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Analysis & Design

3 strategies focused on building customer value [Future Processing example]

date: 11 May 2021
reading time: 9 min

Which strategic path should you choose to meet your customers’ needs and take the lead on the market? In the 90s, Michael Treacy and Fred Wiersema created three complementary strategies to win a competitive advantage. Let’s explore each one of them and check how they help develop Future Processing.

Nowadays expectations among new customers, users and employees are higher than ever before. They regard quality, usability and ergonomics as well as the prices of products and services. Market leaders constantly shift quality standards in terms of essential features for the recipient.

What’s their key to success? A strategy oriented towards customers’ needs. At Future Processing, we follow this path and always put customers first.

Treacy & Wiersema concept

In 1993 Michael Treacy and Fred Wiersema published a text entitled “Customer Intimacy and Other Value Disciplines”, where they explored three complementary strategies that help win competitive advantage:

  • customer intimacy,

  • operational excellence,

  • product leadership.

Treacy Wiersema Market Positioning product leadership
Treacy Wiersema Market Positioning Product Leadership

Each of these strategies focuses on products and services improvement by creating more customer value in the area that is a priority. Treacy and Wiersema’s concept is still a successful alternative to strategies focused on the lowest possible price, differentiation or concentration on selected segments.

Future Processing practice shows that the best results are achieved by selecting one leading strategy that powers particular solutions. However, it is also essential to ensure a decent level of implementation of the other two concepts.

Let’s look at it in more detail.

Why is it important to create value for customers?

Creating customer value is of paramount importance for businesses of all sizes and sectors. It allows organisations to increase their brands’ reputation, profits and general success. When you provide customers with goods and services at the highest level, you work towards increasing their confidence and trust in your company.

Thanks to that they are more likely to come back to you for more and recommend your business to others.

Read more about creating more value for your audience:

As customer value creation allows businesses to increase customer loyalty and retention, it also means repeat business and long-term value. By building trust and confidence in your brand you are working towards better future and sustainability of the business.

By consistently meeting and exceeding customer expectations, businesses can build strong, enduring relationships that form the bedrock of a long-term success.

What Really Matters in Modern Customer-Centric Design?
What Really Matters in Modern Customer-Centric Design?

The business benefits of prioritising customer value creation

Having in mind how important customer experiences and customer value concept is for the long-term strategy of every company, let’s look in details at the most important business benefits it brings:

  1. Customer satisfaction

    By focusing on value proposition for customers, businesses can create customer satisfaction. And, as we all know, satisfied customers are more likely to remain loyal and make repeat purchases.

  2. Customer loyalty and retention

    Prioritising customer value creation fosters loyalty. Loyal customers are more likely to stick with a brand, reducing churn and increasing customer retention rates.

  3. Increased sales and revenue

    Satisfied customers are more willing to make additional purchases and often spend more. This leads to increased sales and revenue for the business.

  4. Competitive advantage

    Providing superior value differentiates a business from its competitors. It gives the company a competitive edge, making it more attractive to customers in a crowded marketplace.

  5. Positive word of mouth

    Customers who experience value are likely to share their positive experiences with others. This word-of-mouth marketing can bring in new customers at a lower acquisition cost.

  6. Brand reputation and trust

    Consistent delivery of value builds a positive brand reputation. A trusted brand is more likely to attract customers and partners, contributing to the overall success of the business.

  7. Long-term customer relationships

    A focus on customer value creation helps build long-term relationships. Businesses can establish themselves as reliable partners, ensuring customer loyalty over an extended period.

  8. Cost efficiency

    Acquiring new customers is often more expensive than retaining existing ones. Prioritising customer value creation often leads to cost optimisation for the business.

  9. Innovation and adaptability

    Customer-centric businesses are more likely to innovate and adapt to changing market conditions. This adaptability is crucial for long-term success in dynamic industries.

  10. Employee satisfaction and productivity

    Employees in organisations that prioritise customer value often feel a sense of purpose and satisfaction. This positive work environment can enhance employee productivity and engagement.

  11. Customer feedback and improvement

    A focus on customer value encourages businesses to actively seek customer feedback. This feedback provides valuable insights that can be used to improve products, services, and overall customer experience.

  12. Reduced marketing costs

    Satisfied customers become brand advocates, reducing the need for extensive marketing efforts. Positive word of mouth generated by happy customers can be a cost-effective way to attract new business.

  13. Risk mitigation

    Strong customer relationships can act as a buffer during challenging times. Loyal customers are more likely to stick with a business through economic downturns or industry disruptions.

3 effective strategies to build customer value

As we already mentioned, there are three effective strategies used to build value for your customers.

Here’s a quick overview of each of them:

#1 Customer intimacy strategy

When following the customer intimacy strategy we focus not on what the market dictates today but on the values ​​that specific customers currently need.

