Building A Value Propostion

1. From Walking Catalogue To Trusted AdvisorProfessionalising The Sales FunctionBuilding A Value PropositionPresented By:Peter Gilbert

2. Brain Break 1: The Fire Hydrant

3. Program OutcomesThis workshop will equip you with some of the insights and tools , required to become a trusted advisor by:Providing insight into the customer’s key business issues

4. Asking high impact questions to clarify the scope of each issue

5. Focusing on the relevant business drivers

6. Communicating the value of your solutionAgenda1The evolution of selling & the forces driving change2Understanding business drivers and their relevance to building value propositions3Building your first value proposition--- “The elevator pitch”4Building more complex value propositions5Creativity in building value propositions

7. The Changing Sales EnvironmentThe Changing Sales Environment

8. What are the market forces that are driving radical change in business to business buying / selling relations?

9. What’s Driving Change?The usual suspectsCommoditisationCompetitionPricing pressureCapacity excessHigh selling costsMergers & acquisitions. . and some newer onesThe internetConsolidation of suppliersContinuous improvement instead of the RFP process

10. Four acquisition mega-trendssupplier consolidationincreased sophistication: new supplier segmentationssuperior economics of continuous improvement over RFPtotal lifetime cost concept

11. supplier consolidationhigher stakes: “all or nothing”increased sophistication: new supplier segmentationcustomers box you inbusiness chain value – not just solutionstotal lifetime cost conceptenterprise commitment/action required – not just sales teamsuperior economics of continuous improvement over RFPConsequences of purchasing trends

12. How do trends like these change the way that customers acquire products and services?

13. HiStrategic or costimportance of supplier’s productLoHiDifficulty of substitutionor of obtaining alternativesSupplier Segmentation MatrixLeveragesizePartnerShop aroundManagerisk

14. What These Purchasing Trends Meaneven complex services will be increasingly commoditised and bought transactionallycustomers are becoming ever smarter and more aggressive about capturing a bigger share of the value their suppliers createrelationships that seemed protected and locked-in are being questioned and are under threatmetrics driven, continuous improvement relationships have the best chance of resisting the new purchasing pressuresnew enterprise relationships are supplanting traditional major account relationships

15. Is this your sales conundrum?ConsultativeMost sales forces are in no-man’s landToo expensive to succeed transactionallyToo lacking in resources and skills to succeed consultativelyToo misaligned and understaffed to succeed in enterprise relationshipsNoman’slandTransactionalEnterprise

16. Brain Break 2: The Alsatian Syndrome

17. Pick Your Battlefield CarefullyWhere you and your organisation choose to fight your sales battle, will have a profound effect on the form, structure and nature of your value proposition.

18. EntrySales - Return on InvestmentProductivityStrategicValueHighLevel 4BusinessValueLevel 3ChasmSolution ValueLevel 2CommodityValueLevel 1LowTime

19. ChasmLevels of Business RelationshipValue CreatedRelationship LevelTrusted AdvisorImpact Strategic IssuesExecSolution ProviderImpact Business IssuesSenior ManagementMiddle ManagementProblem SolverImpact Operational issuesOperationsOffer product, service and supportProduct Vendor

20. EventProcessSystemOutcomeTransactionSolutionValue / InnovationRelationship / PartnershipConsideredCompetitivePreferredDominantIgnorantAwareAgileAstutePriceCost of OwnershipReturn on InvestmentBusinessValueOperations(Transaction)Management(Trust)Executive(Political)Business(Partner)Make the listMake the saleMake the RulesSet the StandardSelling LevelsLevel 1Level 2Level 3Level 4FocusOrientationStatusPoliticalFinanceRelationshipsEngagement

21. Product ExpertPotential ResourceBusiness AnalystBusiness ConsultantInterruptionSales PitchJoint DiscoveryBusiness MeetingPast EventInformativeCreative Ideas ExploredCompelling ValueIgnoredSent DownConsideredContinued AccessSelling at the Executive LevelLevel 1Level 2Level 3Level 4Customer’s Impression of YouCustomer’s Impression of the Sales SituationCustomer’s ConclusionOutcome

22. Strategic ResourceSolution ProviderProblem SolverVendorRelationships & Role in the Decision ProcessCorporate PlanningAssess Problems /OpportunitiesForming Corporate InitiativesAnalysingResultsInitiate a ProjectTrackingResultsIdentifySuppliersProject ImplementationEvaluate & Shortlist Products/SuppliersSelect SuppliersNegotiate ContractsProve theConcept

23. What Is A Business Driver?A business driver is any source of pressure (either a problem or an opportunity), that is impacting on an executive and/or the company, and creating a need for change.

