written by Daniel Lambert

The pace of innovation is increasing and affecting more and more how businesses are developing products/services and approaching clients. Disruptions are occurring at a quicker pace then ever, where the most acute organizations have no choice but to transform rapidly to a customer driven enterprise providing customer lifetime value, involving not just marketing, but all functions in an organization. Large corporations have several client segments (personas) and none of them should experience the exact same customer journey when interfacing with any part of its organization. Value Propositions, customer relationships and channels need to be tweaked for each client segment at regular intervals.

Modeling and sharing your Business Architecture is an excellent way to make sense of it all and make sure that business strategic consistence occurs from the early awareness marketing stage to after sales delivery within every business units and departments of an organization. Through a financial service example, this article will show how Business Model Canvas, Customer Journey Mapping, Customer Value Mapping, Value Streams mapped for each customer segment or persona where each Value Stream is linked to its enabling Business Capabilities can assist organizations in facing their business transformation to deliver a more customer driven enterprise.

From a Seller Driven Enterprise Model to a Customer Driven Enterprise

As explained by Craig Martin [1], disruptions are occurring at a quicker pace then ever, where the most rigorous organizations have no choice but to transform rapidly from a seller driven enterprise model or a customer centric enterprise to a Customer Driven Enterprise providing Customer Lifetime Value as shown in Diagram 1 [2] below.

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In a Customer Lifetime Value model, it’s clearly not just about marketing push anymore, but more about marketing pull and collaboration. It requires more predictive insight data analysis, interactive & proactive services, individualized customer understanding using personas, inter-enterprise bundles between business units and departments, integrated and seamless channels and the elimination of all functional organizational silos to become a customer outcome organization.

Enabling a Customer Driven Enterprise Using Business Architecture

Modeling and sharing your Business Architecture is an excellent way to make sense of it all and make sure that strategic consistence occurs from top down and from the early awareness marketing stage to after sales delivery within every business units and departments of an organization, therefore enabling a Customer Driven Enterprise providing customer lifetime value. To accomplish this goal, a business architect can use Business Model Canvas, Customer Journey Maps, Customer Value Maps, Value Streams mapped for each customer segment and where each Value Stream is linked to its enabling Business Capabilities.

Business Model Canvas

As I have mentioned in a previous article entitled “Bridging Business Model Canvas and Business Architecture” [3], a Business Model Canvas, as per Diagram 2 below, is a common method to build a business plan in very large and small companies because it is both structured and yet very simple to understand. The Business Model Canvas is also very customer driven.

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In a Business Model Canvas, each element of the “Key Activities” building block can be related to Business Capabilities of any Business Architecture model. The “Key Resources/Assets” building block can be crossed mapped to Stakeholders (either key employees and/or partners) or Assets (like software applications, internal proprietary systems, physical assets, etc.). The Value Propositions building block can be linked to Stakeholders (either partners and/or customers), Initiatives and Business Strategies. As for the other building blocks of the Business Model Canvas, they will usually be linked to various Partners/Customers/Personas (which are all Stakeholders in a Business Architecture model).

The Business Model Canvas in Diagram 2 above is a banking example [4]. Some business architects may list the “Value Propositions” block that are linked to Product lines, like Loans, Payment Services, Securities Management, Insurances, Deposit and Credit Cards. This, in my opinion, leads to silos and is far from optimal. Ideally, Value Propositions are a combination of products and services from different product lines and brands specific to a customer segment or persona. I have listed one Value Proposition per Customer Segment in this example. In reality, there can be several Value Propositions for your most important Customer Segments. In Diagram 2, the “Customer Segments” block is made of Small Businesses, Large Corporations, Business Owners, Families, Double Income No Kids Couple, Retired and Millennials. For most large bank, the reality is often far more complex, where customers can be segmented in over 50 personas. The other 7 Business Model Canvas blocks should be build around the elements mentioned in the “Value Propositions” and “Customer Segments” blocks.
A Business Architecture model that includes a Business Model Canvas can assist corporate strategists, marketers and architects untangle this complexity in a smooth operation throughout each customer segment journey.

Customer Journey Maps

A “Customer Experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship,” as described by Wikipedia [5]. The customer wants a maximum of value at a reasonable cost. The business organization wants to provide as much value as possible for each of its customer segments (persona) with each of its Product Line/Brand while maximizing its profits. A good Customer Experience means that the individual’s experience during all points of contact matches the individual’s expectations. A common way to describe and enhance a customer experience for a customer segment is to build a Customer Journey Map, as per Diagram 3 [6] below.

