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How to Win with Your Customers
D. KEITH PIGUES
D. Keith PiguesPartner, Keen Strategy@dkeithpigues - @keen_strategy
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Are Your Customersat the Center of Your Business?
Is Your Customer’sBusiness at the Center of Your Business?
WINNING WITH CUSTOMERS I D. Keith Pigues
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Customer Winning Check-up
• We know specifically how we help customers make more money
• We understand how we will make our customers more money in the future
• We measure and track how much money over time customers make doing business with us
• We measure and track how much more money our customers make doing business with us relative to our competitors
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True Measure of Winning
• And, capture your fair share
How your customers…
Make more money
by doing business with you
• In today’s world, you must understand
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• The challenge…
• The lightning strike…
• The enterprise…
The Journey to Win with Customers
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Change the Customer Conversation
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What Matters to Customers?
• Quality and Reliability?
• Reputation?
• Relationships?
• Product?
• Technical Capability?
• Product Features?
• Financial Stability?
• Long Term Players?
• Increased Performance
• Earnings
• Growth
• Return on Investment
• Shareholder value
• Drive Revenue
• Control Costs
• Improve Cash Flow
• Build Shareholder Value
Their Bottom Line
WINNING WITH CUSTOMERS I D. Keith Pigues
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Traditional Management Winning With Customers
Inside Out
How much profit do we make from our customers?
Outside InDo our customers perform betterbecause they do business with us?
There Is More Than One Point of View
WINNING WITH CUSTOMERS I D. Keith Pigues
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Help Your Customers Make More $$$
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Differential Value Proposition
Supply Chain
Product Line
Brand Name
Sales Organization
Marketing Campaigns
What is Your Differential Value?
DVP Your Customers’Financials
Your Value Proposition
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DVP™ = Money Your Customer Makes with You vs. Other Alternatives
Amount of Business You Do Together
DVP™ =$40,000
$1,000,000= 4%
Measuring Differential Value
WINNING WITH CUSTOMERS I D. Keith Pigues
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DVP%
Dif
fere
nti
al A
ttri
bu
tes
HypothesisWhat we think
Ease of Install
Customer Service
Reliability
6%
CurrentCustomer view
of today
Reliability
Customer Service
Ease of Install
Safety
4%
OpportunityIncremental
improvements identified
Customer Service
Safety
3%
GoalAchievable 18–24 months from now
Reliability
Customer Service
Ease of Install
Safety
7%
Measuring and Improving DVP™
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6%
4%
2%
0%
-2%
DV
P%
Sca
le
DVP is real money, not a satisfaction or loyalty score
Customer relies on you to run their business profitably – Indispensible
Customer considers relationship healthy – Partnership and Growth
Customer does not consider you significant to the business – No Growth
Customer is losing money doing business with you – At Risk
Customer considers your offering a commodity – No Impact
What a DVP™ ‘Feels Like’
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DVP Varies by Industry and Business
200%
50%
10%
0%
-2%
DV
P
• DVP is not compared by business
• DVP varies by business type, product maturity and geography
1% A
4% B 4% C
7% D
25% - 30% E
200% F
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THE LIST: Top 5 things to make our customers more $$$
Investment OpportunityImpact on Customer
Product Differentiation
Upgrade existing low-end products to provide an offering for price-sensitive buyers.
$3,082,000
Product LineFill gap in Product Line by offering High End Option that provides a natural up-sell to mainstream products.
$1,843,000
Loyalty Programs
Simplify the paperwork required to participate in LoyaltyProgram.
$1,645,000
Sales Organization
Increase focus down channel to drive demand with our customer’s customers.
$2,071,000
Marketing Materials
Upgraded materials required to help close the sale with our customer’s customers. The materials need to be simplified and widely available in all branches.
