Customer Loyalty Building 101: The Customer Value Package

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How to Build Customer Loyalty 

When organizations focus on cost reductions and efficiency improvement, they often miss the opportunity to study the customer as an essential improvement element and build a loyal customer.

At Business Enterprise Mapping (BEM), we partner with organizations to develop an understanding of the customer of each process, determine the extent to which each process serves its customer, and align processes in a way that builds a succession of satisfied loyal customers.  

 

Define the Customer

Who are the customers of your organization? The answer might surprise you.

While most organizations think only of customers external to the organization, at BEM we define customers as the people or organizations that receive products and services from business processes, whether external or internal, who use the products and services provided to solve their problem or satisfy their need. Some examples,

  • A company Supplier is the customer of a purchase order. The Supplier must receive adequate information on the purchase order so it can provide the product or service that the organization requests.
  • The Supplier then sends purchased parts to Production. Production is the customer of the Supplier that delivers the purchased parts that Production needs.
  • Production produces finished products that are sold to an external customer. The external customer’s satisfaction is directly dependent upon the chain of business processes that align to meet internal customer requirements.

Once defined, you can develop a customer profile that includes writing a short sentence or two describing common traits or characteristics for the customer whose problem the process solves. If the process serves more than one customer, a unique customer profile should be developed for each customer type. 

 

Define the Purpose of the Process

A process must provide an overall level of performance that builds a loyal customer and provides the best option available.

At a minimum, every process should 1) define who the customer of the process is, 2) understand the customer’s perception of value, and 3) provide a Customer Value Package (CVP) that solves the customer’s problem or satisfies the customer’s want or need.

 

Four Basic Levels of Customer Satisfaction 

Dissatisfied represents a basic failure or missing element in the CVP that will cause the customer to turn against the process.   A dissatisfied customer likely is or will soon be an ex-customer.

Expected represents the minimum level of customer value that is necessary to even be considered for purchase or usage. It is “just enough” to meet the customer’s needs.

Desired represents features that the customer would like to have from the CVP, but lacking them does not necessarily prevent the purchase or usage. Desired features are likely available elsewhere and are seen as valuable, but not essential.

Delighted represents a pleasant surprise, where the customer receives an unexpected, desirable benefit from the CVP. In this case, the CVP is surprisingly better than expected.

Over time, it is common for desired benefits to become expected and delighted benefits to become desired by the loyal customer.

 

Build a Loyal Customer.

Building customer loyalty comes from the development of an insightful understanding of what the customer wants from a process, determining what alternatives the customer has relative to getting his product or service from the process, and then building a Customer Value Package (CVP) that is better than all other alternatives available to the customer. 

Customer value comes through the outcomes customers experience and the perceptions they form, not the tangible products or services they receive.

Understanding and delivering a consistent, sustainable, and superior CVP earns customer loyalty. This can only come after you define who your customers are and identify their expectations. Once you understand these, you can ensure business processes achieve the desired outcomes.

Continue Reading: Learn How Business Process Mapping Can Make You a Better Manager

 

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