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SRI's "NABC" Approach
1.
S © 2006
SRI International SRI’s “NABC” approach A methodology to develop a quantitative value proposition — the first step in value creation APPROACH CUSTOMER NEEDS BENEFITS COMPETITION IMPORTANT Compelling, Quantitative Value Proposition Important Customer/Market Needs Quantitative Customer Benefits Unique Approach Competitive and Alternative Approaches Business Plan
2.
S © 2006
SRI International Starting to Create a Value Proposition Write down what you know and start talking to colleagues • First steps – Write it down: don’t worry, it won’t be right at first – Start with the basics: NABC – Pass it around to your colleagues to collect input – Get out of your office: listen to prospective customers, partners and friends; spend a “day in the life of a customer” – Capture and synthesize all ideas to improve your NABC – As appropriate, protect your ideas with a nondisclosure agreement • Constant improvement: iterate, iterate, iterate – Don’t fall in love with your first idea – Use pictures, simulations and images; build multiple mock-ups – Do it fast and repeat often! • Test of a Value Proposition – Compelling answer to the question: “Why will we win?” – Applies to all clients The end goal is a compelling, quantitative Value Proposition that is easy to remember
3.
S © 2006
SRI International Example A first draft of an NABC for hands free car phone service • Need – Cell phone use in America is increasing – People like to use cell phones in while driving – Government is regulating use because it is worried about the danger of distracted drivers talking on cell phones in their cars – There is an emerging need for a safe way to communicate while driving • Approach – Leverage SRI’s world-class voice recognition technology to provide a hands-free solution – Sell low-cost software that enables cell phones to use voice activation for dialing and hanging up • Benefits – Hands free is safer – Software applies to most cell phones – Software is easy to install – Value added service for mobile carriers • Competition – Growing number of cars have built in speech-activated car phones – Not all states are pushing the cell phone safety issue through legislation
4.
S © 2006
SRI International Improving Your Value Proposition: Be Quantitative Qualitative statements are not persuasive • Need – Not: The market is growing fast – Rather: Our market segment is $2B per year and growing at 20% per year • Approach – Not: We have a clever design – Rather: We have created a one-step process that replaces the current two-step process with the same quality • Benefits – Not: The ROI is excellent – Rather: Our one-step process reduces our cost by 50% and results in an expected ROI of 50% per year with a profit of $30M in Year 3 • Competition – Not: We are better than our competitors – Rather: Our competitor is Evergreen Corporation, which uses the current two-step process. We own the IP for our new process
5.
S © 2006
SRI International Improving your NABC A second draft of the car phone value Proposition Need • Consumers want to continue being able to use their cell phones while driving • Cell phones are difficult to use when you have to see where you are going! • Many governments are legislating against use of cell phones in cars • Cell phone usage will decrease in cars with a loss of $1B telecom revenue in 2005 • For us, as a cell phone provider, this represents a $500M-per-year opportunity Approach • Voice-activated dialing • Simple software overlay on existing phones • Downloadable to existing phones with a subscription to the “in car service” • Cost: under $10 per phone Areas of improvement • Visuals • Quantified • Better articulation of Need and Approach
6.
S © 2006
SRI International Improved Cell Phone Example (continued) Customer Benefits • Convenience – Allows increased phone usage – Safe, comfortable, easy to use: does not require a new phone • Quality – Excellent speech recognition (99% accuracy with untrained users, 12 languages) – Robust (>95%) performance in noisy environments Company Benefits • New product = increased sales (10% of 500M phones @ $10 each = $500M) • Fast time to market = increased market share (75% of headset market) • Hands-free auto use = reduced litigation (average of $50,000 per lawsuit) • Low risk = prototype developed and channels identified Competition • Existing phones (requires usage out of the car) • Speech-activated phone built into car (expensive, $100 more per car – we have 10% better quality with handheld devices and more convenience due to mobility) Areas of improvement • Includes Customer and Company Benefits • Quantified
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