Service Product Profit Model - FULL

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The Service Profit Chain Customer Lifecycle Profitably Serving Customers Followed by: Part One – Linking the Customer Lifecycle and Business Logic Part Two – Developing the Customer Value Package Part Three – Developing Service Products to fill the Value Package Part Four – Understanding Service Pricing Strategies Part Five – Improving Margins through the Service Value Chain

Text of Service Product Profit Model - FULL

  • Customer Lifecycle and The Service-Profit Chain Walter Adamson June, 2003 Version C Contact: [email_address] Tel: +61 403 345 632
  • Introduction
    • The Service Profit Chain
    • Customer Lifecycle
    • Profitably Serving Customers
    • Followed by:
      • Part One Linking the Customer Lifecycle and Business Logic
      • Part Two Developing the Customer Value Package
      • Part Three Developing Service Products to fill the Value Package
      • Part Four Understanding Service Pricing Strategies
      • Part Five Improving Margins through the Service Value Chain
  • The Service Profit Chain 1 Focus of This Presentation Connected through Value Employee Productivity Internal Performance Employee Loyalty When we have this ..... Employee Satisfaction Profit & Growth 1 Customer Loyalty Customer Satisfaction 1 Customer Value 1 Service Value 1 External Performance
  • Customer Lifecycle
    • Represents the total potential touch-points and profit capture
    The Customer Lifecycle Phase 1 Pre-sale Phase 5 Value Creation Phase 9 Disposing & Upgrading Phase 2 Value Identification Phase 7 Customer Value Gain Phase 8 Value Improvement Phase 3 Meeting Needs Phase 4 Obtaining Commitment Phase 6 Customer Learning
  • Profitably Serving Customers
    • A systems thinking approach optimises:
    • Value creation for the customer
    • Value capture and sustainability for the provider
    Customer Value Model Customer Value Package Whole Product Business Logic Customer Lifecycle Service-Profit Chain Profit & Growth Value Chain When we have this ..... $$
  • The Customer
    • From the market into the business strategy
    • Drives the business logic and value packages
    • Reflects industry trends and competitive forces
    • Without this analysis the business has no grounding
    • A value package is a customer-oriented offer
    • It includes a value proposition for specific customers
    • Without this offers will be only features or advantages
    • Requires an associated move to solutions selling
    Understanding the Customer Value Model drives the development of the Customer Value Packages Customer Value Model Customer Value Package
  • The Service Product
    • The totality of what a customer buys
    • Includes all touch-points, resources, and emotions
    • Closely synchronised with the customer value package
    • Required to understand pricing, costing and competition
    • The lifecycle represents the lifecycle touch-points
    • Customer value packages must reflect different phases
    • Whole product and business logic link to lifecycle
    • Understanding required as a key part of solutions selling
    Understanding the Whole Product concept allows business to be captured and value created through the full Customer Lifecycle Whole Product Customer Lifecycle
  • The Delivery
    • The process of delivering the whole product
    • Describes the activities and resources and interfaces
    • Closely synchronised with the customer lifecycle
    • Required to reduce inefficiencies and increase net profit
    • How the business operates and makes money
    • Driven from the strategy and customer value model
    • Measured by business targets and key result areas
    • Without clear understanding the business is suboptimal
    Understanding the Whole Product concept allows business to be captured and value created through the full Customer Lifecycle Value Chain Business Logic
  • The Lifecycle Link to Profit Understanding the complete Customer Lifecycle is essential in order to the satisfaction required in the Service-Profit Chain Customer Lifecycle Service-Profit Chain
    • A satisfaction cycle
    • Reflects total costs and potential profit
    • If broken then breaks satisfaction
    • Customer satisfaction drives profit
    • Value package drives satisfaction
    • Solution selling meets value needs
  • Profitability and Sustainability Successfully delivering service profits requires an understanding and enablement of the linkages across the complete system Profitability Sustainability
    • Understand customer value
    • Sell value propositions that matter
    • Effective resource deployment
    • Efficient distribution of whole product
    • Satisfy customers and employees
    • Capture fair share of value created
    • Re-validate customer value & lifecycle
  • The Lifecycle Sales Approach - 1
    • Moving Sales from HOW & WHAT WHO & WHY
    Solution (Why) Product (What) Advantages Promoter Transaction, Product Pusher Salesperson Needs Relationship, Value Provider Problem Solver Customer Needs (Who) Stages of Sales Maturity focus process 4 3 2 1
  • The Lifecycle Sales Approach - 2
    • The primary objective of the salesperson shifts
    • FROM : Close the sale, and
    • Sell the advantages and get through the process, TO:
    • Solve the problem of why the customer needs the product
    • Create customer value and capture a fair share of it
    Solution (Why) Product (What) Advantages Promoter Transaction, Product Pusher Salesperson Needs Relationship, Value Provider Problem Solver Customer Needs (Who) focus process 4 3 2 1
  • The Service Profit Chain 1 Focus of This Presentation Connected through Value Employee Productivity Internal Performance Employee Loyalty When we have this ..... Employee Satisfaction Profit & Growth 1 Customer Loyalty Customer Satisfaction 1 Customer Value 1 Service Value 1 External Performance
  • The Service-Profit Model
    • Linking the Customer Lifecycle and Business Logic
    • Customer Lifecycle
    • Business Logic
    • Customer Value
    • Customer Value Model
    • Customer Value Package
    • Customer Value Audit
    1
  • Customer Lifecycle
    • The objective is to optimise the creation and capture of value
    The Customer Lifecycle Phase 1 Pre-sale Phase 5 Value Creation Phase 9 Disposing & Upgrading Phase 2 Value Identification Phase 7 Customer Value Gain Phase 8 Value Improvement Phase 3 Meeting Needs Phase 4 Obtaining Commitment Phase 6 Customer Learning
  • Business Logic
    • To service customers you need operational business logic
    • The logic that organises a businesss approach to things
    Revenue Model Marketing & Sales Logic Service Product Design Delivery & Customer Support Business Strategy Customer Value Package Resources Customers Needs Customer Value Model Profit Targets Competition
  • Lifecycle and Business Logic
    • To maximise return on investment:
    • The customer lifecycle is supported by the Business Logic
    Business Logic
  • Business Logic Basics
    • Describes how a business operates and how it makes money
    Business Logic Value Creation Value Capture Value Chain Customer Value The Value Proposition Marketing Model Revenue Model Core Competencies Funds and Investment People Management Operations Model Systems Management
  • Business Logic and Strategy
    • Business Logic is the essential logic of the business
    • Needed in order to optimise value creation and capture
    • Expressed in terms of a major action premise that can:
      • Maximize market share, revenue, short-term-profit, ROI, or,
      • Whatever focus the Business Leaders have chosen
    • The Logic aligns the action premise and the peoples energies:
      • Marketing and Sales Logic
      • Revenue Model
      • Service-Product Development Logic
      • Customer Delivery and Support Logic
  • Business Logic and Strategy
    • Marketing & Sales how to we gain access to our customers?
      • Niche, vertical, horizontal, alliances, distribution
    • Revenue Model how do we use and make our money?
      • Market