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Shifting the Conversation from Price to Value

Shifting the Conversation from Price to Value. Channel Elite Express Webinar Series July, 2008. From CMP to… Everything Channel. Channel Consulting, Education and Market Intelligence Over 50 years of collective experience in the channel

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Shifting the Conversation from Price to Value

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  1. Shifting the Conversation from Price to Value Channel Elite Express Webinar Series July, 2008

  2. From CMP to… Everything Channel • Channel Consulting, Education and Market Intelligence • Over 50 years of collective experience in the channel • Thousands and thousands of partner profiles in every geography worldwide • More than 90,000 interviews with Channel Partners and their customers annually 2

  3. Agenda Dynamics of Pricing Creating a Unique Business Value Position Changing the Conversation

  4. Dynamics of Pricing • Why Do Prices Go Down? • They Must • Macro-economic reality … as markets mature, prices drop • Customers always want to get the best deal = “best price” • Perception of Product Equality • Product capability exceeds customer capacity • Competitive Undercutting • When products are equal, differentiation is based on credibility and price • Lack of selling and negotiating skills accelerates the erosion • Changing Customer Buying Patterns and Processes • Savvy buyers; ubiquity of shopping; vast choices; beyond IT 4

  5. The Reality of Pricing vs. Value • Lessons Learned in the Real World • Price = What You Charge • Value = What Your Customer Believes It’s Worth • There is VERY LITTLE Statistical Correlation Between Price & Value • Price Will Always Be an Issue … Even when Value is Perceived • If Your Customers aren’t Questioning the Price … You’re Not Charging Enough • No Matter How Competitive a Market is, Some Players Can Almost Always Justify Premium Prices 5

  6. Creating a Unique Business Value Position 6

  7. Greatest Areas of Value, In Relationship w/ Partners Technical Expertise Cost Experience With Technology Understanding Of My Business Implementation Time Breadth Of Product & Tech. Offerings Market Awareness Ability To Prove ROI Creative Expertise Strategic Business Expertise Staff Size 7

  8. Unique Business Value What is the specific or measurable business result that we will deliver? How does the client define value? How will they measure it? How have we quantified this value in the client’s terms? Has the client confirmed their understanding of the value we will deliver? How does this value differentiate us from our competitors? CompellingEvents BusinessProfile BusinessDrivers BusinessInitiatives Differen-tiation Solution Capabilities Unique Business Value 8

  9. Capabilities—What Makes Us Unique and Superior? Products (What) Functionality Quality Innovation Technology Integration Processes (How) Share best practices Education Implementation Account support Global presence Intellectual capital Resource commitment Business partners Experience and expertise Support (before and after the sale) Culture People (Who) 9

  10. Building an Effective Position and Message • Components of Your Value Proposition • The “Much-ness” • How much value will you deliver to the business … in what commodity? • The “Soon-ness” • When will the value begin to pay back … and how long will it continue? • The “Sure-ness” • Why should the customer believe your claims? • Testimonials / Case Studies • Methodology • Business Acumen • Guarantee / Warranty • Shared Risk / Shared Reward 10

  11. Changing the Conversation 11

  12. Perception of Value Expected Benefit Benefit Received When you have formed “partnerships” with strategic suppliers, what benefits did you expect and what did you actually receive? 12

  13. Differentiating Your Value To the End Customer Trusted Advisor Relationship Technical Support Specialized technologies Knowledge Turnaround/Delivery Speed Proactively Manage Customer Risk/Cost Vertical market Knowledge Customer Geographical Proximity Vendor/Partner Relationships Vendor/Brand Reputation Number of References Most Aggressive Pricing Certification and Credentials 13

  14. Justifying Premium Pricing Through Value 14

  15. Make the Translation: “Connect the Value!” WHAT YOU SELL WHAT THEY WANT HOW TO TRANSLATE From Technical Products To Business Value “What’s In It for Them?” • Servers • Printers • Software • Storage • IP Telephony • Virtualization • Increase Revenue • Decrease Costs • Faster Time To Market • Minimize Business Risk • Establish / Protect Competitive Advantage • How Much, How Fast • What will be impacted? • Risk/Reward • Total Available Benefit • Based on Previous Success/Implementation 15

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