Through our work, writing and speaking etc we get lots of questions and comments about value propositions. Reading through research material and general information about value propositions it seems that there are many interpretations of what is a value proposition. As a consequence, we want to get a snapshot of what people think about value propositions.
Please would you help us by filling out this short questionnaire. Link to questionnaire. It should take 4 minutes and if you give us your contact details (which are only for our admin use and will not be displayed in the summary), we will send you the summary report in the Autumn. We will release this report to coincide with the launch of our book "Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit" by Cindy Barnes, Helen Blake and David Pinder, Kogan Page 2009.
We'll let you know more about the book in the next newsletter; it's due out later this year.
Link to questionnaire.
Thursday, 16 July 2009
Discounting Europeans
70% of world-class organisations say that if they do give price concessions to customers, they always ensure they get comparable value in return, such as an extended contract or an additional warranty. This compares with only 19% of European firms, according to the 2009 Sales Best Practices Study from Miller Heiman. In other words, European companies are too ready to discount without getting anything in return. I’m looking forward to the UK-specific breakdown of this report which is due out shortly. It will be interesting to see if Brits are more or less likely to offer discounts or if we understand value any better.
The study, based on input from European and global sales professionals, analyses complex B2B sales environments to reveal the best practices of world-class sales organisations.
It’s so important that you first understand and really believe your own value. If you don’t then you are much more likely to devalue yourself, your offering, your firm by offering some form of pricing reduction. The best way to really understand your value is to ask your customers, conduct a customer value experience exercise. This is the first step on the road to creating a value proposition – note the word value – it’s not there for decoration, it really does help you create, articulate, believe and substantiate your value!
A free copy of the executive summary is available by calling
01908 519 615.
The study, based on input from European and global sales professionals, analyses complex B2B sales environments to reveal the best practices of world-class sales organisations.
It’s so important that you first understand and really believe your own value. If you don’t then you are much more likely to devalue yourself, your offering, your firm by offering some form of pricing reduction. The best way to really understand your value is to ask your customers, conduct a customer value experience exercise. This is the first step on the road to creating a value proposition – note the word value – it’s not there for decoration, it really does help you create, articulate, believe and substantiate your value!
A free copy of the executive summary is available by calling
01908 519 615.
Left brain, right brain
When times are tough, you’ve had to lose good people and you can’t afford to hire more, the key to growth is innovation and the best way of achieving this is pairing a left-brain thinker with a right-brain thinker.
Innovation is a messy process – hard to measure and hard to manage. Most people only recognise it when it generates a surge in growth. When revenues and earnings decline most executives conclude that their innovation efforts are just not worth it. Better to focus on what we know, they say, rather than the untested. Better to play safe and be risk averse.
Recently we worked with a technology company on one of their largest customer accounts. We analysed what was happening with the account in terms of value, processes and people and in the course of our work came across two sales professionals – we’ll call them Jim and Tom – who were totally dissimilar in pretty much every aspect of their approach to work. Jim was a total ‘left-brain’ thinker (logical, analytical, task-driven) and Tom a ‘right-brain’ (creative, relationship-orientated, door-opener) but they had figured out that together they could create a fantastic approach to innovative, consultative sales within their customer account. Individually, they were OK sales people but by working together they were incredibly successful.
Defining successful behaviours in successful sales professionals is something we have been working on for some considerable time. Come back to this Blog very soon and you’ll find more information on an exceptional way of identifying and defining successful people.
Innovation is a messy process – hard to measure and hard to manage. Most people only recognise it when it generates a surge in growth. When revenues and earnings decline most executives conclude that their innovation efforts are just not worth it. Better to focus on what we know, they say, rather than the untested. Better to play safe and be risk averse.
Recently we worked with a technology company on one of their largest customer accounts. We analysed what was happening with the account in terms of value, processes and people and in the course of our work came across two sales professionals – we’ll call them Jim and Tom – who were totally dissimilar in pretty much every aspect of their approach to work. Jim was a total ‘left-brain’ thinker (logical, analytical, task-driven) and Tom a ‘right-brain’ (creative, relationship-orientated, door-opener) but they had figured out that together they could create a fantastic approach to innovative, consultative sales within their customer account. Individually, they were OK sales people but by working together they were incredibly successful.
Defining successful behaviours in successful sales professionals is something we have been working on for some considerable time. Come back to this Blog very soon and you’ll find more information on an exceptional way of identifying and defining successful people.
