Testimonials for Article of the Week
Sumit Chaudhuri Chairperson and Managing Director(Third Millennium Business Resource Associate Priva)

Excellent piece, Gautam.. Appreciate your sending it to us..

Jayaram India Correspondent (The Straits Times)

Excellent piece, Gautam. Enjoyed reading it. Hope all the CEOs read this, too.

Kapil Mehan Managing Director (Zuari Agro Chemicals Ltd.)

Heartiest Congratulations my friend on this well deserved recognition.

Jagrithi Vemulkar Principal (Christel House International- Bangalore)

Thank you Gautam. Interesting and true!

Rajbir Singh Head - Customer Centric Solutions Group (HCL Technologies

Interesting Read Look forward to catching up with you if you're in Delhi.

Kingsuk Sikdar Principal Consultant

This is after my heart, helping entrepreneurs test out their ideas and minimise risks as they set-up/ invest. My idea is to train entrepreneurs on research techniques relevant to small biz start-ups, develop a toolkit for them to test ideas and then monitor their respective ventures, thus make a measurable difference to the current success rate of entrepreneurial ventures. Look forward to catching up with you if you're in Delhi.

Ravi Vora (Transventure Energy LLC)

Again a long time has lapsed since we have talked or in touch. I would like to learn about entrepreneurship at the bottom of pyramid as I am currently involved in promoting a venture to create community based cooperatives to serve community needs for electricity,energy, clean water, sanitation etc on economically sustainable basis....both in India and South Africa. I am based in Denver Colorado area. Please let me know when would be a good time to chat!

Sandesh Jain Vice President(Sun Capital Advisory Services (P) Ltd)

I really appreciate your efforts and keen to associate in your noble cause... Please suggest what can I do in Mumbai. I have lots of unique ideas and I fascinated to change all unorganised hawkers and roadside seller in proper organised market and create respectable position of them in society and involvement and direct participation in economic growth of our country.

Sudhir Bijanki Principal Engineer(Advanced Technology Consulting Services)

Dear Gautam: Thanks for sending this along. I feel the same way, that the BOP folks likely don't have the entrepreneurship training. I don't have any data, though I imagine that to be the case. This new "ecosystem" is highly touted in the Chicago area, https://1871.com/ . There is a similar attempt in Lisbon, Portugal called Web Summit that is attempting to pull in EU startups.(I spent a month in Lisbon this spring )

Sandra Anderson Principal Owner(Illuminate Sales)

I really liked your Value Co-Creation Model shown below! Well done.

David Pinder Managing Director (Value Genie)

Hi Gautam, Comparing and contrasting TQM and CVM is fascinating and I couldn’t resist jotting down some thoughts. I don’t know whether they add to the debate, but they may prompt some discussion … TQM and CVM relate to customer outcomes from completely opposite directions – like looking down opposite ends of a telescope. TQM is about intrinsic value in a product dominant logic. CVM is about extrinsic value in a service dominant logic. You state that, “The Quality Revolution was meant to be customer focused, instead became process centric and one of record keeping.” But, as I see it, TQM always was an internally focused, process-based initiative. It had to be. The Quality movement was very much a part of the Product Era dominated by the value in exchange model. In that context, it made absolute sense that, if you improved the quality/reliability of manufactured goods, the customer would benefit. However, the primary driver was competitive productivity. This is borne out by the example of Japan. At the end of the Second World War, America’s productivity was 9 or 10 times greater than that of Japan. This prompted Toyoda Kuchiro, president of Toyota Motor Company, to say in 1945 that they must “Catch up with America in three years. Otherwise the automobile industry of Japan will not survive.” This kick-started Taiichi Ohno on development of the Toyota Production System, and gave rise to his famous statement: ““All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added wastes.” (Toyota Production System: beyond large-scale production, Taiichi Ohno, 1978) This was classic Product Era value creation, and something that generations of employees have worked very hard and ‘gone beyond’ to deliver. (So it’s not a matter of employees ‘going beyond’ – a lot of them have always done that. The important bit is where and how they focus their energy.) The Quality Movement operated on the assumption that internally driven manufacturing process improvements would ultimately benefit Customers by improving competitiveness, but was driven by an internal focus on competitive advantage. That’s obviously not the same as being Customer-focused or pursuing Customer Value. And it was always, axiomatically, a process-centric activity. I think the Quality Movement was a great success of the second half of the 20th century. (And it carries on via Agile methods etc. etc.) In fact, thanks also to huge help from computing technology, a lot of the quality issues in manufacturing have now been solved. (Old joke: “How many people does it take to operate an automobile factory?” “One man and a fierce dog.” “What’s the fierce dog for?” “To stop the man touching anything.”) Back in the 20th century you had to choose between quantity or quality. You could have one but not both. Now you must have both. So the two functions differ as follows: • Quality Management is about the intrinsic value in a product or service. • Customer Value Management is about the extrinsic value in a Customer outcome.** ** A Customer outcome is NOT “About ‘us’. I.e. NOT products/services or their attributes, features, advantages, differentiators; not our plans, resources, assets, capabilities, processes, functions, reputation or descriptions of excellence.” (Michael J. Lanning, Delivering Profitable Value (1998)) The more than $64,000 Question is, how can we assure an understanding of the outcomes required by Customers and Prospects, and then deliver those outcomes?

Saravjit Professor (Gyan Jyoti School of TQM and Entrepreneurship)

Dear Mahajan Ji, I have encountered many post purchase negative experiences. Most relate to unfair 'supplier convenience' policies and practices. The worst one is the need to retain an invoice throughout the warranty period and produce it when something goes wrong. In this day and age, product serial number should be sufficient and the manufacturer should retain date of sale information. Many companies are bringing to do so - thankfully. Companies are looking at single transaction profit when creating their post purchase customer handling policies. They need to look at the life time value of customers. When they do so they will treat customers better and deal with failures with alacrity.

Amit Chakrapani Managing Director (CRM ACADEMY OF ASIA)

Great Article.

