customers but have not convinced them of that. At this point, I presume to share two thoughts of my own, alll of which are consistent with what the authors of this book assert. First, whatever an organization's size or nature, its executives must nail the economic essentials by knowing (a) exactly what the organization's operating costs are & (b) what the margin is on each product or service offered. I agree with Jason Jennings: "If it's DOA, bury it." Whoever & whatever that does not add value (directly or at least indirectly) to the organization should be eliminated. Second, the same strict standard should be applied to the given offering as well as to those who sell or service it: Whoever & whatever that does not add value (directly or at least indirectly) to the customer -- & at a profitable margin -- should be eliminated.
This is not an "easy read" but for those who absorb & digest the wealth of information & wisdom the authors provide, then apply whatever is relevant as their own organization' pursuit of its own objectives, this book can be of incalculable value. One final point: Merchants should be driven to provide superior value to two categories of customers: directly to their own, of course, but also indirectly to their customers' customers. I cannot think of a better way to lock in a valued customer than to do whatever is possible & (yes) prudent to help that customer to strengthen each of its own customer relationships. Think of that as Superior Value to the third or fourth power.
Should you read this book? That is a decision you must make but perhaps these questions will help: Does your organization now have a CVM program? Is it effective? If not, do you know why? Do your customers frequently thank you for helping them create value for their own customers? If your answer to any of these basic questions is "you," you need to read this book immediately.
Those who share my high regard for it are urged to check out Lawrence L. Steinmetz & William T. Brooks's How to Sell at Margins Higher Than Your Competitors: Winning Every Sale at Full Price, Rate, or Fee, Gary Hamel & C.K. Prahalad's Competing for the Future, Jason Jennings' Think Big, Act Smalll: How America's Best Performing Companies Keep the Start-up Spirit Alive, Anderson's The Long Tail: Why the Future of Business is Selling Less of More, & The Dollarization Discipline: How Smart Companies Create Customer Value...and Profit from It by Jeffrey J. Fox with Richard C. Gregory.
