The Importance of the Brand Value Chain (BVC) to Attaining Market Leadership

A High Performing Company with All Value Chain Links Strong (No Brand Value Links Broken or Sub-optimized):

Company Brand Value Chain
Company Brand Value Chain

How a Broken Value Chain Impacts Your Company

In order for your company to have a chance at being a market leader, it is important for it to have all links in the brand value chain attaining top effectiveness. Just one broken link in this brand value chain (BVC) can bring your whole company down and subject your company to the following risks:

1)      Loss of Market Share as compared to your competitors

2)      Inability to close sales

3)      Lack of marketing leads and inquiries

4)      Declining customer base over time including customer defection to the competition

What is the Brand Value Chain (BVC) you might ask?

The Brand Value Chain is defined as the effectiveness of the sum of all company functions delivered to your customers and the marketplace: Marketing, Sales, Product/Service Quality, Customer Service, Pricing, Warranties/Returns, Customer Relationship & Experience Quality, etc.

Brand Value Chain Defined
Brand Value Chain Defined

Therefore, when one link of the brand value chain is weak or about to break, the following rule regarding brand image almost always holds true:

Brand Image & Brand Value Chain Rule
Brand Image & Brand Value Chain Rule

Symptoms of a Broken Value Chain:

  1. Your sales team just can’t seem to close the deals. Potential broken value chain links: Poor customer service, product utility/quality, pricing.
  2. You have great products, pricing and customer service but nobody has heard of you. Likely broken value chain links: Poor marketing and/or sales operations.
  3. Your customer base keeps declining year-over-year: Likely broken value chain links: Poor customer service or eroding product quality or pricing.
  4. Your marketing generates a plethora of leads that are not closed or turned into sales deals: Likely broken value chain links: Sales operations and marketing-sales lead management procedures are non-existent or sub-optimized.

Examples Companies with Potential Broken Value Chains:

Every day we see examples of companies that seem to have everything going for them except one weak link in the brand value chain that brings the entire perceived brand value down. Some examples are as follows:

  • Comcast – great programming, great marketing/sales, great products, great technology & infrastructure but perceived bad customer service and pricing creates a negative impression of the company by many customers and prospects – their company’s Achilles heel.
  • Searsgreat products, good pricing, good in-store sales, etc. but is severely lacking in marketing and promotions including in-store and on-line customer experience design which tends to brings down the other great intra-company performers and has led to a decline in the customer base.
  • General Motorsgood pricing, promotions, dealer sales, etc. but perceived increased negative product quality due to the number of recent recalls has brought many questions regarding the GM brand. These questions about product quality could impact customer retention and acquisition in the longer-term.

How the Broken Value Chain Impacts Company Performance:

What all of these examples show is that a company must deliver great performances in every category to become a market leader. One broken link in the brand value chain is enough to reduce the company to a market laggard and risks them going out of business over time if not rectified.

The following chart illustrates how one broken brand value chain has the ability to bring down the entire company and risk its overall viability:

Company Impacts of the Broken Brand Value Chain
Company Impacts of the Broken Brand Value Chain

 

How to Identify & Rectify a Broken Value Chain:

What steps can you take to identify and then rectify a broken brand value chain (BBVC) you might ask? Here are some easy steps to take to first, identify and then rectify a broken value chain:

Proven Methods to Identify a Broken Value Chain (BVC):

 

  • Inter-departmental peer reviews – How well do our peer departments think we are performing?
  • External departmental & function benchmark reviews – how well are doing vs. market leading company’s similar function (e.g. sales to sales or marketing to marketing performance comparison)?
  • Customer external scorecard reviews – How well do our customers and prospects think we are performing?

 

 Methods to Rectify a broken value chain:

  1. Perform Six-Sigma process and effectiveness improvement reviews
  2. Invite customers to participate in focus groups and advisory councils to help identify ways to improve the department’s effectiveness (sales, marketing, customer service, etc.)
  3. Form Improvement “Tiger Teams” consisting of inter-departmental high performers to assist with increasing functional performance.
  4. Invite outside and leading consulting firms to help infuse a holistic set of industry best practices across and within company functions – marketing, sales, customer service, pricing, etc.
  5. Tie performance and variable rewards to customer rated scorecards where company employees only get paid bonuses when our customers rate us as high performing.
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About StevenJeffes
About Steve Jeffes: Steven Jeffes is a thought leader in developing world-class corporate innovation, CRM, marketing, social media, loyalty, customer retention and customer experience programs. The recipient of many awards (http://www.stevenjeffes.com/stevenjeffes_awards.html), Steve is expert marketing strategy design & optimization: design, development and launch of world-class and best practice marketing and social media programs; change management organizational design and process excellence in marketing, sales, customer service, engineering, product management; and development of successful sales and sales management programs for Fortune 100 companies and government entities. He holds dual B.B.A. degrees in Computer Science and Finance from Temple University and a Master’s in Organizational Design and Excellence from the University of Pennsylvania/Wharton. Steve can be e-mailed at stevenjeffes@gmail.com or contacted via phone at 518-339-5857.

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