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- Robert Bell
Value Assessments: Time To Take Action
Most firms have conducted their value assessments alongside or as part of their open product reviews, which need to be completed by the end of April. The reviews, if completed thoroughly, should have identified a number of areas where improvement in your product design can be made. This article will focus on the value assessment element and how firms can improve the value their customers receive.
The first step is of course identifying poor value, which is not an easy concept given that value is defined to include non-monetary “payments” such as a customer’s time or data. There are a few approaches firms can take to complete value assessments, the first is a more simple “list and compare” approach by listing the payments customers may make (remember the wide definition of payments as given above) and justifying such payments through the cost to the company (to manufacture or a true cost to the company for taking specific actions in relation to contingent fees such as late payment fees).
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Examples can include:
Price paid by customers for the product or service
Interest to be paid by the customer
Contingent fees
Data provided by the customer which will be monetised by the firm
Time spent by the customer
The justification for each item can include competitor pricing comparisons, costs to your organisation to manufacture the product or the level of service, for example, if you charge a greater amount, you may be able to justify this through a better level of customer support.
The second approach that can be used is to analyse data to identify groups of customers who receive poorer value, scatter diagrams are a great tool to support this approach. Firms may plot price paid vs. usage or price paid vs. amount of cover in an insurance setting. By adding a sample of customers to the diagram you are able to identify outliers - those paying more or receiving less of a service - and investigate why. You may find that customers with a certain characteristic feature heavily in the outlier group, this finding can be used to improve the distribution strategy and thus improve value for customers.
As discussed, value assessments play a crucial role in guiding decision-making processes by providing insights into the worth and potential outcomes of different options. However, the true value of these assessments lies in the actions taken based on their findings. We will now explore effective strategies for taking action following a value assessment, ensuring that the insights gained are translated into tangible outcomes and positive change:
Review and Validate Assessment Results: Before proceeding with any action, it is essential to review and validate the results of the value assessment. Ensure that the assessment was conducted using accurate and relevant data, and that the evaluation criteria and weights assigned align with the goals and priorities of the decision-makers. This review process helps build confidence in the assessment outcomes and ensures their reliability as a foundation for decision-making.
Establish Clear Objectives and Goals: To effectively implement decisions derived from a value assessment, it is crucial to establish clear objectives and goals. Define what success looks like and set measurable targets that align with the desired outcomes. Clearly articulate the purpose of the actions to be taken and ensure they are aligned with the overall strategy and vision of the organisation.
Develop an Action Plan: Creating a well-defined action plan is vital for translating assessment findings into concrete steps. Break down the decision into manageable tasks, establish timelines, and assign responsibilities to relevant individuals or teams. The action plan should outline the specific actions required, resources needed, and potential challenges or risks to be addressed. A well-structured plan provides a roadmap for implementation and helps ensure that actions are executed efficiently.
Secure Necessary Resources: Identify and secure the resources required to execute the action plan effectively. This may include financial resources, human capital, technology, or any other necessary assets. Adequate resource allocation is crucial for smooth implementation and ensures that the required support is available to overcome obstacles and challenges that may arise.
Communicate and Engage Stakeholders: Effective communication and stakeholder engagement are key factors in successful implementation. Clearly communicate the rationale behind the decisions made following the value assessment and how they align with the firm’s goals. Engage stakeholders by involving them in the implementation process, seeking their input, and addressing any concerns or questions they may have. This collaboration fosters a sense of ownership and commitment among stakeholders, increasing the likelihood of successful outcomes.
Monitor Progress and Adjust as Needed: Regularly monitor the progress of the implemented actions and compare the actual outcomes with the desired goals. This allows for timely identification of any deviations or challenges and enables necessary adjustments to be made. Monitoring also helps to identify potential opportunities for optimisation and improvement, ensuring that the actions taken remain aligned with the desired outcomes throughout the implementation process.
Evaluate and Learn: After the actions have been implemented, conduct a post-implementation evaluation to assess the effectiveness and impact of the decisions made following the value assessment. Evaluate the outcomes achieved and compare them with the initial assessment results. Identify lessons learned, both in terms of successful outcomes and areas for improvement. These insights can inform future value assessments and decision-making processes, facilitating continuous improvement and refinement of actions taken.
Taking action following a value assessment is a critical step in realising the full potential of the insights gained. By reviewing and validating assessment results, establishing clear objectives, developing an action plan, securing resources, engaging stakeholders, monitoring progress, and evaluating outcomes, firms can effectively implement decisions derived from value assessments.
We’re currently working to update our online consumer duty resources with new versions of our templates, including our value assessment template and a brand-new consumer duty policy. Keep an eye out here.