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There are numerous ways to build a Customer Journey Map, but usually it will include various stages and/or moments (with a duration, a goal, expectations, and principles), a timeline (linear, non-linear, iterative, no time restriction), facets (types of data like activities, touchpoints, pain points, level of effort, perception maps, moods, etc.). In Diagram 3 above, goals, activities/touchpoints and opportunities are described for each stage of the customer journey based on the customer’s point of view. Each Customer Journey Stage (or Moment) can be associated to a corresponding Value Stage in a Business Architecture Value Stream. Each Activity can be linked to a second level Value Stage. Each Opportunity in a Customer Journey Map can be linked to a Business Capability that enables Value Stages from a Value Stream within a Business Architecture Model.

The Customer Journey Map in Diagram 3 above is a banking example. It is related to the “Acquire Customer for a Product” Value Stream mentioned in Diagrams 6, 7 and 8 below for the “Millennials” Customer Segment. It includes goals, timeline, activities, opportunities, challenges and touchpoints for the first 3 value stages of the “Acquire Customer for a Product” Value Stream, which are “Consider a Category or a Type of Product or Service”, “Evaluate & Compare” and “Commit to Product or Service”. It should also include the same kind of information for the last 2 stages, that are “Use and Monitor” and “Refine and Review”. The Customer Journey Map would vary for other Customer Segments or Personas.

Before jumping into the understanding of a Customer Value Stream, let’s first examine how to link a Value Proposition made of specific products and services to a customer segment or persona using Customer Value Maps.

Customer Value Maps

As described in this article entitled “Product Management Using Business Architecture” [6], a Customer Value Map, as shown in Diagram 4 below, enables an organization to understand how to plan and deliver a Value Proposition, made of product(s) and service(s), in line with the specificities of a customer segment. It execution will involve one or several business units, with all the necessary enabling Business Capabilities, which are all to be aligned to specific sets of business strategies.

A Customer Value Map includes two main sections, the Customer Profile, which links to one customer segment or persona, and the value proposition profile. The Customer Profile for each customer segment or persona is made of needs, gains and pains. The Value Proposition profile is made of the covered products/services, benefits and features. Each need should ideally be covered by a product/service. Each gain and pain should be addressed or remediated by a benefit and/or a feature of one of the covered products/services. Once needs, gains and pains for each targeted customer segment or persona are addressed, a product manager can start planning which Business Capabilities, Initiatives (Projects), Business Units (Departments) and/or Information Concepts is required (Requirement Mapping) to execute and deliver properly the products and/or services of a Value Proposition for each targeted persona.

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The Customer Value Map in Diagram 4 above matches the needs, gains and pains of the “Millennials” Customer Segment to an “All Inclusive Financial Services for Millennials” Value Proposition’s covered Product & Services, Benefits and Features. Should a benefit not be known to its “Millennials” Customer Segment, the bank’s marketing team should address this issue with an appropriate campaign. Should any gain or pain not be addressed by a benefit or product/service feature, a requirement should be built to address it.

Preferably Value Propositions, but also Products and Services can all be addressed with various Customer Value Streams, as shown in Diagram 5 below. Let’s examine a few of them.

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Customer Value Streams

Value Streams are the best kept secret among the Business Architect’s arsenals. Not enough Business Architects use them. Yet, it is an ideal method to transform your business from a seller driven enterprise to a customer driven enterprise and provide customer lifetime value allowing you to have a better understanding of your most important business capabilities among others and the others that do not really matter. Diagram 5 [8] above, shows for example various important Value Streams that a Financial Services Institution will usually provide to any of its customer segments. Each Value Stream is composed of several Value Stages. Each of them have one or several entry criteria and exit criteria that involves internal and/or external stakeholders. Each Value Stage is enabled by several Business Capabilities and is mapped in detailed by one or more Processes, that need to be described in detailed for delivery and execution. Finally, each Value Stage can be linked to Stages or Moments in a Customer Journey Map. The first 3 Value Stages of the second value stream “Acquire a Customer for a Product”, pointed by the blue arrow in Diagram 5, was for example detailed in the Customer Journey Map shown in Diagram 3.

