When running a business, it can be difficult to manage all back office and front office responsibilities with just an in-house staff. Many enterprises soon discover that there are tasks that their team just won’t be able to execute or handle well. This can be anything, from technical support and payments processing to digital marketing and product design. Continue reading “5 Important Business Processes That You Can Outsource”
One of the most important aspects of making a new business successful is building momentum after the launch. How can you keep people interested and ensure that your company gains popularity rather than fizzles away after a few weeks? The answer to that question will largely depend on the niche you’re operating in, but there are some steps that can be taken to benefit any business universally. Most methods of building momentum involve innovative advertising, third-party funding, and conducting outreach before the launch, as the preliminary and early stages are typically paramount when it comes to picking up steam. Continue reading “5 Tips for Building Momentum as a Startup”
At the core of many successful business operations is going to be the simple idea of engagement. Now, if every business did engagement at the same level of passion and professionalism, the creativity and content would come to the top as priorities, but because the playing field is different with each type of personnel and within each industry, there are more factors to consider. Continue reading “5 Types of Engagement For Your Business Promotion Projects”
Internet has transformed the way we look at the world. Even though this transformation can be seen in several aspects of life, it’s main impact was on how we deal with products and services. Today we can do anything over the internet. We can buy materials, we can book tickets and travel around the world or even go and watch films or other shows. Continue reading “Best Deals on eBay!”
The first thing to do when paying a supplier in a different country is to work out how to get the best result from the transaction.
There are four ways in which to go about paying an overseas suppler: Continue reading “How You Should Pay a Supplier in a Different Country”
Every business, just like every single thing in nature, is constantly striving towards one thing – growth. Stagnation is not an option – with fierce competition in almost all areas of business, standing in one place means that you’re actually going backwards and that’s not something you should allow.
Without question, outsourcing has changed the way business is done. The reason behind it is simple – outsourcing is a simple solution to many problems businesses are faced with on a daily basis. For a single project to be completed, it needs to go through several phases, each equally important, if we want the results to be satisfactory. However, it often happens that there’s not a big enough workforce or not enough time to be dedicated to individual phases and that’s exactly why we turn to a brilliant shortcut called outsourcing, because it enables constant expansion. Continue reading “5 Things You Need to Know When Hiring an Outsourcing Business”
From the moment of birth, life is filled with people telling you what you can and can’t do. As a child, you’re constantly told to not touch things and to stop crying, but you’re also told to smile at visitors, let them hug you, and do things like eat your vegetables. It’s a necessary part of life. In order to learn how to operate on a day to day basis, you have to be told what is socially acceptable and what is not, or else behaviors are left as a free for all based upon the whims of your emotion.
As you get older, the issue of being told what to do and what not to do doesn’t go away. You’re able to say no easier, but it’s still a part of everyday life. When you’re in the business of building a home, you’re going to be told what you can and can’t have a lot and you’re going to be told what you can and cannot do. Here are some of those things you can’t do when building a home on the business aspect of things: Continue reading “The Business of Building a Home: Things Not to Do”
While flying, even the most seasoned flyers gets jitters. Who doesn’t have the occasional butterflies in the stomach? The same concerns are much higher for those who do not use airlines so frequently. For example, if we would want our parents to visit us, what would we not do, to ensure that they get an experience and care that they truly deserve. Check out this video from British Airways. Continue reading “British Airways – For they are truly fuelled by love”
The festive season is a notoriously busy period for the retail sector. As birds start calling, maids begin milking and lords commence their leaping, the whole world it seems is (im)patiently waiting on the jolly fat man in an ill-fitting red suit to put in an appearance and deliver the gifts they pretend to like. Continue reading “How to Deliver Happiness toYour Customers This Christmas”
Salesforce is an excellent help for many small and medium businesses. It allows sales teams to communicate and keep track of their progress in the work of bringing new customers on board. Nonetheless, like all similar programs, Salesforce leaves room for human error. This is how duplicate recordings can appear. It is enough for two members of a team to enter the details of the same person without performing a proper check of the database, and you are going to have two recordings which represent the same individual. Continue reading “Merging Accounts In Salesforce – How To Guide”
If you are used to running your own business and taking care of all the problems that arise on your own, it can be hard to give control to a contractor. When you need the services of a contractor, it’s frustrating to feel that you don’t know where the project is or how much time is needed. Worst of all, if you don’t know much about construction, you could be getting ripped off without knowing it! Continue reading “Best Business Practices When Hiring A Contractor”