24. FinancialPressureCustomersSuppliersBusiness PartnersCompetitionOperationalPressureThe Customer’s Business DriversRevenue

25. Cost

26. Metrics of Industry

27. Shareholder Equity

28. Financial Analysts

29. Militant customers

30. Satisfied Customers

31. Delighted Customers

32. Loyal Customers

33. Retain Customer Base

34. Grow the Customer Base

35. Quality

36. JIT

37. One Stop Shopping

38. Share Information

39. Problem suppliersBusiness Unit Executive“Nightmare Competitors”

40. Niche Players

41. Potential Threats

42. Sell With

43. Sell Through

44. Impact

45. “Co-opetition”

46. Making, Selling,

47. Delivering Products

48. Right Skill Mix?

49. Reorganise

50. RegulatoryProblemsOpportunitiesConsequencesPaybackThe Compelling Reason to BuyHow customers define and prioritise their “needs”BusinessInitiativesBusiness DriversBusiness ProfileCritical Success FactorsCompellingreason to BuyAnalysing the customer’s business driversWhy does the customer have to act?Something that matters to someone with influence?What is the deadline for the customer to make a decision?What will be the measurable impact on the customer’s business?

51. BusinessProfileBusinessDriversBusinessInitiativesCapabilities SolutionDifferen-tiationThe Value PropositionUniqueBusinessValueSolutionDefines your unique business value

52. Specific to the customer

53. Creates a specific or measurable business outcome

54. Sets the customer’s expectations

55. Assures your ability to deliverCritical Success FactorsBusiness InitiativesBusiness DriversBusiness ProfileBusinessInitiativesBusiness initiatives are the projects, programs, or plans that address the business drivers. CSFsCSFsCSFs are things that must happen or resources that must be in place to ensure the success of the initiative.

56. Understanding the Customer’s BusinessBusiness DriversBusiness drivers are the internal and external pressures that create the need for change.Business DriversBusiness ProfileBusinessInitiativesBusiness InitiativesCSFsBusiness initiatives are the projects, programs, or plans that address the business drivers. CSFsCSFs are things that must happen or resources that must be in place to ensure the success of the initiative.Compelling Reason to Buy‘Selling Event’Compelling situations that cause the customer to make a decision or a change in their current situation.

57. Customer satisfaction metrics falling

58. Losing customers

59. Repeat sales to customer base are slowing

60. Opportunities exist to double branded goods exports to East Africa during the next year

61. Customers demand quality products and competitors are gearing up to take advantage

62. Re-engineer service offerings and introduce Premier Service Plan

63. The Integrated Export Initiative

64. Train employees to deliver higher levels of services

65. Customer involvement in design of new services

66. Web-based Premier Service Plan

67. Understand quality, logistical and legislative requirements

68. Overcome the logistical / manufacturing capacity constraints

69. Develop brand awareness in East African markets by mid-yearExamples of Business Drivers, Initiatives and CSFsExample 1Example 2BusinessDriversInitiativesCriticalSuccessFactors

70. Brain Break 3: It Is Better To Be Wrong Than To Be Confused!!

71. Maintaining your Executive OutlookRead what executives readNewspapers: Business Day, Business Report etc.

72. Periodicals: Financial Mail, Finance Week, Business Week, Economist etc

73. Subscribe to the customer’s industry trade journals

74. Subscribe to industry consultants’ newsletters

75. Join the customer’s trade associations Follow the customer’s industryFollow the customer’s businessSubscribe to an on-line tracking service (McGregor’s)

76. Get on the customer’s PR mailing list

77. Get on the customer’s Investor relations mailing lists

78. Visit the customer’s website regularly

79. Access on line services (Business Day & FM)Put yourself in a position to meet executives sociallyAttend the customer’s trade shows

80. Spend time where executives spend timeThe OfferingValueThe Value PropositionCustomer’s IssueValue PromiseYour Services & Unique CapabilitiesCustomer’sInvestmentEconomic PaybackCustomer’s Improvement

81. Value Proposition FormatsYou will be able to ______________ resulting in _____________________ §business initiativespecific or measurable outcomeby implementing our _____________________. We delivered similar solutionresults at ____________________ which resulted in __________________.similar situation or customerpast value deliveredBy changing from _________________ to ________________, you will§current situationour solutionaffect __________ which means ____________________. We will track the business driverspecific or measurable outcomevalue delivered by _______________ and report it back to you _________.frequency/timevalue tracking systemWe can help you address __________________________ by installing§compelling event_________________ which will result in ____________________________. specific or measurable outcomesolutionWe will insure your return on investment by ________________________.shared risk/reward strategy

