Creating Superior Customer Value in the Now Economy

From Journal of Creating Value

Leading multinationals such as Alibaba, Lenovo, LG Corporation,  Mitsubishi, Nestlé, Tata Motors and Tesco use customer value strategies to build rational and emotional bonds with their target markets. As Amazon Prime demonstrates, demanding customers want the best products and services, and they want them now! In fact, Amazon is the world’s second-most admired company after Apple (Fortune, 2019)..

In 1998, the start-up Pets.com attempted to revolutionize the online delivery of pet food and supplies. They even advertised in the 2000 Super Bowl but were out of business by the end of that year. Typical of many e-commerce firms, Pets.com failed due to unclear value propositions, poor market research, inadequate business models, ineffective promotion strategies, short-term emphases and weak business fundamentals. Chewy.com, operating in the same marketspace, was acquired by PetSmart for $3.35 billion, 20 years later. Chewy.com offers 30,000 online pet products, while PetSmart runs 1,500 superstores in North America. Online pet products are a $4 billion market—Chewy.com accounts for half of those revenues. So, what changed? The internet is now mainstream and mobile devices are affordable, easy-to-use and always on. Chewy.com fine-tuned its business model providing first-rate products, excellent service and solid customer value.

The economic, global and technological business environment has changed dramatically in the past decade. To compete successfully, customer value should be the overall basis for strategy. Entrepreneurs, managers and employees must become value creators and implement strategies to delight customers. Unfortunately, caught up in the daily pressures of running businesses, managers may lose sight of customers’ desires. This may be due to other corporate priorities (cost cutting, market expansion, product development, etc.), limited resources, knowledge gaps or failing to understand the value of a value philosophy.

Customer-centric cultures provide focus and direction for organizations ensuring that exceptional value is provided; this in turn, yields outstanding business performance. Forrester found that only one-third of companies were customer-committed or customer-obsessed—the remainder were customer-aware or customer-naïve. Superior customer value means to continually create business experiences that exceed customer expectations. Innovative companies such as Tesla amaze buyers. Tesla’s Model 3 electric vehicles received more than 400,000 pre-orders. Other exciting Tesla initiatives include its Gigafactory (a multi-billion-dollar battery production facility) and futuristic Hyperloop transportation system.

Value is defined by customers, not companies. Organizations that offer stellar value turn buyers (try-ers) into lifetime customers. Value is the strategic driver that global companies utilize, as well as mom-and-pop small businesses, to differentiate themselves in the minds of customers. Apple’s two-decade string of success with iDevices and Apps built market share for their Mac computers. Apple’s imagination, led by late Steve Jobs and former Chief Design Officer Jony Ive is about giving customers extraordinary experiences.

Article details
Creating Superior Customer Value in the Now Economy
Art Weinstein
First Published March 17, 2020 Research Article
DOI: 10.1177/2394964319898962
Journal of Creating Value