Follow these steps:
- Discover What the Customer is Willing to Pay For. Notice I didn’t say “discover what the customer is willing to pay”.
- Hit All the Right Buttons. B2B buying decisions are rarely made by one person.
- Sell the Results, Not the Features.
- Never Stop Improving.
How do you create value for B2B?
Value Marketing & Value Selling In B2B Markets
- Decide who you don’t want to sell to.
- Sell outcomes, not products.
- Be clear on what the customer will pay for.
- Business buyers have emotions too.
- Be a storyteller.
- Target the highest decision-maker possible.
- Communicate the ROI of your proposition.
- Never bargain.
What is value in use B2B marketing?
The value proposition is basically defined as the benefits that somebody will gain from buying your product or service, minus the cost that you will charge them for it. It’s the value transaction that you are presenting them with.
How do we create value at the market place among so many competitors?
If you’re looking to boost your sales by winning new customers from other vendors, follow these seven steps to outshine the competition:
- Conduct competitor analysis.
- Adapt to your audience.
- Promote your USPs.
- Invest in digital marketing.
- Encourage brand advocates.
- Identify gaps in the market.
- Create brand loyalty.
What do B2B customers value?
It could be interpreted as the worth of that product or service. Customer value applies to both B2B services and products. So what exactly is customer value? It’s a perception of what a B2B product or service is worth to a customer versus the other existing alternatives on the market.
How do you create value?
Here are 5 steps you can take:
- Step 1: Understand what drives value for your customers.
- Step 2: Understand your value proposition.
- Step 3: Identify the customers and segments where are you can create more value relative to competitors.
- Step 4: Create a win-win price.
- Step 5: Focus investments on your most valuable customers.
How do you create market value?
14 Tips for creating value for customers
- Improve the buying process.
- Focus on brand perception.
- Get customer feedback.
- Make a unique product.
- Provide a positive experience.
- Prioritize quality over price.
- Identify your strengths.
- Adjust your marketing strategy.
What are elements of value?
“elements of value” that meet four kinds of need— functional, emotional, life changing, and social impact —and that, when optimally combined, increase customer loyalty and revenue growth.
What is value marketing strategy?
Value marketing — also known as customer-centric marketing— is centered on strategies that look to exceed the client’s expectations and fuel consumer loyalty to achieve customer success. Value marketing campaigns aim to turn customers into raving fans that help promote products and services with their positive reviews.
What methods estimate customer value?
Calculating lifetime customer value involves using a simple formula: (Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer). This will tell you what to spend over time to retain that customer.
How do I make my competitors stand out?
How To Stand Out From Your Competitors
- Phenomenal Customer Service. 33% of consumers say they will take their business elsewhere after a single bad experience with a company.
- Branding That Stands Out.
- Build A Strong Online Presence.
- Reward Customer Loyalty.
- Give Back.
How do you beat competitors in marketing?
How to Handle Competition in Business: 10 Tips to Beat Competition
- Learn How to Handle Competition in Business.
- Know Your Customers.
- Understand the Competition.
- Highlight Your Difference.
- Clarify Your Message.
- Ensure Your Branding Reinforces Your Messaging.
- Target New Markets.
- Look After Your Existing Customers.
How will you win against your key competitors?
5 Effective Ways to Beat Your Competition
- Find and then solve your customers’ pain points.
- Find a niche in the market via storytelling and specialization.
- Set competitive pricing.
- Change your business to stay ahead of your competition.
- Provide great customer service.
How do you measure customer value for B2B?
B2B CX Measurement Methods
- Surveys. Surveys are a classic method to gather customer feedback, but they need to be used properly.
- Check-In Calls.
- Paid Advertising.
- Website Engagement.
- Customer Satisfaction (CSAT)
- Net Promoter Score (NPS)
- Net Value Score (NVS)
What are two types of value creating relationships B2B?
We find that B2B relationships deliver value in four different forms, each of which can be indicated in a number of ways: 1) Personal value, indicated in customer retention and referral; 2) Financial value, expressed through increases in efficiency, share of business/wallet, share of market, and received price; 3)
What are the three value elements in business?
Value is equal to cash flow capitalized by, or divided by, “R” risk minus growth, “G.” That’s three things: cash flow, risk, and growth – that can be further simplified into value is equal to cash flow times a multiple.