One of the most important factors involved in producing products is the effective design of the packaging and labels. A product can succeed or fail based on how effective its label is. Plus, choosing the right labels can save you money and time. If you do not have the time or the expertise to design and produce labels in-house, you will need to outsource the task to a contract labelling firm. Here’s how to choose the best solution for your labelling needs. Continue reading “5 Key Considerations in Choosing a Contract Labelling Service”
Companies rarely have it alone when they start a CRM (Customer Relationship Management) business. That’s because there are certain aspects they need to consider: operational processes, employee use transitions, change management, business strategies, budgets, and new technology. Continue reading “3 Tips For Being Successful With CRM Integration”
The car title loans are basically short term loans provided to the individuals who possess bad credit. The loans are offered in exchange of the car title as the collateral. The title loan can thus help you to ride over the crisis and emergency situations. If you are holding a clear title of a vehicle, you are eligible for obtaining the loan. But how can you get the accurate evaluation of the auto title loans San Jose from the online lenders? Continue reading “Effective Ways to Determine Your Car’s Value Online for Auto Title Loan”
Have you considered using a mystery shopper service as a way to learn more about your business and how you can improve your service? A mystery shopper is someone who visits your retail location while pretending to be a customer, so that they can observe what the experience is like. They will pay attention to details such as the cleanliness of the premises, the use of displays and signs, the friendliness of the staff and how the interaction was handled. They will then create a report based on these observations so that you can see how your business needs to improve. Before this though you will sit down with the company to create a tailored field marketing plan. Continue reading “How Mystery Shoppers Can Help a Business”
Businesses have a life cycle, a natural ebb and flow. Some businesses last for generations, but 80% close their doors before their fifth anniversary. To get to be part of the latter, you need to strike a balance in your daily operations. A new business owner needs to constantly identify and eliminate inefficiencies. At first, many of these will be hard to spot, but as your experience grows you’ll notice them more and more. By getting rid of that which wastes time and money, you’ll add years and even decades to the life cycle of your business. But by leaving fatal flaws in place, you are numbering your days. Here are a few of the best ways you can bring order and efficiency to the way you do business. If you follow these steps in the next year, you’ll make sure you have many more anniversaries to come. Continue reading “How to Kill Inefficiency in Your Small Business”
Though the process of Bid Management is as simple as Responding to a Tender Document, it certainly involves a lot of Intra-Organizational or Inter-Organizational coordination of multi functional departments. Some of the challenges of managing bids are being highlighted here. Continue reading “Challenges of Bid Management”
The business world is overwhelmed with problems keeping customers loyal. It is a problem that extends well beyond the old fashioned notions of doing business, when people would cling to brand names and familiar businesses as a matter of principle. With the holidays approaching, sending loyal clients a designer Christmas card might be a nice touch to letting them know that they matter, but do modern clients receive such a gesture as warmly as former generations once did? Or are clients today less interested in subtle niceties, aware that businesses use such tactics just to pad their bottom line? With a consumer base that is far more educated and wise to marketing tactics today, being bombarded with marketing ploys on a daily basis, it really begs the question of what sort of approach works to keep clients loyal in a modern business environment. Continue reading “Letting Your Loyal Clients Know They Matter During the Holidays”
There’s one undeniable fact in the business world: every enterprise needs a certain amount of leverage in order to move forward. Whether it’s in the range of products you have, your expert and competent team of employees, your incomparable services, or your digital marketing edge, your company needs to find ways to present itself that far outshines your competition. Continue reading “How Your Business can Get Ahead with an Outsourced Transcription Service”
The business world is fraught with a variety of challenges, as any business owner would attest. These challenges may come in the form of increased competition, a lack of business exposure, a high cost of raw materials, and the like. But with the right know-how and the right support, your business need not face too many difficulties. Continue reading “All You Need to Know about Invoice Financing for Your Business Growth and Success”
Every business in the world is thought of as a faceless bunch of suits that want to take advantage and have a pack of attorneys just waiting to step in and start litigating at the first sign of trouble. The truth is that the opposite true. Nobody, particularly a business, wants things to go to the extreme of litigation and legal actions. It is expensive and time consuming and distracts from the daily routine of running a business and providing great value to its customers. If there is actually a fault in the business world it is the reluctance to use legal counsel when it really should. Continue reading “Knowing When It is Time to Get Legal Help”
