Over 5,000 executives were recently asked in Winning with Customers session polls this important question: Do your customers make more money doing business with you? An alarming 2% of these executives could answer YES to the question.
As a C-Suite executive, answering YES to the question above is the first critical step to improve your company’s value proposition and help you WIN with you customers.
"How to Win With Your Customers: Become the Go-To Organization in Your Industry"
This presentation by D. Keith Pigues, Past Chairman of BMA National Board of Directors, co-author of “Winning With Customers: A B2B Playbook", and Partner at Keen Strategy, was delivered at SoCal BMA’s 2nd Annual Regional Conference: The Integrated Leadership Summit — held January 21, 2015, in Long Beach, CA. The event, organized and hosted by Business Marketing Association, Southern California Chapter, was part of the third annual BMA Global B2B Regional Conference Series, and SoCal Chapter’s ‘The Leading Edge' executive signature series. http://www.SoCalBMA.org/Events
How to Win With Your Customers: Become the Go-To Organization in Your Industry
1. #socalbma
How to Win with Your Customers
D. KEITH PIGUES
D. Keith Pigues
Partner, Keen Strategy
@dkeithpigues - @keen_strategy
2. #socalbma
Are Your Customers
at the Center of Your Business?
Is Your Customer’s
Business 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
WINNING WITH CUSTOMERS I D. Keith Pigues
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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
WINNING WITH CUSTOMERS I D. Keith Pigues
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• The challenge…
• The lightning strike…
• The enterprise…
The Journey to Win with Customers
WINNING WITH CUSTOMERS I D. Keith Pigues
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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 In
Do our customers perform better
because 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 $$$
WINNING WITH CUSTOMERS I D. Keith Pigues
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Differential Value Proposition
Supply Chain
Product Line
Brand Name
Sales Organization
Marketing Campaigns
What is Your Differential Value?
DVP Your Customers’
Financials
Your Value
Proposition
WINNING WITH CUSTOMERS I D. Keith Pigues
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DVP™ =
Money Your Customer Makes with You vs. Other Alternatives
Amount of Business You Do Together
DVP™ =
$40,000
$1,000,000
= 4%
Measuring Differential Value
WINNING WITH CUSTOMERS I D. Keith Pigues
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DVP%
DifferentialAttributes
Hypothesis
What we think
Ease of Install
Customer
Service
Reliability
6%
Current
Customer view
of today
Reliability
Customer
Service
Ease of Install
Safety
4%
Opportunity
Incremental
improvements
identified
Customer
Service
Safety
3%
Goal
Achievable 18–24
months from now
Reliability
Customer
Service
Ease of Install
Safety
7%
Measuring and Improving DVP™
WINNING WITH CUSTOMERS I D. Keith Pigues
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6%
4%
2%
0%
-2%
DVP%Scale
DVP is real money, not a satisfaction or loyalty score
Customer relies on you to run their business profitably – Indispensible
Customer considers relationship healthy – Partnership and Growth
Customer does not consider you significant to the business – No Growth
Customer is losing money doing business with you – At Risk
Customer considers your offering a commodity – No Impact
What a DVP™ ‘Feels Like’
WINNING WITH CUSTOMERS I D. Keith Pigues
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DVP Varies by Industry and Business
200%
50%
10%
0%
-2%
DVP
• DVP is not compared by business
• DVP varies by business type, product maturity and geography
1% A
4% B 4% C
7% D
25% - 30% E
200% F
WINNING WITH CUSTOMERS I D. Keith Pigues
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THE LIST: Top 5 things to make our customers more $$$
Investment Opportunity
Impact on
Customer
Product
Differentiation
Upgrade existing low-end products to provide an offering
for price-sensitive buyers.
$3,082,000
Product Line
Fill 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 Loyalty
Program.
$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
WINNING WITH CUSTOMERS I D. Keith Pigues
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Correlate DVP to Financial Outcomes
2007 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
WINNING WITH CUSTOMERS I D. Keith Pigues
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Linking DVP to Your Company’s Profit
AT RISK PARTNER
TRANSACTIONAL OPPORTUNITY
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%
WINNING WITH CUSTOMERS I D. Keith Pigues
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Winning with Customers
Customers Company
More Profits Growth + Profits
WINNING WITH CUSTOMERS I D. Keith Pigues
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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
WINNING WITH CUSTOMERS I D. Keith Pigues
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Select a Customer
AT RISK PARTNER
TRANSACTIONAL OPPORTUNITY
WINNING WITH CUSTOMERS I D. Keith Pigues
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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’l
Uptime/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™
WINNING WITH CUSTOMERS I D. Keith Pigues
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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.
WINNING WITH CUSTOMERS I D. Keith Pigues
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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
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