What is "customer value" that realizes differentiation?
How do customers buy their products and services? The idea of “customer value” is a hint. And what is the framework that enables differentiation from other companies?
1. Concept of customer value proposition
A unique customer value proposal is the starting point for differentiation from other companies
There are so many products and services out there, but they don't solve all the problems customers have. Also, customers themselves are not necessarily aware of the problems they are having. Therefore, if we can meet the problems that the world has not yet met, or the problems that exist, but are not yet noticed, it will be a great difference.
However, discovering unique customer value is not easy. Therefore, in this column, we will introduce some frameworks for discovering customer value.
Framework (1) << Basic expression of customer value >>
Customer value is given by the following formula.
"Functional (performance / spec) value" is an advantage in terms of reason, and "emotional value (value felt by using a product)" and "self-realization value (value that expresses one's personality)" Is an aesthetic benefit.
Taking soap as an example, "more dirt" and "good foaming" are functional values, "color and fragrance" "feel" and "feeling" are emotional values, "natural ingredients" "natural orientation" "luxury feeling" Is the self-realization value.
In the case of the service industry, in addition to the benefits, "process quality (quality of the provision process)" may be added.
In the case of intangible services such as products, it is difficult to perform proper quality evaluation before purchasing. In some cases, a reasonable quality evaluation will not be possible even after purchase. Therefore, users tend to evaluate the quality of service in the process of providing the service.
Even if the service content itself is not much different from the others, if the staff responds seriously to the customer's circumstances, the value and satisfaction for the customer will be high.
On the other hand, costs include financial costs (customer payments), time costs (time required to go to buy a product or reach a location where services are available), and physical costs ( There are physical fatigue to get a product or service, install it, and make it available, and mental cost (such as effort to learn usability).
Increasing the numerator benefits or lowering the denominator cost will increase customer value. Think about whether you can contribute either of the two benefits or the four costs.
Framework (2) << Think about the scene to use >>
Even with the same products and services, there are various ways in which customers will find value depending on the situation.
1. Cross-border goods
Examples of items that cause changes in the consumer environment : Internet, automobiles / motorcycles, travel / tourism, amusement facilities
2. Guardian goods
Examples of items that save consumers' crises and bring healing and compassion : Food / beverage , Banking / insurance, home security, home appliances, furniture / interior, beauty / health equipment, accessories
3. Strengthening goods
Examples of items that enhance consumers' vitality and ability: PCs, stationery, books, sports equipment, fashion, food Beverages, education
4. Reward goods
Items that are acquired and donated by the victory of consumers
Ex.) Houses, luxury cars, jewellery, precious metals, education, alcohol, luxury goods
For example, beauty treatment salons can change you depending on the person. It can be "things" "things that grow and enhance vitality and ability" "things that are won and donated by victory".
Let's think about "what value does your product / service have for the customer? (What kind of value do you want to provide?)".
Framework (3) << Remove customer inconvenience >>
In the framework (1), we have taken up the cost to the customer (some sort of hassle when using it). In order to remove the cost (inconvenience) for the customer, it is necessary to pay attention to the following three "inconveniences".
●
Eliminate inconvenience in use Change "difficulty" to "easy" such as "easy to use", "easy to use", "easy to ask" and "easy to understand".
Example: Amazon's online ordering / same day delivery
● Remove “unnecessary” from overdoing Example
of providing value that is necessary for customers
Example) QB house, simple mobile phone, standing bar
● “Uncertainty” that can be called disappointing remove
to eliminate the "regret after the purchase" feel before a customer purchases
example) return freedom, value guarantees (achievements billing), pay-as-you-go system, trial use
Framework (4) << Consider consumer activities >>
In order to remove the inconvenience of customers mentioned in Framework (3), it is necessary to pay attention to the process of purchasing and using the customer.
