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138 Managing Customers Through Economic Cycles

Low Business Impact High

NON-TRADITIONAL APPROACHES Strategic
Customer Satisfaction Benefits
Work Value
Cost of Quality
Option Value
Technical importance
Competitive Advantage

Value of customer over time

TRADITIONAL APPROACHES Traditional
Revenue Generation Comfort Zone

Reduced Revenue Loss of Benefits
Cost Displacement
Cost Avoidance

Low High
Degree of Difficulty in Predicting Impact

Figure 6.2

though the impact of nontraditional measures can eclipse
the impact of traditional measures in the long term.

One might think that using the nontraditional approaches
would be a waste of effort in a down economy. This is
not the case. Powerful approaches such as Work Value
and cost of quality can do much to fundamentally change
the cost structures a business wrestles with in troubled
times.

When building a business case, businesses must first
understand how their product impacts their prospective cus-
tomers’ financial and operational success factors.

This, in and of itself, is an important step but worthless
by itself. Unless your customer is a monopoly, they will
always have choices and therefore you will need to under-
stand how your business impacts your prospective cus-
tomers’ business relative to your competition’s impact.