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A FEW COMPONENTS OF CUSTOMER VALUE TODAY

1. Let’s start talking about business and the driving force of it – the customers. They are you and me and, generally speaking, everybody in the world. We must think of that, and it doesn’t matter whether you are working for a company or firm, or just having a business of your own.

2. Customers today want more of the things they value. If they value low cost, they want it lower. If they value convenience or speed when they buy, they want it easier and faster. If they need expert advice, they want companies to give them more depth, more time, and more of a feeling that they are the only customer.

3. Whatever customers want today, they want more of it. Many companies in their markets have increased the value offered to customers *by improving products, cutting prices, or enhancing service¹. By raising the level of value that customers expect from everyone, leading companies are driving the market, *and driving competitors downhill².

4. Today’s market leaders understand the battle in which they are engaged. They know they have to redefine value by raising customer expectations in the one component of value they choose to highlight, and they have honed it to a level of excellence that puts all competitors to shame. Some, for instance, establish new affordability levels for familiar products; others reinvent the concept of reliability.

5. Price is one of these components. The tight lid on pricing demands that firms get a grip on costs. In many markets the only established way to improve value to customers is to cut prices.

6. Time is another of value. Customers now penalize suppliers that infringe on their time, whether through delays, mistakes, or inconveniences. Round-the-clock availability is setting the pace. Today companies bring service to the customer, not the other way around.

7. Premium service is one more component of value. Not long ago only special customers felt entitled to special treatment. But today the extraordinary is becoming ordinary. What was once premium service – speedy, flawless, and responsive – is commonplace. Customers now expect their suppliers to go beyond the expected. Truly premium services are being redefined.

8. Quality is yet another component. Now it’s a given in all products. High quality is the cost of admission to the market. The ability to generate high-quality, low-cost products that the market has ever seen before is the lynchpin of corporate growth.

9. What is needed nowadays for the businesses in response to the new competition is focus and discipline that will help to define an unmatched value proposition, build an operating model, and sustain it through constant transformation of a company’s concept and improvement of its products or services.

3. Few explanations to the text