≡ Menu

How To Understand Customer Value With The Strategy Canvas – Customer Matrix – Customer Value Attribute Map

The Customer Value Attribute Map is an essential tool to help you focus on establishing and maintaining a competitive advantage based on differentiation (i.e being different in ways which matter to the targeted customers.)

It goes by different names:

  • W. Chan Kim and Renee Mauborgne call it the Strategy Canvas in Blue Ocean Strategy, (This is probably the most famous of the names due to the popularity of the book.)
  • Cliff Bowman calls it the Customer Matrix in Competitive and Corporate Strategy,
  • I call a Customer Value Attribute Map (because I feel that’s the most descriptive) and
  • others call it a Customer Value Matrix.

It doesn’t really matter what you call it as long as you use the basic concept to get crystal clear about what particular customer segments or niches want and what you and your closest competitors offer. This way you can see areas where you are better than them, where they are better than you and where one of you offers a unique attribute.

Just don’t confuse it with the Customer Value Map which shows the fair value line of value for money between low price, low value brands and high price, high value brands and where your business lies in relation to that fair value line.

What is The Strategy Canvas Or Customer Value Attribute Map?

The strategy canvas or customer value attribute map is a graphical representation of the key elements of customer value which determine:

  • the initial purchase choice (based on perceptions before use) and
  • the continued use for a product or service based on perceptions after use.
  • if these are different, it may be necessary to have to attribute maps for initial purchases and subsequent purchases.

The strategy map (customer value attribute map) allows a visual comparison of two or more brands to show the relative strengths and weaknesses.

The Strategy Canvas For Luxury Cars – An Example

Below is a sample strategy canvas for two expensive, luxury saloon cars – Rolls-Royce and Mercedes.

Strategy Map aka Customer Value Attribute Map

Strategy Map comparing two luxury saloon cars

I don’t want to get caught up in a detailed discussion of car models so let’s leave this as a rough and ready example as I talk through the strategy canvas.

I’ve listed four key customer value attributes for an imaginary luxury car buyer:

  • prestige,
  • comfort,
  • appearance and
  • handling
  • I’ve also included price with a high price as a disadvantage.

People have different views on whether price should be included in the strategy map or whether it should be left for the customer value map and in the strategy canvas / customer matrix you could just focus on the factors of customer value. I’ve included it for simplicity and clarity.

In my assessment, I have rated prestige and comfort as better in a Rolls Royce but appearance and handling better in a Mercedes. I’ve also said that the price is more of a problem for a Rolls-Royce because it is more expensive. While for the other attributes, more is better, for price less is better.

There are potentially other negative attributes. This happens when there is a specific problem with a product solution. I prefer to present these as positive factors for the products which don’t suffer the problem. For example, because of my size, a big disadvantage of flying economy class is the lack of leg and shoulder room. This turns into an advantage for other solutions as “space to shift positions”.

The strategy canvas makes the key differentiation factors very clear and the relative importance of these attributes will influence the final purchase decision.

For example if I was being chauffeured around in one of these luxury saloons, then handling would be much less important to me than if I was doing the driving myself and took pleasure from it.

Other luxury cars could be added onto the strategy canvas if other marques are seen as serious competitors.

How To Prepare A Strategy Canvas or Customer Value Attribute Map

I’ll quickly take you through the process to prepare your first strategy canvas.

  1. Decide on your customer segment – get specific because different types of customers will be interested in different things. It can be helpful to think through your customers and allocate particular customers to typify particular customer segments. This is more complex segmentation than you will often see by demographic factors.
    .
  2. Determine the key customer value attributes – what matters most to the customer and user in the initial purchase decision and their continued use of the product?
    .
  3. Determine the relative importance of the customer value attributes.  The creators of both the strategy canvas and customer matrix recommend that you list the attributes in order of importance with the most important coming first. I agree.
    .
  4. Determine the customer’s perception of your customer value rating for your product or service and plot it on the strategy canvas.
    .
  5. Determine the customer’s perception of your key competitors’ ratings for each of the attributes and plot those on the strategy canvas as well.

You will now have a visual chart of the competitive strengths and weaknesses of your product which can be used as the basis for current marketing and for future product development and business improvement.

The Advantages Of Mapping Attributes Of Customer Value

Often strategy, strategic options and differentiation can feel like vague “good to have” topics. Preparing a strategy canvas or customer value attribute map brings the differentiation factors which matter to customers into sharp focus.

It Provides Clarity When There May Have Been A Muddle

The exercise brings great clarity but also highlights what a muddle existed before the work was done. You’re forced to think when preparing a strategy canvas about the important criteria that really matter to particular groups of customers.

If you do the exercise with your management team, ask them to go through the process on their own first and then compare and contrast. I think you’ll be amazed at the different perceptions of what is important to this particular group of customers and the relative importance, even when you start with a tightly defined customer group.