<Purchase stage>
1. Problem recognition (revealing needs)
2. Information search
3. Product selection
4. Order
5. Delivery
6. Payment (finance)
7. Product receipt
<Emergency solution stage>
8. Product installation / assembly
9 . use master
10. errands resolution
<continuation stage>
11. return merchandise
12. maintenance
13. Product disposal
14. Product replacement upgrade
seller (company) side, but will believe Eteshite the point of sale is the goal, purchased for the customer The point is just a start for subsequent use. Consumers are having problems with any of this process. Expand your eyes on the overall consumer activity and think about what your company can do.
Framework (5) << Add sharpness >>
One of the most common ways to think about the benefits for customers is to add functionality to everything. I feel that the idea that "customers want various functions is better to add various functions" and "more functions to make a difference" is still strong.
However, many of the features are unnecessary for the user. Also, the more features you add, the more it will bounce back to cost (price for customers). There are many customers who say that "the functionality is minimal and the price is cheap". "Removing unnecessary functions and providing at a price that customers can afford" is also a fine differentiation (this is called "negative differentiation").
Even if a certain function is enhanced, it is necessary to sharpen other functions that are not valuable to our customers. The points of sharpness are as follows.
● Which factors should be “removed” that are commonplace in the industry?
● Which factors should be “reduced” below industry standards?
● Which factors should be “increased” over industry standards?
● Which elements should not be added to the industry so far?
For SMEs, differentiating functionally (reasonable in terms of benefits) would be quite difficult. However, other benefits and costs can contribute to customer value. We would be grateful if you could share the framework introduced in this column with your organization and use it as a material for developing ideas for customer value.
<Reference>
“Job Theory” by Clayton M. Christensen et al. Harper Collins Japan
“Making a Selling Mechanism This Way” K. Kuriki, Nobutoshi Shimizu, Takuro Youda Nihon Keizai Shimbun
"Grand design of business model"
Masanao Kawakami "Chuo Keizai " "Blue Ocean Strategy" W. Chan Kim (Author), Rene Moborgne Random House Kodansha
"Story Marketing by Cases" Satoru Yamakawa Japan Management Association Management Center
1. Concept of customer value proposition
A unique customer value proposal is the starting point for differentiation from other companies
"Customers buy products and services to solve their problems"Customers buy goods and services not because they want the goods or services themselves, but because they want some kind of benefit or solution. For example, you buy an electric drill because you want to make a hole, and you go to the gym because you want a youthful body.
There are so many products and services out there, but they don't solve all the problems customers have. Also, customers themselves are not necessarily aware of the problems they are having. Therefore, if we can meet the problems that the world has not yet met, or the problems that exist, but are not yet noticed, it will be a great difference.
However, discovering unique customer value is not easy. Therefore, in this column, we will introduce some frameworks for discovering customer value.
Framework (1) << Basic expression of customer value >>
Customer value is given by the following formula.
Customer value = Benefits / CostBenefits include both rationale and sensibility benefits.
"Functional (performance / spec) value" is an advantage in terms of reason, and "emotional value (value felt by using a product)" and "self-realization value (value that expresses one's personality)" Is an aesthetic benefit.
Taking soap as an example, "more dirt" and "good foaming" are functional values, "color and fragrance" "feel" and "feeling" are emotional values, "natural ingredients" "natural orientation" "luxury feeling" Is the self-realization value.
In the case of the service industry, in addition to the benefits, "process quality (quality of the provision process)" may be added.
In the case of intangible services such as products, it is difficult to perform proper quality evaluation before purchasing. In some cases, a reasonable quality evaluation will not be possible even after purchase. Therefore, users tend to evaluate the quality of service in the process of providing the service.
Even if the service content itself is not much different from the others, if the staff responds seriously to the customer's circumstances, the value and satisfaction for the customer will be high.
On the other hand, costs include financial costs (customer payments), time costs (time required to go to buy a product or reach a location where services are available), and physical costs ( There are physical fatigue to get a product or service, install it, and make it available, and mental cost (such as effort to learn usability).
Increasing the numerator benefits or lowering the denominator cost will increase customer value. Think about whether you can contribute either of the two benefits or the four costs.
