Customer Value Proposition

Awareness
 Self Briefing
• Your Name
• Academic Status
• Your Position
• Work Experience
• Expectations
• The value you appreciate most

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 Training Norms

• Mobiles

• Punctuality

• Participation

• Respect

• Side Talk

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 Customer Value Proposition

• Target Audience
• Managers, Business Managers, Manager Retail
Banking at Districts & RMs, Trainers in CBE
• Prerequisites
• None
• Duration
• 2 days

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 Training Methods

The Training applies a Class Room Training delivery model:

• Learner-centered approach;

• Interactive lectures;

• Discussion of concepts;

• Group activities.

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Objectives of the Training

Upon the completion of this training, participants will be able to:

• Familiarize with customer value proposition.
• Internalize benefits of CVP.
• Implement the right CVP to the segmented customers.

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 Contents of The Training
I. Corporate Strategy Overview
• Vision, Mission, Core Values, strategic Pillars and enablers
II. Fundamentals of Customer Value Propositions
2.1. Introduction
2.2. Customer Segmentation
2.3. Importance of Value Proposition
2.4. What a Value Proposition Is Not
2.5. Elements of an Effective Value Proposition
2.6. Characteristics of a Value Proposition

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Contents of The Training
II. Fundamentals of Customer Value Propositions
2.7. How to Create a Value Proposition
2.8. Value Proposition Canvas
III. Benefits, Categories & Determinants of Workable CVP
3.1. Benefits and Related Costs of CVP
3.2. Categories of CVP
3.3. How to determine the customer value proposition

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Group Discussion

Discuss and present the corporate strategy ( vision, mission,

core values ,strategic pillars and enablers ) of CBE
 PART - One
Corporate Strategy Overview
 CBE CORPORATE STRATEGY
Vision
” To become a world-class commercial bank f inancially driving
Ethiopia’s future”

Mission
“We are committed to realizing stakeholder’s value through
enhanced f inancial intermediation globally, deploying highly
motivated and skilled employees.”
CBE CORPORATE STRATEGY

Core Values
 CBE CORPORATE STRATEGY

Strategic Pillars
• Secure and risk conscious Bank;
• Customer Centric Bank with differentiated Customer Value
Propositions;
• Digital Leader Scaling mobile money & digital innovation;
• Cost efficient bank;
 CBE CORPORATE STRATEGY

Strategic Enablers
1. Modern streamlined IT architecture and technology
2. Develop CBE into a collaborative customer-centered
organization supported by rigorous talent management and
effective corporate governance.
 PART - Two
Fundamentals of Customer Value
Proposition
Group Discussion

Assume yourself as a customer and you have alternative

providers for a given product or service. How do you choose one
from the other given that the services provided are similar?
 2.1. Introduction
Reasons why customers choose a company over competitors

•Service excellence ( welcoming, branch lay out, consistency, feed back acceptance etc )
•Good reputation
•Accessibility
•Quality
•Trust worthy /integrity
•Price
•Digital offerings
•Fraud Management

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2.1. Introduction
Customer Value Proposition (CVP) - is the sum total of benef its
which a vender promises a customer will receive in return for
customer´s associated payment.
• Is an outward looking discription the offer that a f in ancial
institutions makes to its target client
• It enables companies to establish a holistic view of the
customers.

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2.1. Introduction
• Companies focus on CVP by not concentrating only on the
economic benef it to them, but also taking the customers’
needs into consideration.
consideration
• Customer loyalty and customer satisfaction are dependent
on how much the company is able to satisfy/meet the value
of its customers.

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2.1. Introduction
• It is a simple statement that summarizes why people would
choose company’s product or service over competitors.
• It communicates the clearest benefit that customers receive.

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2.1. Introduction
• The CVP provides a focused approach to understanding the
target users in the context of the bank’s product.

• CVP means the value that the Bank promises to deliver to its
customers when they do business with the Bank.

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2.1. Introduction
• A company’s value proposition is a unique identif ie r for its
business.
 Without it, buyers won’t have a reason to purchase.
 should communicate its value proposition clearly in its
marketing campaign and sales process.
 It helps to communicate value to effectively turn a prospect
into a paying customer.

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2.1. Introduction
A value proposition is a basic statement that communicates
the benefit of promise to deliver to customers.

