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Customer Value: The Elements of Value - Coggle Diagram

- - - - After quality, the critical elements depend on the industry. In food and beverages, sensory appeal, not surprisingly, runs a close second. In consumer banking, provides access and heirloom are the elements that matter; in fact, heirloom is crucial in financial services generally, because of the con- nection between money and inheritance.
- - - - Those insights, combined with the consumer research, informed ideation sessions with a project team consisting of people from all customer-touching departments across the bank, not just marketers.
    - - Each concept approved by the project team contained a different mix of product features, fees, and levels of customer service. Many of these new concepts could be delivered through an improved smartphone app that would increase customer engagement with the bank. Almost all the targeted consumers used smartphones for financial services The financial services company then conducted further one-on-one interviews with consumers and got fast feedback that allowed it to winnow the 12 prototypes down to four concepts for enhanced value. Then, on the basis of the feedback, it refined them in the fourth, quantitative stage
        
        Getting Started.
        
        New-product development.
        
        Our model can stimulate ideas for new products and for elements to add to existing products. Managers might ask, for ex- ample: Can we connect in a new way with consum- ers? Can our customers benefit from integration with other software applications? Can we add therapeutic value to our service?
        
        Pricing.
        
        Managers commonly view pricing as one of the most important levers in demand man- agement, because when demand is constant, higher prices accrue directly to profits. But higher prices also change the consumer value equation, so any discussion about raising prices should consider the addition of value elements. Recall how Amazon’s judicious increases in value helped justify higher prices over time.
        
        Customer segmentation
        
        Most companies have a formal method of segmenting their custom- ers into demographic or behavioral groups, which presents an opportunity to analyze what each of these groups values and then develop products and services that deliver those elements.
        
        Rigorous choice modeling.
        
        Having designed the four prototypes, the project team tested them with thousands of customers using discrete choice analysis, which requires people to make a sequence of explicit choices when presented with a series of product options. The researchers began by amass- ing a detailed list of the attributes for each proto- type—ATM fees, overdraft fees, credit monitoring, customer service hours, and so on. They presented respondents with several sets of checking accounts that varied on these attributes, asking them to select which prototype from each set they preferred. This process was repeated several times, as attributes changed according to an experimental design, until the team derived the winning combination of attributes.
    - - The goal was to understand consumers’ pri- orities for a checking account, their frustrations, their compromises, and their reasons for using multiple institutions for banking services.