Three Ways to Sell Value in B2B Markets
2. 1. A. Hinterhuber and T.C. Snelgrove, eds., “Value First Then Price” (London: Routledge, 2017); M. Bertini and O. Koenigsberg, “Competing on Customer Outcomes,” MIT Sloan Management Review 62, no. 1 (fall 2020): 78–84; and J. Keränen, A. Salonen, and H. Terho, “Opportun The article “Selling Value in Business Markets: Individual and Organizational Factors for Turning the Idea Into Action” by H. Terho, A. Eggert, W. Ulaga, and colleagues is available online at Industrial Marketing Management 66 (October 2017): 42-55.
Ulaga and J.M.
The Journal of Marketing, volume 75, number 6 (November 2011), pages 5-23, has an article by W.
Reinartz titled “Hybrid Offerings: How Manufacturing Firms Combine Goods and Services Successfully.” “Customer Value Propositions in Business Markets,” Harvard Business Review (March 2006): 90-99.
- Anderson, J.A.
- The paper “Value Merchants: Demonstrating and Documenting Superior Customer Value in Business Markets” by J.C.
- Kumar, and J.A.
- 5 (July 2011): 699-711; and K.
- Haas and colleagues, “A Solution Business Model” (Boston: Harvard
Value Marketing & Value Selling In B2B Markets
For business-to-business marketers in North America and Europe, the last decade has been particularly difficult to navigate. The global financial crisis, low-cost Asian competition, and the advent of internet marketing and commerce have made most markets more competitive than they have ever been, putting tremendous pressure on margins and reducing profit margins. Many firms have responded to these issues with resignation — an acknowledgment that prices would have to be decreased, margins will be stretched, and enterprises will be less lucrative as a result of these challenges.
- The fact that cheaper competition is more pervasive in B2B markets than ever before must be weighed against another trend in the other direction: the needs of B2B decision makers are becoming more sophisticated.
- The polarization of many business-to-business markets has occurred since 2007: the minority of price buyers is more price-focused than ever, while the bulk of the market – value buyers – is more discriminating than ever, with heightened demands based on service, brand, and consulting.
- In Western markets, sectors that were once dominated by product-based industries such as information technology and printing are now dominated by services.
- When it comes to very advanced requirements that were formerly considered distinguishing requirements, they are now merely hygiene aspects that must be met in order for a provider to even be considered for consideration.
- Because of this, savvy firms now have a bigger potential than ever before to differentiate themselves via the use of value marketing and selling techniques.
The 10 factors listed below demonstrate how to advertise and sell your offer based on value rather than price, and they can be applied to any b2b market environment.
Decide who youdon’t wantto sell to
- Business-to-business marketers are well aware that segmentation is all about matching different proposals to distinct groups of clients who have varying wants and preferences. Customer decision is made easier by segmentation. The fact that segmentation promotes choice for us as business-to-business suppliers is less well-known: the decision between who to do business with and who not to do business with is less well-known. Because marketing is defined as the lucrative satisfying of customers’ requirements, clients or segments who will not supply us with the margin we require should be excluded from the marketing mix. Customers have the right to grow more picky, and providers have the right to become more discerning as well. Building on extensive market research, the first and most important stage in determining which clients you desire to service is to define and analyze your segments in detail (including both market and financial analysis).
Sell outcomes, not products
- Marketing to consumers has long understood that selling results rather than things and their features is the most effective strategy for increasing profits. Sporting goods firms that used to offer sports shoes now sell visions of success or improved well-being, while perfume companies promote romance, elegance, or a combination of the two. Consumers place a far higher value on these outcomes than they do on the actual items that are used to attain them. Despite their objections, business-to-business consumers are searching for the same outcomes: a buyer of IT equipment may be looking for increased business efficiency
- A buyer of recruiting services might be wanting to buy corporate expansion. Successful B2B marketers ask themselves and their colleagues the question “What are we actually selling?” and then design their marketing and sales strategies to achieve these goals. It is OK to utilize product characteristics to support the outcome that is being marketed, but they should not be included as part of the message itself.
Be clear on what the customer will pay for
- Marketing to consumers has long understood that selling results rather than things and their features is the most profitable strategy. Former sports shoe retailers are now selling visions of prosperity or improved health
- Perfume retailers are selling romance, refinement, or a combination of the two. When it comes to consumer satisfaction, results are considerably more important to them than the specific items used to get there. Contrary to what they may claim, business to business clients have a common set of expectations for outcomes: a buyer of IT equipment may demand increased business efficiency
- A buyer of recruiting services may really be wanting to purchase business development. Marketers who know what they’re doing ask themselves and their colleagues, “What are we actually selling?” and base their marketing and sales strategies on the answers. It is OK to utilize product characteristics to support the outcome that is being marketed, but they should not be included as part of the overall message.
