What is "customer value" that realizes differentiation?

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
"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 / Cost
Benefits 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
Buy Your First House! How to Prepare?

Buy Your First House! How to Prepare?


I'm coming at you guys with an article,just giving you some tips to get ready for your home buying process. If you know you want a home and you know you haven't really been steady, this is your time to figure out what it is that you want to do find a place to work and stay still for a while, so that you can show that you are consistent in getting your income home.

Work That You Do

Buying starts with you going back two years and working a job that you get full-time hours, you have your benefit, you have your consistent pain. In some cases depending on the type of work that you do, you may move around but as long as you can show that you've worked consistently for the past two to three years then you're good.

I started with my company about four or five months after I graduated from college and I've been there ever since and the convenient thing about. That is that when I have to send documents over they're all coming from the same place, so not only does it make it easier for the loan officer to see your credibility. It also makes it easier for you when you have to search for w-2s and tax returns they're all in the same place.

Building Your Credit

The second thing that I want to recommend is building your credit. Your credit matters the biggest thing that the mortgage lender is looking for is your debt to income ratio. My situation is quite different than anybody else's because as a college graduate, I don't have any debt a lot of college graduates to have debt. And that's okay.

What they want to see is are you making payments towards that day. A car purchase is probably the only thing. I can think of that is large not quite like a house but on that level and it shows your creditworthiness. Now if you're like me, I didn't want a car note I wasn't making a lot of money when I had my child.

I was like you know my daycare bill is the amount of a car note, so I don't want a car note. I always bought my cars cash tax time will come around refund check will come around and my car is with myself and I just have to get another card cash.

So another way to build your credit and what I did is to just get some credit cards. Now I'm gonna be real with job. I was afraid to get a credit card if I would have known what I know. Now I would have had credit cards in college because I've always been good with budgeting and financing and saving, but I was afraid I heard the horror stories about people maxing out their credit cards and balling out on their friends and they boyfriends and Pookie and baby daddy them and ruining their credit. 


Maintaining credit is as simple as getting a secured card from your bank and a three to five hundred dollar limit and paying your phone bill on it every month. It's that simple you pick a bill or you pick something that is necessary like gas groceries and instead of using the money off your checking account, you charge it on the credit card and then in three to five days you pay it off using the money that was in your checking account.

Now don't make the mistake of thinking that you already paid for with the credit card and then spend the money out your checking account and then you don't have a way to pay the credit card off and you should never use more than 30% of your line of credit because you never know.

When they're gonna run your numbers and see how much you're spending if you're responsible. I recommend getting a higher limit than $300 what they require you to do is to pay your minimum down. It's easier to get 290 dollars on a $300 card, it looks like you're spending 33 percent of your income versus if it was $90 on a $1000 card . You're using 10% it's the same $90 but now you're making that $90 work for you and make you look like you're just responsible as hell.

Save your Money

The third thing that you want to do is save. When I was trusting myself to transfer the money from checking to savings let's just be real it wasn't happening, so the first thing I started doing is any tax refund, any large lump sum of money, any extra money. I set it up and going to my savings account instead of my checking account the reason. Why I do that is because it's harder for me to take the money out once to say my savings gone the biggest thing that helped me.

Save is direct deposit some employers give you the option to send money to multiple accounts. I like that option because I basically take each paycheck and I split it into two and part goes into my checking and part goes into my savings and once I actually get like that, I was able to say it much more money you want to save as much as you can. If you're living at home you also want to have extra money because you're gonna have to pay for your appraisal, you're gonna have to pay for additional closing cost that.

The seller doesn't pay for and you just want to have an emergency bag. The more you save the better the best time to save moms, single moms with kids is during tax time. If you start two years in advance save 50% of your tax return for two years, if you're not disciplined go to your bank put that money on a CD and don't touch it for eighteen months. Let that money work for you and then when it gives you some interest and you're ready to do your home buying. Take what you need out for your home.

Read:

Buying process and leave the remainder of it on the CD that is the best way to get yourself ready for this home buying process. The less money that you have the harder it is because there's fees all over the place when you're buying a house. 

That's I can say to you about How to Prepate to Buy First Home.