No company can survive the modern business era without providing value beyond cost. Providing your customer a seamless and simple interaction with your company is key to retaining repeat customers and in creating a “lean culture” for your company. Creating a lean culture, allows for your internal business culture to sync up. Once your internal company is synced, it’s easier to be more transparent you’re your client in terms of KPIs and cost structure. Kimberly-Clark showed SSOW how they continue to provide value beyond cost to their customers. To understand the value beyond cost there are 5 Cs to providing value: control, cost, capacity, capability, culture.

The 5 Cs 

Control: End-to end oversight of processes with appropriate control measures that enable better transparency and early indicators. Transparency is a key theme in providing additional value.

Cost: Creating the economies of scale and leveraging labor arbitrage to drive lower costs.

Capacity: Creating capacity through stream-lined processes to allow for organic business growth focused on their core mission

Capability: Investing in continuous improvement and technology transformations to streamline processes and optimize value

Culture: Building a lean and agile high-performing organization that creates value and improves efficiencies, builds excellent service capabilities and aligns with your company core values.

Transparency is key. 

A company that provides transparency and harmonizes all these aspects across their business is able to provide more value to their customers. An example of a company that does this is Ledvance. Don’t have night vision? Ledvance has got you. Ledvance is a premier light manufacturing company for standard consumers and professional users. They specialize in combining traditional lighting installations with modern technology like SmartHome and auto lights.From the start, Ledvance wanted to center their business model around “lean culture.” Having a lean culture in their business would improve operations and allow them to provide value beyond cost.

Implementing shared service centers are a major part of creating a lean culture in your organization. It’s important to discuss major points of failure when your launching your SSC. Ledvance realized that cost transparency was key for clients. From 2014-2017 they saw major declines in their sales from not being transparent enough with their costs. Clients don’t expect break-even services or products, but being forthright about the production cost plus markup is what one of the big things that swung them back into the green zone in 2018. All their shared service centers had many measurable KPIs and metrics, but choosing to communicate these to the clients over the cost transparency was shown to have a negative impact in sales.

To provide more value, they tried to take their customers from transactional to strategic service partners and grow their bottom line. The first thing you need to know about this transition is that-- you need to have your clients trust. If you can’t get your clients to trust you, your retention rate for clients will always be low.

How do you build trust among your clients?

Simply put, cost transparency is the most effective way to get your clients to trust you and thus have you provide more value for them. Another way to keep your clients trust is to have open channels of communication. Make them strategic partners with feedback sections available at every step of the deal-closing/purchasing process. They want to hear that you care about what they think and what their experience is.

Applying a lean business culture to all LBS community also moves you to a strategic partnership. This can be done through SSCs. Having HR and the higher ups be involved in factory visits, sales meetings, and results meetings will result in cross trained employees who can provide better knowledge of the business and its services to the clients. If your internal processes are smooth, then your external interactions will be that much smoother as well.

Providing value beyond cost is important for all businesses now. You can’t compete on just price, but must provide an experience as well. You don’t have to sell an experience per say, but it’s key to make the interaction that a customer has with your business as smooth and as seamless as possible. For more on how to provide value beyond cost, check out the SSOW Collection of Past Presentations from 2019!