Business buyers have emotions too
- It is true that business-to-business clients are less frivolous than consumers and that their purchases are less noticeable than those made by consumers. Emotions, on the other hand, have a significant role in business-to-business buying choices. Risk aversion, respect, and patriotism are all sentiments that purchasers in various marketplaces experience, and they all indicate a psychological desire for reassurance that the seller shares the same values as the buyer and that the customer is making the correct decision in the purchase. For example, it used to be said that if you bought IBM, you would never be fired. According to product surveys conducted in most B2B marketplaces, the connection with the account manager is one of the most important factors influencing both supplier selection and client satisfaction. When it comes to b2b buyers in France, ‘being French’ is usually included among the top requirements, yet when it comes to engineering customers in China, being from a Western nation is often listed as a crucial criterion. Additionally, a new category of emotional need is emerging among business-to-business buyers – the need for ‘a future together’. This need is emerging in addition to the need for reassurance. The number of options accessible to business-to-business clients is growing, economic cycles are becoming shorter, and labor markets are becoming less stable. Parallel to this, a thorough understanding of cost-in-use and product life cost has emerged throughout time. As a result, consumers are increasingly looking for suppliers that can assist them in developing the next invention, entering a new market, or developing a new business model. In most business-to-business studies, ‘innovation’ and ‘collaboration’ are identified as critical requirements, yet both are frequently not well delivered.
Be a storyteller
- Business-to-business clients seeking outcomes demand a compelling, complicated, and diverse offer that includes features, goods, and services, as well as the ability to provide emotional fulfillment. Business-to-business marketers and salespeople must be able to effortlessly weave these components of the proposal together in order to create the ‘result’ they are seeking that is both defensible and compelling. The same fascinating tale must be communicated to multiple parties within the decision-making unit in a way that engages each of them in order for the story to be effective and persuasive. We must appeal to the “hot buttons” of both the technical buyer and the commercial customer while keeping coherence from beginning to end of the transaction. It is imperative that marketers and salespeople adopt the role of narrative chameleons, capable of clearly expressing complicated propositions to complex decision-making units, rather than hammering clients with a basic price/quality message.
Target the highest decision-maker possible
- It is critical to have a thorough grasp of the decision-making unit of the consumer before selling and marketing on value. In particular, it is critical to identify the most senior individual who will be able to assess the worth of the offer. When you target high, you boost your chances of closing a large transaction
- More significantly, decision makers in strategic positions are more likely to think strategically about the offer and, as a result, place a higher value on the offer. Because of the relevance of your product to your target customer’s strategic objectives, and the amount of its overall budget that the target customer spends with you, the matrix below can assist you discover who the most senior decision maker you can approach is likely to be.
Communicate the ROI of your proposition
- The ability to shift the discourse away from transaction price is essential for value marketing and selling. The return on investment should be discussed alongside the outcomes and advantages of the proposal. Suppose you are offering a more costly industrial pump than your competition, how much money do you think the client would save in downtime reduction? If you are in the business of offering marketing communications services, how much additional money do you anticipate generating and why? The majority of business-to-business acquisitions are conducted with return on investment in mind. To be effective, we must explain our proposals in measurable units and, if at all feasible, in financial terms. And we must do so in a way that is completely believable.
- In the long run, it is hard to advertise and sell an offer on the basis of its worth if you comply with requests to ‘make a deal.’ Customers’ perception of the value of your offer is reduced when you are willing to negotiate, and in business-to-business marketplaces, word spreads quickly when you are willing to bargain. Business-to-business marketers frequently excuse their readiness to negotiate by claiming that their product is perishable. Particularly relevant is this in the quaternary and quinary industries, which are effectively in the business of selling time. Negotiating hourly prices, on the other hand, is a certain method to make your whole proposal perishable and to spark a ‘race to the bottom’ in your particular market. The process of lowering your offer to reflect a decreased price is riddled with difficulties. A consistent set of advantages must be articulated in order for value marketing to be effective. Deconstructing this bundle into its component pieces undermines the coherence of the offer and eliminates the synergies that have been established by combining a number of complimentary advantages into a single package. The loss of these synergies lowers the perceived value of the product in the eyes of potential customers.
Remember that for most b2b buyers, it isNOTall about price
- The data acquired by B2B International over the course of 15 years demonstrates unequivocally that the average share of any market that prioritizes pricing over all other factors is 20 percent. Price is not the most important factor for 80 percent of business-to-business customers. In other words, salesmen who are only concerned with pricing are leaving money on the table in 80 percent of situations! Fewer than half of purchasers prioritize pricing in highly homogeneous areas such as utilities, according to research. Simply put, price-focused salespeople who only know how to sell – or only want to sell – on price are perpetuating the idea of the price-focused market.
