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Customer Value Management: A Progressive, Practical Approach

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To combat price concessions and commoditization pressures, firms have to fundamentally reexamine their philosophy of doing business and how they put it into practice. Suppliers must adopt a philosophy of doing business based on demonstrated and documented superior value and implement that philosophy using an approach we call customer value management. Customer value management is a progressive, practical approach to business markets that, in its essence, has two basic goals:

1 Deliver superior value to targeted market segments and customer firms

2 Get an equitable return on the value delivered

Customer value management relies on customer value assessment to gain an understanding of customer requirements and preferences and what fulfilling those are worth in monetary terms. Although firms may be able to accomplish the first goal without any systematic assessment of customer value, it is unlikely that they will be able to accomplish the second goal without it. Simply put, to gain an equitable or fair return on the value their offerings deliver, suppliers must be able to persuasively demonstrate and document the superior value they provide customers relative to the next-best alternative.

Value Merchants

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