value added selling
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October 2008
Value
Proposition
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(Make a comment)
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Customer ExpectationsBusinessBlueprints
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What does every customer wantwhen making a purchase?
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Customer ExpectationsBusinessBlueprints
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What are you looking for when you goto buy a car, a television, computer,house,.?
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Customer ExpectationsBusinessBlueprints
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You wantthe greatest return
on your investment
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Customer ExpectationsBusinessBlueprints
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What is
Return on Investment
from a customers perspective?
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Value PropositionBusinessBlueprints
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Value Proposition
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Value PropositionBusinessBlueprints
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What the customer gets for
what the customer pays .
Wikipedia
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Value PropositionBusinessBlueprints
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A business or marketing
statement that summarizes why a
consumer should buy a productor use a service.
Investopedia
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Value PropositionBusinessBlueprints
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How do customers define
Value Proposition?
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Value PropositionBusinessBlueprints
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Good, Fast and Cheap
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Value PropositionBusinessBlueprints
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How did suppliers meet
customer expectations?
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Value PropositionBusinessBlueprints
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Good, Fast and Cheap: Pick Two
*http://www.sixside.com/fast_good_cheap.asp
*
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Value PropositionBusinessBlueprints
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Good, Fast and Cheap, pick two -
If you want Good and Fast it will not be Cheap
If you want Good and Cheap it will not be Fast
If you want Fast and Cheap it will not be Good
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Value PropositionBusinessBlueprints
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Good, Fast and Cheap, pick two
Imagine if you are a supplier who can make all
three come true at the same time?
You will have the compelling Value Proposition andyou will win in the market place
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Dell ComputersBusinessBlueprints
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Michael Dell net worth $17.3 billion
Offered computers to customers:
Good quality on par or better than competitors Fast customize PCs delivered in days
Cheap equal to or lower than competition.
Became most profitable supplier of PCs in world
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Wal-MartBusinessBlueprints
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Wal-Mart from one store in Arkansas to: 2,055,000 employees
$397 Billion in annual sales
Why?
Good quality on par or better than competitors
Fast product available on shelves
Cheap equal to or lower than competition
Became largest corporation in world
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Value PropositionBusinessBlueprints
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Good, Fast and Cheap
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Only three of the four components of theValue Proposition
There is one more component
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Value PropositionBusinessBlueprints
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Desirability
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DesirabilityBusinessBlueprints
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Desirability in a House:
- May be style
- May be landscaping
- May be number of bathrooms
- May be open floor plan
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DesirabilityBusinessBlueprints
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Desirability in a Car:
- May be styling of car
- May be options
- May be speed
- May be gas mileage
http://www.google.com/imgres?imgurl=http://www.defence.gov.au/news/raafnews/EDITIONS/4621/images/common%2520pages/18-car%2520interior.jpg&imgrefurl=http://yovegami.livejournal.com/&h=450&w=600&sz=52&tbnid=DEJcQZkKTSwJ::&tbnh=101&tbnw=135&prev=/images%3Fq%3Dcar%2Binterior&usg=__87M23dhhYvsA8niaJaOBEEpaDwA=&sa=X&oi=image_result&resnum=6&ct=image&cd=1 -
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DesirabilityBusinessBlueprints
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If a car is: Good - has few problems
Fast - available immediately
Cheap - affordable
But
It is ugly
Will you buy it?
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DesirabilityBusinessBlueprints
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Not if you can help it.
Your decision will dependon how you view the fourcomponents of the Value
Proposition.
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Relative ValueBusinessBlueprints
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Weight of Value Proposition (VP) Components depends on customer segment
Quantify the importance of each Value Proposition Component
VPComponents
Car
All thingsequal
Collegegraduate
Family offive
EmptyNester
Desirability 25 10 25 50
Price 25 70 25 15
Quality 25 15 40 25
Lead Time 25 5 10 10
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Value Proposition AttributesBusinessBlueprints
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Value Proposition Components are made up of VP Attributes which can
be further decomposed into VP Elements.
Component Attributes Elements
Desirability
Styling
Curved bumper
Mag Wheels
Spoiler
OptionsLeather Seats
GPS
Sun Roof
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Management by DesignBusinessBlueprints
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The key to the Value Proposition effort:
Defining and quantifying the Value Proposition so
that you can measure and manage it.
DQM = Define, Quantify, Measure and Manage
You are creating a critical path for your company
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Management by DesignBusinessBlueprints
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Defining and quantifying the Value Propositioncreates a critical path for your company
Provides clarity of purpose
Identifies where to focus resources
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BusinessBlueprints Market Performance
Focus on what is Important!
Which Market will you go after?
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K-12 Universities First Responder
Market Importance
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BusinessBlueprints Customer Performance
Focus on what is Important!
Customers use your products andservices. Which customers will youappeal to?
Customer Rankings - Pie
Police
Fire
EMS
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BusinessBlueprints Product Performance
Focus on what is Important!
Your products and services must have acompelling Value Proposition.
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Std Duty Heavy Duty Turnout Storage
Products
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Value PropositionBusinessBlueprints
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Several important ideas to remember: You should be intentionally designing yourproducts and services based upon the ValueProposition
The market place establishes the base line forValue Proposition
The market place keeps changing which means
the relevance of every design keeps changing All designs become obsolete over time
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