Customer Value

Proposition Awareness
 Prepared by:
CBE-Learning & Development

2
 Self Briefing

• Your Name

• Academic Status

• Your Position

• Work Experience

3
 Training Norms

• Mobiles

• Punctuality

• Participation

• Respect

• Side Talk

4
 Customer Value Proposition

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

5
 Training Methods

The Training applies a Class Room Training delivery

model:
• Learner-centered approach;
• Interactive lectures;
• Discussion of concepts;
• Group activities.

6
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.

7
 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
8
Contents of The Training
II. Fundamentals of Customer Value Propositions
2.7. How to Create a Value Proposition
2.8. Value Proposition Canvas
2.9. Factors that are the main determinant for workable
CVP
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

9
 PART - One
Corporate Strategy Overview
 CBE CORPORATE STRATEGY
Vision
” To become a world-class commercial bank financially
driving Ethiopia’s future”

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

Integrity

Corporate Service
Citizenship Excellence

Respect for
Diversity
Core Professionalism
Values
Team Work Empowerment

Innovative
Organization
 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
Customer Value Proposition (CVP) - is the sum total
of benefits which a vender promises a customer will
receive in return for customer´s associated payment.
• It provides a platform so that customers’ needs can
be addressed for their entire relationship with the
bank.
• It enables companies to establish a holistic view of
the customers. 17
2.1. Introduction
• Companies focus on CVP by not concentrating only
on the economic benefit to them, but also taking the
customers’ needs into consideration.
• Considering the customer-led environment the
changes in demands pressure the actors to be
responsive, and to ensure that their internal
systems can cope with the emerged circumstances.

18
2.1. Introduction
• Customer loyalty and customer satisfaction are
dependent on how much the company is able to
satisfy the value of its customers.
• 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. 19
2.1. Introduction
• The banking industry is further rooted in the
technological environment, the customer
increasingly requires the actors to be flexible and
accessible.

• More effective execution of value proposition results

in a sustained competitive advantage and
increased financial performance.

20
2.1. Introduction
• The CVP provides a focused approach to
understanding the target users in the context of the
bank’s product.

• Therefore, CVP means the value that the Bank

promises to deliver to its customers when they do
business with the Bank.

• In the absence of CVP companies are working blindly

in the market place. 21
2.1. Introduction
• A company’s value proposition is a unique identifier
for its business.
 Without it, buyers won’t have a reason to
purchase.
 A company 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.

11/22/2024 22
2.1. Introduction
In general 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.

23
2.1. Introduction
A compelling value proposition meets three criteria:
• It’s specific: What are the specific benefits that
target customer will receive?
• It’s pain-focused: How will the product fix the
customer’s problem or improve their life?
• It’s exclusive: How is it both desirable and
exclusive? How a company apart from competitors?
24
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
profitable customer groups to focus on."
CBE Customer segmentation guideline

26
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
 Increase customer loyalty
 Improve customer service
 Positively impact revenue and reduce waste
27
2.2. Customer Segmentation
General Customer Segmentation Criteria in CBE
The two main customer segments:
• Retail Customers - individual customers that do not
partake in formal trading activities;
• Wholesale Customers - are trading individuals and
non-individuals;

28
2.2. Customer Segmentation
General Customer Segmentation Criteria

Retail and Wholesale Customers further classified

under different sub-segments based on their existing
or potential value generating capacity. Accordingly,
• Retail Customers: sub-segmented into Affluent, Middle and
Mass;
• Wholesale Customers: are broadly sub-segmented into
Corporate, SME, Micro and Public & institutional
customers 29
Sub-Segmentation criteria for existing retail and wholesale
customers

No. Retail Customer No Wholesale Customers

.
1 Average deposit positions 1 Average deposit positions
Total credit transaction amount to Total credit transaction amount to
2 2
deposit accounts per annum deposit accounts per annum

3 Length of relationship with the Bank 3 Length of relationship with the Bank
Total number of credit transactions to Total number of credit transactions to
4 4
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
Cross Selling: No of Credit Products
8
per customer
9 NPL-Status as a negative criterion
30
 2.2. Customer Segmentation
Wholesale Customers Segmentation: Conventional
and CBE Noor
Deposit Customers
• Average monthly deposit position per annum [70%]
• Total amount of credit transaction to deposit
account(s) per annum [15%]
• Banking relationship with CBE [10%] and
• Total number of Credit Transactions to deposit
account(s) per annum [5%]