Nitika Sharma Research Scholar,Department of Commerce(University of Delhi)

Dear Mr. Mahajan, It’s been a pleasure meeting you speak at IIM Lucknow (Noida Campus). I would like to share that I enjoyed our academic interaction and sincerely hope that we can get together again in the near future.

Martin Keyser Stanton, CA

This is such a large topic that it could fill a book, not just an email. For starters, zero defects always meant making a product that wouldn't fail. Nobody ever asked, "at what price?". And, would a customer buy a product that would last longer than he would?? ? It is also said that quality products come from quality parts. Although I agree with this, again, at what price? The solution is to focus on the customer. 1) Listen to what he wants, 2) give it to him. It's that simple.? I believe "Customer is What the Customer Says It Is". In some cases, this means if he needs a product to last just one time, you sell him a product that lasts just one time. The product may have little quality but it does the job which is what the customer wants.? The other side of this coin is "the customer is not always right". Sometimes he wants to buy something but you know it will either not do the job or is more than he needs to do the job. Do not sell something that will not do the job. I can give you examples of all the above but I'm trying to keep this short.

Pradip V. Mehta Fellow, American Society for Quality Fellow, Textile Institute, UK

Excellent idea, Gautam! The first thing to do, as we do in quality management, is to define "customer value." Perhaps, you have a definition and I am not aware. Having lived and travelled in several countries, I find it interesting that western societies (Europe and North America) are more customer focused than eastern societies (Asis-Pacific, except Japan and South Korea). Also, I find that western countries/culture is more trusting of people in general, while Indian culture is the least trusting of people. I find that in India most businesses are transaction oriented, not focused on customers or long term prospects but on a quick buck! Most businesses are customer focused in the U.S. Therefore, I think the definition of "customer value" will be influenced/colored by the culture. This is not meant as criticism but meant as simply observation. While the quality can be defined in quantitative terms, customer value is more qualitative. Also, as the grade of quality varies, i.e. Hyundai cars vs Mercedes cars, or Holiday Inn vs Sheraton or Hilton, customer value may also vary. Well, that's all for now.

Bill Van Eron CMO- Market & Internal Value Creation Architect (Headwaters Marketing & Innovation for the value economy)

The more I read my new partner in progress’ book on Value Creation and realize how this simple, yet powerful concept is overlooked by a majority, yet how it delivers the ultimate value including revenue growth – something eluding most, I am excited to combine my high impact experience with this with the world’s leading author on the topic Gautam Mahajan.

Saravjit Singh Professor (Gyan Jyoti School of TQM and Entrepreneurship)

I admire what you are doing for Customer Value Creation. All human endeavor, to be successful, should be based on this one agenda. Thanks for the article by Prof. Kumar and Prof. Reinartz. Its superb!

Martin Keyser

For every item one buys, there is a range of prices, below which, you get nothing worth having and, above which, you get no more than what you would have received at the lower price. One example is single edge razor blades with no cutting edge for $.02 ea or masking tape for $.10 ea with no adhesive. I have bought both for customers who insisted I they would pay no more. Of course, they were rejected and I had the problem of making my suppliers accept the return. It would have been better to tell my customer I couldn't match the price. Another "problem" occurs when you put a vendor out of business when he sells you a product too cheap to stay in business. Try making your manager understand you can't find another vendor that stupid and now you have to buy from someone who charges more for that item. Lastly, I once had a printer tell me he didn't intend to make anything on my order, he just wanted to keep his people employed and his machines running. I told him, "I don't want to hear that. What are you going to do when you have a choice between running my order or running an order that you will make a profit?" By letting him make a profit, I got my stuff and on time. This was a financial company. Our "production" stopped if we ran out of printed forms and envelopes. There was a time when the top managers came from the Accounting Dept. Hopefully, those days are over.

Holly Jordan (HRJ Development)

I enjoyed this article and yes sales people should be part of the value chain but it takes courage sometimes. I posted it on LinkedIn and Twitter.

David James Hood Marketing Director (Aqua Energy Scotland Ltd)

Wow - great new word too Gautam - Customeric!

Jagdish Shivhare Assistant Professor (ITM University Gurgaon)

Thanks for highly useful information.

Raymond Kordupleski President (Customer Value Management)

This is excellent. Very well written, very true and important.

Jagdish Shivhare Astt Prof (Selection Grade) (ITM University Gurgaon)

Thanks for very useful information. Kindly, continue in future also.

Saravjit Singh Freelance Business Consultant and Implementor

Extremely well said, I agree. Thanks

Saravjit Singh Freelancer Business Consultant( Lean Management and TQM)

Dear Gautam Ji, I really enjoyed your article. So typical of what is happening around us. Slips show up all the time - and my experience with IDEA, Airtel and Honda Service are similar to yours. I firmly believe that the actions and behaviours of front-line sales and service staff are a product of the company's internalized core values and culture. Unless the organization develops the right values and culture statements and then the CEO leads in following these, and rewards those who follow the professed values and culture, no amount of training or other effort will help enough. SouthWest Airlines is a great example of how they spread their wonderful values and culture and grew+ exponentially as a result of the happy employees and happier customers. This is part of my Value Focused Organizational Excellence model. A few slides form my one day seminar for this are attached as five pdf frames. I request you to please have a look. Wishing you all the very best,

Rick Harris Founder ( Customer Faithful)

I'd like to add a counterpoint to some of your thoughts and those in the book. For me, companies like Apple are very easy to speak to - I simply click on a link on their webpage and they ask if I'd like an immediate ring back, or to book an appointment at a time that suits me. Perfect - I don't incur a call charge, but they contact me on any channel and/or time I prefer. What's not to like? I'm 50 years old - certainly not a Millennial! But I'm very familiar with the appalling customer service of telecom companies (whose business it is to connect people!) - endless on-holds, un-empowered webchat people who simply waste your time and theirs. How about banks, who try to smother you with code of conduct reasons for being so bland and risk-averse? Parcel deliveries? Here in the UK, we use DPD, who give you live tracking of where your parcel is on the van, to within 15 mins accuracy, as well as a 1 hour guarantee window. My takeout: there are companies out there who have been steadily pushing the boundaries on finding an efficient, semi-automated way of offering you a connection that works both for them and you the customer. The more that achieve this, the better.