Selling to the Post-recession Buyer
In the developed world, until last year we had 15 years of uninterrupted prosperity where growth was a permanent feature. Between 1995 and 2005 disposable incomes increased in the slower economies by 10% and in the highest growth economies by as much as 33%. That economic landscape has had a profound impact on our buying habits. We could afford to be curious about gadgets and new technology, indulge ourselves in premium products and just-for-fun experiences. In the latest Harvard Business Review(1) research shows how the recession has sobered us all up, moving some buying trends forward and slowing or reversing others.
The key dominant and advancing trends are:
1) Focus on how to help people realise the true value of your offering. It amazing what great and simple ideas can come out of doing this
2) Be honest. In a world of mistrust, 'spinning' your messages is turning people off fast.
3) Don't start by focusing on price! Price is relative and it's a bad place to start any sales and marketing efforts. Get your customers talking about what really matters to them and then you can reframe the whole 'price' discussion.
4) Network. As buyers are shopping around and using technology and networking as part of their decision-making process, then you need to be part of it. Linked In, Twitter, Blogs are proving to be powerful influencers. If you're not tweeting, then you need to start!
In what ways are you changing your sales and marketing efforts for this economy? What's working for you?
(1) Understanding the Post Recession Consumer, P Flatters and M Willmott, Harvard Business Review July-August 2009, pp 106-112
The key dominant and advancing trends are:
- A demand for simplicity
Even before the recession many people were feeling overwhelmed by the proliferation of choices (see the article More Jam Anyone? in this blog) coupled with 24/7 connectivity and were starting to simplify. The recession is accelerating this trend.
The authors say, "Consider the rise of edited retailing (consumers are offered limited collections of coordinated product choices), a growing demand for trusted brands and value, an increasing desire for advisors - ranging from social networks to product ranking web sites - that can simplify choice making, and enthusiasm for less complicated, more user-friendly technologies." - A focus on the boardroom
Like the simplicity trend, this issue has been building for years, spurred by major governance failures such as Enron and WorldCom. Misbehaviour in the boardroom is no longer acceptable. The huge tax payer bail-outs of badly managed businesses will accelerate this trend. This also builds on people's well established reflex to punish companies for unethical labour or customer practices, as Nike and Nestlé have learned the hard way. - Discretionary thrift
A desire to be more wholesome and less wasteful is prevalent, with people recycling more and buying more used goods. "People are imbuing their children with traditional values - behaviours that dovetail with the growing demand for simplicity and a solid, though currently slowing, interest in green consumerism." Many post recession purchases will be less extravagant versions of pre-recession ones. - Mercurial consumption
Buyers are more agile and more fickle due to technology and social networking. They are more likely to shop around and shift allegiances.
1) Focus on how to help people realise the true value of your offering. It amazing what great and simple ideas can come out of doing this
2) Be honest. In a world of mistrust, 'spinning' your messages is turning people off fast.
3) Don't start by focusing on price! Price is relative and it's a bad place to start any sales and marketing efforts. Get your customers talking about what really matters to them and then you can reframe the whole 'price' discussion.
4) Network. As buyers are shopping around and using technology and networking as part of their decision-making process, then you need to be part of it. Linked In, Twitter, Blogs are proving to be powerful influencers. If you're not tweeting, then you need to start!
In what ways are you changing your sales and marketing efforts for this economy? What's working for you?
(1) Understanding the Post Recession Consumer, P Flatters and M Willmott, Harvard Business Review July-August 2009, pp 106-112
More jam, anyone?
Or, 'how does having more to choose from affect your choice'?
Have you ever felt so daunted by the amount of different things to choose from that you ended up not choosing anything at all? If so, you are not alone, as the results from the following experiment show. A stall was set up in a supermarket for jam tasting. On one day the stall had 24 jams, and on a different day only 6 jams. Although the stalls with more jams attracted more attention (60% of the people passing by stopped, compared with only 40% for the small-selection stall), of the people who stopped only 4% at the stall with the larger selection subsequently bought a pot, whereas 30% of the people who stopped at the small-selection stall went on to buy a pot(1).
Too much choice can make us feel overwhelmed and not know what to choose, thereby often not making any choice at all. Even when we do choose something, we are often dissatisfied, thinking we have probably made the wrong choice (2)(3).
So what does this mean for sales and marketing?