31
2.2. Customer Segmentation
Wholesale Customers Segmentation: Conventional
and CBE Noor
Foreign Currency Inflow Customers
• Amount of FCY earned per year 1OO%.
Credit
• Total Amount of Credit Approved [50%]:
• Total Principal Outstanding Amount [40%]:
• Cross Selling [10%]
• NPL Status: for Loss - [-30%], for Doubtful - [-25%], for Sub-
standard - [-20%], for Special Mention - [-10%], for Pass status
- [0%]
32
2.2. Customer Segmentation

• So based on the above criteria CBE Classified its

wholesale customers with scoring by taking Dec
31,2021 existing customers account balance
position and information.
No Wholesale Segment Number of Customers

1 Large Corporate 200

2 Medium Corporate 1,000
3 Small Corporate 10,000
4 SME 38,800
5 Micro-Businesses The Rest

33
2.2. Customer Segmentation
• Wholesale customers should further segmented
based on their nature of economic sector to
create enabling environment for value proposition.
• Wholesale Economic Sectors Includes:
 Agriculture, hunting, forestry  International trade
and fishing  Mortgage and personal loan
 Manufacturing Consumer loan
 Financial institutions  Mining and quarrying and
 Building and construction  Public administration
 Domestic trade and finance
34
 2.2. Customer Segmentation
Existing retail customers’ segmentation criteria and weights
i. Retail customers shall be classified into three
customer sub-segments: mass, middle and affluent
based on the following criteria.
• Average monthly deposit position per annum [55%];
• Total amount of Credit transactions to deposit account(s) per
annum [20%];
• The total amount of FCY receipts per annum [10%].
• Length of customer’s relationship with the Bank [10%];
• Total number of Credit transactions to deposit accounts of a
customer per annum [5%];
35
 2.2. Customer Segmentation
Existing retail customers’ segmentation criteria and weights
ii. Existing retail customers whose annual FCY earning exceeding
USD 20,000 shall automatically be classified under Affluent
segment. Similarly, retail customers whose FCY earning is
Between 1,000 and 20,000 USD shall be classified under
Middle segment.
S. N Criteria Weight
1 Average monthly deposit position of a customer per annum 55%
Total amount of credit transactions to deposit accounts per
2 annum 20%

3 FCY earning 10%

4 Length of customer’s relationship 10%
5 Total number of Credit transactions 5%
 2.2. Customer Segmentation
Retail Customer Sub-segment: Conv. and CBE Noor
• Based on the criteria, retail customers are further sub-
segmented by applying the under listed proportion of
targeted customers.

No Retail Segment Number of Customers

1 Affluent 25,000
2 Middle 71,500
3 Mass The rest

37
 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

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

38
What would be some of the practical implications of
CVP for Branch Performers, who is trying to market a
given product?
2.2. Importance of Value Proposition
• CVP is essential element in a marketing plan that can
improve customer lifetime value.
• It may become the governing axis in a brand
strategy and taglines.
• Relevancy — how a specific product or service can
improve a particular problem.
• Differentiation — what makes a brand stand out
from all others.
• Quantified value — By delivering distinctive and
measurable benefits.

40
2.3. 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
fills a particular consumer need in a way that its
competitors don’t.
 A positioning statement is a subset of a value
proposition, but it’s not the same thing.
41
2.4. Elements of an Effective Value Proposition

A strong CVP understands its target market, offers

specific 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, singles versus families, or income levels,
then design its value proposition to speak to that
target market.

42
2.4. Elements of an Effective Value Proposition

2. Specific Value
• The second key element of a VP is the specific
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.
11/22/2024 43
2.4. Elements of an Effective Value Proposition

3. Customer Connection
• 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 trade on this sort
of goodwill as a primary driver for their business.

11/22/2024 44
2.5. 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.

11/22/2024 45
2.5. 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”).

46
2.5. 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.

