George S. Day and Christine Moorman

Four Imperatives

Be a customer value leader

Customer value leaders understand that they cannot be all things to all market segments. These companies are focused and tough strategists that choose their customer segments, offer a value proposition that is distinct from competitors’, and deliver this value with a business model that is optimized for their market. They are careful in their choices and vigilant in their outlook as they seek the profits from value leadership.

Innovate new value for customers

It is not enough to win the battle for current customers’ needs. Companies must relentlessly drive growth by innovating new value for current customers and attracting new customers. Customer value innovation is not restricted to technology advances. Customer value innovators see opportunities for growth along every dimension of a competitive strategy—they pursue new geographies and new customer segments, create new and enriched customer experiences, rethink the profile of features in ways that competitors can’t match, and reconfigure the way they create and capture value.

Capitalize on the customer as an asset

Companies that master this imperative have found a way to consistently turn customer value into valuable customers. For these customer asset managers, customers produce profits by purchasing more in a category, purchasing across categories, purchasing new products, responding faster to company marketing activities, defecting at lower rates to the competition, investing in the relationship, and promoting the company more by word of mouth and by word of mouse.

Capitalize on the brand as an asset

A strong brand makes a credible promise to deliver a meaningful benefit. However, companies that master this imperative go further to turn their strong brands into profits.  These brand asset managers devote sustained attention to building the brand by adopting a long-run investment perspective, protecting the brand against competitive attacks and loss of relevance in the market, and then optimizing the value of the brand asset by leveraging it prudently for growth.