Cards & Payments: Customer Value You Must Create It and Measure It

Value creation is about understanding customer needs and wants and filling them at a price customers are willing to pay for at a profit in advance of the competition. Fulfilling these needs requires both supply and demand development and management. Creating and fulfilling demand may involve secondary and primary research. Beyond survey data or focus groups it may include in market testing. In the software business they often rely on minimally viable products and speed to market. The beta concept allows for rapid speed to market and real time customer feedback. The equivalent of outsourcing much of the product development and evolution process to the marketplace. Lessons can be shared and learned across industries. With regard to supply management it may come down to core competencies informing strategy decisions around building, buying or partnering for product and service delivery.

Much effort is spent in the credit card and #payments industry in attempting to differentiate within a competitive market. It is largely a commoditized category which leaves the consumer to navigate the maze of choice. Some #issuers will attempt to rise above the din by building and growing brand equity while others focus on guerrilla tactics to thrive on a small piece of the pie. The larger point is that much effort is focused on originating new customers with less emphasis placed on retaining and managing them once acquired. Unlike selling soap the payments industry is about acquiring, activating, stimulating usage and retaining customers. This requires a deep understanding of the dimensions of customer value.

One tool I like use to assist in framing customer value is a Value Management Construct. It provides dimensions of value for both demand and supply in support of a given value proposition. In the instance of a credit card it looks at the Length of Relationship (attrition management), Cost to Acquire & Serve (Supply Management), Share of Wallet and Price & Frequency of Use (Currency Exchange). Once the dimensions of value are derived for a respective industry the challenge then moves to identifying and measuring the attributes for each link in the value chain. Specific #strategies and #tactics can be developed to optimize, challenge and evolve the dimensions of value over time to insure product relevance thus ongoing customer adoption.



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