How to Win With Your Customers: Become the Go-To Organization in Your Industry

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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


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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


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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


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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


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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)


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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


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[email protected]

www.KeenStrategy.com or dkeithpigues.com

www.linkedin.com/in/dkeithpigues

@dkeithpigues

713-248-1539

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