82. Constructing Your Value PropositionCustomer Business DriverYour CapabilityMutual ValueBusiness InitiativeCritical Success FactorsUnique SolutionProducts ServicesProcessesPeople

83. Business and Personal Value When you can combine business value for the customer with personal value for the individual, you create competitive advantage.©2002 Consiliat Marketing. All rights reserved. Using Consultative Selling Skills

84. Asking High-Impact QuestionsHigh-impact questions serve two purposes. You will use them to:Uncover the customer’s business or personal views of theirImplied Needs and Preconceived Solutions

85. Deepen the customer’s view to explore Underlying Needs and Potential SolutionsPurpose:Conduct a dialogue that yields information that cannot easily be obtained through other means

86. Validate your perceptions, while demonstrating expertise

87. Reshape the customer’s thinking of both the issue and the solution

88. Expose underlying priorities and issues that reveal Underlying NeedsValue Proposition – Templates & GuidelinesHigh Impact QuestionsGuidelinesTemplateThe ABC industry is fiercely competitive and highly commoditised. Is this causing managers and share holders major concern?

89. Your ROCE is significantly lower than major industry players. Why is this? Step 1Identify clear and indisputable market trends or business drivers: that currently have or have the potential to have an effect on your Customer’s way of doing business. The better you can prioritise the trends or business drivers according to the business significance of their impact, the more attention your solution will command. Currently, you’ve been experiencing:Step 2Articulate the resulting impact of the trend / business driver on the second line of theValue Proposition template:Once you have identified and prioritised trends / drivers, analysis will yield the probable areas within your Customer’s organisation that are or will soon be feeling the pain, or will be prime for being held accountable for new unfolding opportunities. The more individuals and functions that can be uncovered, the broader the scope of your Value Proposition, the greater its receptivity. Articulate the resulting impact of the trend or driver on the second line of the Value Proposition template. If you identify a wider audience, you may decide to have a number of different versions of the same Value Proposition for these different targeted individuals.This must be placing great strain on your sales organisation? Do they have the skills and resources to sell at higher margins?

90. Is this causing higher levels of staff churn?

91. Do you have the calibre of sales management to respond appropriately to this situation? which causes:Articulate the resulting impact of the trend / business driver on the second line of theValue Proposition template.If you identify a wider audience, you may decide to have a number of different versions of the same Value Proposition for these different targeted individuals.

92. Value Proposition – Templates & GuidelinesHigh Impact QuestionsGuidelinesTemplateStep 3Reduce the above thinking into a Business Driver , Potential Initiative and CSF for the Customer:Please note that one business driver or industry trend may spawn different potential initiatives and CSFs for different functions and/or business units within your Customer’s organisation. Be sure to select a Driver /Initiative / CSF that represents a key area of activity in which favourable results are absolutely necessary for your Customer to achieve its business goals. The more pertinent your CSF to your customer, the more compelling your Value Proposition. On line three, specifically state that you will address the selected Drivers and CSF, and describe the success that can be expected. Your Value Proposition should contain a total business solution involving multiple areas and facets of the Customer’s environment to which we will contribute. Account interventions, therefore, will be larger and will take full advantage of your combined expertise, thereby decreasing the likelihood of duplication by a competitor. You will be able:Do you have the tools and skills to make the transition from vendor to solution provider?

93. Does management understand the difficulties of making this transition?

94. What improvements in margins might be possible, if you make this change successfully?

95. What are the risks of failure? Value Proposition – Templates & GuidelinesHigh Impact QuestionsGuidelinesTemplateStep 4Calculate the probable results of your solution on this line. Remember, a Value Proposition is to be co-developed with your Account, but it often works best if you present an estimated number initially. This will increase your credibility as you relate real results from a similar solution being applied to other companies. Also, be prepared to ask your client the right questions. It is important to solicit and secure your customer’s involvement as early as possible in the sales cycle which would yeld:Did you know that the successful solution providers are achieving 20-40% price premiums over their competitors?