• It is ultimately what makes our product attractive.

• A value proposition expresses what a business does

better than anyone else.

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 2.1. Introduction
A compelling value proposition meets three criteria:
• It’s specif ic : What are the specif ic benef it s that target
customer will receive? e.g.. Negotiable interest rate
• It’s pain-focused: How will the product f ix the customer’s
problem or improve their life?
• It’s exclusive: How is it both desirable and special? How
company apart from competitors?

In general, in the absence of CVP companies are working blindly

in the market place.

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2.2. Customer
Segmentation

Group Discussion


Why CBE segments its customers?
2.2. Customer Segmentation
Definition
•The approach of classifying a large and diverse customer of
the Bank to smaller groups based on related traits in order to
identify and choose the most prof itable customer groups to
focus on.
•It helps banks to group customers by value to offer more
tailored products and services

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2.2. Customer Segmentation
Goal and Importance of Customer Segmentation
• The goal of segmenting customers is to decide how to relate to
customers in each segment in order to maximize the value of
each customer to the business.
• Importance
 Better identify most valuable customer segments
 Improve return on marketing investment (by only targeting those likely to
be your best customers)

 Increase customer loyalty(by tailoring your service to your best customers)

 Improve customer service
 Positively impact revenue and reduce waste
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2.2. Customer Segmentation
Customer Segmentation in CBE
• Retail Customers - individual customers that do not partake
in formal trading activities;
• Wholesale Customers - are trading individuals and non-
individuals;

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2.2. Customer Segmentation
1. Retail Customers: sub-segmented into
• Affluent,
Individuals earning more than ETB 123,949 per month

Executive employees e.g., CEOs and directors at top corporate, NGOs,

international organizations, MNCs etc.

• Middle and
Individuals earning between ETB 20,659 – 123,949 per month
Salaried employees (e.g., lawyers, accountants, engineers) of large organizations
• Mass;
Individuals earning less than ETB 20,658 per month
Youth (e.g., university students, recent graduates), smallholder farmers, women

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2. Wholesale Customers: sub-segemented ;

 Corporate

• Small & medium enterprise (SME),

• Micro and Public & institutional customers

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Sub-Segmentation criteria for existing retail and wholesale customers
No. Retail Customer No. Wholesale Customers
1 Average deposit positions 1 Average deposit positions
2 Total credit transaction amount to deposit 2 Total credit transaction amount to deposit
accounts per annum accounts per annum

3 Length of relationship with the Bank 3 Length of relationship with the Bank

4 Total number of credit transactions to 4 Total number of credit transactions to

deposit accounts per annum deposit accounts per annum
5 FCY earning through CBE 5 FCY earning through CBE
6 Total Loan Approved
7 Principal amount
8 Cross Selling: No of Credit Products per
customer
9 NPL-Status as a negative criterion

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2.2. Customer Segmentation
Whole sale customer classified based on their Deposit
Performance, Foreign currency earning and Credit utilization in
to four categories :

 Public sector and institutional customer

Corporate customer
Small and medium enterprise (SMEs) and
Micro business customers

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2.2. Customer Segmentation

Whole sale Economic Sectors includes:

• Agriculture, hunting, forestry and fishing

• Manufacturing
• Financial institutions
• Building and construction
• Domestic trade and finance
• International trade
• Mortgage and personal loan Consumer loan
• Mining and quarrying and
• Public administration
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 2.2. Customer Segmentation
Retail customers’ segmentation criteria and weights:
Retail customers shall be classified into three customer sub-
segments: mass, middle and affluent based on their Deposit
Performance, Foreign currency earning
• whose annual FCY earning exceeding USD 20,000 shall
automatically be classified under Affluent segment
• while FCY earning is Between 1,000 and 20,000 USD shall be
classified under Middle segment.
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 2.2. Customer Segmentation
Existing retail customers’ segmentation criteria and weights

S. N Criteria Weight

1 Average monthly deposit position of a customer per annum 55%

2 Total amount of credit transactions to deposit accounts per annum 20%

3 FCY earning 10%

4 Length of customer’s relationship 10%

5 Total number of Credit transactions 5%

 2.2. Customer Segmentation
The proposed CVP for the three key Retail Segments

Mass Middle Affluent

CBE offers convenient CBE offers affordable CBE offers sophisticated offerings
access to affordable products, tailored lending and unparalleled service to meet
banking and beyond options and convenience the lifestyle requirements.
products. for the growing needs of
the middle income
segment.