Choosing the right ad server for your company’s needs is not an easy process. The main problem is navigating in the blooming mass of propositions, available on the market. Time is one of the most valuable resources available, and you need the perfect tool that will help you save it, establishing your brand name in the process. Finding the right partner is extremely important, as switching between them brings a lot of inconvenience into the whole work process. Therefore, we wrote some tips that will help you to choose the Ad Server best suited for your business. Continue reading “How to choose relevant ad server for your business”
Given the technological advancements of the past decade – in particular the internet – customers now have a staggeringly vast choice in terms of the products and services they consume. Each year, countless new companies emerge on the scene, each trying to undercut the prices of those who’ve come before them. Undeniably, in a buyer’s market, perceived value for money is paramount. But what else marks the distinction between businesses that succeed and businesses that don’t? Without at doubt, customer service or “the buying experience” have a massive part to play as well. Here are some essential areas to focus on. Continue reading “Going The Extra Mile: Customer Service Essentials”
Purchasing is among the most important activities in supply chain management, since it is the primary point of contact with most supply-chain partners. A major area in purchasing management is that of Supplier Selection Problem (sometimes called the Vendor Selection Problem). Research in this domain started in the early 1960s and over 175 studies have attempted to address this highly critical issue of procurement management. “Vendor selection criteria and methods” have reportedly been the highest area of interest in operations management research.
A wide variety of selection criteria have been used in different studies for the evaluation of suppliers which have varied due to the differences in requirements in different industries and also often had been purely firm specific. Typically the variety of supplier selection criteria that has been used has exceeded 50 criteria in over 65 research papers working on finding new criteria for evaluation of suppliers. These criteria have been enlisted in the matrix shown below.
Some of the most popular criteria in supplier selection which has been used in over 10 research papers and have also been widely cited are relative price, compliance with the delivery schedule, quality of the delivered goods to specifications, production capabilities of the supplier, geographic distance (of the warehouse), technical capability of the supplier, management capability of the supplier and financial position of the supplier. All these supplier evaluation criteria have found massive application in the studies in this domain and are marked by subtle differences in terms of relative importance, as perceived by senior procurement practitioners.
Similarly another area of keen interest is the models which has been used to provide decision support to the supplier selection problem. Over 35 different mathematical models have been used for providing decision support to this extremely critical issue of procurement management. A study by Ho, Xu and Dey (2010) reveals that the Analytic Hierarchy Process, Mathematical Programming and Data Envelopment Analysis are the top 3 modeling paradigms used to provide decision support in supplier selection problems. Many other novel techniques like multi-attribute-deterministic models; mixed mathematical programming, outranking techniques; weighted sum of products; interpretive structural modeling; fuzzy set theory, neural networks; intelligent agent based techniques; TOPSIS, fuzzy multi-attribute frameworks; rule based reasoning models and multi-objective programming models have also been used. Typically the evolution of supplier selection models have been as described pictorially below, due to the evolution of the nature of selection criteria, from quantitative to a mix of quantitative and qualitative criteria.
As the trend highlights, there is a paradigm shift in the nature of the mathematical models used for supplier selection with a change in the requirements in the nature of business, mostly in the manufacturing industries and the maturity of the discipline. No wonder the area has attracted so much of attention to the consulting practitioners and theory developers in academia alike.
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The source of a sustainable competitive advantage for any organization is derived from the access and subsequent exploitation of resources, and today, knowledge is being heralded as the most important of such resources that is available to organizations (Drucker, 1993). For the larger and mature organizations, often process capability knowledge is the primary source of advantage, whereas for the organizations seeking to grow and out-grow competition, in addition to process capability knowledge, knowledge management focus would also include market knowledge, rapid product development, or the creation of knowledge through research. However, it is important to recognise that even mature organizations need to create knowledge to avoid falling into the stagnancy pit. This is exactly what knowledge management attempts to provide more succinctly to the organizations. Knowledge management aims are to create conditions under which competitive advantage can be maintained, by creating, acquiring, retaining and exploiting the knowledge for the welfare of the organisation.
