differentiate to outperform competition - commercial excellence forum

Differentiate to outperform competition and capture more value Oslo, 11th of May 2016

Commercial Excellence Forum

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

Growth ambition

Fight commoditisation +

Why differentiation now?

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

does strategy top-down with limited involvement of employees

58%

believe there is an imaginary line in the organizational chart above which strategy is made

59%

of employees fully understand their company’s business strategies and what’s expected from them

7%

of “Not Successful” transformations were planned by 10 or fewer people

70%

of employees receive no information on how to execute the strategy

30%

are not able to communicate the Value Proposition clearly to customers

3 out of 4

fail to communicate the financial impact

90%

of all Value Propositions are NOT based on what truly drives value for customers

50%

of you disagree or strongly disagree that your companies have clearly formulated Value Propositions

25%

of you do not know how often your company works with Value Propositions or have never part-taken

+20%

of you are neutral to or disagree that there is a shared understanding about your Value Propositions in your organization

+30%

of you are neutral to or disagree that you have clearly defined guidelines as to how you convey your Value Propositions

+30%

of you are neutral to or disagree that Value Propositions are typically on the agenda for leadership seminars

Close to 50%

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%

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Lets hear some perspectives on working with

Value Propositions….

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… 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

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What is a Value Proposition?

The answer to the fundamental question:

”Why should I as a customer buy your product or

services?”

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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?

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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”

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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

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Define your differentiators based on deep customer insights on what drives perceived value for the customer

Differentiators

High Low

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

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

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

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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

segment Value Differentiators Unique features that customers

perceive as valuable

Perceived value to the customer

Perceived uniqueness Low High

Low

High

1b

1c

2a

3b

4a

4b

5b

6

7

1a

2b

3a

8

5c

5a

3c

(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

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Partner network Key activities

Key resources

Cost model Revenue model

Customer relationships

Distribution channels

Customer segments Value proposition

Business Model Canvas

34

Today we are zooming in on the Value Proposition and customer profiles

Business Model Canvas

36

Value Proposition Canvas

Products & Services

Gain Creators

Pain Relievers

Gains

Pains

Customer Job(s)

Kilde: Alexander Osterwalder

37

Making it fit: are we addressing essential customer gains and extreme customer pains?

38

What is the Value Proposition of a Tesla?

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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

Design Brand recognition

Range of 250km to 350km

Laughed at

Accident and harm

Fear of dead battery

Frequent charging

Aircon draining battery

Lack of space

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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

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Ideal customer characteristics

Fashion retailers with Asian production and European sales “We help …

Impact % 20% reduction ..to achieve …

Value driver Buffer stock cost in their…

Differentiator 95% transport reliability due to our …

Delta to competition 20% higher than second best which is …

Reference cases H&M and we have realized this for…”

Value Proposition formulation

Jobs to be done Transportation of final goods from production to stock ..who work with

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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

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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

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Lets try to work with the framework …

Products & Services

Gain Creators

Pain Relievers

Gains

Pains

Customer Job(s)

18 Aug 2016 KEY ACCOUNT MANAGEMENT:

“Accelerate growth with your largest accounts”

Next Commercial Excellence Forum

in Oslo hosted by Implement Consulting Group

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Change with Impact.