Be prepared for a cultural change
- The most difficult aspect of value selling and value marketing is that it can only be accomplished if it is firmly ingrained in the corporate culture
- It must become part of the DNA of the organization. However, in most B2B markets, the small size of the target audience necessitates a labor-intensive marketing and sales process, with a strong emphasis on salespeople, volume, and short-term results. In addition, most B2B markets are very competitive. To achieve value marketing and selling, this strategy must be reversed, with marketers joining salespeople as the “heroes” of the b2b firm, profit replacing volume as the number one key performance indicator, and a longer-term view conveyed from the top of the organization.
Creating Competitive Advantage with High Value B2B Solutions — Institute for the Study of Business Markets
Steve HurleySolutions Insights, Inc. is a privately held corporation. Steve Hurley is a seasoned consultant and business strategist who specializes in assisting medium-sized and big B2B firms in integrating scattered assets and skills in order to fulfill the particular demands of their customers. Known as an industry leader in solution development and implementation, Steve has spent the last ten years collaborating with a diverse range of B2B companies on developing, implementing, and refining innovative methodologies and tools for better understanding customer problems and opportunities, aligning internally to build and market true solutions, and re-skilling sales forces to communicate the business value of their solutions to customers and prospects.
- Additionally, Steve has been teaching an MBA course on Solutions Marketing at the Hult International Business School in conjunction with his consulting work at Solutions Insights for the past three years.
- ITSMA’s solutions publications and resources, including the Solutions Roadmap, competence assessment guide, and sales training program, benefited greatly from Steve’s contributions.
- Steve earned his MBA at the Hult International Business School, formerly known as the Arthur D.
- His Bachelor of Arts degree was awarded to him by the University of Windsor in Ontario, Canada.
6 Steps to a Strong(er) B2B Value Proposition
The Solutions Insights, Inc., founded by Steve Hurley, is a privately held corporation. Steve Hurley is a seasoned consultant and business strategist who specializes in assisting medium- and large-sized B2B firms in integrating scattered assets and skills in order to fulfill the particular demands of each customer. Steve works with a diverse range of B2B companies, developing and implementing innovative methodologies and tools to better understand their customers’ problems and opportunities, align internally to build and market true solutions, as well as re-skilling sales forces to articulate the business value of their solutions to customers and prospects.
Additionally, Steve has been teaching an MBA course on Solutions Marketing at the Hult International Business School in conjunction with his consulting work at Solutions Insights for the last three years.
ITSMA’s solutions publications and resources, including the Solutions Roadmap, competence assessment guide, and sales training curriculum, benefited significantly from Steve’s contributions.
The Hult International Business School, originally known as the Arthur D. Little School of Management, awarded Steve his MBA with honors, and he graduated with honors from there. From the University of Windsor in Canada, he obtained his Bachelor of Arts degree in English Literature.
- Define the issue at hand
- Take into consideration the influence on your consumer. Examine the value propositions that your rivals employ. Experiment with different methods to make your message more clear. Make a draft of your B2B value proposition. Make a presentation to your team.
But first, let’s make sure we’re all on the same page on what a B2B value proposition is in the first place before we get into the step-by-step process.
What is a B2B value proposition?
A business-to-business value proposition is a statement that communicates the distinct advantages that a client will have as a result of employing your company’s product or service. This should be done in accordance with your overall brand positioning, and it should be consistent with your product or service messaging. In addition, a value offer should be as convincing as it possibly can be. While it might be valuable as a reference for the rest of your marketing and sales staff, the primary audience should be your consumers themselves.
- Your value proposition is the key to distinguishing your company’s product from those of its competitors.
- Complimenting this, Compt notes that it is straightforward and easy to use, which is something that not all organizations who provide employee incentives can guarantee.
- According to HubSpot, 69 percent of B2B organizations offer value propositions, which should be taken into consideration.
- Even more crucial, you need a compelling value offer if you want to outperform your competition and attract more clients.
6 steps to a strong(er) B2B value proposition
To get you started, let’s go through the six-step process of creating a unique, compelling value proposition, regardless of whether you’re beginning from scratch or not.