Knowledge management is the way organizations today are attempting to make the otherwise intangible knowledge tangible and distributable, throughout the organization, in search of the illusive competitive advantage. Today, in this evolving world where insights on data or business intelligence plays an extremely crucial role for the sustainable development of an organization, knowledge management has become a key area of focus.
Beckett et al. (2000) has provided an interesting framework by which many organizations are actually managing their data within with a growing focus to manage the data outside the organization also. Through research, the authors highlight how effective knowledge management can provide a wider scope of continuous improvement to obtain benefits for the parent organization, by providing higher quality information, better quality information, removing information asymmetry, and subsequently increasing the levels of organisational expertise which can be applied to it to create substantial improvements for the organization.
The sole focus of organizations today is to convert internalized tacit knowledge into explicit knowledge, so that it can be commoditized and less dependency is there on an individual for being the source of knowledge. With a high attrition rate in organizations across industry, it becomes extremely pertinent that knowledge once created within the organization stays inside the organization and does not become unusable once the creator of the same changes base, within or outside the organization. That is the sole objective of the initial knowledge management systems.
For improving the knowledge management practices within the organization, companies today are increasingly adopting rewards systems, collaborative systems, post-project reviews, knowledge mapping, establishing communities of practice with cross-project learning platforms, creating expert directories, competence management systems, best practice transfer, mentor-mentee relationships, knowledge fairs, formal knowledge repositories, measuring and reporting intellectual capital, knowledge brokers, social media and social network mining systems.
While it is important for organizations to understand the importance of knowledge management systems, even one aspect that many organizations often overlook is using the knowledge outside the boundaries of the organization, but within the value chain. Realizing this, the recent focus has been the development of customer knowledge management systems, where customer tacit knowledge is use to co-create value for the customer in the best possible way, and finally value for the company. Another group of stakeholders who are being introduced into the knowledge management realms are the supplier networks, where knowledge management is often used to create otherwise non-contactable value for the stakeholders. The way forward for knowledge management systems into the future is to capture the tacit knowledge outside the organization but within the value chain (and within multiple stakeholders) to create value for both.
Today, it is pertinent that all the senior executives of organizations realize the potential benefits of effective introduction and management of knowledge management systems, that can benefit the organization. Today, while organizations are facing increasing levels of competition due to the effects of greater competition, knowledge management provides an important way for organization to utilize the most valuable resource available to them, to gain competitive advantage.
Customer sentiment mining or opinion mining refers to the application of datamining techniques like natural language processing, computational linguistics, and text analytics to identify and extract subjective information from customer data like textual interactions (sms, emails), recorded phone calls (calls to CRM divisions) and more recently usage of products/services (website usage, etc).
There are many popular technology products for customer sentiment mining.
Typically, these products analyze e-mails and telephonic conversations to decide if it is a complaint or a query and forwards it to most suitable agent for immediate resolution thus increasing agent productivity. They can also perform both structured and unstructured data analysis to understand & quantify customer satisfaction, display customer details and past communication, prioritize complaints based on customer satisfaction level the value of the customer, update customer contact details in the data warehouse, and also helps to differentiate services to HNI and LNI clients.
Sometimes, these data-mining systems can even create customized email/sms/ automated phone call campaigns for the marketer to increase revenue from cross-selling and up-selling, analyze customer preferences post campaign-creation, analyze customer actions post email reading, generate reports to facilitate management decision making process (which can be integrated with the existing other report generation tools)and also helps to analyze productivity of agents and channels.
A feature-wise competitive analysis of the 15 most popular instruments available in the market for customer sentiment mining can be obtained on request to email@example.com. The comparative report is easy to understand with charts implying a comparison of features an is priced $350 only.
Today “customer is the king” is the mantra for success for all marketing managers. But for actual decision making, the marketers (especially the relationship managers) are often poised with a simple challenge. They cannot meet the needs of of all the customers equally and satisfy them all. So how should they prioritize how to satisfy the needs of the customer and by what means to select such customers?
