Posted on 30-12-2009 at 12:30
Lean and understanding customer value
Lean looks at operations and processes from the customers perspective. Before an activity can be categorised as value adding or non value adding you need to know what it is and how your customer values your product or service.
A customer apportions value based on how well your process outputs meet and fulfil their requirements. The greater the fulfilment the higher the customers satisfaction and so the higher or greater the customers assigned value.
All customer requirements are not created equal. There are must haves, nice to haves and any combination in between!
Customers have needs and wants but there is something else, they like bonuses! They like to be “delighted”. It is these bonuses that exponentially increase the level of customer satisfaction.
Because these bonuses are unexpected there is no downside if they are not there but when they are it increases customer satisfaction.
Remember needs a fairly fundamental; they are requirements so there is no negotiation. You must provide these just to be in the race. But even if you meet the needs of your customer you must still meet their wants. Wants are expectations and if you do not meet expectations your customer will be dissatisfied.
So, you need a black mountain bike with 15 gears to get you to work. You want this bicycle to be made of good quality materials to be reliable, to last a long time and for the gears to be low enough to get you up that large hill just before you reach the office. If it comes with lights, helmet and a three year warranty and insurance then there is your bonus (sometimes called a delighter, because you have “delighted” the customer)
Needs: A company needs a bid written
Wants: They want it to answer all the questions and show their company off in a good light, be written in good English, with no grammatical errors or spelling mistakes and they want to win the contract.
Delighters: By providing templates for their next bid or by offering to write the next one on a no win no fee delights the customer. As does binding documents or contacting their client on their behalf for additional information.
A small two person company needs a web site.
They want it to project a professional image, look good and attract customers.
You delight them by providing hosting, SEO, content management, blog writing, news letters and e-mail marketing software etc as a complete package. Or you delight them by arranging funding via business link. Whatever it was, it was unexpected but more importantly, your customer values it.
Fulfilling your customer’s needs, wants and providing delighters is the way to achieving customer satisfaction but remember that value is in the eye of the beholder and that customer values are not static.
To fully understand your customer’s requirements you need to understand them, you need to ask them, talk to them and involve them.
The web site is a good example. It’s not so long ago that web sites were fairly straightforward, at least from the customer perspective. However, blogs, videos, twitter, advertising, PPC, template sites and a host of other available features have increased the wants of the customer. Plus the customer is often more informed and knowledgeable than previously.
What delighters can you provide now? Unless it is a commodity, price will not do it, and even then it is probably unsustainable. It need not be a huge differentiator; it could be as simple as a free gift with every purchase. Whatever you come up with remember that it will soon become a want, an expectation and after a while you will need something else to delight the customer. Also remember that the customer must value it. Too many companies make the mistake of attempting to delight the customer by providing extra’s that their customers do not value.
Remember that delighters should not just be used to attract new clients. Use them to retain existing customers.
Two years ago I received several bottles of red wine and three bottles of Grouse whisky from suppliers at Christmas time. I don’t drink wine or Grouse whisky. If only they had spoken to me they could have learnt what I valued and used that to cement our relationship.
