Raising the bar

Written by Alokananda Chakraborty | Updated: Mar 16 2008, 05:48am hrs
Its bad enough that markets are becoming competitive by the day. As technology becomes easily accessible to many, product parity is the biggest threat facing marketers. So how does the marketer make it worth the consumers buck so that she walks up to the store and picks up his product time and time again Or avail of his service every time without batting an eyelid

To state in the simplest terms, companies are on an endless search, looking for ways to make products at the service and quality level that customers demand, while also continually finding ways to reduce the incremental cost of production.

No points for guessing that technological advances and broad functional improvement programmes alone arent quite the answer. The need is to devise a way to improve the processes and the organisation supporting those processes to achieve performance results that are recognised by those who count the most the customers and stakeholders.

In their book Value Merchants, James C Anderson, Nirmalya Kumar and James Narus, argue that hard evidence of the value you can deliver to customers will set your company apart from commodity suppliers, and show how you can become indispensable to all the stakeholders. But does the task get any easier if you are able to lay it down in simple terms You know the answer. There is no easy way out. There can be a few broad pointers as to how you can protect both your customers and your bottomline from the onslaught of nifty competitors. It goes without saying this book is not what you can classify as an easy read. But if you really put your mind to it, this book can be of great value.

To begin with, the book is well organised. It provides a road map that introduces the concept of value, how to conceptualise and formulate value propositions even going so far as distinguishing between value merchants and value spendthrifts and describes how to practice the art of investing in the long-term value generation.

Right at the outset, the authors say that customer value management has three unique strengths: superior conceptualisation of the value, a progressive approach to assessing value in practice, and proven concepts and tools for translating knowledge of customer value into superior business performance. Then, in its eight chapters, the authors not only reiterate why it is important to create and document value for customers, it also gives a practical roadmap of how to transform a companys sales force into a value merchant.

One more point: Value merchants should be driven to provide superior value to two categories of customers directly to their own, of course, but also indirectly to their customers customers.

Mind you, customer satisfaction doesnt come cheap. The producer/seller usually has to give something up to get it. Marketers/theorists who claim that improving customer satisfaction will inevitably lead to improved profitability are grossly oversimplifying how businesses unfold in real life. The book describes how some financially strong, well-run companies earn exceptional returns over time. It does this by contrasting the simplicity of customer focus and benchmarking against the more difficult strategy of market timing.

My feeling is this book was not written for the experienced marketing practitioner. Rather, it was meant for a broader audience that may not have the time or inclination to sift through the reams of literature and mathematical-formulae-driven works on value creation.

In Chapters 6 and 7, the book sets forth, in a manner a marketing student can easily grasp, several concepts crucial to understanding why selling on value and not price wins in the long term (Transform Sales Force Into Value Merchants and Profit From Value Provided). Can you find this information elsewhere Of course, but not in as lucid terms as laid down in this book. For me these two chapters make the book a worthwhile read.