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%

Lets hear some perspectives
on working with
Value Propositions….

21
… 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

22
What is a Value Proposition?
The answer to the fundamental
question:
”Why should I as
a customer buy
your product or
services?”

23
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?

24
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”

25
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

26
Define your differentiators based on deep customer insights
on what drives perceived value for the customer
Differentiators
HighLow
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

29
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
segmentValue
Differentiators
Unique features
that customers
perceive as
valuable
Perceived value to the customer
Perceived uniquenessLow High
Low
High
1
b
1
c
2
a
3
b
4
a
4
b
5
b
6
7
1
a
2
b
3
a
8
5
c
5
a
3
c
(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

30
Agenda

31
Agenda

32
Agenda

33
Partner network Key activities
Key resources
Cost model Revenue model
Customer
relationships
Distribution channels
Customer segmentsValue 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?

39
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
DesignBrand
recognition
Range of 250km
to 350km
Laughed at
Accident and
harm
Fear of dead
battery
Frequent
charging
Aircon draining
battery
Lack of space

40
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

41
Ideal customer
characteristics
Fashion retailers with Asian
production and European sales“We help …
Impact %20% reduction..to achieve …
Value driverBuffer stock costin their…
Differentiator95% transport reliabilitydue to our …
Delta to competition20% higher than second bestwhich is …
Reference casesH&Mand we have realized this for…”
Value Proposition formulation
Jobs to be done
Transportation of final goods
from production to stock..who work with

42
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

43
Agenda

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

45
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

47
Agenda

Differentiate to outperform competition - Commercial Excellence Forum

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