Create unique added value with your customers – strengthen your pricing power – boost sales and profit!
In a volatile market environment, companies are facing increasing cost and price pressure. However, providers who possess Value Power in the eyes of their customers — i.e. who create unique, measurable, added value and quantify this financially — still manage to achieve above-average results. How do they do it? Value Power leads to Pricing Power: Your customers recognize the added value, are willing to pay higher prices, and react much less strongly to price increases.
Value power can be built up and developed through a systematic process. Starting with a company's business model, the focus is on the key customer-driven, value-adding activities, including the individual sales conversation.
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Process / Results
Review and develop your business model as the foundation of Value Power. Create and monetize measurable added value for clearly defined target groups. Position your company as an indispensable service provider for the customer who optimizes or takes over its processes.
Segment customers according to their needs and willingness to pay for added value. On this basis, develop segment-specific interaction and pricing models to serve different customer types efficiently and effectively and to increase customer satisfaction.
Develop customer-specific benefit bundles that create measurable added value for the customer and a unique position for the provider. Offer tiered solutions consisting of products, software and services. Use innovative pricing models (e.g. pay-per-use) to lower purchase barriers and create customer loyalty. Strengthen your brand and personal relationships as differentiators.
Value Power is the basis of Pricing Power! Therefore, first financially quantify and document the added value delivered to the customer (cost reduction, sales/profit increase, risk reduction) as the basis for price setting.
Ensure customer acceptance of the added value quantification. Base the price on the value delivered, instead of exclusively on your costs or the competition. Fairly share the added value with the customer when setting prices (value sharing).
Qualify sales as the spearhead of value creation and provide support with tools (e.g. software-based profitability calculators) that help to steer customer discussions away from price and towards value. Incentivize salespeople based on margins instead of exclusively on turnover.
First convince your own people, then win the customer! Therefore, closely involve product management and sales in the transformation project. Pilot the value-based strategy with selected products/markets. Then implement a successive roll-out.
