1. Janet LeBlanc Director, Canada Post

2. Presentation Objectives
Define customer value management (CVM),
Understand the difference between customer value and customer satisfaction,
describe key CVM concepts and tools, and
communicate the importance of measuring quality in the eyes of your clients.

3. WHY invest in CVM?
Canada Post will be a world leader in providing innovative physical and electronic delivery solutions, creating value for our customers, employees and all Canadians

4. What is Customer Value? VALUE Quality Price
Source: Adapted from Customer Satisfaction in Practice by the American Productivity & Quality Center, 1998

5. Customer Value Defined

6. Quality Attributes
Performance Rating
Importance Weight
ABC
XYZ
Product Information 50 6 8
Advertising and Promotion 20 7
Customer & Consultation 9
Customized Solutions 10
100

7. Competitive Focus on Targeted Markets 21st Century Growth Company
Stage One
Stage Two
Stage Three
Stage Four
Minimum Requirements
Customer Focus
Customer Attitudes
Competitive Focus on Targeted Markets
Customer
Value
Customer
Loyalty
Meeting critical needs of targeted customers
Outperforming competitors
Creating new, unique benefits
Customer
Satisfaction
Retaining our customers
Getting them to recommend us
Conformance Quality
Delivering what we promise
Meeting standards
Providing what customers want
Responding to customer complaints
21st Century Growth Company
Source: Adapted from Managing Customer Value by Bradley T. Gale, (New York, The Free Press, 1994)

8. I can’t get no (customer) satisfaction…
Satisfaction in itself does not lead to customer loyalty
Positive empirical relationship between value focus and link to market share
Satisfaction = Satisfy Existing Customers Better
Value =
Improve Your Competitive Position
Attract and Retain Targeted Customers
Where are leading-edge companies headed?

9. VS Satisfaction Value Current Service The Entire Customer Relationship
Lag Indicator
Lead Indicator VS
Company Performance
Company Vs. Competition
Tenuous Link to Business Performance
Proven Relationship to Business Performance

10. DEFINITION GOAL INPUTS OUTPUTS KEY MEASUREMENTS
Customer Value Management is a process designed to develop and execute value-based strategies which impact marketing, strategic planning, competitive positioning, branding, pricing, and selling.
GOAL
To establish CVM as a core competence for the
Canada Post Group of Companies.
INPUTS
Customer Value Management Council
External/Internal Data Sources
OUTPUTS
Customer Value Tools and Data
Competitive Value Proposition
Customer Loyalty and Market Share Analysis
KEY MEASUREMENTS
Customer Loyalty Market Share Profitability Customer Retention 12

11. Ideal Customer Value Process Capabilities Performance Improvement
CUSTOMER-CENTRIC
Ideal Customer Value
Process
Capabilities
Performance
Improvement

12. Customer Value Management
2. Conduct Analysis
Assess Market Opportunity
Customer Value Management
4. Measure and Reward Performance
3. Commit to a Value Proposition

13. Head-to-Head Comparisons
Value Analysis Tools
Value Map
Price Performance Profile
Head-to-Head Comparisons
Value Scorecard

14. Price Performance Profile

15. Value Map

16. Value Scorecard

17. Head-to-Head Comparisons (Average)

18. Conduct Baseline Study Business Process Improvement On-going
Identify
Value
Drivers
Measure
Value Creation
After
Transaction
Develop Action
Plans
Measure
Market
Perception
feedback
Conduct
Baseline
Study
Business
Process
Improvement
On-going
Transactional
Surveys
On-going
Market
Surveys

19. The Value Proposition Deployment Process
Plan/Do/Check/Act
Define/
Refine
Value
Proposition
Build
Commitment To
Value
Proposition
Process &
Organization
Gap
Analysis
Changes
To Deliver
Value
Proposition
Internal
Tracking
&
Measurement
Tracking
Market
Impact
The Value Proposition Deployment Process
Plan/Do/Check/Act
Internal
Management/
Staff
Group of
Companies

20. Customer Value Yields Big Dividends
Wireless Telecom Company
Heavy Equipment Dealership
Underground Mining Equipment Manufacturer / Distributor
International Health and Leisure Firm
Reclaimed more than $8mm in lost sales
30% improvement in on-time deliveries
Improved margins on equipment repairs from 11% to 28%
Doubled sales revenue – from $250M to $500M+
Tripled market share in a strategically important market: 4% - 12%
Increased employees from 600 to 1000+
Achieved record profitability last year
Doubled profits in a single year
Moved from being a market “nicher” to the market leader
50% reduction in customer churn
Improved equipment delivery time from 10 days to 2 days
Total estimated bottom line contribution = $4.5M
Source: Adapted from Customer Satisfaction in Practice by the American Productivity & Quality Center, 1998

21. Retention Acquisition Positive Turnover Employee Value
The Right Workforce”
MODELING EMPLOYEE VALUE
Retention
Acquisition
Positive Turnover
Employee Value
Relative Compensation
Relative Job Quality
Base Salary
Pay Equity
Bonus
Benefits
Manager Quality
Brand Equity
Work Life Balance

22. The “Value” of Customer Value
Strengthen value propositions – value is the basis for customer decisions
Identify responses with the greatest impact on customers’ future purchase behaviour
Hone in on winning client strategies
Discipline and focus—across all functions
Dramatic impacts and performance gains
The key to attracting, satisfying, and retaining customers.

23. November, 2003