Sustainable customer relationships and trust are crucial. Thanks to this, market leaders have access to knowledge about particular needs. It means that they have the best solutions for their clients.

Customer intimacy strategy’s main features:

  • Key business processes are focused on helping clients achieve their strategy and business goals.

  • The organisational structure supports building relationships and identifying customer needs.

  • Management systems are designed to measure the costs of providing services and maintaining relationships with customers.

  • A culture of cooperation with the client-focused approach and flexibility.

  • Ease of cooperation from the customer’s perspective.

How to follow customer intimacy?

FP has developed the so-called feedback culture. The feedback is gathered by clients and associates at least once a quarter.

We use the DSI survey procedure, which helps us understand mood and satisfaction at the project team level. Based on that, the leaders of different teams set expectations for specific results. Our job is to meet those expectations.

Once a quarter, the NPS (Net promoter score) survey is performed globally for almost all FP clients. Thanks to it, we know what our customers expect from us!

What customer needs do we successfully respond to?

  • Fast delivery of competencies.

  • The certainty of delivering the service on time.

  • Invariability of the staff (lower employee turnover).

  • Individual approach and flexibility (focus on the client’s goals and strategy).

  • Solutions that effectively help to achieve the company’s business goals.

  • Regular adjustment of our services to clients’ needs.

  • A whole department of Analysts and UX designers to ensure full focus on client’s business and industry requirements.

#2 Operational excellence strategy

Operational excellence strategy recognises the key value of providing good value products with average, decent and fair majority quality with hassle-free service.

Operational excellence strategy’s main features:

  • Critical business processes are centred around the optimisation of distribution processes and trouble-free service. Operational excellence allows you to reduce costs but also ensure sufficient quality and trouble-free service.

  • A structure built around central management and limited powers.

  • Management systems based on rigid procedures.

  • A culture based on predictability and a mass approach.

How do we follow operational excellence?

Following the strategy of matching customers’ needs requires taking a closer look at operational efficiency. Some of FP’s customers, particularly those who implement more and more projects involving several people expect greater discounts.

To meet customers’ needs, constantly develop and still provide growing salaries and benefits for our employees, we optimise costs.

7 gray

What existing customers needs do we respond to?

  • More favourable prices with the highest quality projects implemented (better value for money).

  • Optimisation of costs thanks to quick reaction if the project goes in the wrong direction or any blockers appear.

  • Involvement of larger teams and optimised processes.

  • Competent, committed and satisfied staff thanks to the care of employees in many fields (benefits, feedback, listening to needs).

  • Opening additional branches, hiring more people to perform less complex tasks.

#3 Product leadership strategy

Product leadership strategy aims to constantly create products or services that redefine customer expectations towards products of this type in a given segment.

A vital feature of this strategy is the need to continually introduce innovations to maintain a competitive advantage.

How do we follow product leadership strategy?

Like most organisations, we dream about product leadership or creating the so-called “blue ocean” (a new market space where competition does not count).

However, the nature of the current FP offer doesn’t create the potential for this direction as dominant. Our structure has been designed for the implementation of IT services. We develop innovative products for business, but we don’t create them as aggressively as IT product leaders.

What customer needs do we respond to?

  • Offer created to perform IT services: design and implementation.

  • Innovative products for business developing sustainably, based on customer needs.

  • Loyal cooperation with other IT companies, which brings them new opportunities to develop.

  • A well-functioning partner channel, and it’s already one of the company’s most important assets.

  • Ability to quickly respond to customers’ needs.

  • Work with consulting agencies in the area of IT strategy to approach significant challenges with customers from foreign markets.

  • Closer cooperation with partners who specialise in the missing areas as in the concept of Open Innovation (to get involved in more significant challenges).

Building strong relationships through customer value management

Building strong relationships through customer value management involves strategically managing every interaction with customers to maximise the value they receive from products, services, and overall experiences.

Its key aspects include understanding customer needs, personalisation, consistent communication, transparency, education and providing value, quality and assurance and feedback mechanisms.

Building strong relationships through customer value management requires a holistic and customer-centric approach. It involves ongoing efforts to understand, meet, and exceed customer expectations, fostering loyalty and advocacy in the long term.

Creating value for customers in Future Processing

At Future Processing it’s statistics that prove the effectiveness of our dominant strategy of following customer needs. As much 56% of our revenue comes from clients working with us for more than 3 years.

It is also proven by:

  • recommendations (many potential customers contact us via our past or current clients);

  • research (above-average results of the NPS tests);

  • perfect employer image (we attract high-end specialists).

Future Processing team has developed broad competencies in Customer Experience. We follow our proven strategy, listen to our customers, ask for feedback, and always talk about the changing needs.

That is why we are confident we can help you build loyalty among your customers, employees or users by delivering them unique experiences. Just view our case studies or give us a call!

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