Customer Value Proposition

Ankur LalCEO

Infozech Software

Problem # 1

Under pressure to keep costs down, customers may only look at price and not listen to your sales pitch.

Help them understand – and believe in – the superior value of your offerings

Problem # 2

Customer managers, increasingly held accountable for reducing costs, don’t have the luxury of simply believing supplier’s assertions

Example – Value proposition

A leading supplier of resins used in architectural coatings

Initial value proposition - stricter environmental compliance

Minor Value proposition – coating could be dried faster

Based on the increased value, he sought a 15% increase in price

Very low customer interest

Value Proposition - Types

Consists of

Customer Question

Requires Potential pitfall

All Benefits

All benefits customers receive from offering

Why should our firm purchase your offering

Knowledge of own market offering

Benefit assertion

Favorable points of difference

All favorable points of difference a market offering has relative to next best alternative

Why should our firm purchase your offering instead of your competitors?

Knowledge of own offering and next best alternative

Value presumption

Ref. Customer Value proposition, HBR, March 2006

Value Proposition - Types

Consists of

Customer Question

Requires Potential pitfall

Resonating Focus

The one or two points which will deliver the greatest customer value

What is most worthwhile for our firm to keep in mind about your offering?

Knowledge of how own market offering delivers superior value to customers, compared to next best alternative

Customer value research

Ref. Customer Value proposition, HBR, March 2006

Example – Supplier of Resins

Customer Value research provided several insights Realization – coatings was only 15% of cost Realization – labor is the largest cost component Resonating Focus – increased productivity through

faster time to Dry allowing two coats in an 8 hour shift. Greater acceptance to higher price

New Value proposition – increased productivity Enthusiastic customer interest at 40% premium