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One Value Stream that is particularly fundamental to the growth and high performance of any competitive organization is the “Acquire Customer for a Product” Value Stream, as shown in Diagram 4 above. It is associated to the Funnel or Pipeline within most Customer Relationship Management software applications. They are related to opportunities, a percentage of which will close once an Acquired Customer of a Financial Institution, for example, “Commits to a Product” or a Service (Value Stage 2.3 in Diagram 4). Yet, this Value Stream is not over. The Financial Institution must continue to provide value to its newly acquired customer by allowing him/her to use, monitor, refine and review its newly acquired product. The Financial Institution will enable each of these Value Stages with the appropriate Business Capabilities, as shown in Diagram 5 below, to ensure that the churn rate is as low as possible.

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Diagram 7 above, shows the same “Acquire Customer for a Product” Value Stream, but with more details. This diagram shows that this Value Stage is triggered by the Millennials customer segment. The entry criteria and exit criteria of each Value Stage are mentioned. The Millennials will not start a Value Stage without having usually all mentioned Entry Criteria for the value stage. The customer will not end a Value Stage without executing all Exit Criteria for the value stage. Value Stages are not serial. In this Value Stream, they can all be skipped except the third Value Stage. Once the “Commit to Service Value Stage” is completed by the customer, the “All Inclusive Financial Services” to Millennials Value Proposition can be considered delivered. This detailed Value Stream Diagram could have also shown the internal and external Stakeholders involved at each Value Stage.

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The Financial Institution will enable each of these Value Stages of the “Acquire Customer for a Product” Value Stream with the appropriate Business Capabilities, as shown in Diagram 8 above, to ensure that the opportunity ratio and the churn rate, both shown earlier in Diagram 6, are respectively as high and as low as possible.

At the first level of a Value Stage, the “Acquire Customer for a Product” Value Stream may not change much from one customer segment (persona) to another. Should you decide to include second-level Value Stage(s) and Value Item(s) link to first-level Value Stages, differences from one customer segment to another will become evident. The same is true of enabling Business Capabilities to a Value Stage, as shown in Diagram 8 above. Some enabling Business Capabilities may not be relevant to a customer segment and yet be very relevant to another. These divergences need to be discovered for each persona to optimize the value that the organization can provide to each customer segment. For example, a financial institution will not provide value to the ‘Millennials” customer segment (the last customer segment in the banking Customer Value Map in Diagram 2) with the same Business Capabilities then for the “Double Income No Kid” customer segment (also mentioned in Diagram 2). The “TV and Radio Advertising” and the “Newsletter Publication” Business Capabilities will be more appropriate to the “Double Income No Kid” customer segment and totally irrelevant to a Millennial. Vice-versa, social media advertising and mobile access management is essential to a Millennial and yet of much less importance to the “Double Income No Kid” customer segment.

Conclusion

Large enterprises have several client segments (personas) and none of them should experience the exact same customer journey when interfacing with any part of its organization. Value Propositions, customer relationships and channels need to be tweaked for each client segment at regular intervals. Business Architecture modeling and publishing is an excellent way to make sense of it all and make sure that business strategic consistence occurs from the early awareness marketing stage to after sales delivery within every business units and departments of an organization. Business Model Canvas, Customer Journey Mapping, Customer Value Mapping, Value Streams mapped for each customer segment or persona where each Value Stream is linked to its enabling Business Capabilities can assist organizations in facing their business transformation to deliver a customer driven enterprise providing customer lifetime value.

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[1] Here is Craig Martin’s LinkedIn Profile: https://www.linkedin.com/in/craigrmartin/
[2] Table extracted from Slide 25 of the Presentation entitled “Using Business Architecture to Enable Customer Experience and Digital Strategy” made by Craig Martin published on Feb 23, 2014.
[3] This article written by Daniel Lambert has been published the first time on LinkedIn Pulse on September 20, 2016.
[4] A detailed banking business architecture model is accessible by completing the form on this webpage (https://biz-architect.com/) and by selecting the financial services example.
[5] Here is Wikipedia’s description of “Customer Experience”: https://en.wikipedia.org/wiki/Customer_experience.
[6] Diagram 2 is inspired from this article entitled “5 Essential Components of Effective Customer Journey Maps” written by By Kathleen Hoski and Phil Goddard on tandemseven.com. Creating Journey Maps similar to Diagram 2 will be possible with IRIS Business Architect release 2.4.3.
[7] This article written by Daniel Lambert has been published on LinkedIn Pulse on January 24, 2017.
[8] Most of the value streams mentioned in Diagram 3 are listed with details in Section 8.1 of the BIZBOK® Guide version 5.5 from page 540 to page 559.