47
Group Activity
Discuss factors that has to be considered to create a
strong Value Proposition.
2.6. 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.
49
2.6. Creating a Value Proposition
• The following are tips to create an effective VP:
2. Understand Your Costs and Benefits
• Identify and assess the benefits delivered by our
bank and its services, along with the costs incurred
to provide them.
• It is because the value we offer is essentially the
difference between the benefits and costs of
product or service.
50
2.6. Creating a Value Proposition
• The following are tips to create an effective VP:
3. Don’t Forget About Competitors
• After the 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.
51
2.6. 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!

52
 2.7. 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.
53
 2.7. 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
audiences.
• Understanding why
customers buy is at the
heart of the value Gain Creators gain

proposition canvas.
Products & Customers
Services
job

Pain Relievers Pain

54
 2.7. 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.

• This enables to think from

the end-user perspective.

11/22/2024 55
 2.7. 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

56
 2.7. Value Proposition Canvas
A. Customer Profile
2. Pains
 It encompasses everything that
annoys a customer while they
are doing their jobs. Such as:
negative experiences and
emotions, challenges, risks
involved, financial costs, Customers
job

mistakes, and consequences,

etc.
 Remember to classify each pain Pain
as severe or light and note down
how often it takes place as well.
57
 2.7. Value Proposition Canvas
A. Customer Profile
3. Gains- are all the benefits 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
58
 2.7. 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.

59
 2.7. 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

60
 2.7. 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

61
 2.7. 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
Gain Creators

Products & Customers

Services job

Pain Relievers Pain

62
 2.7. Value Proposition Canvas

Advantages of the Value Proposition Canvas- It helps

the business in decision making and positioning of the
product. The most important 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 fit; Avoiding producing
something nobody wants,
• Saving time and money.
63
 2.7. Value Proposition Canvas
Advantages of the Value Proposition Canvas-
Focused Planning
• With new ideas flowing 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
satisfies their needs. This helps build a strong brand image in
the minds of consumers.

64
 2.7. Value Proposition Canvas

Advantages of the Value Proposition Canvas-

Strong Customer Involvement

• A Value Proposition Canvas links together the
identification and fulfillment 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.
65
 2.7. Value Proposition Canvas
When to use Value Proposition Canvas?
• This tool comes to facilitate the job of putting yourself in
your customers’ shoes and understanding their world.
• Its final goal, is to discover a Product-Market Fit, according
to the necessities, expectations, & interests of the customer.
• With Value Proposition Canvas, we have an overview of how
our value proposition is going to impact our customer’s life.
• The product-market fit is achieved when the products and
services match most the most important gains and pains of
the customer profile.

66
 2.7. 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
• Write value propositions
• Refine a marketing strategy

11/22/2024 67
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 goods 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.
• This can help you to achieve a better fit between product and
market.
69
 PART - Three
Benefits, Categories and
Determinants of Workable CVP

70
3.1. Benefits and Related Costs of CVP

• There is a disconnect between what customers want

and what banks offer.

• Profitability and low-risk business appear to be key

considerations in the competitive strategy of banks.

• Banks have to balance the costs of offering customers

value with the benefits thereof.

71
 3.1. Benefits and Related Costs of CVP

Benefits Costs
• Developing a deeper understanding of • Increased costs and resource to
the customer conduct customer research;
• Increasing frequency of bank products • Increasing processing costs;
activation and utilization rates; • Higher servicing and retention
• Lower attrition rates and higher customer costs;
retention; • Higher acquisition costs e.g direct
• Increased acquisition and market share; marketing campaigns to customers;
• Differentiated and attracting offerings; • Higher product costs for the
enriched offering;
72
 3.2. Categories of CVP
There are four major categories of value proposition
that reflect the value that they provide, which are:
• Functional value (based on specific functional needs) focuses
on the product/service and convenience, has a problem-
solving ability, is better or easier to use and is more
comprehensive than other products/services.
• 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.

73
 3.2. Categories of CVP
• Economic value (based on price) focuses on the
product/service and offers a financial advantage, saves
time, or is innovative.
• 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.
74
 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 or

too good to be true.
75
 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.

76
 3.3. The Main Determinants of Workable CVP

3. Best Price
• While rock-bottom costs may be valuable for some
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.
11/22/2024 77
 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.

11/22/2024 78
 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.

79
Thank You!!