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2.3. Importance of Value Proposition
• CVP is essential element in a marketing plan that can improve
customer lifetime value.
• CVP enables companies to establish a holistic views of the
customers
• A good value proposition is able to offer three highly
important qualities:
 Relevancy — how a specific product or service can solve a
particular problem.
 Differentiation — what makes a brand stand out from all
others.
 Quanti f ie d v al ue — By d e l i v e ri ng d i sti nc ti v e and
measurable benefits.
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2.4. Value Proposition Is Not
A Value Proposition Is Not:
• An incentive;
• A catchphrase: A slogan or tagline is “a catchphrase or small
group of words that are combined in a special way to identify a
product or company.”
• A Positioning statement: A positioning statement is an
expression of how a given product, service or brand f il ls a
particular consumer need than competitors don’t.
 A positioning statement is a subset of a value proposition,
but it’s not the same thing.

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2.5. Elements of an Effective Value Proposition

A strong CVP understands its target market, offers specif ic

value, and connects with its customers.
1. Target Market
• CVP begins with identifying main target market.
• A business needs to have a clear idea of who its ideal
customer is and shape its value proposition.
• A company must identify key demographics, such as Age,
Sex, or income levels, then design its value proposition to
speak to that target market.

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2.5. Elements of an Effective Value Proposition

2. Specific Value
• The second key element of a VP is the specif ic value the
company’s products offer.
• We must clearly answer for potential customers why they
should choose our products over all other available choices.
• Some companies offer value in the form of the lowest price.
Others offer the value of the highest quality.
• Time-saving is another potential value.

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2.5. Elements of an Effective Value Proposition

3. Customer Link/integration
• Customer connection covers how a company meets the
individual needs or desires of its customers.
• This element is aimed at appealing to customers' emotions
and establishing a relationship that hopefully stimulates
ongoing brand loyalty.
• Some of the most famous brands in the world use their
goodwill as a primary driver for their business.

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 2.6. Characteristics of a Value Proposition

1. Clear and Concise

• An effective value proposition should be clear and concise.
• Our target customers must quickly grasp the message we
want to convey.
• It should not exceed two or three sentences.
• Clarity! It’s easy to understand.
• It communicates the concrete results a customer will get
from products and/or services.

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 2.6. Characteristics of a Value Proposition

2. Uses Simple Language

• Assume the lowest common denominator.
• It avoids hype (like “Never seen before!” or “Amazing miracle
product!”), superlatives (“best”) and business jargon (“value-
added interactions”).

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 2.6. Characteristics of a Value Proposition

3. Specific
• It is about mentioning “what’s in it for the customer”
4. Reason to Believe
• A testimonial or third party rating can be helpful here.

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Group Activity

Discuss factors that has to be considered to create a strong
Value Proposition.
2.7. Creating a Value Proposition
• The creation of a powerful Value Proposition is a challenging
yet rewarding task.
• The following are tips to create an effective VP:
1. Know Your Customers
• Before creating value proposition, we must analyze the
market and potential customers.
• Identify target customers and target market segment to
understand their desired benefits.
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2.7. Creating a Value Proposition
2. Understand Your Costs and Benefits
• Identify and assess the benef its delivered by our bank and
its services, along with the costs incurred to provide them.
• I t is b ec ause the value we offer is essentially the
difference between the benef its and costs of product or
service.

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2.7. Creating a Value Proposition
3. Don’t Forget About Competitors
• Analysis of target customers and own Bank, evaluate the
competitive landscape in the market.
• Determine the strengths and weaknesses of major
competitors and identify ways we can differentiate our
Bank from them.

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2.7. Creating a Value Proposition
4. Be Clear and Concise
• An effective value proposition has to be clear and concise.
• Our target customers must quickly grasp the message we want
to convey; It should not exceed 2-3 sentences.
5. Design is King!
• Make our proposition visible and appealing on all marketing
materials (e.g., website).
• Remember that if we have created a powerful VP, but no one can
see it, the effect of the proposition will be zero!

