A case of Product Leadership or Customer Intimacy?
February 5, 2010 at 1:07 pm 1 comment
The case I will discuss here was presented by James Anderson in the Kellogg’s program that several marketers in my company attended in November last year.
To put all this into context, in short, we were lectured on the Customer Value Management (CVM) discipline and the importance of that in a Business to Business marketplace. You may rightfully ask yourself, what is Customer Value Management? Well, that means to run your business with the one objective of creating value (and yes, we are talking $$$ here) for the customer. In other words, develop, tailor and market your products/solutions with basis on the value they add to the customer’s business operations.
THE CASE
“Tata Steel supplied steel tubes to a boiler manufacturer. The tubes were oiled to avoid rusting en route to the customer’s plant. Bizarre as it may seem, the customer first cleaned the oiled surfaces and then let it pick up rust before using it!
Result: $30 to $40 of savings per metric ton for the customer while lowering Tata’s cost by eliminating the oiling step “
MY VIEW ON THE CASE
The CVM theory classifies the above as a typical Value Drain (offerings that cost more to provide than they are worth to customers and that have no strategic significance). For me though, in order to make it simple, that’s no more than a case of tailoring, customization and customer intimacy. A lot has to be in place to make that happen, including resources (to understand that opportunity), flexibility (to adapt products) and sales strategy (you can’t customize everything for all. So, who are your prioritized customers?)
YOUR OPINION
I would appreciate to hear your comments. So, what do you think about customer intimacy as a strategy for high-tech B2B companies? How to manage that strategy without compromising a technology leadership culture?
Related links:
- Insights after the Business Marketing Strategy Executive Program from Kellogg School of Management
- The delta value formula: Price premium ≤ (value of your product) – (value of your competitor’s product)
Entry filed under: Sales Strategies. Tags: B2B, Business Marketing Strategy, competitive strategies, consultative selling, customer intimacy, customer value, customer value management, CVM, Executive program, Kellogg, Kellogg School of Management, product leadership, provocation based selling, Sales Strategies, sales strategy, technology leadership, value creation, Value Merchants.
1. henrikkenanik | August 22, 2011 at 2:11 pm
I think this is a classic case of we can’t ask cause we will look stupid if we order half rusty metal parts.. Like the classic swedish-japanese orderer-supplier incident where they ordered 10 000 steel bars with a tollerance of 99% within limits and they got two shipments. 9900 Bars that met the reqirements and 100 bars that was cut short. On the question why the answers was. Cause you said so…