Chase Get Your Price!

Value-Based Strategy for Capital Equipment Companies
1. Auflage 2016
ISBN: 978-1-4835-6581-1
Verlag: BookBaby
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 222 Seiten

Capital equipment professionals, do you want more customers at higher prices? Are your customers treating your products like commodities? Are your competitors' getting more aggressive? Do you crave more persuasive marketing messages? Does your sales team need help defending prices? If you answered yes to any of these, then this book is for you. Get Your Price! is the first-ever book that shows you how to implement a value-based strategy in a capital equipment company. You'll learn how to avoid the commodity trap, create products with compelling value propositions, and secure value-based pricing.

Autoren/Hrsg.

Chase, Michael

Leseproben

2. Why You Can’t Sell Value You’re the go-to guy for specification responses, the most wanted for customer meetings, and you’re one-stop shopping for product-development status. There’s nothing about the product that you don’t know. Specifications, configurations, history, installed base, cost, pricing, roadmap, and production schedule are all known by you. The marketing materials you’ve provided the sales force are exquisite. Every key feature and benefit is artfully presented with plenty of data to back it up. You listen closely to customers when they tell you what features are most important to them, and you make sure that those features find a home on your product roadmaps. You’ve taken the title of product manager to heart and have committed yourself to becoming the ultimate product expert. You’ve used that talent to equip the sales force and drive product strategy. But there’s a big problem. Your salespeople are getting killed during price negotiations. Your CEO is all over you for poor margins and keeps harping, “You’re not selling value!” You’re frustrated. You know what they want, but you’re not sure where to start. Roadmap to Selling Value First, you need to understand the road you must take to arrive at the wonderful place where value can be sold. It’s a four-step process. See Figure 1. Figure 1: Roadmap to selling value Defining value is pretty straightforward in the capital equipment world. Here, your customers buy from you only because they believe that by buying your product they will earn more money than if they didn’t buy from you. The degree to which your products make more money for your customers is your value. In our context, value is a financial expression. Creating value is turning that understanding into a product that will produce more financial return for your customers than will your competitors’ products. Once you have that product, the next step is to market it. You need to create demand based on the product’s unique value at a price that compensates you for the extra profit your customer will earn by owning it. Once you have the first three steps done, selling value should be easy. You have the product. You have a cold-cash value proposition to defend pricing. All that remains is to hold your ground when the negotiations begin. It seems simple enough. So what’s the problem? Well, as with solving almost any problem, you need to start by diagnosing your current condition. Once you have a handle on that, you can chart your course for improvement. Rate Your Value-Selling Capability You can quickly assess your organization’s value-selling capability by assessing your sales-and-marketing approach against these three attributes: 1. Perspective 2. Dealing with the competition 3. Pricing To do this, read the descriptions under each of these attributes below. Then, select the one that best describes your organization’s sales-and-marketing condition. Your score for that attribute is the number associated with the description you selected. Perspective 1. Your marketing materials speak in the language of your product and company. Very little of your content concentrates on the customer’s problem or the commercial outcome the customer obtains by owning your product. Your materials are often written in the first person. The words we and our show up more than you and your. 2. Your marketing materials demonstrate a real understanding of the customer’s problem and how your product will solve it. Sales-and-marketing materials are less about your product’s capabilities and more about how they improve your customer’s economic condition. Dealing with the Competition 1. Your marketing materials explain many of your product’s key features and benefits. But they do not contain direct comparisons to the competition. 2. Your marketing materials focus on the key advantages that you have over the competition. These materials contain direct, head-to-head comparisons between you and the competition that point out these advantages. 3. Your marketing materials make direct, head-to-head advantage comparisons between you and your competition. You make a direct connection between those advantages and the economic value they produce for the customer. Pricing 1. No direct connection between product performance and price is apparent. 2. Pricing is related to your relative performance advantage or disadvantage vs. the competition. 3. Pricing is directly related to the economic value your product produces for the customer. How to Use Your Value-Selling Rating Tally up your organization’s score for the three attributes. Then, correlate it to the value-selling capability assessment below: =4 = Level 1: Features for a price 5–7 = Level 2: Advantage for a price 8 = Level 3: Value for a price At level 1, there’s no direct connection between your product’s capability and price. When selling at the “Features for a Price” level, the probability of achieving value-based pricing is very low. Selling and marketing at level 2 improves your potential for achieving value-based pricing. Here you are at least taking into account your competitive position. However, you still cannot be sure that your prices reflect your product’s value because you are not relating your price to the economic value that you provide your customer. That brings us to level 3, the highest value-selling capability level. At this level, you are selling a value advantage for a price. Your price is directly connected to the superior economic outcome your customer realizes from buying your product. Your value-selling capability is directly related to your understanding of your competitor’s capability and your customer’s business. See Figure 2 below for the relationship between your value-selling capability level, expertise domains, and the outlook for achieving value pricing. Figure 2: Outlook for achieving value-based pricing If you scored at level 3, you must clear one more hurdle before you achieve a true “Value for a Price” rating. Do you actually achieve value-based pricing? If your answer is yes, congratulations. If your answer is no or “I don’t know,” your level 3 rating is a false indicator. Even though your market messaging follows a value-based framework, you have a defect somewhere in your value proposition. It’s likely one or more of the following: • You haven’t correctly defined the customer or customer value. • Your assessment of where you stand vs. the competition is flawed. • You haven’t developed the capability to substantiate value during the sales process. The Secret to Selling Value The secret to successfully executing the four steps on the value-selling roadmap is having the same level of expertise about your customers and competitors as you do about your own company and products. Understanding exactly how your product produces profit for your customer requires intimate knowledge of your customer’s business. Making sure that your product truly produces more value than the competition’s product means knowing your competition’s product as thoroughly as you know the product rolling off your own shipping dock. Without this intimate knowledge of your customers and competitors, you risk creating products that don’t produce value for your customers and taking market positions that get blown out of the water the moment the competition attacks. The product manager who is the unquestioned guru on his own products but has only superficial understanding of his customers and competitors is not ready to help your company sell value. For a company to succeed at value selling, its product managers have to change their emphasis. Their attention needs to turn outward. They need to think of themselves as “customer” and “competitor” managers, not just product managers. It’s not easy. Your product information is usually at arm’s reach—not so for the same level of detail about your customers and competitors....