Those differences are what have caused muddled strategy, disappointing marketing results and low sales order conversions.

Discuss the differences. It might be that two customer groups have been combined when they have distinct needs and wants. It might be that a few managers have funny ideas about what is important to these customers.

Usually the management team become aware that they haven’t done enough research with customers – through surveys, customer groups and purposeful informal discussions – and there is pressure to close this gap and to capture the voice of the customer.

Big Differences In The Attributes Of Customer Value Probably Highlight Different Customer Segments or Niche Markets

The second advantage of the strategy canvas is that it vividly demonstrates the differences between different customer segments so you can see why a one size fits all policy doesn’t work well.

By preparing difference customer value attribute maps and understanding the main attributes of value and the different weightings, the reasons why your marketing success in one compared to another become clear.

Some market segments you fit like a glove – what I call bullseye marketing – and others you have a mismatch between what you are able to offer and what customers want.

It Brings Out Your Unique Selling Proposition (USP)

The third big advantage of the customer matrix is that it helps to focus your marketing on the few things that really matter to customers and it helps you to understand and emphasise your unique selling point.

The assessment of value that matters in the buying decision is the customer’s perceived value. This depends on:

  1. the underlying performance value and
  2. how well it is signalled in your marketing.

The Attributes Of Customer Value Link Into Your Internal Processes

The fourth advantage is that it provides a link from the reasons why customers buy to what you need to do internally to consistently deliver on your marketing promise.

For example, if customers want quick delivery then your business needs to be designed to produce short lead times and that ripples through into your operations strategies including purchasing, stock control and distribution.

Consciously identifying the attributes of customer value that are vital to your strategy and how they link into your internal operations, will provide focus on necessary improvements. It also helps to provide great motivation to your team if it’s based on surveys because it helps to turn your business into a game you can win.

It Shows How Your Market Is Potentially Becoming Too Much Of A Commodity In The Eyes Of Customers

The fifth advantage is that it focuses attention on the extent to which you and your competitors have allowed the product to be commoditised. The customer value matrix will highlight vertical differentiation where performance is better on the same attributes  or horizontal differentiation where different competitors bring in unique attributes to make their case for customer preference.

In a market that’s been commoditised, the attributes offered by the leading competitors are the same and the relative performance offered by each is very similar. This means that customers are intensely focused on finding the lowest prices because they don’t have a reason to care who supplies the product.

The strategy canvas, as explained by W. Chan Kim and Renee Mauborgne in their book  Blue Ocean Strategy, is very much a tool for looking for innovative ways to create differentiation by looking across different solutions to particular customer wants and needs.

How To Find Out More About The Strategy Canvas and Customer Matrix

If you’re a business owner in the UK, you could take advantage of my free Business SOS 60minute free consultation but otherwise, I recommend four books in particular:

  • Competitive & Corporate Strategy by Cliff Bowman and David Faulkner – this was the book that first introduced me to this crystal clear way of focusing on the factors of differentiation. It’s hard to find but it’s a great book which takes the ideas of the customer matrix and looks at how you can build it into the strategy of your business.
    .
  • Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne – this is the book to read to understand how the strategy canvas can be used to create innovative product offerings by deliberately choosing to break the common assumptions of a successful product.
    .
  • Blue Ocean Shift by W. Chan Kim and Renee Mauborgne -this is the follow-up and instead of focusing on “what to do”, this emphasises “how to do it”. The book is written for big companies (because that’s where the large consultancy assignments are) but the underlying logic applies to smaller businesses.
    .
  • Managing Customer Value by Bradley Gale – while the book doesn’t feature the customer matrix or strategy canvas, it was the first book to go deeply into the ideas of customer value and presents the process for bringing the management team together to determine customer value attributes and weightings.

You can buy these from Amazon.co.uk or Amazon.com (these are affiliate links but it doesn’t cost you any more and it provides a little reward from you to me.)

Have You Used The Strategy Canvas, Customer Matrix, Customer Value Attribute Map?

I’m sorry if the different names for the same strategy tool has confused you.

If you’ve used it, I’d love to hear whether you found the process invaluable for:

  1. Setting the strategy debate
    .
  2. Planning out what changes you intend to make in your competitive strategy as you look to strengthen your competitive advantage.
    .
  3. Implementing the strategic plan.

Please leave a comment.

Get To Know Me

Paul Simister is a business coach who helps business owners who are stuck or struggling with disappointing marketing, to get unstuck. You can then start attracting, converting and keeping more customers. If your business is based in the UK and you feel stuck, get a Business SOS consultation for up to 2 hours (please click) with me to get you unstuck.

Don't forget to download and read my FREE Report - The SIX Steps PROFIT Formula: The Simple Rules That Every Small Business Owner Needs To Know available to download at Six Steps Report (Please click).

 

Similar Posts:

 Name: Email: We respect your email privacy 
{ 0 comments… add one }

Leave a Comment