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Differentiate to outperform competition - Commercial Excellence Forum

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How do you design and implement winning value propositions that enable you to win in the market and capture a price premium?

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Differentiate to outperform competition - Commercial Excellence Forum

  1. 1. Differentiate to outperform competition and capture more value Oslo, 11th of May 2016 Commercial Excellence Forum
  2. 2. Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  3. 3. 3 Growth ambition Fight commoditisation+ Why differentiation now?
  4. 4. 4 Most companies have something unique and valuable to offer their customers… However only a minority are able to truly define and convey the value to their customers
  5. 5. does strategy top-down with limited involvement of employees 58%
  6. 6. believe there is an imaginary line in the organizational chart above which strategy is made 59%
  7. 7. of employees fully understand their company’s business strategies and what’s expected from them 7%
  8. 8. of “Not Successful” transformations were planned by 10 or fewer people 70%
  9. 9. of employees receive no information on how to execute the strategy 30%
  10. 10. are not able to communicate the Value Proposition clearly to customers 3 out of 4
  11. 11. fail to communicate the financial impact 90%
  12. 12. of all Value Propositions are NOT based on what truly drives value for customers 50%
  13. 13. of you disagree or strongly disagree that your companies have clearly formulated Value Propositions 25%
  14. 14. of you do not know how often your company works with Value Propositions or have never part-taken +20%
  15. 15. of you are neutral to or disagree that there is a shared understanding about your Value Propositions in your organization +30%
  16. 16. of you are neutral to or disagree that you have clearly defined guidelines as to how you convey your Value Propositions +30%
  17. 17. of you are neutral to or disagree that Value Propositions are typically on the agenda for leadership seminars Close to 50%
  18. 18. of you agree or strongly agree that Value Propositions are important for you to be relevant towards your target audience and outperform competition Yet 90%
  19. 19. Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  20. 20. Lets hear some perspectives on working with Value Propositions….
  21. 21. 21 … choice of business model Value Proposition is … … our product features … our service strategy … our marketing material … our marketing campaign … framing the issue … sales collateral … go-to-market strategy … our purpose … vision and mission … customer satisfaction … customer segmentation … R&D and innovation
  22. 22. 22 What is a Value Proposition? The answer to the fundamental question: ”Why should I as a customer buy your product or services?”
  23. 23. 23 Winning Value Propositions are rooted in profound understanding of what drives customer value Creating customer value = Benefits – Cost Value Benefits are the outcomes and experiences of value to the customer, not the features of the offering Cost includes factors that the customer must “pay” to get the benefits Value is a relative measure and is determined by the customer Answering your customers’ key questions What is important to me? How much will I really need? How much am I willing to pay?
  24. 24. 24 A winning Value Proposition has three core components The components of a winning Value Proposition... 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”
  25. 25. 25 Building a value proposition requires understanding of features and differentiators and how these translate into customer value Features Differentiators Value Proposition 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 a number of differentiators Understanding needs and drivers of target group Influencing decision making and behaviour of target group
  26. 26. 26 Define your differentiators based on deep customer insights on what drives perceived value for the customer Differentiators HighLow Perceived value to the customer High Low Perceived uniqueness What to sell We have a unique Value Proposition which creates value for our customers and differentiates us in the market How to sell We challenge our customers and are able to communicate and engage our Value Proposition on a customer level
  27. 27. A 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 organization Remember this…
  28. 28. 28 Sources of differentiation can come from a number of sources – ranging from the core product, to services to brand position Brand and wider context of company Distribution, channels, customer service, go-to- market offering, etc. Services related to product Product experience , other attributes Additional product functionality Core product functionality A Value Proposition is a compelling story that engages (emotionally) and provides convincing reason of why a customer should choose you over competitors