1. Define the problem
You are aware that your product provides a solution to a problem. Compt, a simple-to-use employee benefit platform, saves time and sanity while while enhancing employee morale. The use of an all-in-one platform such asKlaviyo, which provides all of the tools necessary for running multi-channel marketing campaigns, makes establishing an ecommerce business much easier. If you want to effectively communicate the value of your service, you must first describe the problem that it answers. Now, the problem does not necessarily have to be caused by a damaged or missing piece of equipment.
The difficulty is that, in most circumstances, you’ll have to utilize numerous technologies to set up ecommerce email marketing, social media marketing, and listening.
It’s possible that your situation is similar.
Consequently, we proceed to the following step:
2. Consider the impact on your customer
One item is the answer that your organization provides. However, there is more to it. Another consideration is the influence that your solution has on your consumer. Consider the social media management tool Hootsuite. If I’m looking for a platform that allows me to plan social media postings ahead of time in a centralized location, Hootsuite is the answer. It is important to note that the usefulness extends much beyond the capacity to plan tweets. What it is, is the ability to quit spending time hopping between tabs and instead spend more time crafting better social copy.
That is a significantly greater and superior advantage.
However, conversing with your consumers is preferable.
If you are unable to check in with customers directly, try contacting your customer service or success team for assistance.
Given the fact that they’ll be working directly with your consumers, they’ll be able to provide insight into the genuine benefits that your customers are already most enthusiastic about.
3. Check out the value propositions your competitors use
What your firm provides is one thing, but there is more to it than that. Another consideration is the influence of your solution on your consumer. Consider the social media management platform Hootsuite. For me, Hootsuite is the go-to application if I want to be able to schedule social media postings ahead of time in one convenient location. Although it is possible to schedule tweets, the usefulness goes well beyond that. Instead of wasting time moving tabs, you’ll be able to spend more time crafting more effective social copy.
The advantage is far greater and more significant in this case.
Even better, though, is to speak with your consumers.
Try checking in with customers through your customer support or success team if you are unable to do so directly.
4. Try out tools to clarify your message
Following a thorough understanding of the problem, its implications, and the competitive environment, it is time to begin defining your message. Fortunately, there are tools available to assist you in this endeavor. The Harvard Business School offers three critical questions to ask yourself in order to determine your value proposition:
- Which types of consumers do you intend to serve? (Or: Which types of clients do you cater to?) What requirements are you planning to meet? (Alternatively: Which needs do you meet? )
- What relative pricing will give acceptable value for customers while still allowing the organization to maintain acceptable profitability? In other words, does the relative pricing of your solution give acceptable value for clients while also providing appropriate profitability for your organization?
All of these questions will prompt you to articulate precisely who you’re assisting, how you’re assisting them, and why your offering has an advantage—all of which will be beneficial to have nailed down before developing a value proposition and distributing it to your teams for distribution to customers. When I’m writing, I find that visually mapping out what I’m working on helps me figure out the structure and the goal of what I’m writing. When creating (or rewriting) your value proposition, you might want to consider using a tool like Strategyzer’s Value Proposition Canvas, which is comparable to what you’re looking for.
This picture is a fantastic tool for identifying your moving elements and getting started on crafting your value proposition, which brings us to the following phase.
5. Draft your B2B value proposition
Take note of the verb used in this stage. It is not necessary to write your value proposal or confirm your value proposition; it is sufficient to create your value proposition. This should be a multi-step process in which you create, workshop, and edit until you have a killer value proposition that is compelling to your target audience. What is the best way to go about it? Make use of a template to get started. Thanks to Daniel Nilsson for the tip. This template is straightforward and to the point, and it will assist you in condensing all of the concepts from the preceding phases into a single, clear, and brief statement.
- What is the next step?
- Then present your findings to your team, do a session, and try again.
- Your value offer should be easily distinguishable from the competition.
- Make certain that your statement is as well.
Is your messaging fun and interesting to read? Make certain that your value proposition is as well. As a result, your value proposition is ready to be used by everyone in your organization when talking to prospects and customers, which brings us to the final phase in the process.
6. Share with your team
If I’m the last person of the team to receive campaign or product messaging—or, even worse, if I discover that there has been an updated message map that everyone else has been using for months—I feel quite upset. FOMO? No, not at all. The fact that you’re working without the same knowledge as someone else is annoying since alignment is so crucial. And, in this particular instance, it is easy. All that remains is for you to communicate your B2B value proposition with your team as soon as it is complete.
This information will be used to drive marketing copy, sales interactions, and even customer service calls.
