0
ComEx

Strengthen your value
proposition to improve
your competitiveness
Commercial Excellence Forum – 7 March 2014, Stock...
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
Implement Consulting Group – key facts

400 CONSULTANTS ACROSS SCANDINAVIA
• Established in 1996

• Today, more than 400 c...
Profitable growth requires focus on both market- and sales excellence
Profitable growth

Commercial Excellence

Market Exc...
Join us at Coming events and on our forum on LinkedIn

COMING IMPLEMENT EVENTS

COMMERCIAL EXCELLENCE ON LINKEDIN

• 7th o...
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
Differentiation is not only question about being different – but a
question about creating a superior perceived value for ...
Companies which successfully differentiate
have grown more than average in their industry
ILLUSTRATIVE

Annual growth

Com...
We have identified seven characteristics of companies that grow more
than market average by means of differentiation
The 7...
Most companies experience an increasing pressure
for delivering profitable growth in a changing environment

Changing cust...
A strong ”Value Proposition” requires
that we deliver superior value to our customers
VALUE PROPOSITION

WHAT IT MEANS

A ...
A winning value proposition has three core components
The components of a winning value proposition...

Creates foundation...
”Why should I as a customer
do business with you?”

13
You need to get all three right…
TAKE ONE AWAY ...

THE CUSTOMER WILL SAY...

Weak
resonance

Difficult to
substitute

Abl...
Building a value proposition requires understanding
of features and differentiators

Features

Differentiators

Features a...
Define your differentiators based on deep customer insights
on what drives value for the customer
High

Differentiators

U...
Differentiation can be achieved across the entire value chain…
TYPE

LEVER
Newness

What if we could serve the needs, the ...
…and should be qualified to prove the potential value creation
for a given segment or a specific customer
Customer
perspec...
Deliver your differentiated value propositions:
“Live it” in all customer touch points
CONSUMER LIFE CYCLE
ZERO

FIRST

Ma...
Mærsk Line: Changing the game in the industry
by creating superior customer value

20
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
Stefan Hedelius

22
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
We see three typical commercial barriers for truly living
and executing a differentiated value proposition
MARKETING-SALES...
To fully execute your value proposition, you often need
to rethink the way you work together across the value chain

 Use...
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
Group exercise

PLEASE DISCUSS IN GROUPS
 What are – also reflecting on your own company – the key
barriers hindering com...
What are the key barriers hindering companies to offer and execute a
strong differentiated value proposition?

Lack of
cus...
How can we overcome the barriers – what are the actionable key
mitigations you would suggest that can remove the barriers?...
Individual exercise

PLEASE CONSIDER INDIVIDUALLY
 To what extent – in our company today – do we have
unique, differentia...
Agenda

09:00

Welcome and introduction

09:05

Strengthen your value proposition to improve your competitiveness

09:20

...
Join us at Coming events and on our forum on LinkedIn

COMING IMPLEMENTTEVENTS

COMMERCIAL EXCELLENCE ON LINKEDIN

• 7th o...
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Commercial Excellence Forum - Strengthening your value proposition

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Most companies face the challenge of increasing competition and lack of differentiation in the market which often leads to increasing competition on price. Focus at this Commercial Excellence Forum event was, therefore, on how to differentiate yourself in the market by creating superior value to your customers.

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Transcript of "Commercial Excellence Forum - Strengthening your value proposition"