In our B2B world we often meet very clever, very technically brilliant people in great companies who want to tell the whole world all about how technically brilliant they are. Technically brilliant people are also most often very analytical people, so they are more left-brain dominant rather than right-brain dominant. This leads them to believe that telling all of their customers about all of the facts, about all of the features and benefits of all of their products or services will just demonstrate how brilliant they are and their customers will naturally fall at their feet and want to buy their offerings. This rarely happens. This approach just frightens or baffles customers and then they're just paralysed into doing nothing. The worst possible outcome for our technical company.
Rather than focusing on technical brilliance we believe it is much better to spend time on developing your corporate value proposition - determining exactly what your customers' value. Spend time defining your customer groups, what offerings you have, what benefits you generate. Then do the same for your separate offerings ensuring your offerings are in alignment with your corporate view. Then develop very clear communication around the few things you want to be famous for, so long as they fit in with the corporate position.
Just think about the best retailers. Does Harrods have everything that they sell crammed into their shop windows? No. They might have one window with nothing more than a beautiful, strategically placed coffee pot on a simple table. But this coffee pot says everything about Harrods, opulence, beauty, quality, precious objects, etc. Also, all the windows will be co-ordinated together into one main theme that reinforces the main message, the main brand. So Harrods signposting is very clear to their customers.
So stop giving customers too much choice, too much information, and you might sell more jam!
I'm very interested to hear about examples of B2B companies who do this very well and also those who fall into this trap, so please let me know your examples.
Footnotes:
(1)1 Iyengar S and Lepper M (2000) 'When choice is demotivating: Can one desire too much of a good thing?' Journal of Personality and Social Psychology, 79, pp. 995-1006
(2) Schwarz B (2004) 'The Paradox of Choice: Why more is less' New York, Harper Collins
(3) This article was inspired by Behavioural Economics, New Economics Foundation, London, July 2005
Have you ever felt so daunted by the amount of different things to choose from that you ended up not choosing anything at all? If so, you are not alone, as the results from the following experiment show. A stall was set up in a supermarket for jam tasting. On one day the stall had 24 jams, and on a different day only 6 jams. Although the stalls with more jams attracted more attention (60% of the people passing by stopped, compared with only 40% for the small-selection stall), of the people who stopped only 4% at the stall with the larger selection subsequently bought a pot, whereas 30% of the people who stopped at the small-selection stall went on to buy a pot(1).
Too much choice can make us feel overwhelmed and not know what to choose, thereby often not making any choice at all. Even when we do choose something, we are often dissatisfied, thinking we have probably made the wrong choice (2)(3).
So what does this mean for sales and marketing?
In our B2B world we often meet very clever, very technically brilliant people in great companies who want to tell the whole world all about how technically brilliant they are. Technically brilliant people are also most often very analytical people, so they are more left-brain dominant rather than right-brain dominant. This leads them to believe that telling all of their customers about all of the facts, about all of the features and benefits of all of their products or services will just demonstrate how brilliant they are and their customers will naturally fall at their feet and want to buy their offerings. This rarely happens. This approach just frightens or baffles customers and then they're just paralysed into doing nothing. The worst possible outcome for our technical company.
Rather than focusing on technical brilliance we believe it is much better to spend time on developing your corporate value proposition - determining exactly what your customers' value. Spend time defining your customer groups, what offerings you have, what benefits you generate. Then do the same for your separate offerings ensuring your offerings are in alignment with your corporate view. Then develop very clear communication around the few things you want to be famous for, so long as they fit in with the corporate position.
Just think about the best retailers. Does Harrods have everything that they sell crammed into their shop windows? No. They might have one window with nothing more than a beautiful, strategically placed coffee pot on a simple table. But this coffee pot says everything about Harrods, opulence, beauty, quality, precious objects, etc. Also, all the windows will be co-ordinated together into one main theme that reinforces the main message, the main brand. So Harrods signposting is very clear to their customers.
So stop giving customers too much choice, too much information, and you might sell more jam!
I'm very interested to hear about examples of B2B companies who do this very well and also those who fall into this trap, so please let me know your examples.
Footnotes:
(1)1 Iyengar S and Lepper M (2000) 'When choice is demotivating: Can one desire too much of a good thing?' Journal of Personality and Social Psychology, 79, pp. 995-1006
(2) Schwarz B (2004) 'The Paradox of Choice: Why more is less' New York, Harper Collins
(3) This article was inspired by Behavioural Economics, New Economics Foundation, London, July 2005
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