Customer Value Proposition Ankur Lal CEO Infozech Software

Problem # 1 Under pressure to keep costs down, customers may only look at price and not listen to your sales pitch. Help them understand – and believe in – the superior value of your offerings

Under pressure to keep costs down, customers may only look at price and not listen to your sales pitch.

Help them understand – and believe in – the superior value of your offerings

Problem # 2 Customer managers, increasingly held accountable for reducing costs, don’t have the luxury of simply believing supplier’s assertions

Customer managers, increasingly held accountable for reducing costs, don’t have the luxury of simply believing supplier’s assertions

Example – Value proposition A leading supplier of resins used in architectural coatings Initial value proposition - stricter environmental compliance Minor Value proposition – coating could be dried faster Based on the increased value, he sought a 15% increase in price Very low customer interest

A leading supplier of resins used in architectural coatings

Initial value proposition - stricter environmental compliance

Minor Value proposition – coating could be dried faster

Based on the increased value, he sought a 15% increase in price

Very low customer interest

Value Proposition - Types Ref. Customer Value proposition, HBR, March 2006 Benefit assertion Knowledge of own market offering Why should our firm purchase your offering All benefits customers receive from offering All Benefits Potential pitfall Requires Customer Question Consists of Value presumption Knowledge of own offering and next best alternative Why should our firm purchase your offering instead of your competitors? All favorable points of difference a market offering has relative to next best alternative Favorable points of difference

Value Proposition - Types Ref. Customer Value proposition, HBR, March 2006 Customer value research Knowledge of how own market offering delivers superior value to customers, compared to next best alternative What is most worthwhile for our firm to keep in mind about your offering? The one or two points which will deliver the greatest customer value Resonating Focus Potential pitfall Requires Customer Question Consists of

Example – Supplier of Resins Customer Value research provided several insights Realization – coatings was only 15% of cost Realization – labor is the largest cost component Resonating Focus – increased productivity through faster time to Dry allowing two coats in an 8 hour shift. Greater acceptance to higher price New Value proposition – increased productivity Enthusiastic customer interest at 40% premium

Customer Value research provided several insights

Realization – coatings was only 15% of cost

Realization – labor is the largest cost component

Resonating Focus – increased productivity through faster time to Dry allowing two coats in an 8 hour shift. Greater acceptance to higher price

New Value proposition – increased productivity

Enthusiastic customer interest at 40% premium