Value chains (a business model tool that describes the full range of activities needed to create a product or service) are typically developed from the perspective of the business. Dana proposes that by reorienting the value chain to be from the perspective of the customer we can proactively identify gaps in the customer experience and solve them. I see this as an ideal alignment between product management and the goals of Service Design. Instead of waiting for customers to report an issue with the product, using ethnographic techniques to map customer value and pain-points throughout the customer’s interaction with the firm is critical for customer-centric innovation.

Key questions

• What is a customer value chain?
• What are the key differences between the typical business value chain and a customer value chain?
• How does using the customer value chain improve product development over existing techniques to integrate voice-of-customer into product strategy?

Notes

• “Value chain” - a business modeling tool that describes the full range of activities needed to create a product or service
• ”Customer value chain” - all the steps or activities that customers have to go through to acquire products and services
• Key ingredients of the customer value chain are: customer needs, how they use the product, how we can make the product easier to use, and a clear picture of how the firm/product adds value to customer’s lives.
• Customer value chain helps us identify gaps in the product by visualizing customer research in a format that can be more easily digested by the team
• Beware, sales goals can often prevail over a customer-first approach
• Beta programs are important but only 10% of teams do them, are you?
• Elevate customer problems by creating 1-pager product requirement documents containing the customer problem to distribute to the entire team

Read Dana Levine’s “How to use customer value chains in your product development strategy” at Amplitude.