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 2.8. Value Proposition Canvas

A value proposition canvas is a visual tool that helps to

position a company’s product or service around the customers’
needs.
• Its primary purpose is to identify how a business provides
value Or to create a fit between the product and market.
• It can be used when introducing a new offer into the market
or when enhancing an existing one.

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 2.8. Value Proposition Canvas
• Customer profile and the value map are the core of the
business model because they focus on “What” and “To
whom”.
• In other words, how a company delivers value to its
customers.
• Understanding why customers
buy is at the heart of the value
proposition canvas. Gain Creators gain

Products & Customers

Services
job

Pain Relievers Pain

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 2.8. Value Proposition Canvas
A. Customer Profile
• The circle represents the customer profile. Further divided into three
parts: jobs, pains, and gains.
• This trio enables to think from the end-user perspective when defining
tasks, challenges and desires customers will have.

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 2.8. Value Proposition Canvas
A. Customer Profile
1. Customers job
This is about what a customer is trying to do. You have to include all
tasks customers are trying to perform, the problems they are trying
to solve, and the needs they want to satisfy.

Customers
job

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 2.8. Value Proposition Canvas
A. Customer Profile
2. Pains
 It encompasses everyt hing t hat
annoys a customer while they are
doing their jobs. Such as: negative
experiences and emotions,
challenges, risks involved, f inancial
costs, mistakes, and consequences, Customers
job
etc.
 Remember to classify each pain as
severe or light and note down how
often it takes place as well. Pain

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 2.8. Value Proposition Canvas
A. Customer Profile
3. Gains- are all the benef it s a customer expects or wishes, or even
something that would surprise them positively.
• They may be functional, emotional, social or financial.
• In short, everything that delight them and make their life easier, more
joyful or more successful.

gain

Customers
job

Pain
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 2.8. Value Proposition Canvas
B. The Value Proposition Map
• The square represents the value proposition map. It divided into three
parts, each relates to the relevant customer profile section.
• The focus here is to map out the product features, functionality and
benefits that attract customers and fulfill their needs from the circle.

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 2.8. Value Proposition Canvas
B. Value Proposition
1. Products & Services- Include all the products and services we are
going to deliver. About each one, ask:
• Can the product/service help to accomplish any job-to-be-done?
• Is the product/service tangible, digital/virtual, or financial?

gain

Products & Customers

Services job

Pain

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 2.8. Value Proposition Canvas
B. Value Proposition
2. Gain Creators- how product/service offers the customer added value,
what are the benefits it brings, and if the customer’s wishes and
expectations are reached.
• All about “how it makes customers happier”.

Gain Creators gain

Products & Customers

Services job

Pain

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 2.8. Value Proposition Canvas
B. Value Proposition
3. Pain Relievers - Describe how product/service relieves customer’s
pains.
• Identify if you reduce their costs, negative feelings, efforts, risks, negative
consequences, mistakes etc.
• It’s about how you make your customer feel and sleep better.

Gain Creators gain

Products & Customers

Services job

Pain Relievers Pain

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 2.8. Value Proposition Canvas
Advantages of the Value Proposition Canvas-
• Understanding the customer, with their needs and expectations;
• Developing a product in accordance with the customer needs
and wants;
• Comparing a product we already have with the user’s need;
• Finding a product-market f it ; Avoiding producing something
nobody wants,
• Saving time and money.

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 2.8. Value Proposition Canvas
Advantages of the Value Proposition Canvas-

Focused Planning
• With new ideas f lowing in every minute, it is easy to lose focus on the
core values.
• A Value Proposition Canvas acts as a visual guide. It ensures a targeted
approach to developing a high demand product.
Improves Marketing Outreach
• It involves informing the customers how buying the product satisf ie s
their needs. This helps build a strong brand image in the minds of
consumers.

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 2.8. Value Proposition Canvas
Advantages of the Value Proposition Canvas-
Strong Customer Involvement
• A Value Proposition Canvas links together the identif ication
and fulf illment of needs. It allows to focus on elements that
customers value the most.
Practical and Simple
• Analyzing the product strategy and performance becomes
comprehensive yet simple.