Michael Lowenstein Advisor (CustomerThink)

Athletic shoe colors, this is a combination of subliminal influence by manufacturers (Nike neon yellow) and simply bowing to consumer trends for brighter hues, in part shaped by manufacturers' relationships with professional sports stars. Re. service components of value, such as delivery communication, some companies will "go the extra mile" and enable the customer to track package arrival down to the day and hour. Other companies don't realize that basic convenience elements of value have an emotional subtext, so they simply don't make much of an effort to be proactive.

David Newton-Dines Managing Director (Challenge Paradigms Ltd)

This is nothing more than economic manipulation; it has been going on since the industrial revolution albeit in a more subtle form. This change however demonstrates a fundamental shift in attitude towards customers. It is now naked contemptuousness. The subtexts of the actions from these companies are: - do as we say or buy elsewhere - we (the company entity) matter more than you (the punter) - we are so big, that what we do today everyone else does tomorrow. Get over it. - we matter more than the market as we make the market Why now? In my view because today’s generation have had their natural empathy suppressed so they feel no sense of outrage at such an attitude or approach. Us oldies have well developed empathy so feel compassion and injustice at the utter lack of consideration exhibited. We however, do not count… Get over it or buy elsewhere…

Neeraj Kapoor Chief Executive Officer (Grow Brands)

Awesome observations. I almost took things for granted till I read your mail. At GrowBrands Worldwide, we are busy building India's Largest Startup consulting and Incubation company. Over of our client is Govardhan Eco Village, Wellness Destination where a lot of world's best minds are coming to converge on various programs and courses on wellness for body, mind and soul. I wanna drive your attention to am opportunity that exists in this discs for your forthcoming programs and workshops in India. Would love to be of any service to you next. Let me know.

David Newton-Dines Director (TapMedic Limited)

An interesting question Gautam. My particular perspective is to explore not the high level reasons why but the genuine root causes. Everything stems from one or two root causes as in an inverted pyramid. Therefor it is my belief that we must look at the humanitarian reasons not simply the actions. ‘Actions’ are a manifestation of the initial emotional drivers; they are what we ‘think’ we need to ‘do’ to satisfy our emotional needs. Of course this is all subconscious. My experience is that, no matter the situation, when people have genuine choice, so easy to write but very complex to define, they act with empathy, integrity and compassion for their fellow man. Despite many tomes to the contrary man is not selfish. The simple fact of the matter is that he cannot be as to be an isolationist would not perpetuate the species. We are fundamentally tribal. We fundamentally rely upon our fellow man for our own survival because we all excel at different things. Tribalism is the ultimate 1+1=3 scenario. When you begin to examine the critical question Why? it turns out that even when you are a CEO of fortune 500 company, your day is still as full of trepidation as the lowest rank in your organisation. Just because you take home 100 times their pay, does not mean you escape one single jot of the same stress. As the lowest ranked person is frightened of what edict comes down from above, the CEO is petrified too of what comes down from the avaricious shareholders. However, the demands of shareholders are not hide bound by regulation and HR law; they simply hold out their buckets and demand they be filled to overflowing with cash – NOW! It is in light of this pressure that we see the behaviours described. It is purely and simply survival, purely and simply a need to keep a roof over one’s head that drives this. Take away those pressures and you take away the majority of the dishonesty and screw you attitude. I guess that means we are stuck with it until we can install a measure of success that is not directly related to financial performance – watch this space…

Mr. Steven Walden Director of Customer Experience (TeleTech Consulting)

Here are my views.... Satisfaction is the reason why people buy: Nope, CSAT like emotion is a prototypical word. People buy based on the value they seek. I concur. The only difference would be, 'satisfaction is a necessary condition'. I would add, the avoidance of dissatisfaction. But it still begs about what. I also don't think people evaluate after each purchase 'to what extent was I satisfied'. So I agree a necessary condition but not a consciously espoused one or one that has a linear relationship to value. High Value products have low satisfaction: I concur with you. Low Value products have high satisfaction: I concur with you. Although price is part of the value equation. Great value so highly priced, don't want it. Satisfaction measures Customer Value: I dont believe the top two boxes should be measured: data is curvilinear and an 8 out of data can be a good result. I also don't believe in transactional measures like this as they can be myopic i.e., the transaction may not be salient to the customer even though you forced an answer. What is salient may be not captured in a transactional survey but still be relevant in the decision moment i.e., other facts outside the immediate transaction such as Apple brand good. Which is why I prefer: capture 'customer story' obliquely about the experience of interest. Value means Benefits: I concur on benefits. Not sure I would compare to other competitive offers all the time. Customer Value is newer than Customer Experience: CX is from the 1990s with Pine and Gilmour. CX is the 'experience the customer has': what is an experience is what delivers utility to the customer. CX defines what is valuable. NPS is a great measure of what the Customer perceives: no it is no different from CSAT.Perception is a complex construct hence my preference from multi-methods that are less dependent on assuming we are evaluative cost -benefit calculators i.e., sensemaker, immersion. Why are these misconceptions propagated and misunderstood? My take is that most people tend to follow what they are told, rather than delving deeply into the actual meaning of, and truly understand how these concepts should be used. These concepts are used and understood loosely. People need to earn a living and there is some utility in everything. Its fine to say do CX or Customer Value but it has to be executed. One reason why companies and executives are not truly becoming Customer–centric is that such loosely used and understood terms confuse companies, and do not give the Customer true insight into what will really help. Thus just measuring NPS and stating that it tells the company what to do is misleading, and will prevent the Customer from truly improving. NPS gives false hope, it exaggerates minor changes and makes people feel they are being successful. Its a scam, in my humble opinion. But a useful one.