Framework (2) << Think about the scene to use >>
Even with the same products and services, there are various ways in which customers will find value depending on the situation.
1. Cross-border goods
Examples of items that cause changes in the consumer environment : Internet, automobiles / motorcycles, travel / tourism, amusement facilities
2. Guardian goods
Examples of items that save consumers' crises and bring healing and compassion : Food / beverage , Banking / insurance, home security, home appliances, furniture / interior, beauty / health equipment, accessories
3. Strengthening goods
Examples of items that enhance consumers' vitality and ability: PCs, stationery, books, sports equipment, fashion, food Beverages, education
4. Reward goods
Items that are acquired and donated by the victory of consumers
Ex.) Houses, luxury cars, jewellery, precious metals, education, alcohol, luxury goods
For example, beauty treatment salons can change you depending on the person. It can be "things" "things that grow and enhance vitality and ability" "things that are won and donated by victory".
Let's think about "what value does your product / service have for the customer? (What kind of value do you want to provide?)".
Framework (3) << Remove customer inconvenience >>
In the framework (1), we have taken up the cost to the customer (some sort of hassle when using it). In order to remove the cost (inconvenience) for the customer, it is necessary to pay attention to the following three "inconveniences".
●
Eliminate inconvenience in use Change "difficulty" to "easy" such as "easy to use", "easy to use", "easy to ask" and "easy to understand".
Example: Amazon's online ordering / same day delivery
● Remove “unnecessary” from overdoing Example
of providing value that is necessary for customers
Example) QB house, simple mobile phone, standing bar
● “Uncertainty” that can be called disappointing remove
to eliminate the "regret after the purchase" feel before a customer purchases
example) return freedom, value guarantees (achievements billing), pay-as-you-go system, trial use
Framework (4) << Consider consumer activities >>
In order to remove the inconvenience of customers mentioned in Framework (3), it is necessary to pay attention to the process of purchasing and using the customer.
<Purchase stage>
1. Problem recognition (revealing needs)
2. Information search
3. Product selection
4. Order
5. Delivery
6. Payment (finance)
7. Product receipt
<Emergency solution stage>
8. Product installation / assembly
9 . use master
10. errands resolution
<continuation stage>
11. return merchandise
12. maintenance
13. Product disposal
14. Product replacement upgrade
seller (company) side, but will believe Eteshite the point of sale is the goal, purchased for the customer The point is just a start for subsequent use. Consumers are having problems with any of this process. Expand your eyes on the overall consumer activity and think about what your company can do.
Framework (5) << Add sharpness >>
One of the most common ways to think about the benefits for customers is to add functionality to everything. I feel that the idea that "customers want various functions is better to add various functions" and "more functions to make a difference" is still strong.
However, many of the features are unnecessary for the user. Also, the more features you add, the more it will bounce back to cost (price for customers). There are many customers who say that "the functionality is minimal and the price is cheap". "Removing unnecessary functions and providing at a price that customers can afford" is also a fine differentiation (this is called "negative differentiation").
Even if a certain function is enhanced, it is necessary to sharpen other functions that are not valuable to our customers. The points of sharpness are as follows.
● Which factors should be “removed” that are commonplace in the industry?
● Which factors should be “reduced” below industry standards?
● Which factors should be “increased” over industry standards?
● Which elements should not be added to the industry so far?
For SMEs, differentiating functionally (reasonable in terms of benefits) would be quite difficult. However, other benefits and costs can contribute to customer value. We would be grateful if you could share the framework introduced in this column with your organization and use it as a material for developing ideas for customer value.
<Reference>
“Job Theory” by Clayton M. Christensen et al. Harper Collins Japan
“Making a Selling Mechanism This Way” K. Kuriki, Nobutoshi Shimizu, Takuro Youda Nihon Keizai Shimbun
"Grand design of business model"
Masanao Kawakami "Chuo Keizai " "Blue Ocean Strategy" W. Chan Kim (Author), Rene Moborgne Random House Kodansha
"Story Marketing by Cases" Satoru Yamakawa Japan Management Association Management Center
