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Archive for the ‘Customer Value Proposition’ CategoryThe New Metric For Judging A Company’s SuccessThursday, August 18th, 2011  During a recent global branding study for PPG Industries Inc., B2B International developed a set of questions and a unique algorithm, which led to the creation of a new tool providing the market’s perception of benefits and price on brand. PPG Industries – the multibillion-dollar supplier of paints, coatings, chemicals, glass and fibre glass – found the tool so useful, that B2B International branded it the Net Value Score (NVS), and has since used it in a number of studies carried out for the company’s other Fortune 500 clients. The NVS is a metric that provides the market’s view on the perceived value offered by each company supplying a market. It can also provide the perceived value of a company’s different business units, indicating where the company’s value proposition is seen as the strongest and weakest. The NVS is based on a calculation that is arrived at through asking just three questions in a market research survey. For each supplier, questions are asked about how the supplier compares relative to other suppliers in the market on (i) its product and service benefits, (ii) its pricing, and (iii) its total value. The data are then run through the algorithm to result in the Net Value Scores. The tool illustrates the strength of a company’s brand relative to competitors, and indicates where more work is required to improve the level of perceived value – be it through better communicating certain benefits to specific market segments; better differentiating benefits so that they more strongly stand apart from those of competitors; or adjusting pricing so that prices are more in tune with the benefits offered. A company with an NVS which is significantly higher than others with which it competes will be one which enjoys a rising market share. The NVS can also change the way a company thinks. A supplier is very aware of the benefits offered by its products or services, but these benefits only resonate with the market if people recognise them. In other words, perceptions are shaped by communications. Companies can therefore increase the level of perceived value they are seen to offer by selling on value (such as lifetime cost) as opposed to price. This in particular refers to the sales force and distributors who frequently talk price instead of value. Patrick Kenny, Vice President of Corporate Marketing for PPG, states, “PPG Industries is fully committed to providing our customers with compelling value and so the NVS is a new metric that provides an ideal way to measure customer-experienced value. It is an excellent, adjacent metric to other popular customer advocacy scores that companies should embrace.” B2B International is currently building a comprehensive databank of industry-specific Net Value Scores for benchmarking clients against other companies (in both similar and different industries), so that learnings can be shared from those who are performing strongly on perceived value. Director Julia Cupman, Head of the company’s North American operations, states, “The Net Value Score is an example of our commitment to thought leadership. We hope more companies will recognise the importance of measuring perceived value and that they start benchmarking their performance with the NVS. One should not underestimate the power of this simple tool in providing critical metrics and research findings, which if acted on effectively, can lead to significant business success.” To learn more about B2B International’s Net Value Score, please visit: Net Value Score Website www.netvaluescore.com Net Value Score White Paper: The Metric For Judging A Company’s Success Don’t give your customers a product or service, give them an experience they will never forgetSunday, August 30th, 2009
In recounting a recent – and somewhat memorable – taxi journey, Matthew Harrison is reminded of how a product or service can really differentiate itself from the rest of the pack by becoming an ‘experience’. I must confess to being one of B2B International’s less tolerant air travelers. The 6 hours I spent imprisoned in a 747 on a Shanghai runway…the 7 course ‘meal’ served up by the good staff of Aeroflot (6 of the courses were salmon)…my interrogation by a wild-eyed immigration goon at Newark Airport…the dimwit who confiscated my cases at Rochester because I allowed said cases to complete two laps of the carousel without collecting….these and other events have been crow-barred into company folklore by my incessant moaning. As a result, it is a relief both to me and to anyone unfortunate enough to be my travel companion when my flight touches down, and all that remains is to catch a cab to my final destination. A couple of weeks back, my colleague and I returned from Pittsburgh to New York in good spirits. The journey had gone ahead without a hitch, our meeting had concluded successfully, and both of us looked forward to the weekend. We drank a couple of beers and took the opportunity to examine the front page of the Wall Street Journal, which was reporting on Bill Clinton’s liberation of two journalists from the clutches of Kim Jong Il. Oddly, the official photograph to mark the event (see below) featured a rather kitsch 1980s wall frieze, which had been dropped onto a Tellytubbies set and gate-crashed by the cast of Madame Tussauds.
