Value Added Selling

8/3/2019 Value Added Selling

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October 2008

Value

Proposition

www.stankirkwood.com

(Make a comment)


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Customer ExpectationsBusinessBlueprints

Copyright: www.stankirkwood.com

What does every customer wantwhen making a purchase?


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What are you looking for when you goto buy a car, a television, computer,house,.?


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You wantthe greatest return

on your investment


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What is

Return on Investment

from a customers perspective?


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Value PropositionBusinessBlueprints


Value Proposition


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What the customer gets for

what the customer pays .

Wikipedia


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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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How do customers define

Value Proposition?


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Good, Fast and Cheap


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How did suppliers meet

customer expectations?


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Good, Fast and Cheap: Pick Two

*http://www.sixside.com/fast_good_cheap.asp

*


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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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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


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


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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Good, Fast and Cheap

-

Only three of the four components of theValue Proposition

There is one more component


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Desirability


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DesirabilityBusinessBlueprints


Desirability in a House:

- May be style

- May be landscaping

- May be number of bathrooms

- May be open floor plan


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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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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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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


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


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


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


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


Customers use your products andservices. Which customers will youappeal to?

Customer Rankings - Pie

Police

Fire

EMS



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BusinessBlueprints Product Performance


Your products and services must have acompelling Value Proposition.

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Std Duty Heavy Duty Turnout Storage

Products



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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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Value Added Selling

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