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The importance of placing customer value at the centre of all you do.

Customer value

When a Japanese train departed 25 seconds early last week, the rail company immediately issued an unreserved apology: ' the great inconvenience we placed upon our customers was truly inexcusable'. As would be expected, social media lapped this up and mocked the poor levels of services Japanese commuters are having to tolerate!

To us, where ‘on-time’ is measured to an accuracy of 5 minutes and still only 90% of trains arrive and depart as scheduled, it seems remarkable that not only did the train operator feel the need to offer an apology for a train leaving 25 seconds early, but they offered such a strongly worded and heartfelt one. So why should they apologise?

The answer is simple. Value.

Japanese train platform

When we talk about value, what we are really referring to is customer value. Whether it be a service or a product you are providing, your processes, procedures and quality levels should be set around the value they add according to the customer.

In the instance of the Japanese rail provider, much like the last similar incident back in November 2017, nobody missed their train as a result of the early departure and yet it made international news and drew customer complaints. The service level expectation had been set by the customer: it was part of the value that the commuter expected as an absolute minimum and companies rightly pride themselves on their ability to deliver that value.

So while we scoff at the Japanese rail provider for the apology, there’s a key lesson to be learned. One of the fundamental keys to business success is understanding the needs of the customer and making the delivery of that value central to everything you do.

Delivering customer value

You will have heard of Lean, Six Sigma, TQM and all the rest of the process improvement tools, but despite the differences in each of these tools, they all share one common objective: to deliver customer satisfaction and value in the most efficient way. Whether you’re a construction company, care provider or call centre and whether you want to use tools like Lean or Six Sigma, there are three simple steps to reducing costs without compromising quality for your organisation:

  1. Establish what the customer perceives as value

Establishing the customer-perceived value is the critical first step in the process. Understanding exactly what your customer is willing to pay, for what and where else they can get it, provides the basis around which a company can design its processes:

  • Understand the minimum expectations the customer has from the service or product you’re providing.
  • Identify any additional value ‘extras’ the customer would be interested in, and what, if anything, they would be willing to pay for them.
  • Establish what elements of value your competitors are offering.
  1. Identify all the steps in your process

Mapping the current process as it stands by identifying all the steps taken to deliver the final product or service is the next stage. The ‘as is’ process map is key in understanding and identifying areas of waste and inefficiencies – those steps that don’t contribute to customer value.

  1. Eliminate non-value adding steps

To establish whether a step in the process adds value, use the following three criteria:

  1. The step transforms the item towards completion (something changes)
  2. The step is done right the first time or isn’t compensation for another step not working (not a rework step)
  3. The customer cares (or would pay) for the step to be done.

Delivering customer value

Successfully defining customer value and making it central to all you do will not only provide you with improved customer satisfaction levels, it will provide the foundation on which to build sustainable business growth.

Our experienced consultants can provide a range of business improvement services for businesses of any size including:

For an informal chat on how we can help, or for a free, on-site consultation, call us today.

 

Call us now to speak to a member of our team:

0191 511 1513 or direct to mobile: 07931 33 65 62

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