To return to the matter in hand, my colleague and I had forgotten that the efforts of the airline industry to make the general public’s life a misery extend far beyond aircraft cabins and indeed airport walls. Whatever medicine the world’s aviators take to ensure unrivalled levels of inhospitality and indolence, it would appear that the New York taxi industry has been raiding the cabinet. The warning signs that B2B International was to experience a nadir in land travel were there from the beginning. The passenger window of the cab was jammed open and the back seat about as comfortable on the posterior as a broken Rubik’s Cube. My colleague and I had naively taken the driver’s rather blank grin upon being asked to drive to White Plains as proof of his willingness to take us there, rather than his inability to find his own backside in the bath with both hands and a personal assistant. Within 2 minutes of leaving the taxi rank, and well inside the airport perimeter, we drew despondently to a stop underneath a graffiti-speckled flyover. - “Where you go?” Our driver lurched into gear, trying but failing to convince us that he had the slightest idea of where he was going. Three laps of the airport’s inner perimeter and 25 minutes later, we finally find our way onto the open road and were heading north. Disconcertingly, the driver had been steering with one finger, most of his other 9 digits clasping a telephone, through which he received nonsensical directions from someone who also had no idea where we were or where White Plains was. Over the ensuing 2 hours we stopped and asked, we shouted at passers-by, we waved, weaved and guessed our way through the streets and back yards of Southern New York, before finally, mercifully, we arrived in White Plains city center. I dragged my weary body out of the cab and headed for home. And as I trooped through the streets I was hit, not by a Friday night drinker but by a kind of Eureka moment. I was happy! In fact I was exhilarated. I HAD ENJOYED THAT TAXI RIDE. The speed. The bumps. The danger. The nausea. The sense of the unknown. The laughs. The memories. I had experienced an adventure that evening – an adventure I am recounting to you now. An adventure I will recount to my children, and my children’s children. That useless man, that anti-navigator with whom I had shared two hours of my life had (unwittingly) met a need that few suppliers can meet. Rather than sell me a tangible product or service, this disorientated scatterbrain had given me a holistic experience that will live with me until my dying day. The savvy marketer recognizes that providing a simple product or service puts the organization on a route towards low prices and commoditization. In order to add value, and therefore raise prices and profit, it is critical to look beyond the tangible. In other words, sell a concept and provide an experience. Our taxi driver, of course, made two mistakes: firstly the basics of product and service were so intolerable that most customers would be uninterested in any ‘experience’ related to these. Secondly, he sold us a basic service (to drive us home) meaning that the thrill-packed tourism experience we endured was unexpected and therefore not paid for. So, I will not pretend that our driver’s marketing strategy was flawless. However, I thank you, Mr Clueless of LaGuardia Airport Taxis, for the memories. Your product is substandard, your service despicable, and your attentiveness to my needs non-existent. But, for a mere $90 (plus tip and tolls), you gave me an experience that was both thrilling and addictive. You, Sir, in one (and only one) respect, are an inspiration to all marketers. The True Value of ValueMonday, April 20th, 2009
A fair number of articles that have been published lately slam the current over-use by marketers of the word ‘value’. Critics claim that ‘value’ is at risk of becoming synonymous with ‘reduced’, ‘cut-price’ and plain old ‘cheap’. Value should also be associated with quality. A product that offers true value is more than just an attractive price; it should meet a customer’s real needs, and go that extra mile. Customers are tending to watch what they spend at present, but if all companies are offering ‘value’ by simply reducing their prices, they will all end up competing on a level playing field. Look to differentiate your product or service in some way. Offer some evidence and reassurance to your customers that they are buying something that really does offer value for money. For example, auto manufacturer Hyundai is winning plaudits at the moment for its Hyundai Assurance program. With this program, anyone that buys a new car is guaranteed that if they lose their job, Hyundai will make their payments for 3 months. If they are still facing financial difficulties after that 3-month period, they can return the car (*subject to various conditions, of course – but you get the idea). In this way, the company is acknowledging the current economic climate and the fears of some of its potential customers, and offering them greater benefits and extra value. Customer Value Propositions Made EasyMonday, March 9th, 2009
One of the most important and yet one of the most badly carried out tasks by business to business marketers is the development of a good customer value proposition. The term customer value proposition or CVP is one of those dreadful inventions of the last decade. In the past we had products and services with unique selling propositions or USPs but that didn’t seem to be simple enough for our developing profession. The problem with customer value propositions is that most people can’t help themselves when they create them. They feel honour bound to list each and every feature and benefit of the offer and, as a result, they weaken the appeal to the person they are aimed at. Instead of the proposition being clear, it becomes fuzzy and listless. Too many features and benefits are too much for recipients to cope with. What has happened to the big hairy idea — the single proposition that makes an offer different, desirable and defensible? In the following article by Mike Southon, and published in the Financial Times over the weekend, he describes how to create an elevator pitch (a CVP by any other name) and instead of using the three Ds (distinctive, desirable and defensible) , he suggests the 5 Ps (pain, premise, people, proof and purpose). Arguably it is a more complicated version of the “3 D formula” but there are some good points for us to ponder on.
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