Commercial Excellence Forum - Strengthening your value proposition

Strengthen your value proposition to improve your competitiveness Commercial Excellence Forum – 7 March 2014, Stockholm

ComEx

Commercial Excellence Forum

2

09:00 Welcome and introduction

09:05 Strengthen your value proposition to improve your competitiveness

10:00 How do you ensure effective execution of a new value proposition?

10:15 Networking break

10:30 Exercise in groups: Differentiation and design of unique value propositions

09:20 Case: SAS – Keep high yield in a very competitive market

11:30 Networking and light lunch

Agenda

3

Implement Consulting Group – key facts

400 CONSULTANTS ACROSS SCANDINAVIA

• Established in 1996

• Today, more than 400 consultants

• Servicing private and public companies in

Scandinavia and the Baltic region from offices

in Copenhagen, Stockholm, Malmö, Oslo,

Bergen and Helsinki

• Average annual growth of 20% since the

establishment in 1996

• Employee-owned

4

Profitable growth requires focus on both market- and sales excellence

Market Excellence

Segment value

proposition Pricing

Go-to-market

approach Communication

Commercial

design

Sales

approach

Competencies

& skills

Sales Excellence

Profitable growth

Understand your market segments and

develop a unique customer value

proposition

Choose your focus customers and align

your communication

Integrate functions and engage with

customers

Commercial Excellence

Management & follow-up

32

Join us at Coming events and on our forum on LinkedIn

• 7th of March Comex Forum: Value Proposition

• 1st of April Strategy Day with Roger Martin

• 9th of May Comex Forum: From customer

insights to business growth

• 23rd of May Change Management Forum

More events during Fall 2014 to follow

COMING IMPLEMENT EVENTS COMMERCIAL EXCELLENCE ON LINKEDIN

• Join our Comex Forum on LINKEDIN to get in touch

with other participants and get updates on news and

future events – an invitation will be send out after the

event

in

http://implementconsultinggroup.com/events/commercial-excellence-forum-stockholm-strenghten-your-value-proposition/

http://implementconsultinggroup.com/events/playing-to-win-with-roger-martin/

http://implementconsultinggroup.com/events/change-management-forum-2014/

http://www.linkedin.com/groups?gid=4474612&goback=.nmp_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1.bzo_*1_*1_*1_*1_*1_*1_*1_implement*5consulting*5group&trk=rr_grp_name

6








Agenda

7

Differentiation is not only question about being different – but a

question about creating a superior perceived value for the customer

Differentiation is fundamentally about how we create a relative

higher perceived value for our customers in a unique way

A company’s differentiated value

proposition is no stronger than the

way it is actually being communicated, sold

and delivered to the customers – meaning, the

way it is implemented and executed by the front line

8

Companies which successfully differentiate

have grown more than average in their industry

Companies who are

able to differentiate by

creating a perceived

value for their customers

– perform significant

better than average

in their industry.

Marketing survey,

Implement Consulting Group

ILLUSTRATIVE

Textile Metal

Chemical

Petroleum

Medicine

Cosmetics

Transport

Telecom

Retail

IT

Technical

Industrial

Application

Finance

& banking

Annual growth

9

We have identified seven characteristics of companies that grow more

than market average by means of differentiation

Company

Value

Proposition

Customer

Value

perception

Understand your

customers and

develop a unique

value proposition

Choose your focus

customers and align

your communication

Integrate functions

and engage with

customers

1. They truly understand

the business of their

customers

2. The articulate clear

value propositions

3. They know who

they want to work

for

4. They know how

they create value

for each customer

and stakeholder

5. They have aligned

their Sales &

Marketing efforts

6. They are able to

challenge the

customer and

stimulate demand

7. They have strong

commercial

leadership

The 7 characteristics of companies which successfully differentiate

10

Most companies experience an increasing pressure

for delivering profitable growth in a changing environment

Increasing product commoditization

Improved competition

New sales channels

Changing customer demands

Changing customer decision process

11

A strong ”Value Proposition” requires

that we deliver superior value to our customers

=

Benefits

Benefits are the outcomes and experiences of value

to the customer, not the features of the offering

A feature is only a benefit if it solves a problem

for the customer

–

Cost

Cost includes financial exposure and other factors

(time, risk etc.) that the customer must “pay” to get

the benefits

Value

Value is a relative measure and is determine

by the customer

WHAT IT MEANS

A value proposition is a clear,

compelling and credible expression

of the experience that a customer

will receive from your.