$5,401,000
Measurable Differential Value
Win - Win
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Correlate DVP to Financial Outcomes2007 GM% vs DVP%
10
20
30
40
50
60
70
0-1-2-3-4 1 2 3 4 5 6 7 8
BathausWestlake
Inspired Interiors
Rhinomart
Ferguson
WM F. MeyerBanner Supply
DVP%
ID your higher value
customers
ID your lower value
customers
GM%
Measuring Return on Spending
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Linking DVP to Your Company’s Profit
AT RISK PARTNER
TRANSACTIONAL OPPORTUNITY
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DVP™ Business Impact
1. Increase Customer Engagement
2. Improve Value Propositions and
Customer Segmentation
3. Develop More Effective Marketing
Communication
4. Support Value-based Pricing &
Capture
5. Enhance Selling Skills/Capabilities
6. Drive Customer Innovation
65%50%
26%
20%
23%
15%
50% 51%
0%10%20%30%40%50%60%70%80%90%
100%
DVPs 21% 14% 107%
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Winning with Customers
Customers Company
More Profits Growth + Profits
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How to Win with Your Customers
What is your Differential Value Proposition?
Do Your Customers Make More Money Doing Business with You?
WORKSHOP
WINNING WITH CUSTOMERS I D. Keith Pigues
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DVP™ Business Impact
1. Increase Customer Engagement
2. Improve Value Propositions and
Customer Segmentation
3. Develop More Effective Marketing
Communication
4. Support Value-based Pricing &
Capture
5. Enhance Selling Skills/Capabilities
6. Drive Customer Innovation
65%50%
26%
20%
23%
15%
50% 51%
0%10%20%30%40%50%60%70%80%90%
100%
DVPs 21% 14% 107%
Differential Value
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Select a Customer
AT RISK PARTNER
TRANSACTIONAL OPPORTUNITY
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Your perspective on the value your company delivers
What We Do Differently How We Help
Attribute Differentiator Description Calculation Value Creation
1 Tech Support
2 Hour Faster Response Time (versus 4 hours)
Responds to service calls within 2 hours
guaranteed.
2 hrs. Add’lUptime/Occurrenc
e x 2 Occurences/Yr. x
200 Units Produced/hr. x
$10K/Unit (Selling Price)
$8M(Adjusted for Contribution
Margin of 65%)
$5.2M
2
3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total
Installation &Training
Specialty Service
Supply Chain
Product
Differential Value Proposition (DVP™) = $5.2M (Differential Value) / $100M (Annual Sales) = 5.2%
DVP™
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Differential Value Glossary
•Attribute: factors or investment categories that you make to create competitive advantage
•Differentiators: a broad definition of what you do differently in comparison to competition
•Description: a detailed account of the differentiator
•Calculation: a description of the variables used to calculate the value creation $. Where applicable, identify the source (i.e., industry reports) of certain variables are also included for further validation.
•Value Creation ($): the actual monetary figure that represents the net or differential increase in revenue or cost savings to your customer.
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Stakeholder Map
Influence
Support+ For
- Against
+ High
- Low
Exercise: Plot each of the identified BENEFICIARIES OF DIFFERENTIAL VALUE for the selected Differential Value Attributes on this map based on their Influence and Support.
(Upper right hand corner = very influential in decision making and highly supportive. Lower left hand corner = Not influential in decision making and not a supporter or advocate)
WINNING WITH CUSTOMERS I D. Keith Pigues
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Path Forward to Win with Your Customers
1. Identify 3-5 Differential Value Attributes
2. Complete Calculations that PROVE the Differential Value
3. Collaborate with a cross-functional team within your company familiar with the selected customer (Get their input)
4. Complete the Stakeholder Map (Identify the relationship gaps that need to be addressed)
5. Present your findings to the selected customer and get their perspective
WINNING WITH CUSTOMERS I D. Keith Pigues
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
#socalbma WINNING WITH CUSTOMERS I D. Keith Pigues WINNING WITH CUSTOMERS I D. Keith Pigues #socalbma
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www.KeenStrategy.com or dkeithpigues.com
www.linkedin.com/in/dkeithpigues
@dkeithpigues
713-248-1539
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