Value Centers


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I recently wrote about Customer Relevance. One way to make any department or stakeholder relevant is to convert it into a value center.
Value Centers are what were traditionally thought of as cost centers. Later we tried to make these profit centers. They really need to be value centers

For example:

Service was considered a cost center. Some companies have tried to convert these into profit centers. Fewer have tried to make them value centers, whereby customers and those contacting and working with the value center receive high value, i.e. they feel good, they feel valued, they feel they are special, and the service is first rate. This then converts service users into advocates of the company, increasing its sales, and thereby profits. Make service a value center. HDFC Ergo’s cashless health insurance service is so fast and seamless, that customers like me would be foolish to leave them. It is becoming a value center.

Call Centers are a prime example of a center that can create value, i.e. become a value center. Unfortunately, many call centers leave customers disgruntled, or frustrated, with half information or half-finished tasks. The problem is the reporting system of the call centers. It is based on efficiency and speed of action and shorter duration calls. It is not based on the customer satisfaction or experience. Generally, call center people are at the lowest rung of the corporate ladder. They are not properly empowered with the right software, information or tools to solve customer problems. I always tell my client’s VPs to spend an hour or so every now and then with call canter people so that the VPs can listen to the problems faced by the call center people and consequently the customers, and get a sense of customer issues. Another idea for companies is to have one call a week sent at random to a CXO. If they cannot solve the customers problems, the call center software will be changed. AI can also help. Convert call centers into value centers. We had call center people meet VPs of a Godrej division. The VPs who had been looking for years at call center reports and seeing improvements in number of calls handled etc. were shocked at basic problems faced by customers, which they proceeded to correct.

Governance: often becomes a compliance tool, must do to avoid penalties. It is not considered a value center where companies can become better citizens and are sought by their customers for their ethics, their fairness, in short for their values and traits. The Tata companies in India are an example of good governance, and in a sense their governance is considered a value center.

Sustainability: Many companies consider this a necessary evil. Others try to use PR to pretend they are sustainable, and this leads to green washing or value washing. If companies convert sustainability efforts into profit centers or value centers, they will soon find that this leads to their company being chosen over competitors or being quoted for their good work which causes customers to prefer such companies. Unilever was preferred for edible oil in retail because they phased out non-sustainable production of palm oil, and their procurement of such oils from sustainable conscious suppliers increased the cost. Customers were willing to pay for this and selected Unilever for their effort.

Corporate Social Responsibility (CSR): Here is yet another area that can be a value centre and promote your company. For example, in India, heavy earthmoving equipment suppliers are setting up skilling centers whose cost is covered by CSR funds. This increases their visibility, their reach, and users understand the advantages of their equipment, making them the preferred and word of mouth supplier. This also ensures proper and efficient use of the equipment by skilled operators.

The above are just a few examples of value centers. Remember these will break silos, encourage a different mindset, and help make companies more profitable, because of increased customer recognition and desirability and therefore more sales.

Values Create Value: We have shown at Tata Power through studies that Values Create Value. Customer choosing a power company were not influenced by the quality of electricity and service (they were similar in most companies) but by the trust in Tata Power, their ethics, their efforts to be sustainable and reduce costs. This caused more customers to move to them over competition.

We believe creating Value centers will lead to better and stakeholder focussed thinking, and will make companies more human, more approachable, more desirable and more relevant to the stakeholder with fewer complaints.

Are you working toward such value goals?

Republished with author's permission from original post.

Gautam Mahajan
Gautam Mahajan, President of Customer Value Foundation is the leading global leader in Customer Value Management. Mr Mahajan worked for a Fortune 50 company in the USA for 17 years and had hand-on experience in consulting, training of leaders, professionals, managers and CEOs from numerous MNCs and local conglomerates like Tata, Birla and Godrej groups. He is also the author of widely acclaimed books "Customer Value Investment: Formula for Sustained Business Success" and "Total Customer Value Management: Transforming Business Thinking." He is Founder Editor of the Journal of Creating Value ( and runs the global conference on Creating Value (


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