KTS value discussion at Six Sigma UG meeting

© Copyright 2010 by KTS Marketing Solutions, LLC. All rights reserved.

What does Value mean to your customers and how can you quantify it?

© Copyright 2010 by KTS Marketing Solutions, LLC. All rights reserved. June 8, 2010

ISSSC Six Sigma User Group MeetingJune 10, 2010

© Copyright 2010 by KTS Marketing Solutions, LLC. All rights reserved. © Copyright 2010 by KTS Marketing Solutions, LLC. All rights reserved.

What is VALUE?• VALUE: 1) a fair return or equivalent in goods, services, or money for

something exchanged. 2) the monetary worth of something: market price. 3) relative worth, utility, or importance <a good value at the price> <the value of base stealing in baseball> <had nothing of value to say>.

Merriam-Webster

• “Value means that someone is willing to pay more for something or is willing to make a change if he can’t get it with the current relationship”

The Profit Zone by Adrian Slywotzky

• “Value is what people perceive it to be, and nothing more”The E-Myth Revisited by Michael E. Gerber


What is VALUE?

• Value is governed by two forces– Desire: Essential to Unwanted

– Distinction: Unique to Generic• Value is delivered in the form of products, services or information to solve customer’s problems

• We must look at value from the customer’s perspective


Who is my Customer?

• External Customer• Internal Customer• Intermediate Customer• Ultimate Customer


Exercise

• Break into groups and discuss the following questions.

• What does VALUE mean to your Customers?

• How can we quantify the VALUE?


What is VALUE to my Customers?

• “It solves my problem at a reasonable price”– Solve relevant problems

• “It’s easy!”–Make it easier for them to do business with me


How do we get to specifics?

• Spend time with the customer.

• Just listening is not enough.–We must observe what they are doing and how they are doing it.

– In mfg, this means spending time with operators – the people doing the actual work.

No Longer Enough…


“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”-Theodore Levitt


IDENTIFYING OPPORTUNITIES


Scoring Opportunities, i.e. Problems

• Identify Jobs, Outcomes & Constraints– Problems that have been identified from customer inputs– Score problems (opportunities) based on Importance &

Satisfaction• Outcome-Driven Innovation Process

Source: What Customer’s Want by Tony Ulwick


Identifying Opportunities

Source: What Customer’s Want by Tony Ulwick


Scoring Opportunities, i.e. Solutions

• Products & Service Opportunities– Score based on Fit, Feasibility & Attractiveness– FIT is scored based on alignment with the organization & the capabilities and capacity

– Feasibility is scored based on the ability to identify and manage technical and commercial risk

– Attractiveness scored based on overall financial expectations of the opportunity


Discover VALUE, the process


A Map of VALUE

From “A New Definition of Value and a Revolution in Price Theory”www.endleofon.com

http://www.endleofon.com/


Recommended Reading• What Customers Want, Using Outcome-Driven Innovation to Create

Breakthrough Products and Services Anthony W. Ulwick

• Fast Innovation, Achieving superior differentiation, speed to market, and increased profitability

Michael L. George

• Sales and Marketing The Six Sigma WayMichael J. Webb

• Delivering Profitable Value, A revolutionary framework to accelerate growth, generate wealth, and rediscover the heart of business

Michael J. Lanning

• The E-Myth Revisited, Why Most Small Businesses Don't Work and What to Do About It

Michael E. Gerber

• Blue Ocean Strategy, How to Create Uncontested Market Space and Make the Competition Irrelevant

W. Chan Kim & Renée Maubourgne


About KTS Marketing Solutions

Managing Partner, Tim DeRosett has 20 years experience in marketing, business development, and sales within industrial automation and high-technology companies.

With experience in LEAN and Six Sigma methodologies, we bring process improvement to marketing, sales and service.

We help high-tech business-to-business companies realize growth and increase share-holder value.


Thank YouTim DeRosett

Managing PartnerKTS Marketing Solutions, LLC

8216 Princeton-Glendale Road, #160West Chester, OH 45069513.407.4908, office

[email protected]

Connect with us on LinkedInwww.LinkedIn.com/TimDeRosett

Also join the Discover, Develop Deliver Value LinkedIn Group.

Robotics Industries Association Memberwww.roboticsonline.com

mailto:[email protected]

http://www.ktsmarketing.com/

http://www.linkedin.com/TimDeRosett

http://www.roboticsonline.com/

KTS value discussion at Six Sigma UG meeting

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