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 2.8. Value Proposition Canvas
Tip:

• The product-market f it is achieved when the products and

services match most the most important gains and pains of
the customer profile.

Value Proposition Canvas Explained.mp4

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 2.8. Value Proposition Canvas
When to use Value Proposition Canvas?

It is truly useful, when:

• Creating a new feature
• Entering a new market or customer segment
• Test product-market fit
• To propose the right value
• Refine a marketing strategy

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Group Activity

Critically evaluate the use/advantages of Value Proposition Canvas
in Branch marketing activities.
 Key Takeaways
• A value proposition is a statement of the value the company offers
through its products or services that differentiates its value from the
competitions.
• A company's value proposition is often included in its mission
statement.
• VPC is a great tool for businesses and product teams.
 You can analyze your strategies and improve your products.
 It helps to understand market and product.
 It encourages you to ask questions which you normally don’t.
 We’ll understand why we are developing a product in the first place.
 It can help to achieve a better fit between product and market.

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 PART - Three
Benefits, Categories and Determinants of
Workable CVP

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3.1. Benefits and Related Costs of CVP

• There is a disconnect between what customers want and what

banks offer.

• P ro f itab i l i ty and l o w - ri sk b usi ne ss ap p e ar to b e ke y

considerations in the competitive strategy of banks.

• Banks have to balance the costs of offering customers value

with the benefits thereof.

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 3.1. Benefits and Related Costs of CVP

Benefits Costs
• Developing a deeper understanding of the • Increased costs and resource to conduct
customer customer research;
• In cr e a si n g f r e qu e n cy of ba n k pr odu ct s • Increasing processing costs;
activation and utilization rates; • Higher servicing and retention costs;
• Lower attrition rates and higher customer • Highe r acquisit ion cost s e .g dire ct
retention; marketing campaigns to customers;
• Increased acquisition and market share; • Higher product costs for the enriched
• Differentiated and attracting offerings; offering;

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 3.2. Categories of CVP
There are four major categories of value proposition that ref lect
the value that they provide, which are:

• Functional value (based on specif ic functional needs) focuses

on the product/service and convenience , has a problem-
solv ing ability, is better or easier to use and is m ore
comprehensive than other products/services.

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 3.2. Categories of CVP
• Emotional value (based on experiential needs) focuses on the
product/service and is pleasant or attractive. When the use of
a particular brand gives the customer a positive feeling, that
brand is providing an emotional benefit.

• Economic value (based on price) focuses on the

product/service and offers a f inancial advantage, saves time,
or is innovative.

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 3.2. Categories of CVP
• Symbolic value (based on self-expression needs) focuses on
the customer and attaches value to the status that the
product/service provides. This status may be oriented
towards social responsibility or may be derived from a brand.

• End value focuses on the functional, emotional, economic

and symbolic value in combination.

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 3.3. The Main Determinants of Workable CVP
According to the Harvard Business Review, there are four main
value determinants to focus:
1. Indispensability - Building a VP around the idea of offering:
• Incorporate the "must-have" message.
• Be sure not to use hype words to describe offering.
• The value proposition do not need to sound braggy/big talk/ or
too good to be true.

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 3.3. The Main Determinants of Workable CVP

2. High Quality
• Standard brands are more likely to remain in the buyer's mind.
• The VP must emphasize on product or service is the highest
possible quality and worth investing in.

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 3.3. The Main Determinants of Workable CVP

3. Best Price
• W hi l e roc k- b ottom c osts m ay b e v al uab l e f or som e
customers, most companies are willing to pay the actual
price, however high, for a great product or service.
• Focusing on the quality-to-price ratio in a value proposition
will allow to justify the monetary value of an offering.

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 3.3. The Main Determinants of Workable CVP

4. Luxury
• Making your brand aspirational is another great way to
attract a certain type of customer.
• Offering luxury and the idea of success or ease of use could
make your product or service appear more valuable.

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 Key Takeaways
• CVP has many benefits for both the company and its customers.
 It provides clear message and customers quickly understand
what a company offers.
 It helps to create differentiation, attract the right customers
and enable the company to take competitive advantages.
• There are four major categories of value proposition: Functional,
Emotional, Economic and Symbolic values.
 End value focuses on the combination of the four.

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Thank You!!