The answer lies in the estimation of the customer’s lifetime value. Customer lifetime value ( CLV or CLTV ), or lifetime value (LTV), or lifetime customer value (LCV) is the net present value of the economic benefits (monetary returns in terms of cash flows) attributed to the relationship with a customer throughout his relationship with the company. The focus on customer lifetime value as a marketing metric is for placing a much greater emphasis on relationship marketing for improving customer service and long-term customer satisfaction, rather than on maximizing short-term sales.
So then, comes the big question, how do one estimate the Customer Lifetime value? The answer is presented to you diagrammatically below, in a simplified manner.
So what should be done to maximize the value from CLTV management? Let us discuss the same in this article step-wise.
- First estimate your customer lifetime value for your entire customer base. This would enable you to make an estimate of the total revenue that the customer is likely to provide you if he/she stays with you throughout the estimated life-cycle of the product.
- For each customer, estimate the possible churn probability at each stage and discount the CLTV value for each customer.
- Segment the customers based on the discounted CLTV value into high net-worth individual (HNI) customers, medium net-worth individual (MNI) customers and Low net-worth individual (LNI) customers
- Now, allocate your budget for marketing and relationship management likewise for each customer segment, to maximize the retentivity of every customer in the segment. Do remember that normally, every new customer acquisition is 5 times costlier than retaining an old customer, as had been found out through research. However, if the cost of retention of a singular customer (based on a case-to-case analysis) is more than the discounted CLTV, incentivising his churn is often a good strategy to optimize the negative effects of his network value and negative word of mouth viral effects.
- Always try to ensure a greater deal of attention for maximizing customer satisfaction. A fully satisfied customer is likely to provide 5 times more economic value to the firm than a customer with a mid-level satisfaction level. It is also important to remember that it is better to let a customer with low satisfaction level churn rather than attempting to retain him, since such a customer has a negative return to the firm, from the customer’s network ( remember Customer Network Value? )
These are few of the necessary steps to ensure customer lifetime value maximization and optimal management of the same, through better resource allocation. Do let us know if you have any queries, we would be happy to resolve your problems.
To create sustainable, long-term value for all the stakeholders of a firm, it is important to explicitly establish an appropriate stakeholder value target. However what would constitute the “success” condition for all the stakeholders of a firm would vary from the goals of individual stakeholder. For an investor in a firm, value may be seen as through higher market price of his stocks and bonds, where as, for a mid level worker, value may mean better returns in terms of satisfaction from the job, maybe in terms of pay grade improvements or in terms of job satisfaction. Although, what constitutes “value creation” may be dependent on stakeholder perception, for a generic strategic framework, there is a need to conceptualize a generic framework to achieve a target so the value may be created for the firm as a whole, in strict strategic sense.
The key to reach this target and achieve a sustainable competitive advantage is the alignment of business strategy, financial strategy, technology strategy, marketing strategy and investor strategies. One such model developed in strategic management literature is that of Strategy Maps.
In Strategic Maps framework, value is created through 3 main organizational resources, namely Human Capital, Information capital and Organization Capital.
As depicted in this model, value for a firm is essentially created through the interaction of four processes, namely, “Operations management processes“, “Customer relationship management processes“, “Innovation processes” and “Regulatory and Social processes“. Under each process, there are lots of transaction level processes which create value. Monitoring and strategizing on the value creation of transaction level processes is the functionality of Mid Level management in the organization which may be termed as “Ploy for Value Creation“. Focus here could be “Ploys” for improving cost structure or improving asset utilization within the firm. The objective at this level is to focus on productivity enhancing strategies.
For the executive senior management, strategy formulation for the purpose of “Value creation” would have a different focus. Their objective could be to expand the revenue opportunities through entering a new market , decide a growth strategy for a product or market, or focus on Business Diversification strategies. In short, the role of the executives would be to evaluate various growth strategies for the firm, which could lead to huge revenues and thus economic value creation in the near future, upon realization of the plan post implementation of the strategy.