It is not just a description of what

your company does for the customer

or a vague benefits statement.

A value proposition has to be

what

you do and who you are . It can’t just be what you want

to be and what you say you

are.

VALUE PROPOSITION

12

A winning value proposition has three core components

Resonate

“I want”

“I need”

“Solves my

problem”

Differentiate

“No alternatives

are as good”

“Only you

offer this”

+

Substantiate

“I trust”

“I believe”

“Real value

to me”

+

The components of a winning value proposition... Creates foundation for...

Lead generation success

Higher win rates

Sales growth

Premium pricing

Market share growth

Customer loyalty

13

”Why should I as a customer

do business with you?”

14

You need to get all three right…

THE CUSTOMER WILL SAY... TAKE ONE AWAY ...

“I don’t need”

“Not important enough”

Weak

resonance

Difficult to

substitute

Able to

substantiate

“What is your best price?”

“I can do without you” Strong resonance Easy to substitute

Able to

substantiate

Strong resonance Difficult to

substitute

Not able to

substantiate

“I’m sceptical”

“I can’t risk it”

15

Building a value proposition requires understanding

of features and differentiators

Features are the fact-

based characteristics of

a given product, service

or solution

Defendable

differentiators are the

features that are unique

and customers perceive

as valuable

A value proposition

is a promise of value

based on number of

differentiators

Features Differentiators Value

proposition

16

Define your differentiators based on deep customer insights

on what drives value for the customer

VALUE TO THE CUSTOMER

UNIQUENESS

Low High

Low

High

Differentiators

17

Can we change the

financial value?

Can we change how

the customer uses

our offering?

Can we change the

customer expe-

rience?

TYPE LEVER

Can we change

our offering?

What if we could serve the needs, the customer didn’t perceive previously? Newness

What if we developed new features or functionality? Performance

What if we allowed for the tailoring of products and services to individual customers? Customisation

What if we developed support and enhancements to surround our offering? Support and enhancements

What if we could offer a similar value at a lower price? Price

What if we helped the customer reduce their costs? Cost

What if we reduced the customer’s risk? Risk

What if we could make our offering to more/new customer groups? Accessibility

What if we could make our products/services much easier to use? Convenience/usability

What if we delivered our offering to the customers in a different way? Channels

What if we designed our products to be more attractive/appealing? Design

What if we represented/positioned and communicated our offering differently? Brand/status

Can we change how

we structure our

work?

What if we worked with others (partners) to create value? Network

What if we developed superior/signature ways of working? Process

Differentiation can be achieved across the entire value chain…

18

…and should be qualified to prove the potential value creation

for a given segment or a specific customer

Features

Fact based

characteristics of

a given offering

Generic value

proposition

Promise to market

about the delivered

value

Segment

Value proposition

Quantitatively

substantiated

promise of value

delivered to

customers in a given

segment Value

Differentiators

Unique features

that customers

perceive as

valuable

Perceived value to the customer

Perceived uniqueness Low High

Low

High

1

b

1

c

2

a

3

b

4

a

4

b

5

b

6

7

1

a

2

b

3

a

8

5

c

5

a

3

c

(Value Differentiators)

(Differentiators)

(Qualifiers)

Fact-founded

promise of value

delivered to a

specific customer

Customer

Value proposition

Internal

company

perspective

Market

perspective

Customer

perspective

19

Deliver your differentiated value propositions:

“Live it” in all customer touch points

Involvement

Awareness

Interest Communicate

Value

proposition

Deliver

Value

proposition

Use

Defend and

experience

Satisfaction

and intended

returning sales

Converting prospects

lead customer

customer loyal customer

loyal customer

ambassador

unsatisfied satisfied

Sales

(converting prospects into

customers through sales and

distribution)

Operations

(deliver on expectations

and build relationships)

Marketing

(engagement and

creating expectations)

