Value Above Cost: Driving Superior Financial Performance with CVA, the Most Important Metric You've Never Used

This book systematically explains how to maximize shareholder value. Columbia University's Don Sexton fully identifies the real drivers of shareholder value, unifying key concepts from marketing, branding, economics, management, finance, accounting, and statistics. Sexton introduces a powerful new metric: Customer Value Added (CVA), the difference between customer-perceived value and variable cost per unit. Next, he demonstrates CVA at work, presents research and case studies that prove its value, and shows how to use it to consistently measure, manage, and optimize profit, cash flow, and shareholder value. Readers will learn why CVA works; how to measure it; how changes in CVA correlate to changes in profits and cash flow; and how to use CVA to steer the enterprise. Along the way, Sexton illuminates CVA's key implications for managers, including why managers must focus attention simultaneously on both customers and costs, and why well-publicized "generic strategies" such as "net recommend" offer only part of the solution. Finally, drawing on his own extensive experience consulting on CVA and related issues, Sexton presents easy-to-use worksheets for translating CVA concepts into reality in your own organization.

Table of Contents:
Foreword     xviii Acknowledgments    xx About the Author     xxi Chapter 1: Marketing and Financial Performance     1 Chapter 2: How CVA® Affects Financial Performance    33 Chapter 3: CVA® over Time    65 Chapter 4: Perceived Value    89 Chapter 5: Costs    127 Chapter 6: Managing CVA®    151 Chapter 7: Managing CVA® over Time    181 Chapter 8: Utilizing CVA® for Strategic Decisions     211 Chapter 9: Utilizing CVA® for Marketing Program Decisions    247 Chapter 10: Building the Marketing Accountability Scorecard     275 Chapter 11: Organizing to Manage CVA®    293 Endnotes     311 Index    329

About the Author :
Donald E. Sexton, Ph.D., is Professor of Business at Columbia University, where for more than forty years he has taught marketing and quantitative methods and earned the Business School’s Distinguished Teaching Award. His numerous articles on marketing return, marketing, and branding strategy have appeared in publications such as the Harvard Business Review, Journal of Marketing Research, and Management Science. He is often quoted in media such as The New York Times, BusinessWeek, and WCBS. Dr. Sexton is the principal of The Arrow Group, Ltd.® which has provided consulting and training to companies such as GE, IBM, Pfizer, Unilever, Citigroup, DuPont, and Verizon. He has taught at the China Europe International Business School, UC-Berkeley, INSEAD, the Indian School of Business, the Australian Graduate School of Management, Skolkovo, and the U.S. Business School in Prague. Sexton holds an M.B.A. and Ph.D. from the University of Chicago in business economics, statistics, and mathematical methods and a B.A. from Wesleyan University in mathematics and economics. His books include Marketing 101, Branding 101, and Marketing and Management Science.