Narindra Bachlaus Chief Executive Officer (Exxon Mobil Chemical)

A nice CRISP summary

Vivek Jaiswal Director & Co-founder (Customer Guru)

Nice one, Gautam! Thanks for sharing.

Saurabh Priyadarshi Executive Director & Chief Geologist (GEOXPLORERS CONSULTING SERVICES(GCS))

I have been reading CVF articles on a range of relevant topics. Appreciate if you could educate me on how I can contribute to your objectives with mutual synergy.

S N Venkataraman Vice President-Marketing (ITC Limited)

Great post sir , clearing the popular misconceptions

Dr. Saeed SOLTANI Head of Marketing Affairs

Great

Danny van Ardenne (inter-) national Account Manager(Heliview Professional Marketing Services, Challenge Tennis Academy )

Still the best way, and probably will always be the best way to have customers engage with customers and explain what they appreciate in their relationship with you. Too bad that this is mostly not enough to building your corporate with, therefore it is always wise to enable this through certain events/occasions where they can interact. I call that c2pc customer to potential customer.

Deepak Harlalka Sr Vice President & CFO(Raychem RPG Ltd)

Great Post!

SAURABH PURANIK (Certified CII SCM P) Deputy Manager Product Development & Supply Chain Management(LG India)

Great Post!

Venkatesh M V Manimoole Group Leader(Toyota Kirloskar Motor)

Great Post!

Gaurav Srinivas

Great Post!

Pankaj Kumar Shrivastava Process Improvmeent(1. Supply Leaders Academy)

Awesome post by our great global leader Most Respected Sir Gautam Mahajan. I am so hungry for next plate of your healthy food.

Suresh Patwardhan Management Consultant & Visiting Faculty

C@C is the only solution

Sridhar KOTA Connector | A-Team Builder | Entrepreneur | Mentor | Customer Mania

Hello Gautam, Greetings. Hope you're doing great.

Kumar Belani Consultant, Global Health Education, Research & Health Care Delivery

Great Post!

Aditi Nandan Co Founder (Artzindia.com)

Great Post!

Yamaguchi Tomohiro Head of Overseas Business (SBI Ventures Malaysia)

Means shared, Thank you.

Sundaram Ramaswamy Senior Consultant (Centre for Digital Financial Inclusion, CDFI)

Great post!

Dr.Sarvjit Dudeja Consultant & Advisor on S&T (Dr. Dudeja Consultancy)

Thanks

Krishnan Karunganni S Director - Learning and Development (Cognizant Technology Solutions)

I found this concept interesting and a few thoughts and clarifications I had were 1) What is unique about C2C interaction through C2C portals as compared to channels available for sharing feedback with Product / service providers directly and through social channels available? In fact brands could be made or marred in social world 2) Should the employees have a say in the C2C portal. I believe yes. I believe customer centric culture and a consistency to walk the talk should be way of life from entry level person to CEO. I inherently believe there will be conflicts specifically when economic down turn happens and ability to deliver same value at a more optimal costs becomes important. 3) Since most of us play a dual role in life - as an employee delivering a service or product as well as a customer where roles are switched - should the C2C portal be able to track and report consistent behaviors when roles are switched. Individuals or workgroups deliver at the same intensity and value as they expect from their service providers. This becomes a true test and I believe even if do it right 9 times out of 10, we would be creating an excellent experience for the customer and build trust so that relationship matures.

Sam Klaidman Head of Strategic Partners (GSM) (Middlesex Consulting)

To me, loyalty is the propensity of a customer to continue to do business with a company. So, if I buy "Apple" I will continue to buy from Apple as long as I receive approximately the same or greater value than if I would buy from a competitor. If I am in the market for an electronic product and Apple offers "significantly" less value than Samsung then Samsung earns my money. However, Value is what is perceived by the buyer and I may feel that the Samsung phone is technically superior to Apple but its App Store has a much better selection, or I am a frequent FaceTime user then I buy Apple. If Value is measured relative to alternatives then Loyalty is a measure of the incremental value.

Andrew Rudin Managing Principal (Contrary Domino ®, Inc.)

Like other newly-popularized marketing words (e.g. love!), loyalty has suffered from overuse, and become trivialized. Rarely, if ever, have I observed unbreakable customer loyalty. Weird, because loyalty connotes unswerving commitment. But most marketers would agree that there are boundaries or limits to customer loyalty. So is loyalty the right word when describing customer relationship nirvana? I think it's the wrong word. But the one that I prefer, inelastic demand, doesn't fit cleanly either, and above all, it isn't catchy! (Who would be so idiotic to set up an inelastic demand program?) I don't know when loyalty became commonplace in customer relation dialogs, but I looked in my 100-year-old book, Salesmanship and Business Efficiency as I often do when I seek insight on how selling ideas have evolved. Interestingly, Loyalty appears in the index, and is mentioned on two pages (out of nearly 400). But the author, James Knox Polk, would probably be laughed out a training session today if he attempted to advance his definition. "Loyalty defined: Loyalty consists in giving faithful allegiance to your employer. It demands whole-hearted, untiring service to the concern that furnishes you with bread and butter. It involves doing everything within your power to evolve some new idea or improved method that will in some way advance the interests of your concern. Every wise manager is eager to obtain help of this kind. He is also on the alert to promote any employee who renders such service." After reading this, I also had to check whether passive-aggressive was mentioned anywhere in this book. It wasn't. And nowhere in this two-page mini-essay about loyalty is there a shred of similar bombast about customer loyalty. For me, a vendor-customer relationship that fully deserves the loyalty attribution is when mutual commitments remain stable even in situations when logic and good business sense dictate otherwise. This can and does occur. I've worked with many companies who tolerate mighty supplier deficiencies because of the vendor's rock-solid record on bailing them out of horrendous problems. But because loyalty has become so trivialized today, the issue I often see is that vendors aspire to having that coveted status, but they are too driven by "the numbers," they are motivated only by short-term profits, and they don't want to expend the effort.

