Operational excellence is based on the creation of value. This is what we often call the added value. At the same time, in the services sector, it is the customer experience that seems to be the predominant element. In this article, I will clarify these two terms, which complement each other perfectly, and explain why you should be interested in both.
Why focus on the customer?
At first, let’s talk about customers. They must be at the heart of all business strategies. In fact, by buying your products or services, they are the ones who make you live. If you ignore your customers, they will also ignore you and you will lose market share. It’s the customer who makes you live, so you have to listen to him. I do not mean to give in to all the requests of the customers, but you must understand their needs, to be able to answer them adequately.
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Sam Walton (1938 – 1992), American businessman, founder of Walmart
What is added value?
Added value is always defined from the customer’s point of view. It is the latter who decides whether he is willing to pay for a feature or a certain level of quality. The added value therefore consists of all operations and products that add value to the initial product.
Added value is therefore added to the basic functionality and the minimum of customer demand.
For example, a pencil must have a body, a mine, and ink. If any of these three elements are missing, the product is not viable. Once the functionality is acquired, it is possible to add value to the product: packaging, durability, accessories, which will justify the difference in price.
Identify your value chain
In the industrial sector, the search for performance involves eliminating waste and especially anything that does not create value. One of the basic actions, which is to map the value chain, is based on this notion of added value. For an introduction to mapping and the value chain, you can read this article.
It is important to master the value chain in order to be efficient. The basic functionalities must be delivered at the best value for money. Any additional elements must bring additional value to the customer.
You must optimize the performance of your operations or the service offered on its core functionality. You can then add components, features. This is the icing on the sundae. It will differentiate you from your competitor, as long as the ice cream is edible.
Here’s another example: a mobile phone must be able to receive and make calls. Once this feature is operational, the manufacturer can add value to their phone with a camera or make it waterproof. No one would want a phone that has so many options that the battery lasts no less than 10 minutes during a call! In this case, the added features do not add value to the product.
Customer experience: beyond satisfaction ?
In the same way, the customer experience is the added value of the service offered to the customer. This is the way customers perceive their interaction with the company, which goes far beyond the simple functionality of the product or service. Just like the added value of a product, it is not the organization that decides what will be a good customer experience, but the customer!
Put yourself in the customer’s shoes
We must put ourselves in the shoes of the customer and offer him a product or service that meets his needs, when he needs it and how he wants it. It must be made easier. Simplify access to the product or service, its implementation, its understanding and in general its use.
You certainly have in mind the example of a self-assembled product with incomprehensible instructions, or a service unavailable when you need it. What experience do you have of this company? Will you buy other products and services at home? Do you think designers have imagined their product or service from your point of view?
Demanding customers
In 2016, manufactured goods can no longer rely solely on their intrinsic value to stand out. The customer experience they provide guarantees the brand a longer term success. That’s why the term customer experience is so present. There are many ways to work the customer experience, especially with the net promoter score.
To determine the value of your products and services, you must always place yourself from the customer’s point of view.