Use your B2B value proposition to win over prospects
The effort required to develop a compelling value proposition that stands out from the competition is significant; yet investing the time to do so will benefit your product marketing—and ideally your bottom line—in the long run. A compelling value proposition can assist you in ensuring that your employees are all on the same page regarding the benefits of your product and that your consumers are all enthusiastic about the solution you’re giving.
Three Steps to Creating Value from B2B Discounts
When it comes to business-to-business industries, discounts are the most important marketing investment a firm can make, accounting for up to 30 percent or more of total sales. Companies, on the other hand, frequently fail to make this critical investment in a strategic manner. Discounts do not provide the value that they could if there were clear and effective principles in place to govern them. Even worse, they frequently detract from the value of a property. According to our observations, the vast majority of B2B enterprises fit into one of two categories.
- The lack of price differential that results as a consequence leaves a lot of money on the table since it does not reflect variations in customers’ willingness—and ability—to pay.
- Flexibility in discounting makes appropriate in some situations; nevertheless, flexible discounters frequently fail to assess whether they are rewarding value-creating activity while offering discounts.
- The most innovative 20 percent of businesses take a new approach, which we refer to as value-based discounting strategy.
- Everything from putting a standing order, which gives the benefit of a steady pattern of demand to allow for optimal production, to extending a period of additional time to allow the seller to complete an order, which reduces the extra cost of rush tasks, can be considered.
- If a competitive market is in place, it makes sense to provide additional discounts to major customers who have a substantial amount of negotiating power, as assessed by criteria such as competitive positioning and the level of product differentiation.
- Companies that use value-based discounting might see an improvement in EBIT of between 1 and 4 percentage points within 18 months, according to our experience.
- Nonstrategic discounting can manifest itself in a variety of ways.
When clients request larger discounts, they are more likely to obtain them.
Companies lose out on a significant amount of value as a result of activities like these.
Large orders were previously rewarded with bigger discounts, as was the case in the past.
These uncommon but nevertheless highly personalized orders posed significant hurdles in the manufacturing process.
In spite of the increased capacity, delivery times remained excessively lengthy and unpredictable.
In reality, they sabotaged the worth of something.
Following the implementation of the new policy, clients were entitled to discount only when they provided the firm with predictable demand.
However, we have discovered that by implementing the appropriate value-based discounting approach and ensuring that discounting regulations are effectively implemented, organizations may indeed alter the laws of the game.
Create a discounting approach based on the most important sources of value.
In order to support value-creating behaviors, we urge that businesses think carefully about the behaviors they wish to encourage, asking questions such as, Do we really want to reward this huge one-time order?
Is this channel generating enough value for our organization to justify its existence? In what ways do we actually grasp what drives a person’s bargaining power? The following are some common instances of customer conduct that adds value to the business:
- Making the switch to higher-margin items
- Making use of sales channels that are congruent with the seller’s development goal, such as online channels or channels that have lower customer-service expenses. Committing to a standing order or acquiring equipment that ensures future sales and consistent demand is a good investment. Developing a preferred-supplier relationship that includes strategies such as advance ordering, collaborative attempts to manage costs, and harmonized procedures
- Accepting the offer to act as a reference for prospective consumers
- Providing information that aids in the refinement of products and services
- Establishing logistics plans, such as delivery to a central warehouse, that save operational expenses. The ability to lower the relative cost of serving a customer—for example, by generating huge sales volumes without necessitating considerable sales resources
In order to develop this type of discounting strategy, it is necessary to transform one’s mentality from viewing discounts as a necessary expense of doing business to viewing them as a strategic and purposeful investment. Choosing which customer behaviors and attributes to reward should be done with the same rigor as deciding whether to establish a new factory or acquire a competitor—and it should involve representatives from marketing, sales, operations and finance. After all, the amount of money at risk is likely to be comparable.
Establishing value-based discounting policies and procedures.
This stage involves organizations applying the insights gained in the previous step to determine the categories of discounts they will give and the behaviors associated with them, as well as the relative magnitude of the discounts they will offer.
- For each source of value, only one sort of discount should be applied. Example: If your organization wants to ensure that orders are placed in a consistent pattern, it should offer precisely one discount type that rewards this behavior, such as a standing-order discount. Reduce the number of different discount kinds available to each consumer in order to maximize their impact
- Ascertain that the investment required for each discount type exceeds a reasonable minimum level for the consumer
- Make certain that the amount of money spent on each discount type is proportional to the benefit received by your organization. Maintain consistency in the sorts of discounts you provide to clients within a specific channel. Customers who are similar in nature should be treated similarly.