Ian Golding Advisor and Featured Columnist (CustomerThink)

As others have described, an excellent article Gautam. I personally do not believe that loyalty is a myth in totality - it is often difficult to create the link between loyalty and commercial value though. My latest blog post is a good example of how brands create loyalty and how they completely lose it - you may be interested in having a read as essentially, I also believe that emotional engagement plays a huge part

Tanya Basu Vice President - Customer Value Management (Max Life Insurance Co. Ltd.)

This is a very insightful article. It is trying to address the fundamental question which a lot of companies are grappling with. Thank you.

Darrell Phun Senior Manager-APAC Strategic Pricing Lead (Zoetis Singapore Pte Ltd.)

ndeed, for B2B, loyalty exists less because what companies are really look for is value/differentiation provided by the other party. Sometimes, companies incorrectly believe there is loyalty from the customers but the situation could be because the companies are enjoying a situation of lack of or no alternatives/competitions. I would say for B2C, there is a lot of emotional attachment based on purchase/usage experience as you mentioned about familiarity which drives the sense of preference in consumers’ next purchase which typically is perceived as “loyalty”. In B2B, many big organization are structured in a way that the purchasing decision is performed by the people whom do not use the products or services directly but rely on feedback of users and hence less emotional attachment is involved. As pointed out by your article, it is important to focus on the “value” aspect that leads to “loyalty” or not focus on “loyalty” as a starting point (e.g. loyalty program).

Mukesh Gupta SAP India Private Limited

Great post and thought provoking too.

Porush Singh Sr. VP Products (MasterCard Worldwide)

Very True...

Krishan Kalra Secretary General (PHD Chamber)
Thanks for sending me your nice article.
Suresh Patwardhan Managing Consultant and Visiting Faculty
What you have expressed is very true. The companies, if are loyal to owners is no issue, if they are loyal to other stakeholders ALSO.. But the real problem is in many cases (barring few exceptions), they are LOYAL TO OWNERS ONLY and expect loyalty from all OTHER stakeholders. Customer Value creation is possible if companies care about customers and will offer best possible value proposition in terms of products or services, if they are loyal to their customers. This is definitely going for growth, profitability taking customers with you.
Krishnan Karunganni S. Director-Learning and Development(Cognizant Technology Solutions)

Thank you for a very interesting post and sharing your valuable perspectives on Company loyalty in relation to stakeholders. My thoughts are as follows.

1. Business entity exists with a primary objective of creating wealth for their investors. This is through a strategy that focuses on business growth as well as managing organization efficiently.

2. For achieving growth, customer focus would be centricity is the key. Customer value creation and customer satisfaction becomes the key. Here a question opens up as organizations scale - Should they have the same level of loyalty to their initial customers or their new customers. This question does not have a simple answer and it depends on which customers could provide impetus for future growth objectives.

A simple example here is concept of exclusive services in Banks for HNI.

3. Who is core stakeholder that would support the objectives of growth, margins and customer satisfaction? Employees. Employees first by Vineet Nayar brings in a set of perspectives. In my own organization, employees in customer facing roles are empowered to make decisions that are right for the customer. One way to look at the loyalty of the company to the employees is those who leverage the empowerment provided to create value for customer and help organization meet its objectives (mutual win-win) would see a higher loyalty.

4. Today a delivery of service or product involves a eco-system of suppliers who work with an organization to deliver value to the customer. This means supplier - organization has to create a working model that is beneficial to both. Loyalty both ways provides commitments are honored and trust in relationship exists.

5. The organization or business entity does not exist in Silos. They are part of society. The concept of loyalty in this context is complex. An example is pollution levels in some of largest cities in world. Should business entities in automobile, energy, and manufacturing adhere to a standard higher than the norms to reduce the pollution and when an inflection point is reached should these entities take a conscious decision to scale their growth in smaller cities that have necessary facilities and there by create inclusive growth.

It also throws up a question of what is the consumption limit that is an inflection point and that impacts human beings significantly in the future.

6. The concept of lock-in where switching providers is difficult and cost of switching is high could result in forced loyalty between customers and providers. As technology helps in disruption and brings down the cost of switching this could change.

7. Wearing a logical hat, can the loyalty to different stakeholders to the company be worked out as a mathematical model or frame work. My thought is no as loyalty is both a function of rational and emotional aspects. Loyalty could be contextual and time sensitive (Refer point 5) and regulation and external risks. In that context, it would be good for organizations to factor in loyalty aspects in their planning and periodically review and make course corrections that helps in building a sustainable business. This would be dependent on risks and benefits of level of loyalty to different stakeholders for a business entity.
Veerendra Jaitly Advisor(Indo America Today)
My comment about your article: According to me the company should be loyal to its customer. That is what I learnt from you.
Giorgos Piperpoulos Visiting Professor(Newcastle University Business School)

Useful subject for debate/discussion in a business school amphitheater! 

I am very pessimistic for the outcome when it comes to reality unless, of course, there is profit at the end of instituting loyalty (to any entity)

Prabal Roy

On question of company loyalty, below are my views.

Most large companies that have a good business model have to be loyal to all of their stake holders. The customer comes first, if customer is not happy, business will eventually fail, Next come employees, if employees are not happy, productive and innovative, product/service quality will suffer and drive customer to other pastures. Then come shareholders. If the previous 2 are taken care of, the business performance will be good, demand will be good, company reputation will be strong, and that will show up in company's economic performance and return on shareholders' investment. That will make the shareholders happy.

Really progressive companies also strive to create a good relationship with local national and international governments and communities where they are located. That creates a good will that will help in getting more customers and also help with recruitment of best talent.

Now if a company is struggling and has issues, then the investors / shareholders need extra attention to keep the company financially strong. This in turn will get the company to focus on customers and employees and get it on the right track towards progress.
Mohamed Latib Chief Executive Officer(CX University)
I enjoyed your article. There continues to be much interest in CXU, and I suspect that it will take us a few more weeks to create a flavor of "value", and a lifetime of commitment to our mission to create lifetime value. I hope our paths cross in ways that will advance our common agenda. Yes, we both want to create a movement around value creation; our journey may follow the systemic property of equifinality- getting to the same end using different paths.
Ajay Sachdeva Managing Director(Hallmark India Private Limited)

A very apt and relevant article. Thanks for sharing.

