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