For each source of value, only one type of discount should be set. Example: If your organization wants to ensure that orders are placed in a consistent pattern, it should offer just one discount type that rewards this behavior, such as a standing-order discount. Customers should only be offered a limited number of different discount categories, in order to maximize their impact. Ascertain that the investment required for each discount type exceeds a reasonable minimum level for the client; and Take care to ensure that the amount of money spent on any form of discount is proportional to the benefit received by your organization.
Customers who are similar in nature should be handled similarly.
Define Your Value Proposition for B2B Marketing Success
One of the most difficult difficulties facing CMOs today is determining and communicating the value and distinctiveness of their goods to prospects in an effective manner. According to a recent survey done by The MHI Research Institute, the “inability to deliver value messaging” continues to be the most significant impediment to achieving sales success. I’ve learned over the course of my career, which has included working with hundreds of emerging-growth companies over the past two decades, that this challenge is still the #1 most difficult thing for B2B marketers to define – despite the fact that it represents one of the most significant obstacles to improving their company’s bottom line.
- Maybe this is due to the fact that many executives in smaller and mid-sized businesses have deep roots in technical competence and find it extremely difficult to put themselves in the shoes of a prospective consumer.
- Sometimes the actual value of a new service or product is not immediately evident to both the consumer and the seller until after it has been completely implemented and tested.
- This is something that everyone, not just sales and marketing, has to be aware of.
- The Definition of the Value Proposition As a result, what exactly is a value proposition?
- The value of your items is what the buyer receives as a result of purchasing them.
- So, how can you figure out what this may be?
- In order to convey your value, you must first have a thorough understanding of your customer’s requirements and the reasons for which they are utilizing your product.
Consequently, be certain that you understand which one(s) you are targeting and that the messaging you develop is relevant to them both now and in the future.
Examples include return on investment (ROI), cost savings, and improvements in the efficacy and efficiency of the customer’s operations.
As well as understanding your target demographic, you must also be aware of the buyer personas they represent and the issues that keep them awake at night.
According to research, consumers purchase two-to-three times more quickly in order to alleviate discomfort.
What Makes You So Special?
You don’t have to be the greatest at everything; you simply have to be the best at something that matters to your target clients.
It takes time and effort to develop compelling value propositions in any type of organization, and we feel that public relations is often the gatekeeper in terms of helping to define and deliver your message.
Do you require assistance in developing your value proposition?
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Competitive B2B positioning strategies to show your value proposition
After you’ve decided on your B2B marketing plan and received buy-in from the executive team, you’ll want to have a thorough grasp of your company’s unique assets and advantages. Markets are a competitive environment. Many goods are designed to tackle problems that are similar for clients. If you are unable to distinguish yourself from your immediate competition, you will be viewed in the same way that they would be viewed. Making a statement and claiming a certain audience or niche is a potent B2B positioning technique that can be implemented quickly.
Our approach helps our customers understand where they are in the market – and how they should be talking about themselves – in order to better align their organizations with their market positions.
Best, Better, Only Exercise
Despite the fact that it appears to be an easy process, most people are astonished by how many businesses continue to make blunders in this area. Using this framework, your team will be better able to identify the aspects of your product or service to emphasize when placing yourself against your competition. It’s a critical component of developing your messaging and outlining the pillars of your value proposition strategy.
Consider some of the reasons why clients come to you for a solution; what are some of the things that your firm does really well that you are glad to mention? Consider the following scenario: you’re meeting up with an old buddy whom you haven’t seen in several years, and you bring up your firm. You’d probably say something like “My company is wonderful because XYZ,” but how does it sound? It’s vital to remember that this part doesn’t necessarily have to be unique compared to your competition, but it should be distinctive enough that you’ll be glad to display it.
Apple excels at developing goods that are durable and of excellent quality for consumers.
We’re now bringing in our rivals. What exactly is it that we do that no one else in the market can match? According to this analogy, there are many awards given out on Oscar night, but just a few categories that the entire world is interested in, which makes you the brightest star on the red carpet that night. Using a linear scale from 1 to 10, with 10 being the highest level of excellence in this particular feature of your product, identify the attribute that will consistently place you above your competition.
This is something that they perform significantly better than the competitors, despite the fact that others are still capable of doing so.
The point at which we truly distinguish ourselves from our competitors is here. In your opinion, what is the single most important thing your organization can accomplish that no one else is doing in the market? This will serve as the foundation for the pillars of your value proposition. The fact that not every organization will have a “only” is natural, and the fact that they will have to position themselves properly is expected. Having between two and three is the perfect quantity of people.
