“Customer Intimacy” – ESP’s long-term Value Proposition

“Customer Intimacy” – ESP’s long-term Value Proposition

Here at ESP Solutions Group (ESP) we’ve been thinking a lot lately about ways we can articulate our value proposition to our customers or potential customers.

The idea that companies succeed by selling value is not new. What IS new is how customers define value. Today’s customers have a broad concept of value that includes convenience of purchase, after-sale service, dependability, and so on.

This is in contrast to the days of old, where customers judged the value of a product or service using a combination of quality and price.

So one might assume then that to compete today, companies have to meet all these different customer expectations? Turns out that this is not necessarily the case. In their best-selling book The Discipline of Market Leaders, Michael Treacy and Fred Wiersema explain:

Adhering to one “Value Discipline” is key

“Companies that have taken leadership positions in their industries in the last decade typically have done so by narrowing their business focus, not broadening it. In other word, they have focused on delivering superior customer value in line with one of three “value disciplines”—operational excellence, product leadership or customer intimacy”

Treacy and Wiersema have drawn these conclusions about “value disciplines” based on a three-year study of over 40 companies that have redefined performance expectations in their markets.

Their research shows that those companies pushing the boundaries of one value discipline, while meeting industry standards in the other two gain such a lead that competitors find it hard to catch up!

This is largely because the leaders have aligned their entire operating model (that is, company culture, business processes, management systems, and computer platforms) to serve only ONE value discipline.

“Customer Intimacy” is ESP’s value discipline

It’s the value discipline they refer to as “customer intimacy” which caught our attention here at ESP.

“Customer Intimacy”, they explain, involves moving beyond independent transactions to deep, long-term customer relationships, by better understanding, anticipating, and fulfilling stated and latent customer needs. Such relationships are oriented towards a long-term win-win. 

Looking at Lifetime Value

This really resonates with us at ESP, as we typically look at our customer’s lifetime value, not the value of any single transaction. As ESP’s Management Team, we understand the big difference between profit or loss on a single transaction and profit over the lifetime of their relationship with a single customer.

customer lifetime value

We have set up ESP’s operating model to allow us to address each customer or small sub-segment of their market individually, as much for the sake of our profitability as for our customer’s satisfaction.

Flexible and Responsive Business Processes

Our business processes stress flexibility and responsiveness and our Information systems collect, integrate, and analyse data from many sources.

We understand that this can be expensive, but we are willing to spend now to build customer loyalty for the long term.

Staff with Creative Decision-Making Abilities

Also, our organisational structure emphasises empowerment of people working close to customers. We hire and train our staff with the creative decision-making skills required to respond to customer needs in mind – which is why our employees will do almost anything—with little regard for initial cost—to make sure that each customer gets exactly what he or she really wants. Think IBM in its heyday.