Strategic Competitive Advantagecampbellbcampbell352006-03-26T07:39:00Z2006-11-04T07:49:00Z16283584Organization298420411.6568Customer Relevance HierarchyYour most profitable customer is the one you already have. Your most expensive customer is the one you’re trying to win. Are you sure that you’re offering what your target customer wants, and the level of service that customer seeks?The customer relevance hierarchy (Crawford and Mathews, 2001) is a tool that identifies the service characteristics valued by customers, provides a scale for measuring achievement of each characteristic, and permits comparison with the performance of other companies offering similar services. The Customer relevance hierarchy includes four levels: Dominant, Differentiated, Compliant, and Deficient; and five dimensions: Access, Experience, Price, Product, and Service. A typical customer relevance model suggests that winning companies reach Level 3 on one dimension, at least Level 2 on a second dimension, and at least Level 1 on the remaining three dimensions. Companies that sink to Level 0 are generally not competitive.Table 1, below, shows the Customer relevance hierarchy. Following the description of the dimension, sample ratings are provided that reflect desirable customer perceptions of our services.Your true status in terms of customer relevance is unlikely to be revealed by mailed questionnaires that attempt to gather customer satisfaction information. Surveys generate poor response rates and yield little reliable information. Similarly, evidence shows that impromptu questions asked during “sales calls” produce little data. What is needed is a systematic approach to customer relevance. You need to learn what dimensions your customers value. Where you can reach Dominance for a relevance dimension? Differentiation? Compliance? Where should you seek to be Level 3 or Level 2? Are there dimensions for which your company is deficient?You should compare your customers’ ideal vendor profile with their current ratings of you. It is worth an investment of time and effort to develop and implement a customer survey to inform your efforts. Recommendation: Develop goals for Customer Relevance across all dimensions, and use a regular customer survey (preferably interview based) to measure progress against your business goals. The results of the survey should be validated against customer acceptance ratings. Business and Ecology Consulting can help you develop and administer your customer interviews, as well as translate the results into an effective and efficient customer retention plan. medEsmart PAGE 2April 2005Table 1. Customer Relevance HierarchyLevelAccessExperiencePriceProductServiceDominant(3)Customer finds that business’s organization facilitates solving unique challenges.Customer perceives that company and employees believe long-term relationship is #1 goalCustomer seeks company because he trusts the business to act as a “purchasing agent” in the category. Customer regards business as the “trend-setter” in its category. Benchmarks all others against business.Customer perceives business recognizes unique individual needs and customizes offering.Differentiated(2)Customer finds it easy and convenient to get products and services.Customer perceives company and employees as caringCustomer prefers company because of consistently fair and honest pricing.Customer finds business offerings are consistently above average and readily available.Customer trusts business to provide accurate, understand-able info about its products.Compliant(1)Customer finds it easy to get products or services, and in a hurry.Customer perceives company and employees as respectfulCustomer believes company’s prices are competitive and reasonable.Customer finds business offerings are “credible” within categoryCustomer believes business treats them fairly and with respect. Deficient(0)Customer experiences difficulty in obtaining products or services. “Hard to do business with”Customer perceives business and employees as indifferent or aggressive.Customer perceives that company’s pricing don’t offer reasonable value.Customer believes that business offerings fail to meet a quality, depth, or breadth requirement.Customer believes that business is unconcerned about customer’s needs or wants.