Refreshing the Value Proposition to More Effectively Target New Customers and Markets THE ENTREPRENEURS EDGE – INNOQUEST 2014 PRESENTATION and WORKBOOK
1 Agenda Topic Time Definition 10 minutes Ø What it is NOT? Ø What it IS? Development 10 minutes Ø What is the process for linking perceived customer benefits to differentiation? Ø What is are the bases for differentiation? Deconstruction 20 – 40 Ø What pieces of the Development process need to be minutes reexamined and rebuilt in order to redefine or redirect your Value Proposition? Ø What trade-offs may need to be considered, who or what may need to be re-aligned, and how will you best express the refreshed Value Proposition?
2 DEFINITION
3 Value proposition is a critical starting piece of the product/service strategy puzzle Product Strategy Puzzle Competitor Understanding Customer Insight Positioning Market Segmentation Value Proposition
4 Value proposition is the promise of value to be delivered to the targeted customer Value Proposition Check List Value Proposition It is NOT: It IS: It IS: It IS: It IS: • Slogan The response In the The answer to The guideline to the sub-set language of the WHAT, the for the • Logo of needs that the targeted WHY, the internal • Positioning you have customer HOW and to alignment Statement chosen to the right which delivers satisfy WHOM the intended value “ You can not compete if you try to be everything to everybody.” “The way YOU speak about your product or services is often very different from how your customers describe it.” “All major investments should be linked with the value proposition.”
5 DEVELOPMENT
6 Development creates a bridge from customer benefits to the way you intend to deliver them A Process for the Start-up Company or the New Product Line 1 2 3 Brainstorm Draft Value Group Benefits Perceived Proposition by Basis for Benefits Differentiation Ø Include everyone, anyone Ø Tradeoff framework Ø Make a statement Ø Document every idea Ø Quick categorization process Ø Align organization Ø Limit to ½ hour Source: NorTech’s Market Opportunity Assessment Methodology, Bush Consulting Group, 2012
7 DECONSTRUCTION
8 Deconstruct your value proposition to deliberately redefine differentiation A Process for Deconstructing Existing Value Propositions 2 Determine Basis for Differentiation 1 3 Re-Examine Revise Value Perceived Proposition Benefits These are essentially the same three fundamentals of DEVELOPMENT but they are not always executed in a linear fashion; in some cases not all steps will need to be executed.
9 WORKSHEET: Evaluate your existing value proposition to identify areas for deconstruction Value Proposition Check List 1. Write Existing Statement 2. Compare to each component listed. Value Proposition It is NOT: It IS: It IS: It IS: It IS: • Slogan The response In the The answer to The guideline to the sub-set language of the WHAT, the for the • Logo of needs that the targeted WHY, the internal • Positioning you have customer HOW and to alignment Statement chosen to the right which delivers satisfy WHOM the intended value
10 1 Re-Examine Perceived Benefits Ø Go to every group in the organization Ø Go to “friendly” customers or prospects Ø Group by basis for differentiation
11 There are three bases for differentiation Three Ways that Create or Drive Customer Value or Benefits Basis for What creates or drives the Value or Benefit Differentiation • The translation of scientific knowledge into products or services Technology • Technology as a differentiator focuses on the product (or service) and how well it delivers its intended functionality • It emphasizes the physical embodiment of the product or service itself, and the perception of its quality and performance • Consists of activities and business-system elements that facilitate the Service commercial transaction • Speaks to the quality and / or timeliness of activities such as technical support, delivery, product availability, the buying experience, problem resolution, and so on • Refers to the overall cost to the customer, often represented by the Cost purchase price charged for the good or service at the time it is acquired • For certain customer types, cost may include life cycle cost elements such as disposal, financing, replacement, and maintenance