B2B Positioning Matrix
Assuming you’ve already used the framework to establish your company’s finest qualities and how they compare to those of your competitors as a whole, it’s time to take your positioning plan a step further by developing a positioning strategy for each of those traits. Using the results of the preceding exercise, narrow down the output into a handful of characteristics with which you may compare yourself to your competition. If you enjoy sports analogies, think of positioning your firm as putting it in a place on the basketball floor where you can receive the ball and score.
However, if there are no defenders in close proximity to you, you greatly boost your chances of scoring.
For those who aren’t fans of sports analogies, another approach to think about positioning strategy is to focus on your company’s unique assets and advantages.
Due to this, many businesses have become lost in the crowd, vying for the same amount of advertising bandwidth, and competing on the same variables.
Choosing the right B2B positioning vectors
The author of “This is Marketing,” Seth Godin, asserts that if you try to please everyone, you’ll wind up pleasing no one at all. To the contrary, according to Seth, it is vital to narrow your target market down to your “Minimum Viable Audience” (which is a spinoff of the term “Minimum Viable Product”) and to position yourself as their champion. Consider who your product solves the most issues for, as well as whom it solves the most problems for the most effectively, when determining your Minimum Viable Audience.
As a result, it is now your responsibility to obsess over your ideal consumer, figure out exactly what they require to make their lives better, and successfully describe how your solution accomplishes this goal.
The advantage of positioning is that you have complete control over which vectors are used.
The good news is that you’ve already accomplished this with the Best, Better, and Only exercise.
You should have enough ideas in the “Only” category to completely fill your vectors with things that only your firm can accomplish, but if you don’t, utilize ideas from the “Better” category to supplement your vectors.
Setting up your positioning scatter plot
Following the narrowing of your ideas to three to five positioning vectors, it’s necessary to evaluate your company’s position relative to your rivals. There are a variety of approaches that will be covered further below, but the most basic is to use a simple scatter plot. Using this method, you can compare yourself to your rivals across two separate dimensions, giving you a more objective picture of how the marketplace perceives your organization. Let’s go back to Seth Godin and his book “This is Marketing.” He provides an excellent illustration of how B2B positioning may provide significant benefits to businesses, depending on the positioning vectors that are employed.
- If you were to look at them only in terms of transportation capabilities (i.e., the ability to physically move a cargo from point A to point B), they would most likely appear to be quite comparable.
- If, on the other hand, you were the Chief Marketing Officer of the United States Postal Service, your positioning vectors would be radically different.
- Examine the positions of your competitors.
- They will be your closest competitors, and they will be the firms you will have to compete against on a regular basis.
- These will be at the heart of your messaging strategy, and they will be at the forefront of much of your material as you prepare to launch into the market.
Additional B2B positioning strategy tools
Following the narrowing of your ideas to three to five positioning vectors, it’s time to evaluate your company’s position relative to your competition. However, the most basic approach to accomplish this is on a simple scatter plot, which will be covered in further detail later. When you compare yourself and your rivals across two separate factors, you can get a more objective picture of how your firm compares to the rest of the market and the competition. Back to Seth Godin’s “This is Marketing” and his philosophy.
- Take a look at the scatterplot below.
- But if you were the CMO of Brinks, you could position the firm around the concepts of “Security” and “Speed,” entirely differentiating yourself from the competitors and charging a higher price as a result.
- This activity will compel you and your firm to take a close look at the market in which you participate.
- On these vectors, you may see who is the most similar to your organization.
What’s more crucial is to figure out what your company’s “Speed” and “Security” vectors are, and then compare them to your rivals. These will be at the heart of your message strategy, and they will be at the forefront of much of your material as you prepare to launch into the market place.
- Spiderchart, Comparison Table, Scatter Chart, Bubble Chart, and Matrix Chart are all examples of diagrams.
An additional benefit of using a SWOT chart is that it is an excellent tool for analyzing your company’s strategic posture. More information may be found here.
More resources for your B2B positioning strategy
Please see the list of recommended readings/videos below if you’re interested in learning more about how to identify your “Best, Better, Only” and how to design your positioning matrix.
- Seth Godin’s “This is Marketing,” notably Chapter 5: In Search of Better
- And Seth Godin’s “This is Marketing 2.” Al Ries and Jack Trout popularized the term “positioning,” which is discussed in detail here. “Five Charts for Competitor Analysis”
- “Five Charts for Competitive Analysis”
- Nike’s Brand Strategy is explained in detail in this video. A video demonstrating how to utilize a Marketing Positioning Map with examples