CVMBoK

This section looks at the need for alignment and ways how to better align Customer Value Management strategically with the organization.

The necessity of aligning CVM #

Most senior leaders understand the importance of making sure that the organization is firstly doing the right things, only then doing them right. Customer Value management role, by virtue of being a modern incarnation of marketing, is extremely sensitive to changes in the business environment and the definition of what is right is an ever moving target. There is almost an infinite number of business scenarios that throw CVM out of balance – ranging from competitor acquisitions or mergers, economic cycles, technological advancements, entry of new competitors, constant stream of regulatory changes, introduction of new products, changing company owners – the changes never end.

Therefore it is essential to ensure that a periodic CVM alignment process is in place. Regardless of whether your planning process is top-down driven by strategy, or bottom-up driven by customer needs and feature requests, strategic alignment process is about creating a shared agreement between key stakeholders on the direction. This may sound daunting at first, but the important thing to realize is that just a few key aspects impact CVM in a significant way, while many aspects can be left out of sync. By making sure that these key aspects are well aligned among senior management you can ensure that the CVM role is well positioned to contribute to the business in a big way.

What are those key aspects? Experience shows that there are 6 key aspects – 3 looking from the customer perspective (persona, needs, alternatives) and 3 looking from the business perspective (strategy, business objectives, and major initiatives). They are described in more detail in the Strategic CVM Alignment Tool chapter below. By making sure all 6 aspects are covered with coherent answers senior leadership creates a solid foundation on top of which CVM team can begin their work in sync with the business direction.

Introducing The Strategic CVM Alignment Tool #

Strategic CVM alignment should always integrate both BUSINESS and CUSTOMER perspectives, allowing flexibility in prioritizing or balancing them.

The Strategic Customer Value Management Alignment Tool is meant to be utilized by senior executives and operates on the level of strategic marketing decisions. It comprises a set of 20 difficult-to-answer questions that require discussion and written answers in order to create a shared understanding between senior leadership and team leaders driving CVM on daily basis. Assuming the business has at least an informally aligned and mostly coherent strategy the tool can be fully utilized in about 4 weeks with 1-2 workshops per week plus several days of work every week to fill in the gaps between the sessions.

Let’s look at each of those questions in turn.

This question is about narrowing down the scope further work. The market may be defined geographically, linguistically, by type of customer, by type of service, etc. Setting clear boundaries improves creativity and productivity of the exercise that follows.

Example:

• Assumed answer before discussion: “We are playing in the telecommunications market of country X”.

• Actual answer after discussion: “We are playing in the telecommunications and media market of country X and neighboring countries Y and Z”.

These 3 questions are related, and aim to better understand the market the organization chose to play in, the unique sets of needs and accordingly the set of customer types (“segments” or “personas”) that are there in the market. We recommend to use the Jobs-to-be-done framework [4] for this part of analysis. At the heart of Jobs-to-be-done framework is the customer Persona, characterized by a range of needs (jobs-to-be-done) that can be addressed in multiple ways (Alternatives).

• Persona
  Who are the typical customers and what are their distinguishing characteristics?

• Jobs to be Done
  What are the primary needs and expectations of these personas?

• Alternatives
  Given the specific job-to-be-done, what alternatives might the persona consider and why?

Please note that Customer segments or personas are defined by virtue of having a unique set of needs and characteristics – so the discovery of needs goes first, and then they are grouped into personas afterwards. However it may be easier to proceed in iterative fashion and revise personas & jobs-to-be-done together.

These 2 questions begin to position the business in light of the persona and his needs – the answers to these two questions are usually the outcome of the company’s founders’ work and historical business evolution, but it is crucial to have clarity here as they may need to be refreshed from time to time.

Here we recommend to conduct the P.E.S.T.L (Political, Economical, Social, Technological, Legal) trend analysis to capture the major trends as they will have predictable influence over time. They will have impact across the board, both on the business and on the persona, and also on all of the alternatives.

The team should take a look at which of these trends are likely to impact the business and the target persona in the future and potentially rank the trends by magnitude of impact.

Here the team should evaluate the long list of possible changes to the services/products by linking them to the customer jobs to be done, alternatives and identify a few candidate value propositions.

Here the team should further elaborate the long list of possible changes to the services/products in a way that accommodates the PESTL trends.

Here the team should continue to evaluate the long list of possible changes to the services/products by evaluating them from competitive standpoint and identifying the characteristics that make your offering stand out.

The senior management team should then consider the expectations of shareholders and the financial goals of the organization, as well as the organizational capabilities to fulfill those goals using a tool like strengths, weaknesses, opportunities and threats (SWOT).

Here the team writes a list of candidate ideas that leverage identified opportunities considering the analysis done so far and formulates them as specific “bets”. This is the crux of strategic thinking process as it aims to synthesize the answers obtained previously into a short strategy “kernel” that pics a specific shortcut to achieve the goal. There should be multiple bets produced and they are narrowed down to top 1-3 bets as main priorities.

Here the team further clarifies progress on top strategic bets by translating them into long term goals as well as establish intermediate medium and short term targets to keep everyone focused. This sets the stage for further resource allocation and operational planning.

Capabilities are the vehicles to bring the strategy and objectives to life. They involve investment, require effort and have a direct impact on the customer base and on revenue streams. This section creates a high level plan that identifies the major building blocks needed/missing and high level investments needed to obtain them. This forms the basis for a variety of programs and projects that transform the business.

Using Strategic CVM Alignment tool for CVM Alignment #

If the rationale for a CVM initiative is rooted in the strategic plan it is much easier to justify and ensure it’s funding even when stakeholders change over time. For example, if a company merger was concluded in order to broaden the product portfolio of the combined company and cross-sell the product portfolio to the combined customer base, this creates a massive CVM initiative to ensure this key commercial driver for the merger is successfully implemented.

How should one go about aligning CVM with the results of the Strategic CVM alignment tool? In order to align CVM we should ensure that the CVM KPIs, the high priority Moments of Truth and the Cross-functional collaboration setup is traceable to the strategic bets.

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