There are many other strategic frameworks for the creation of value for businesses which have their individual merits and limitations. Another popular framework for value creation is that of Prahlad et al. (2004)
Do let us know if you have any query.
No doubt that the efficient management of the Supply Chain is crucial for any business, but the grasping question always comes is how does it create value for the firm? More still, how can that value be better managed so as to create competitive advantage for the firm?
While the Value Chain analysis as developed by Michael Porter in 1985 argues as being efficient for creating a sustainable platform for value generation for firms so that they may achieve competitive advantage in the industry, the proposition is not without major limitations, like all other popular frameworks in strategic management literature.
Theory of Economics is one of many possible ways to define and measure value.
While operationalizing the definition of value, it is crucial to note whether the exchange that creates this economic value is between business entities i.e. Business to Business (B2B) – or between a firm and a consumer – i.e., Business to Consumer (B2C).
Since Supply Chain is intrinsic to creation of economic value between business entities only, we focus on B2B value creation. There are 3 forms of value that is created in B2B type economic transactions that is widely accepted in strategic management literature focusing on Supply Chains.
- Technical value, which is intrinsic to the resource being provided and occurs in almost every economic exchanges.
- Organizational value, which is built upon the context of the exchange, and may derive from a range of factors such as ethical standards, prestige, reliability, and association. This may help the organization get more than the normal economic value from the transactional point of view, in terms of helping the same to achieve some degree of competitive advantage.
- Personal value, which is derived from the personal experiences and relationships involved in the exchange of resources and the benefits provided to the entities associated with the firms bounded by the economic exchange.
Value in supply chain gets created through the following processes:
- Supply chain modeling must be done quantitatively and objectively. Understanding of the goals objectively is crucial for its success.
- The major challenge in an excellent supply chain network is not to build a model but to model the sensitivity of one variable against others optimally. A simple model can work fine in many cases. However, supply chain experts (OR & Analytics Professionals) should be involved immediately when doing multi-layered inventory strategies, industrial engineers and operations.
- The fundamental building blocks of work are the methods and standards for the tasks. Value creation occurs when the changing business dynamics can be effectively modeled regularly to drive maximum benefits. (remember the Theories of Constraints?)
So creating value from supply chain should be a major focus for all manufacturing companies.
This is crucial to improve the effectiveness and efficiency of not only the supply chain in particular, but for the overall firm productivity.
By the way, did you read the following articles?
- Complexity and Adaptivity of Buyer-Supplier Networks
- Information sharing in Buyer Supplier Relationships
- How to manage a Lean Supply Chain
These are few of our highly popular articles
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos.
Customer Network Value is the Value generated from the network (Both social and professional) by the acquisition of new customers through word of mouth advertising.
Jeff Bezos, the founder, president, chief executive officer and chairman of the board of Amazon.com never said anything truer when it came to realize Customer Network Value. Typically it has been seen that for both B2B products and especially for B2C products, word of mouth proves to be a better media for advertising than most other media, and actually the returns on investments are that much higher.
Typically every customer has their own Customer Life-time Value (CLTV) to the firm. But very few managers realize that this is only a small fraction of the value that can be generated from a customer. The social and professional network provides another great source of value to the firm, potentially called the Customer Network Value.
Customers, on an average, through their network can potentially rope in, 2-5 times their own life time value (revenue), from their network, if they are satisfied. A satisfied customer, on an average, brings in 2.8 new customers to your firm, in the B2C segment, through word of mouth.
Not only by creating customer satisfaction, you are increasing his life tme value to the firm, by increasing customer loyalty, but also you will increase the customers network value and rope in new customers.
And all this extra network value for almost zero cost of acquisition. This is of prime importance in today’s business scenario since typically, cost of new customer acquisition is 5 times than to retain an old one. Although it is difficult to determine the exact origins of this value claim, the earliest sources that we can find attribute it to research conducted by the Technical Assistance Research Project (TARP) in Washington, D.C. in the late 1980s. Around the same time, other loyalty pundits claimed exactly the same findings as their own (for example, the Customer Service Institute, Consumer Connections Corp., and ITEM Group).
How ever big may be the multiplicity value, it boils down to one thing, Customer’s network value cannot be rejected in current times.
By the way, did you read our article on customer lifetime value estimation and management?