22
22
-34
22
-34
0
2
2
2
-9
2
0
2
13
2
-8
-8
0
23
-64
53
-35
23
0
-19
-19
0
19
19
0
-7
-15
2
-15
34
0
0
16
-16
-16
16
0
25
-44
9
-43
53
0
13
-10
0
-7
5
0
-10
-50
56
25
-20
0
3
-60
56
18
-15
0
28
-104
64
-25
38
0
137
200
84
122
Selling price
Other costs
(b) Total cost advantage
Capital cost Disposibles cost
(c) Total value advantage = (a)+(b)
(d) Actual price (or cost) (e) Fair Value Price = (a) + (average price, 140 ) (f) Total value advantage = (e)-(d)
• Identify responses with the greatest impact on customers’ future purchase behaviour
• Hone in on winning client strategies
• Discipline and focus—across all functions • Dramatic impacts and performance gains
Relationship Capital cost Disposibles cost
-25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0
Relative value impacts - Filto vs. Average
Identify Value Drivers
• Total estimated bottom • Increased employees from line contribution = $4.5M 600 to 1000+
• Achieved record
profitability last year
• Reclaimed more than $8mm in lost sales
Develop Action Plans
Measure Value Creation
After Transaction
Measure Market Perception
Conduct Baseline
Study
Business Process Improvement
feedback
On-going Transactional
Bonus
Benefits Manager Brand Quality Equity
Work Life Balance
The “Value” of Customer Value
• Strengthen value propositions – value is the basis for customer decisions
Customer Value Yields Big Dividends
Wireless Telecom Company
Heavy Equipment Dealership
Underground Mining Equipment
Manufacturer / Distributor
• 50% reduction in customer churn
The key to attracting, satisfying, and retaining
customers.
November, 2003
155
140
165
96
148
97
193
140
28
-104
64
-25
38
0
Head-to-Head Comparisons (Average)
Filtro Value Relative to Average
Chloroform Removal Lead Removal Taste Clogging
Reliable supply Technical support
• Moved from being a market “nicher” to the market leader
Source: Adapted from Customer Satisfaction in Practice by the American Productivity & Quality Center, 1998
• Doubled sales revenue – from $250M to $500M+
• Improved equipment delivery time from 10 days to 2 days
• Tripled market share in a strategically important market: 4% - 12%
MODELING EMPLOYEE VALUE
Retention
The Right Workforce”
Acquisition
Employee Value
Relative Compensation
Positive Turnover
Relative Job Quality
Base Salary
Pay Equity
Value Scorecard
Differential worth of performance advantages and disadvantages
Filtro Walter Envir Brite Clarion Average
Dimension
Attribute
Benefits Product
17 40 120 160 137 200
30 37 25 54 85 130 84 122 155
Attrib. Value
6.8 12.0
9.6 10.0
7.6
9.0
6.4 25.0
7.0 16.0
2.8 14.0
7.0 14.0
6.6
98.3
30 100.0
110 100.0
140
-1.7
58.5032
Janet LeBlanc Director, Canada Post
Price Performance Profile
Performance Scores
Weights for:
Filtro Walter Envir Brite Clarion Average
Dimension Attribute
Surveys
On-going Market Surveys
Plan/Do/Check/Act
Define/ Refine Value Proposition
Build Commitment
To Value Proposition
Process & Organization
Gap Analysis
Value Map
Value Map for Commercial Filtration -- Base
220
200
High
Cost 180
Walter
160
Price 140 ($) 120
Brite
Filtro
Clarion
100
Envir
80
60
5.6
6.0
6.4
6.8
7.2
7.6
Performance
• 30% improvement in on-time deliveries
• Improved margins on equipment repairs from 11% to 28%
International Health and Leisure Firm
• Doubled profits in a single year
Changes To Deliver
Value Proposition
Internal Tracking
& Measurement
Tracking Market Impact
Internal Management/
Staff
Group of Companies
Plan/Do/Check/Act
The Value Proposition Deployment Process
Costs
Selling price Capital cost
Other costs Disposibles cost
Weighted cost scores
Slope of fair value line
10.0 10.0 2.0 10.0 2.0 10.0 10.0 10.0 8.0 10.0 8.0 10.0 8.0 6.0 6.0 8.0 2.0 10.0 4.0 8.0 5.0 5.0 7.0 9.0 9.0 2.0 1.0 3.0 1.0 7.0 7.0 9.0 5.0 5.0 9.0 7.0 5.8 6.7 5.8 7.5