12 There are a handful of benefit drivers comprising each basis for differentiation Examples of Benefit Drivers Grouped by Basis for Differentiation Basis for Differentiation Benefit Driver Technology Ø Features Ø Design Ø Capabilities Ø Aesthetics Ø Performance Ø Reliability Ø Methods Ø Acumen Ø Tech Support Ø Access Service Ø Delivery Ø Buying Exper. Ø Product Avail Ø Sales Res. Ø Installation Ø Convenience Cost Ø Initial Price Ø Disposal Ø Terms Ø Warranty Ø Total Cost Ø Useful LIfe
13 WORKSHEET: What benefits are you delivering and how? Benefits Differentiation • Ability to glean meaningful insights out of wealth of information • Technology • Affordable • Cost • Always deliver more value than what is expected • Cost • Data rarely gets to this level • Technology • Trust our insights, recommendations • Technology • Rich data-based insights • Technology • Save them time • Technology • Reduced their innovation or investment risk in market development • Cost • Become part of their team; fill the gap in capability • Technology • Your process for using industry experts is a best and unique practice • Technology • Ready access • Technology • Local • Service • Flexibility • Service • You put market research into the context of our business • Service • They don't make decisions based on overly optimistic perspectives • Technology • Your depth and clarity is most important • Technology • Your process does not waste our valuable employees’ time 1. Brainstorm and augment list of benefits with “friendly” customer/prospect input 2. Categorized each benefit by basis for differentiation – Technology, Service, or Cost
14 2 Determine Basis for Differentiation Ø Do not straddle all three axes Ø Stay away from competitive sharks Ø Re-position yourself within clients’ value priorities
15 WORKSHEET: Illustrate your position relative to competitive sharks and customer value priorities Technology Value Proposition Map Cost Service 1. Plot your current value proposition 2. Plot the competition 3. Plot customer Value Priorities
16 3 Redefine & Reconstruct Ø What trade-offs make sense? Ø Who/what needs to be re-aligned? Ø What words better represent?
17 EXAMPLE: Bush Consulting Group’s trade-offs to be considered Benefits Differentiation Ø Technology • Ability to glean meaningful insights out of wealth of information • Technology Ø Cost • Affordable • Cost Ø Cost • Always deliver more value than what is expected • Cost • Data rarely gets to this level Ø Technology • Technology • Trust our insights, recommendations Ø Technology • Technology • Rich data-based insights • Technology Ø Technology • Save them time • Technology Ø Cost • Reduced their innovation or investment risk in market development • Cost Ø Cost • Become part of their team; fill the gap in capability • Technology Ø Technology • Your process for using industry experts is a best and unique practice • Technology Ø Technology • Ready access • Technology Ø Service • Local • Service Ø Service • Flexibility • Service Ø Service • You put market research into the context of our business • Service Ø Technology • They don't make decisions based on overly optimistic perspectives • Technology Ø Technology • Your depth and clarity is most important • Technology Ø Technology • Your process does not waste our valuable employees’ time Ø Cost 1. Revisit your lists and make trade-off decisions, if necessary. 2. Consider who/what needs to be re-aligned.
18 EXAMPLE: Bush Consulting Group’s ideal position Where are we? Where are we in relationship to the key competitors? Technology “Your process for … is a best and unique “You put market practice.” research into the PFP context of our “Your depth and CRA business.” clarity is most important.” VP “Firm-centric – entire value chain as Big 3 “Data rarely gets to framework is the VP this level.” value add.” “Your process does Next 3 not waste our valuable employees’ time.” “You delivered more value than we expected.” Reg. 1 Cost Service M R 1. Based on trade-off decisions, re-plot ideal value proposition location
19 WORKSHEET: revise value proposition statement and test it with the check list Value Proposition Check List 1. Revise Value Proposition Statement – seek assistance from communications experts. 2. Compare to each component listed. Value Proposition It is NOT: It IS: It IS: It IS: It IS: • Slogan The response In the The answer to The guideline to the sub-set language of the WHAT, the for the • Logo of needs that the targeted WHY, the internal • Positioning you have customer HOW and to alignment Statement chosen to the right which delivers satisfy WHOM the intended value
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