  29. 29. 29 A Value Proposition 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 Promise of value delivered to customers in a given segmentValue Differentiators Unique features that customers perceive as valuable Perceived value to the customer Perceived uniquenessLow 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) A personalized promise of value delivered on an individual basis or for an individual customer Customer Value proposition Internal company perspective Market perspective Customer perspective
  30. 30. 30 Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  31. 31. 31 Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  32. 32. 32 Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  33. 33. 33 Partner network Key activities Key resources Cost model Revenue model Customer relationships Distribution channels Customer segmentsValue proposition Business Model Canvas
  34. 34. 34 Today we are zooming in on the Value Proposition and customer profiles Business Model Canvas
  35. 35. 36 Value Proposition Canvas Products & Services Gain Creators Pain Relievers Gains Pains Customer Job(s) Kilde: Alexander Osterwalder
  36. 36. 37 Making it fit: are we addressing essential customer gains and extreme customer pains?
  37. 37. 38 What is the Value Proposition of a Tesla?
  38. 38. 39 Pain relievers Gain creators Products and Services    Pains Gains Customer job(s) What is the Value Proposition of a Tesla? Tesla Value Proposition Customer segment: Upper Middle Class Male, $100K+ income Model S 60-85 kWh 8 year battery warranty Options Charging: 45-90 km/hour 5+2 seats Performance 0-100 km/h 4,4s-6,2s Focus on design and style High-tech feel: 17’’ touch screen Highest safety ever by NHTSA Range of 350km to 450km Convey an image of succes Commute to work In sync with personal values Be different from others Personal mobility Occasional long dist. trip High safety ratings Compliments from friends High-end Battery Tech Perform like a sportscar DesignBrand recognition Range of 250km to 350km Laughed at Accident and harm Fear of dead battery Frequent charging Aircon draining battery Lack of space
  39. 39. 40 Differentiator 95% transport reliability Jobs to be done Transport of final goods from production to stock Value driver influenced Buffer stock costs Impact % 20 % reduction Ideal customer characteristics Fashion retailers with Asian production and European sales Reference cases H&M Example: Maersk Line Delta to competition 20% higher than second best “Differentiator to Customer Value” tool
  40. 40. 41 Ideal customer characteristics Fashion retailers with Asian production and European sales“We help … Impact %20% reduction..to achieve … Value driverBuffer stock costin their… Differentiator95% transport reliabilitydue to our … Delta to competition20% higher than second bestwhich is … Reference casesH&Mand we have realized this for…” Value Proposition formulation Jobs to be done Transportation of final goods from production to stock..who work with
  41. 41. 42 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 & practical sales execution tools – and create sales engagement in the communication Sales/Retail/Channel 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/Retail/Channel 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
  42. 42. 43 Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  43. 43. WHAT? • An inspirational exercise around considering if you have true differentiators HOW? Work individually: EXERCISE DESCRIPTION Exercise: Identify pains/gains as well as your “pain relievers” and “gain creators” and consider if they are differentiators 1. Select a specific customer type that you want to look at and consider the typical customer jobs for this type of customer 2. Identify gains and pains (2-3 most important) and write them on post its – ONE gain or pain per post it 3. Outline how your products and services relieve customer pains (2-3 most important) and create gains (2-3 most important) – write ONE pain reliever or gain creator per post it 4. Look at the outlined pain relievers and gain creators and consider which of these that are true differentiators? i.e. creating superior customer value and are unique
  44. 44. 45 Lets try to work with the framework … Products & Services Gain Creators Pain Relievers Gains Pains Customer Job(s)
  45. 45. 18 Aug 2016 KEY ACCOUNT MANAGEMENT: “Accelerate growth with your largest accounts” Next Commercial Excellence Forum in Oslo hosted by Implement Consulting Group
  46. 46. 47 Agenda 09:00 Welcome and introduction 09:10 Introduction to differentiation and Value Proposition 10:05 Short break and networking 10:50 Applying Value Proposition on your own company 09:35 Case: Telia Norge 11:30 Lunch & network 10:15 How to design strong Value Propositions
  47. 47. Change with Impact.

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