Monitor, analyse and report

ZERO FIRST SECOND

CONSUMER LIFE CYCLE

20

Mærsk Line: Changing the game in the industry

by creating superior customer value

3.01_Sony_Daily_Maersk.avi

21








Agenda

22

Stefan Hedelius

23








Agenda

24

We see three typical commercial barriers for truly living

and executing a differentiated value proposition

Company

Value

Proposition

Customer

Value

perception

Marketing

Translating company

product/services to

differentiated value

propositions with value

messages for target

segments

Align & Engage

Alignment of sales

approach and practical

sales execution tools

– and create sales

engagement in the

communication

Sales

Articulate, substantiate

and convey superior

customer-specific value

of company offering

MARKETING-SALES CHAIN

Marketing not able to

formulate differentiated

value propositions and

value messages truly

resonating with

customer’s needs and

value perception”

Marketing/sales not able

to align and engage with

each other AND not able

to design powerful sales

tools fit for execution in

sales situation”

Sales not able to convey

and articulate customer-

specific value of company

product/services

– thereby not selling the

“differentiated value

proposition”

Most common

barriers

You need a complete and integrated “marketing-sales chain”

to define, communicate and execute your value proposition

25

To fully execute your value proposition, you often need

to rethink the way you work together across the value chain

Use time to understand customer needs from an “outsight-in” perspective

and discuss the consequences across the management team

Include the FULL marketing-sales chain in the value proposition work,

not only the ”marketing” function

Focus on customer value creation in all your discussions

Approach value proposition implementation as a change process

– and design the project accordingly

Acknowledge the differences between marketing and sales

– and embrace the principle of co-creation

Ensure senior management commitment and buy-in

– across C-level commercial functions

26








Agenda

27

Group exercise

What are – also reflecting on your own company – the key

barriers hindering companies to offer and execute a strong

differentiated value proposition? (note down top 3 barriers

on YELLOW cards)

How can we overcome the barriers – what are the

actionable key mitigations you would suggest that can

remove the barriers? (note down top 3 on GREEN cards)

PLEASE DISCUSS IN GROUPS

28

What are the key barriers hindering companies to offer and execute a

strong differentiated value proposition?

Low

involvement

of sales

Lack of

communali

ty drives

cost and

complexity

Lack of

customer

insight

Communication:

convey added

value to customer

Procure-

ment

Legacy: From

product and

engineering to

value adding and

customer

experience

Defining an

offer based

on legislation

driven

applications

Match value

prop. to

target group

Lack of

competitive

analysis

No internal

alinment cause

different views

on value

proposition

29

How can we overcome the barriers – what are the actionable key

mitigations you would suggest that can remove the barriers?

Leadership

with focus on

sales

Commercial

product

management

ensure early

definition of value

added in R&D

Clear

marketing

strategy for

target

group

Communication

and leadership

Simplicity and

structure in value

propositions

Customer

understanding

initatives

Focus on the

“right”

customer –

dare to say no

to the “wrong”

customer

Time to

market –

alignment of

functions

prior to

launch

30

Individual exercise

To what extent – in our company today – do we have

unique, differentiated segment value propositions that are

clearly preferred by our customers?

To what extent – in our company today – are we fully able

to execute our segment value propositions in the front-line

sales and delivery organisations?

What do we need to do differently to strengthen our value

proposition and front-line execution?

PLEASE CONSIDER INDIVIDUALLY

NB: Note down your reflections and bring home to make

an impact for your company and yourself

31








Agenda

32

Join us at Coming events and on our forum on LinkedIn

• 7th of March Comex Forum: Value Proposition

• 1st of April Strategy Day with Roger Martin

• 9th of May Comex Forum: From customer

insights to business growth

• 23rd of May Change Management Forum

More events during Fall 2014 to follow

COMING IMPLEMENTTEVENTS COMMERCIAL EXCELLENCE ON LINKEDIN

• Join our Comex Forum on LINKEDIN to get in touch

with other participants and get updates on news and

future events – an invitation will be send out after the

event

in

http://implementconsultinggroup.com/events/commercial-excellence-forum-stockholm-strenghten-your-value-proposition/

http://implementconsultinggroup.com/events/playing-to-win-with-roger-martin/

http://implementconsultinggroup.com/events/change-management-forum-2014/

http://www.linkedin.com/groups?gid=4474612&goback=.nmp_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1.bzo_*1_*1_*1_*1_*1_*1_*1_implement*5consulting*5group&trk=rr_grp_name

Commercial Excellence Forum - Strengthening your value proposition

Business

actionable

ensure effective

april strategy

march comex

change management

comex forum

roger martin

light lunch