  1. 1. ComEx Strengthen your value proposition to improve your competitiveness Commercial Excellence Forum – 7 March 2014, Stockholm Commercial Excellence Forum
  2. 2. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 2
  3. 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 3
  4. 4. Profitable growth requires focus on both market- and sales excellence Profitable growth Commercial Excellence Market Excellence Understand your market segments and develop a unique customer value proposition Segment value proposition Pricing Sales Excellence Choose your focus customers and align your communication Go-to-market approach Communication Management & follow-up 4 Commercial design Integrate functions and engage with customers Sales approach Competencies & skills
  5. 5. Join us at Coming events and on our forum on LinkedIn COMING IMPLEMENT EVENTS COMMERCIAL EXCELLENCE 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 • 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 • 23rd of May Change Management Forum in More events during Fall 2014 to follow 32
  6. 6. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 6
  7. 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 7
  8. 8. Companies which successfully differentiate have grown more than average in their industry ILLUSTRATIVE Annual growth Companies who are able to differentiate by creating a perceived value for their customers – perform significant better than average in their industry. Transport Medicine Petroleum Textile IT Finance & banking Metal Chemical Marketing survey, Implement Consulting Group 8 Technical Industrial Application Telecom Retail Cosmetics
  9. 9. We have identified seven characteristics of companies that grow more than market average by means of differentiation The 7 characteristics of companies which successfully differentiate Company Value Proposition 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 3. They know who they want to work for 5. They have aligned their Sales & Marketing efforts 2. The articulate clear value propositions 4. They know how they create value for each customer and stakeholder 6. They are able to challenge the customer and stimulate demand 7. They have strong commercial leadership 9 Customer Value perception
  10. 10. Most companies experience an increasing pressure for delivering profitable growth in a changing environment Changing customer demands Increasing product commoditization Improved competition New sales channels Changing customer decision process 10
  11. 11. A strong ”Value Proposition” requires that we deliver superior value to our customers VALUE PROPOSITION 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. Value is a relative measure and is determine by the customer Value = Benefits 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. 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 includes financial exposure and other factors (time, risk etc.) that the customer must “pay” to get the benefits Cost 11
  12. 12. A winning value proposition has three core components The components of a winning value proposition... Creates foundation for... Resonate Differentiate Substantiate “I want” “No alternatives are as good” “I trust” “I need” “Solves my problem” + “Only you offer this” Premium pricing Lead generation success “I believe” Higher win rates “Real value to me” Customer loyalty + Sales growth Market share growth 12
  13. 13. ”Why should I as a customer do business with you?” 13
  14. 14. You need to get all three right… TAKE ONE AWAY ... THE CUSTOMER WILL SAY... Weak resonance Difficult to substitute Able to substantiate “I don’t need” Strong resonance Easy to substitute Able to substantiate “What is your best price?” Strong resonance Difficult to substitute Not able to substantiate “I’m sceptical” 14 “Not important enough” “I can do without you” “I can’t risk it”
  15. 15. Building a value proposition requires understanding of features and differentiators Features Differentiators Features are the factbased characteristics of a given product, service or solution Defendable differentiators are the features that are unique and customers perceive as valuable 15 Value proposition A value proposition is a promise of value based on number of differentiators
  16. 16. Define your differentiators based on deep customer insights on what drives value for the customer High Differentiators UNIQUENESS Low Low High VALUE TO THE CUSTOMER 16
  17. 17. Differentiation can be achieved across the entire value chain… TYPE LEVER Newness What if we could serve the needs, the customer didn’t perceive previously? Performance What if we developed new features or functionality? Customisation What if we allowed for the tailoring of products and services to individual customers? Support and enhancements What if we developed support and enhancements to surround our offering? Price What if we could offer a similar value at a lower price? Cost What if we helped the customer reduce their costs? Risk What if we reduced the customer’s risk? Accessibility What if we could make our offering to more/new customer groups? Convenience/usability What if we could make our products/services much easier to use? Channels What if we delivered our offering to the customers in a different way? Can we change the customer experience? Design What if we designed our products to be more attractive/appealing? Brand/status What if we represented/positioned and communicated our offering differently? Can we change how we structure our work? Network What if we worked with others (partners) to create value? Process What if we developed superior/signature ways of working? Can we change our offering? Can we change the financial value? Can we change how the customer uses our offering? 17
  18. 18. …and should be qualified to prove the potential value creation for a given segment or a specific customer Customer perspective Market perspective High (Qualifiers) 1 (Value Differentiators) a 3 4a 2 b a 7 4 b 5 c 3 1 b c Perceived value to the customer 2 a 5 a 5 b 1 3 b c 6 8 Low (Differentiators) Low Internal company perspective Features Fact based characteristics of a given offering Perceived uniqueness High Value Differentiators Unique features that customers perceive as valuable Generic value proposition Promise to market about the delivered value 18 Segment Value proposition Quantitatively substantiated promise of value delivered to customers in a given segment Customer Value proposition Fact-founded promise of value delivered to a specific customer
  19. 19. Deliver your differentiated value propositions: “Live it” in all customer touch points CONSUMER LIFE CYCLE ZERO FIRST Marketing (engagement and creating expectations) Involvement Sales (converting prospects into customers through sales and distribution) SECOND Satisfaction and intended returning sales Converting prospects Interest Communicate Value proposition lead customer customer  loyal customer loyal customer  ambassador unsatisfied  satisfied Awareness Defend and experience Deliver Value proposition Use Monitor, analyse and report 19 Operations (deliver on expectations and build relationships)
  20. 20. Mærsk Line: Changing the game in the industry by creating superior customer value 20
  21. 21. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 21
  22. 22. Stefan Hedelius 22
  23. 23. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 23
  24. 24. We see three typical commercial barriers for truly living and executing a differentiated value proposition MARKETING-SALES CHAIN Marketing Company Value Proposition Most common barriers Align & Engage Sales Translating company product/services to differentiated value propositions with value messages for target segments Alignment of sales approach and practical sales execution tools – and create sales engagement in the communication Articulate, substantiate and convey superior customer-specific value of company offering 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 customerspecific value of company product/services – thereby not selling the “differentiated value proposition” You need a complete and integrated “marketing-sales chain” to define, communicate and execute your value proposition 24 Customer Value perception
  25. 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 25
  26. 26. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 26
  27. 27. Group exercise PLEASE DISCUSS IN GROUPS  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) 27
  28. 28. What are the key barriers hindering companies to offer and execute a strong differentiated value proposition? Lack of customer insight No internal alinment cause different views on value proposition Procurement Lack of competitive analysis Match value prop. to target group Low involvement of sales Communication: convey added value to customer Defining an offer based on legislation driven applications 28 Lack of communali ty drives cost and complexity Legacy: From product and engineering to value adding and customer experience
  29. 29. How can we overcome the barriers – what are the actionable key mitigations you would suggest that can remove the barriers? Clear marketing strategy for target group Simplicity and structure in value propositions Time to market – alignment of functions prior to launch Customer understanding initatives Commercial product management  ensure early definition of value added in R&D Communication and leadership Focus on the “right” customer – dare to say no to the “wrong” customer Leadership with focus on sales 29
  30. 30. Individual exercise PLEASE CONSIDER INDIVIDUALLY  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? NB: Note down your reflections and bring home to make an impact for your company and yourself 30
  31. 31. Agenda 09:00 Welcome and introduction 09:05 Strengthen your value proposition to improve your competitiveness 09:20 Case: SAS – Keep high yield in a very competitive market 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 11:30 Networking and light lunch 31
  32. 32. Join us at Coming events and on our forum on LinkedIn COMING IMPLEMENTTEVENTS COMMERCIAL EXCELLENCE 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 • 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 • 23rd of May Change Management Forum in More events during Fall 2014 to follow 32
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