If there is one overarching objective for corporate leadership, it must be this: maximize customer value-not, as is often assumed, maximize profit.

Maximizing customer value can hardly ever be wrong; profit maximization, by contrast, almost always leads systematically and inevitably to wrong paths in the medium to long term.

Making customer value maximization the top priority inevitably directs the attention of all executives and employees to the right questions. It compels the right analyses and actions and places the most important “object” – the customer and their problems and needs – at the very center of all activities.

“Customer orientation,” of course, is nothing new; yet it remains important and valid. By now, there is probably no company left in which passionate commitments to this principle are not voiced. Unfortunately, these are still too often mere lip service. One key reason for this is that customer value is still far too rarely measured and systematically monitored.

The measurement of customer value has, however, become feasible and can be implemented in any company, business unit, and product group in a relatively simple way. It should be a standard instrument for every manager with responsibility for results.

Customer value is best expressed through what is known as the relative price-performance ratio. It is therefore not a one-dimensional but a two-dimensional concept – and, crucially, a relative one.

Although the price-performance ratio is discussed very frequently, it is not always understood correctly. The first dimension is the relative quality of the market offering; the second dimension is the relative price. The combination of these two factors results in what might be called a strategic map, which expresses the value of what a company delivers to its customers. Positioning business activities within this map – also referred to as a value map – leads to some of the most important strategic and entrepreneurial conclusions and actions: the continuous improvement of customer value.

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