Gone are the days when customers were loyal to companies and brands (the likes of Colgate, Lifebuoy etc.)

In the new evolutionary curve fast developing, companies and brands will need to be loyal to customers not just for their survival but for them to realise sustainable growth.

Every touch point wherein the customer engages with the company/brand will need to not just meet but surpass customer value expectations.

Whilst technology is a great enabler for businesses, companies would need to revisit the technology dependent interface with customers via IVR'S, recordings etc. and assess whether lack of a human element in the interaction process can provide a "value" enhancing experience or will leave the customer feeling irritated and let down.

Raghu Kaimal Director Sales(STAT DECISION LABS)

I truly enjoyed your perspective about company being Loyal. 

As customer are spoiled with choices, and moving from a King to God, every company need to be customer centric to survive in this competitive world. Employees, Suppliers, Partners & stake holders should complement the company to deliver maximum value to the customer, those are the companies who wins in the current market.

Thanks a lot for sharing your views.
Rakesh Kumar Gupta GM-Marketing and Operations(LOGISTIC)
I feel this concept about companies loyalty will throw open a whole new debate
Subhashis Dasgupta Head-Corporate Business Development(Duncans Group)
Touching and well thought out article. Thank You Sir.
HS Bawa
Very interesting info on customer value creation
Doug Morse Founder / Chief Inspiration Officer(ServTrans)
Good article. My company has been helping to create those C-suite metrics for clients to translate CX into more conventional financial reporting that can be understood by investors and c-suite. One that we like is Customer Equity.
Dick Lee Author at Self-employed(Principal at High-Yield Methods LLC)
Now to the outstanding article by our colleague and outstanding contributor, Gautam Mahajan. Because it's his work published in his own journal, Gautam didn't post it to the group, but here's the link:https://customervaluefoundation.wordpress.com/2015/04/15/are-we-blowing-in-the-wind/. We all ask ourselves why CXOs so frequently fail to accept our arguments that customer-centricity is good for business. Well, Gautam exchanged his customer hat for a management cap and gives us the low-down. Illuminating thinking and very well written, too. Hats off to Gautam for some cutting edge work.
Sanjay Mehta Managing Director(Teleperformance India)
Hi Gautam,
Very thought provoking, may be if you have time open on Friday we could have a quick call and I could sure some thoughts on it which you may like to consider for your next article.
Tedd Aurelius svp, director of one-to-one engagement/account director(the martin agency)
Gautam -
I see that you've not only created your organization but you've also created a logo. You work quickly.
My comment on the article is that while it all makes perfect sense, it doesn't really tell me anything new or enlightening.
I think all marketers understand that not all of their customers are happy or have happy experiences 100% of the time. And most of them spend money on research and/or focus groups/surveys to determine what's the root of the unhappiness so that they can take steps in order to reverse it.
To me, what would be helpful is understanding what the Top 3 reasons for the unhappiness are and what might be some possible solutions. OR how can you spot and/or correct unhappiness in real time.
I'm assuming the Members of CVF are seasoned marketers who have joined your organization in the hope of gaining knowledge that will help them improve upon their customers' value. I'm also assuming that they've already identified the problems/issues and are looking for solutions.
I hope my comments are not too harsh but I'm trying to help provide you with some thoughts on how to bring your CVF Members as much value as possible.
chander sabharwal Senior Professor(ITS Institute of Science & Technology)
Hi Gautam - talking to anonymous is a great digital challenge! Will data govern interface ? Or will interface lead to face time, a meeting and a coffee opportunity? For Marketers the challenge is cut out. Get relevant data, measure it, connect and engage with anonymous groups, identify targets, and get them to participate and become visible.
Narender Kumar Business Process Coordinator(ETC Inc. Asia)
Dear Sir,
Thanks for writing this...I always get something new to learn from you in terms of "Customer Value Creation".
You raise some points that companies normally ignores and finally pay the price.
Sreenivasan Ravishankar Office General Manager(WorleyParsons)
Why indeed! You are entirely right about firms talking out of both sides of their collective mouths. Either that or they don't understand what empowerment means. Managers should understand that there are potential short term costs when you empower your employees to do the right thing. In your case it would have been an upgrade or putting you on another airline. What they don't appreciate or care about is the huge long term benefit of a loyal customer.
Sundar Swami Head-Foundry Furnace Division(Electrotherm (India) ltd.)
What if he was not empowered to do so. The company would have saved money that was the point of my note
Oscar DeMello Mentor and Advisor(On a Sabbatical)
Dear Gautam
Trust you are well.
I eagerly read everything you send out for the sheer relevance and value it brings to me. A big thanks for keeping me in your mailing list Awesome video - very well defined. Really loved the formula! Thanks very much for sharing. Unfortunately I am unable to access the article - it keeps giving a 'problem loading page' message
Sourav Sharma Business Manager(BConsultants)
hello
Thanks for the email , very nice
Sundar Swami Head-Foundry Furnace Division(Electrotherm (India) ltd. )
Sir,
Not use what ? Jet ?
Ok, How about your reaction if the flaw is resolved immd by the employee for your ease? I am just trying to say, for Sustainable Profitable Growth, empowering is a reasonably less risky than not empowering specially in service oriented businesses .Here is a classic example - The captain of a restaurant ( Not Manager ) Served ice cream free to a family birthday party where obviously children were more in numbers , on a mere complaint of one item served was not upto the expectation of the children. To me , he has earned one more chance and benefit of doubt from a dissatisfied guardian of those children.
Sundar Swami Head-Foundry Furnace Division(Electrotherm (India) ltd. )
How about your reaction if the flaw happens second and Third time again?
Sundar Swami Head-Foundry Furnace Division(Electrotherm (India) ltd. )
I am sure you will fly with Jet next time keeping this flaw in mind..with option of other cheaper on time flights !
Hence empower.
Babu Nair Publisher(Banking Frontiers)
Excellent piece Gautam.
Manoj, can we take it with some tweak?
abhinaba chakravarti (corporate trainer)
Gautam - Thank you. Appreciate support from a sensei on Value. I must read your book
Susan Au Allen USPAACC (US Pan Asian American Chamber of Commerce EF)
Gautam, this is a great article. What an interesting take on customer relations. I think we're all used to trying to get customers' attention we forget they might be overwhelmed with material.
Chitra Kanna Vice President (Shetron Limited)
Yes, this is interesting, but true. Although there are various means of feedback from customer, many times marketing tries to disguise it as a means for ISO/TPM requirement, rather than damn their KRA's...
We have a good system of customer feedback which has everything from technical, resonse/communication, packaging etc rated on scale from 0 to 100. But after that we do lag behind in benchmarking these for actions by concerned individuals and set targets for subsequent year...
Yes, but we are trying to overcome this...
Prerit Sood (Ecscorts limited)
Customer? V?alue?team for the newsletter !
Rich Hagle Editor/Publisher (International Journal of Integrated Marketing Communications)
Thank you for sendiiing me your article, which I read with great iinterest. if you are interested, I would very much ike to get an article absed on yuor discussion for the Internatonal Journal of Integrated Marketiing Communications (www.ijimc.com). I'm not asking for a reprint; rather an article discussing IMC in the context of your midel.An article of 4,000 to 10,000words would be ideal.
Thank you for your consideratioin.
Tushar Dutt
Very often 'good ' companies/staff react fast to a customer complaint nad quickfix' the problem.. the customer is delighted/satisfied.. whch packs up again later,,addiyionally these companies also go ahead and sell reduntant stuff to the customer, which sooner or later the customer finds out..nad it finally goes against the company. This needs to be curbed by the senior man?a?gement ..not just aim at bonuses, healthy balance sheets.
Olaf Hermans CEO (NHTV Breda Academy of Hotel & Facility Management (NL))
interestingly the "value destruction multiplier" you describe becomes a "value construction multiplier" in a relational context: customer with an established affinity to a brand or service organization oversee (forgive) negative incidents, attributing it to an external cause unrelated to the provider ('unlucky circumstances'), and attaching personal motivation and meaning to positively deviating service acts, amplifying their effects.
in conclusion: strong relationship processes directly create value by enhancing loyalty, but also moderate/strengthen the impact of relatively basic service acts

