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Refreshing the Value Proposition to More Effectively Target New Customers and Markets
THE ENTREPRENEURS EDGE – INNOQUEST 2014 PRESENTATION and WORKBOOK
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Refreshing the Value Proposition to More Effectively Target New - - PowerPoint PPT Presentation
Refreshing the Value Proposition to More Effectively Target New - - PowerPoint PPT Presentation
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 What it is NOT? What it IS?
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DEFINITION
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Value proposition is a critical starting piece of the product/service strategy puzzle
Product Strategy Puzzle
Value Proposition Customer Insight Market Segmentation Competitor Understanding Positioning
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Value Proposition
It is NOT:
- Slogan
- Logo
- Positioning
Statement It IS: The response to the sub-set
- f needs that
you have chosen to satisfy It IS: In the language of the targeted customer It IS: The answer to the WHAT, the WHY, the HOW and to the right WHOM It IS: The guideline for the internal alignment which delivers the intended value
Value proposition is the promise of value to be delivered to the targeted customer
Value Proposition Check List “The way YOU speak about your product or services is often very different from how your customers describe it.”
“You can not compete if you try to be everything to everybody.”
“All major investments should be linked with the value proposition.”
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DEVELOPMENT
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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
Source: NorTech’s Market Opportunity Assessment Methodology, Bush Consulting Group, 2012
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Brainstorm Perceived Benefits
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Group Benefits by Basis for Differentiation
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Draft Value Proposition
Ø Include everyone, anyone Ø Document every idea Ø Limit to ½ hour Ø Tradeoff framework Ø Quick categorization process Ø Make a statement Ø Align organization
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DECONSTRUCTION
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Deconstruct your value proposition to deliberately redefine differentiation
A Process for Deconstructing Existing Value Propositions
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Re-Examine Perceived Benefits
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Determine Basis for Differentiation
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Revise Value Proposition
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.
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Value Proposition
It is NOT:
- Slogan
- Logo
- Positioning
Statement It IS: The response to the sub-set
- f needs that
you have chosen to satisfy It IS: In the language of the targeted customer It IS: The answer to the WHAT, the WHY, the HOW and to the right WHOM It IS: The guideline for the internal alignment which delivers the intended value
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.
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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
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Basis for Differentiation
- The translation of scientific knowledge into products or services
- 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
Technology
- Consists of activities and business-system elements that facilitate the
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
Service
- Refers to the overall cost to the customer, often represented by the
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
Cost
There are three bases for differentiation
Three Ways that Create or Drive Customer Value or Benefits
What creates or drives the Value or Benefit
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Basis for Differentiation
Technology Service Cost
There are a handful of benefit drivers comprising each basis for differentiation
Examples of Benefit Drivers Grouped by Basis for Differentiation
Ø Features Ø Capabilities Ø Performance Ø Methods Ø Design Ø Aesthetics Ø Reliability Ø Acumen Ø Tech Support Ø Delivery Ø Product Avail Ø Installation Ø Access Ø Buying Exper. Ø Sales Res. Ø Convenience Ø Initial Price Ø Terms Ø Total Cost Ø Disposal Ø Warranty Ø Useful LIfe
Benefit Driver
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WORKSHEET: What benefits are you delivering and how?
Benefits
- Ability to glean meaningful insights out of wealth of information
- Affordable
- Always deliver more value than what is expected
- Data rarely gets to this level
- Trust our insights, recommendations
- Rich data-based insights
- Save them time
- Reduced their innovation or investment risk in market development
- Become part of their team; fill the gap in capability
- Your process for using industry experts is a best and unique practice
- Ready access
- Local
- Flexibility
- You put market research into the context of our business
- They don't make decisions based on overly optimistic perspectives
- Your depth and clarity is most important
- Your process does not waste our valuable employees’ time
Differentiation
- Technology
- Cost
- Cost
- Technology
- Technology
- Technology
- Technology
- Cost
- Technology
- Technology
- Technology
- Service
- Service
- Service
- Technology
- Technology
- 1. Brainstorm and augment list of benefits with “friendly” customer/prospect input
- 2. Categorized each benefit by basis for differentiation – Technology, Service, or
Cost
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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
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WORKSHEET: Illustrate your position relative to competitive sharks and customer value priorities
Value Proposition Map
- 1. Plot your current value proposition
- 2. Plot the competition
- 3. Plot customer Value Priorities
Cost Service Technology
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Redefine & Reconstruct
Ø What trade-offs make sense? Ø Who/what needs to be re-aligned? Ø What words better represent?
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EXAMPLE: Bush Consulting Group’s trade-offs to be considered
Benefits
- Ability to glean meaningful insights out of wealth of information
- Affordable
- Always deliver more value than what is expected
- Data rarely gets to this level
- Trust our insights, recommendations
- Rich data-based insights
- Save them time
- Reduced their innovation or investment risk in market development
- Become part of their team; fill the gap in capability
- Your process for using industry experts is a best and unique practice
- Ready access
- Local
- Flexibility
- You put market research into the context of our business
- They don't make decisions based on overly optimistic perspectives
- Your depth and clarity is most important
- Your process does not waste our valuable employees’ time
Differentiation
- Technology
- Cost
- Cost
- Technology
- Technology
- Technology
- Technology
- Cost
- Technology
- Technology
- Technology
- Service
- Service
- Service
- Technology
- Technology
Ø Technology Ø Cost Ø Cost Ø Technology Ø Technology Ø Technology Ø Cost Ø Cost Ø Technology Ø Technology Ø Service Ø Service Ø Service Ø Technology Ø Technology Ø Technology Ø Cost
- 1. Revisit your lists and make trade-off decisions, if necessary.
- 2. Consider who/what needs to be re-aligned.
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Cost Service Technology
VP Big 3
- Reg. 1
PFP Next 3 CRA M R
“Your process for … is a best and unique practice.”
Where are we? Where are we in relationship to the key competitors? EXAMPLE: Bush Consulting Group’s ideal position
“Your depth and clarity is most important.” “Data rarely gets to this level.” “You put market research into the context of our business.” “Firm-centric – entire value chain as framework is the value add.”
VP
“Your process does not waste our valuable employees’ time.” “You delivered more value than we expected.”
- 1. Based on trade-off decisions, re-plot ideal value proposition location
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Value Proposition
It is NOT:
- Slogan
- Logo
- Positioning
Statement It IS: The response to the sub-set
- f needs that
you have chosen to satisfy It IS: In the language of the targeted customer It IS: The answer to the WHAT, the WHY, the HOW and to the right WHOM It IS: The guideline for the internal alignment which delivers the intended value
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.
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