Appendix B. A Little More Background on Outside-In

An outside-in perspective is one of the core principles underlying Customer Value Creation (CVC). Though the term "outside-in" can mean many things to many people, our shorthand definition indicates that too often companies do not spend enough time thinking about business decisions from a perspective other than their own. Instead, companies continue to make business decisions using an approach based on their internal knowledge and instincts: an inside-out approach. By continuing to operate with an inside-out approach, companies lose connection with their customers, struggle to offer enhanced value propositions, and frequently underperform against financial expectations.

The business world is familiar with the basic concept of outside-in. The idea that companies should align their businesses around their customers and make customers their top priority has been a popular area of emphasis for longer than we can remember. Yet despite everyone's acknowledgment of the importance of customer intimacy, few companies embrace what we consider to be a thorough customer focus, especially as it pertains to defining value. In our minds, companies that exhibit an outside-in perspective are those that employ a rigorous, fact-based approach to interacting with customers (yes, this means talking to them) to understand their perspectives, pain points, business drivers, growth objectives, and so forth. Several pioneering and market-leading companies ...

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