Mastering Customer Value Management: The Art and Science of Creating Competitive Advantage

Citation

Narasimhan, K. (2003), "Mastering Customer Value Management: The Art and Science of Creating Competitive Advantage", Managing Service Quality: An International Journal, Vol. 13 No. 5, pp. 433-434. https://doi.org/10.1108/09604520310495895

Ray Kordupleski is president of CVM, Inc., based in the USA. He has 17 years experience implementing customer value management initiatives and has consulted globally with firms of all sizes in many industries in Asia, Australia, Europe, Latin America, the USA and New Zealand. He is considered one of the leaders in the customer value management movement. John Mckean, whose book is reviewed in this journal, quotes profusely from Ray’s work.

Mastering Customer Value Management comprises an eight‐page introduction, 16 chapters and six case studies derived from the author’s actual experiences. The book is divided into three parts.

Part I comprises three chapters and two case studies and deals with the fundamentals of customer value management (CVM). In chapter 1, Ray briefly explains why businesses must win in three key markets (financial, employment, and customer) to be successful.

In chapter 2, the readers are introduced, via a simple three‐fold “value creation arrow”, to the key concepts and processes of CVM: choosing value propositions, delivering value, and communicating the value proposition. An overview is given of the application of various tools developed by the author (value maps, attribute trees, customer waterfall of needs, and the slippery slope).

In chapter 3, Ray explores the soft issues of organizational culture and change leadership that are essential in CVM. Two case studies, from Suncorp (Australia), a large bank/insurance corporation, and J. Heller and Sons (USA), a small, family owned hardware store, are provided to vividly demonstrate how the concepts and tools tie together.

Part II comprises 11 chapters and three case studies and presents the core of the author’s CVM methodology. In this part, Ray focuses on his ten steps to mastery and the skills required for applying the concepts to choose, deliver and communicate the “value propositions”. He explains in detail how to identify what actually drives value for customers, how to identify sub‐attributes that link to the organization’s business processes, and how to manage, measure and improve these processes.

The ten steps to mastery are grouped into four sections: making commitment, researching the customer base, implementing, and reinforcing. Also covered in some depth is the need for, and the makeup of, a balanced implementation team with the correct mix of internal and outsourced knowledge and skills required to make the process work. The ten steps are presented graphically and explained in depth with the help of numerous exhibits and examples.

The author clearly identifies the first step in gaining commitment to a CVM initiative as securing agreement on plans that work. The steps to achieve this, from articulating the purpose to deciding on the leadership structure, are quite deftly explained. Next, the fundamentals of survey strategy, scope, and survey design are dealt with in some depth. The vital topic of market research is covered in three chapters that deal with capturing data, choosing the format for sharing the results, and analysing the data. In the chapter on analysing the data, Ray focuses on the mechanics of assembling survey data, using the various tools introduced in chapter 2.

The chapter on implementation introduces the Kordupleski Cube to illustrate the linkages among customer‐facing processes, core business processes, and support processes. In the chapter on rewarding success, Ray deals with the “three Rs” (reinforcement, rewards, and recognition) and the “three Cs”: clarifying the purpose and how employees contribute to it; collaboration among different departments and units; and creative recognition to reward those who successfully apply the concepts in business. The aspects of whom to reward for what and how are briefly covered.

Part II concludes with case studies from Roche Diagnostics (New Zealand), Vodafone (New Zealand), and Mead Corporation (USA), featuring numerous comments from executives and managers about the value and efficacy of CVM. Although interesting and informative, these case studies do not provide the practical information and guidance featured in the case studies included in part I.

Part III, which is relatively short, comprises two chapters and a case study of Multibras S.A. Eletrodomesticos (Brazil); and it provides an overview of CVM in context with other customer‐related concepts. In the first chapter, Ray briefly describes the fundamental principles behind known and popular concepts such as customer satisfaction, customer loyalty, customer value, and customer relationship management, and how each of them complements CVM.

In the final chapter, he briefly introduces two companies who are using CVM concepts in new and unique ways. One is exploring the application of CVM to business decisions such as mergers, acquisitions, and spin‐offs. The second is actively adapting CVM to key stakeholder groups: shareholders, employees, suppliers/partners, and communities.

As other reviewers have concluded, this book is written in a very readable first‐person style and contains sufficient information and data to enable a reader to accurately assess the efficacy of the CVM approach.