so excited to see the first edition of the Journal !!
Sandeep Gupta Healthcare Consultant (Self-Employed)
Great article, Mr.Mahajan. Thanks for sharing! Couldn't agree more with your key messages.
Two examples come to my mind:
1. About a year ago, I had subscribed to a stock advisory service by a reputed organisation. Two months before the expiry, I started receiving messages on why I should renew my subscription and that there were special offers that I could avail of. The frequency of messages increased with each passing day. Ironically, none of the messages were aimed at eliciting my feedback on their service and whether I was satisfied with the quality of information being provided ! Now I have reached a point where I immediately delete any message that I receive from that company. It is almost like a reflex action. Every message that I receive from them strengthens my conviction for not renewing their service. I am completely frustrated and annoyed with their approach.
Ironically,tover-agressivehe truth of the matter is that their service was of high quality and ordinarily I would have renewed my subscription for another year. What put me off completely was their aggressive approach and the fact that they were in my face everyday.

2. Almost 3 years ago, I bought a Samsonite suitcase 3 years ago with a 10 year warranty. Recently, I detected a big crack on the top-side of the suitcase. Even though the bag was covered under a warranty, I was not at all hopeful of getting a replacement. I also anticipated that the dealer will ask me a lot of questions/details before even considering my request for a replacement. Much to my surprise, the experience turned out to be very different. The dealer expressed his regret about the inconvenience caused to me and immediately made arrangements for a replacement of the product. Two days later, I was able to collect an absolutely new suitcase !
There was very little paperwork, no questions and minimum fuss! I have always liked Samsonite products but this experience has delighted me and turned me into one of their most loyal customers.
Indeed, less is more for a customer!
Ashok Kacker
Gautam great article I do not know much about Consumer marketing but n B 2B while it is true that user does not place the order he does influence the decision .Of course the extent of influence may vary from company to company
As a marketer of such goods I would advise my team to pitch benefits at the user and it pays
The key is getting mindset of marketing away from price to value. It is difficult because it is harder
Glen Westlake CEO (Kairos Analytics)
Would you mind if we reposted this on our blog www.kairos.co.uk?
Kairos is going down very well, we are getting our first customers up and running, validating our pre-built models for b2b and adding extra analytics functionality.
Matthew Gordon
By the way; Great overview.
Gautam you are perfectly imbedded and watching the customers subconscious mind stream.
Creating CV is an obvious set of values when you write customer reactions to stimulus.
Dr.R K Gupta Director (SCMS)
Mahajan sir there are volumes written in management. But basic thing I noticed majority of companies and executives are dishonest like out politicians .Always deny benefits and start with negative note on customer complaint. So all this literature is trash for them. You must have faced this as customer in various situations. Honesty of purpose and ethics in business are supreme factors of value creation.
We should do something to start a training program for CEOs and owners and research in this area.
Malena Farias Bouvier Director (Biblos)
Really good
Frank Flaga
It was good to hear from you and I enjoy your publications that I've read. I think you've got the right ideas regarding how to run companies. Best possible regards,
S V Ramarathnam
Your Creating Value articles have been stimulating and quite to the point. Glad to note it is getting good recognition. Unfortunately we are swaying away from this in this country which will have some long term impact.
Rajiv Sant Director-Business Development (AB-Inbevindia)
I have been following your posts very eagerly as not only they are valuable but also make me a proud old colleague as I recall that you also worked with the K K Birla Group aka Chambal when we were setting up Gautier. Keep up the great work! Happy to help with whatever you feel I can
Chand Das SBU CEO (ITC)
Meanwhile I enjoy reading your articles..... keep them coming & more power to your elbow
Alfred D'souza Adjunct Faculty (Eastern University - Campolo College of Graduate & Professional Studies)
I am glad your sons are doing well. I enjoy your articles, and am happy that you have created this great forum for business education.
Sonali Dutta Vice President (Bry-Air Asia Pvt. Ltd.)
I find the Journal very useful and you have all our support.
J S Gogia Vice President (CFCL)
At the outset , please accept my heartiest congratulation for your efforts, you put in " Customer value Foundation" It is well received by the Readers. Lot of material has been published, but prior to this nobody has made it ' Target Oriented efforts' for customer value management' In fact it is the base for any organization to succeed in the business'
Prem Sibbal Head -- Academics (Lal Bahadur Shastri Institute of Management)
It is a great feeling to go through your ? journal every time. It is my belief that it will go a long way in benefiting all the stakeholders. Thanks again,
Somesh Surana Deputy Chief Manager Marketing (L&T Insurance )
I surely get a lot of insights from your articles.
