Conversation from Price to Value Channel Elite Express Webinar Series July 2008 Channel Consulting Education and Market Intelligence Over 50 years of collective experience in the channel ID: 347489
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Slide1
Shifting the
Conversation from Price to Value
Channel Elite Express Webinar Series
July, 2008Slide2
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
From CMP to… Everything Channel
2Slide3
Agenda
Dynamics of Pricing
Creating a Unique Business Value Position
Changing the ConversationSlide4
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 ProcessesSavvy buyers; ubiquity of shopping; vast choices; beyond IT4Slide5
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
5Slide6
Creating a Unique
Business Value Position
6Slide7
Technical Expertise
Cost
Experience With TechnologyUnderstanding Of My Business
Implementation Time
Breadth Of Product & Tech. Offerings
Market Awareness
Ability To Prove ROI
Creative Expertise
Strategic Business Expertise
Staff Size
Greatest Areas of Value, In Relationship w/ Partners7Slide8
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?
Business
Profile
Business
Drivers
BusinessInitiatives
Capabilities
Solution
Differen-tiation
CompellingEvents
Unique
BusinessValue
8Slide9
Capabilities—What Makes Us
Unique and Superior?
People
(Who)
Processes
(How)
Products
(What)
Intellectual capital
Resource commitment
Business partnersExperience and expertiseSupport (before and after the sale)CultureShare best practicesEducationImplementationAccount supportGlobal presence
Functionality
QualityInnovation
TechnologyIntegration
9Slide10
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
MethodologyBusiness Acumen
Guarantee / WarrantyShared Risk / Shared Reward10Slide11
Changing the Conversation
11Slide12
Perception of Value
Benefit Received
Expected Benefit
12
When you have formed “partnerships” with strategic suppliers, what
benefits did
you expect and what did you actually receive? Slide13
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
13Slide14
Justifying Premium Pricing Through Value
14Slide15
Make the Translation: “Connect the Value!”
From Technical Products
WHAT YOU SELL
Servers
Printers
Software
Storage
IP Telephony
Virtualization
To Business Value
WHAT THEY WANT
Increase Revenue
Decrease CostsFaster Time To Market
Minimize Business RiskEstablish / Protect Competitive Advantage
“What’s In It for Them?”
HOW TO TRANSLATE
How Much, How Fast
What will be impacted?
Risk/Reward
Total Available Benefit
Based on Previous Success/Implementation
15