96. Are you aware that companies who fail to execute this type of change successfully, suffer a significant negative ROI and lost credibility? Step 5List your total pricing on this line.You may elect to drop a footnote to itemise the different components of your solution if deemed appropriate. Note, however, that if you break your solution into smaller components, your client may be tempted to un-bundle your solution and shop its individual components out to the lowest competitive bidder. Initiatives of this nature typically cost around R100k per thousand employees, an ROI of 50% or better would be quite feasible. Would this be attractive? for:

97. Value Proposition – Templates & GuidelinesHigh Impact QuestionsTemplateGuidelinesIf it was possible to complete a pilot project and see a positive ROI within 6 months, would it make economic sense? Step 6The time frame is listed on this line. Care should be given to how you represent your time scales. Accelerating your time may give you advantage over a competitor who may not be able or willing to move at your speed. within:Step 7On this line, state as succinctly as possible, exactly what you are asking the customer to buy. Make sure to differentiate from your competitors in your description. The client must be able to easily describe what he/she is recommending that his/her company buy.We could have an experienced team in place within 2 weeks and a complete installation completed within 4 weeks. Do you have the resources to absorb this type of change? as a result of:Would it be possible for your HR and finance people to give us a detailed breakdown of staff churn for the last 2 years?Step 8Ensure that you can translate time from line six into – either loss costs (Consequences) or opportunity costs.This will prevent “slippage” in your forecast. This important line item allows your ally to move forward aggressively in championing your solution. This business issue is currently costing:

98. Value Proposition – Templates & GuidelinesGuidelinesHigh Impact QuestionsTemplateIf we were able to reduce staff churn by 30% in year 1, what would the impact on your organisation be? Step 9Reduce the above thinking into an Economic Benefit for the Customer:If done well, this final line may enable you to enact a performance bond or contingency fee pricing structure. If all the variables that will dictate your project’s success can be identified and weighted, it may be possible to raise a “barrier of entry” to your would-be competitors. Illustrating that you will take your profit from the Customer’s resulting incremental profit (that you will assist them in realising) is always well received. Should you choose this type of approach, you are justified in elevating your fees to accommodate the risk you will be absorbing. Even if you do not elect to do any risk-reward sharing, a results tracking approach will give your client a sense of confidence to move forward with the project. We will measure the results by:

99. Never EVER Apologise To A Customer!Brain Break 4: A simple “sorry” would suffice

100. Consultative QuestioningSituational What is the situation / How do you handle this? AskingListeningIssueInforming What’s wrong / What needs to be done?AskingListeningConsequenceInformingSo what?AskingListeningValueInformingHow much?©2002 Consiliat Marketing. All rights reserved. Using Consultative Selling Skills

101. Provide Context – Get the Discussion Going Situation QuestionsWhich cost issues will you be addressing with this initiative?

102. Which of the following two issues are the most important…..?

103. Who will you be looking to compete with in the new market sectors?

104. How many contractors are involved?

105. How do you feel about growth prospects for next year?

106. How ready are you to raise the bar against the competition?

107. What is your opinion on import substitution?

108. Which non-core assets do you plan to dispose of this year?

109. Once you have divested your non-core operations, where will you look for growth? Examples:Ask open ended questions to get the discussion goingRemember The Four Cs - Customers / Competitors / Commercial / Channels

110. Establish the Issue – What’s wrong?Issue QuestionsExamples:What are the major challenges in executing your strategy?

111. What opportunities look most attractive?

112. How are these challenges impacting you?

113. Where do you need to improve?

114. What effect will ………………have on your business?

115. Why isn’t it working as you’d like it?

116. How are you going to protect and grow your margins?

117. What’s keeping you awake at night?

119. Exploring the Consequences – So What?Consequence QuestionsExamples:Why is this a problem?

120. What will happen if you don’t solve it?

121. What is this issue costing you?

122. How difficult would it be to solve the problem with internal resources?

123. What’s the worst that could happen?

124. If you don’t solve it, how will it affect your performance?

125. If you don’t act what do you stand to lose?

127. Explore the Need – What would help?Need Exploration QuestionsExamples:What do you need? Why do you need it?

128. What solutions have you considered?

129. Would it be helpful if…………………………………..?

130. Do you really need (……….) or do you need (…………)?

131. What will it take to address this issue?

132. What would the ideal solution be?

133. If solving this problem by yourself were an option, what would you do?

135. Determine the Value – How much?Value QuestionsExamples:How much would it help?

136. How would this approach make it easier for you?

137. How much would that save you?

138. Can you quantify the payback on this opportunity?

139. How would you assess each of these options?

140. Which of these potential solutions would have the greatest impact? Least Impact?

141. What does this option do for you that the others don’t?ANY QUESTIONS???

Building A Value Propostion

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