Michael Corcoran Process Improvement and Regulatory Challenges. Data Paradigm Changer (GVP Partners)
Gautam, Congratulations on your value management(creation and preservation) education successes.
Manoj Kabre Vice President -Marketing (Indo-US MIM Tec)
I have been recommending and referring your CVF concept to professionals within my network. I am sure they would contact you. Congratulations on the formal approval of 'Journal of Creating Value' - I am a staunch believer of this concept and philosophy.
Sudip Goel President & CEO (SKG Global)
Your articles are indeed informative and I always look forward to receive these. Frankly, I have been a beneficiary by your wisdom.
R Santhanaraj
Enjoyed reading your write ups and I have circulated a few to some of my Clients and friends.
Janusz Kamienski CEO (Executive-Conversation)
Great points in your article. I can't agree more!
Chander Sabarwal Senior Professor (ITS Institute of Science & Technology)
Like any initiative, training has to be top driven and monitored for results and up-gradation of skills and performance on a continual basis. Hiring high class trainers in 5 star hotels is only symbolic ; until the ground is linked to strategic objectives, competence & PMS.
R Srinivasan
Dear Gautam, Best regards and Best wishes to you & the family!
Nice one and well written! The customer-employee message is sound!
Companies send managers to Leadership Training Programmers' to assuage their own sense of guilt at not having alternatives to choose from. Trainers have got the motivations and uncertainties of bosses assessed well. Partly. such a Leadership Programme compensates for the lack of mentorship in top management who may be individually capable but do not necessarily want to create successor alternatives for fear of being marginalized by manipulative bosses seeking to create more 'obliged' networks. Leaders who rise to power and then consciously throttle down in order to coach others are a rarity--they need to have an extraordinary institutional purpose to go beyond themselves and pass on the baton in a timely manner. Unfortunately neither shareholder purpose nor customer purpose has managed to capture their imagination and raise it to a lofty goal. There are some instances of superordinate goals as during a freedom movement when people are able to rise beyond the ordinary(Gandhi, Nehru, Patel) or for a major human value like Abe Lincoln fighting for equality or Nelson Mandela pressing for peace and reconciliation rather than revenge after independence.
In more mundane matters such as the commercial world everybody appreciates the role of the customer but hesitates to accept their irrevocability as it means humble acceptance. Organisations tend to perpetuate the status quo that has brought them success so far rather than reinvent themselves in the face of changing realities/preferences--witness Clayton Christensen's research on The Innovator's Dilemma---whether excavators or microprocessors or copiers, Companies made similar errors! Even Henry Ford thought he could forever sell black cars of a standardized model! On a Corporate Governance note please notice that entire Boards of Directors who should know better seem stuck in the rut unable to point towards stagnant customer satisfaction or ineffective Leadership Development programmers' or to bring about checks & balances to save their Titanic organisations from hitting icebergs!
I am struggling to articulate what we all sense but still fall short of pinpointing---a road to change for Leadership--- including the debate of whether leaders are born(&self evolved)or made .After all circumstances pitch forked an Eisenhower(and not Marshall who was a first choice) to handle Monty, Patton, Bradley and others in risky situations where others felt they knew better and had more relevant experience and were often right--yet it required a rare temperament like Ike's to string them along together in a common purpose without ever sounding casual!
On a generic basis of what contributes towards people development, all of us would vouchsafe for good teachers who shaped us in our youth and made us think and act differently. The entire nation would rise if schooling were to improve and retention were to improve. And likewise with health & hygiene as Kerala has demonstrated on infant and maternal mortality parameters. There can be no doubts that all boats would rise if the swell of customer value were to lift them
Vijay S Karkare Managing Director (Cornerstone India Consulting Pvt. Ltd.)
Dear Gautam,
Lot of interest with our customers of late on Customer Value Creation and CRM. Look forward to meet when I am in Delhi next on Jan 20-22. Are you in town?
Just purchased following 3 books recommended by you on Amazon.
1) "Value Merchants", James C. Anderson, Nirmalya Kumar, James A. Narus, 2007 = really good on value metrication (it's something of a follow-up to a 1999 book by Anderson and Narus called "Business Market Management" which is also very good)
2) Then, of course, there is the must-read "Total Customer Value Management" by our very own Gautam Mahajan.
3) And, last but not least, please excuse the plug for "Creating And Delivering Your Value Proposition", 2009, by Cindy Barnes, Helen Blake and ... David Pinder '
P Jayaram
Dear Gautam, You have literally taken the words out of the mouths of countless hapless customers, who have to listen to endless recorded messages, hunt for phone number that no longer exist etc. before you give up in frustration. Hope the customer care executives read your excellent piece.
Anil Pillai Director (Terragni Consulting (P) Ltd)
Great read, Gautam.
Thank you!
Warmest,