By D. Keith Pigues
Amazing things happen when an organization thinks first about how it can help its customers grow their profits. Really. The days of defining winning based solely on your own P&L are over. Today’s leading B2B companies are focused on making more money for their customers – and doing it better than the competition – while also getting their fair share in return. This redefines what it means to truly win with customers.
How can you tell if your organization is on the winning path?
First, do you know specifically how your company helps customers make more money? Does your organization measure and track how much money customers make doing business with your company over time? Does your organization understand how it will make more money for your customers in the future? Does your organization measure and track how much more money your customers make doing business with your company as compared with your competitors?
If you fell short of answering each question with a big YES, then there is an opportunity for you and your organization to build upon what you are currently doing to increase your winning score.
So, here is how you can capitalize on this opportunity:
Change the Conversation
Your sales and marketing professionals or executive team speak with customers regularly. A new approach that makes each customer interaction more valuable for both parties is called “Customer Discovery.” Asking customers to discuss how you help them make more money creates an environment conducive to a different and more fruitful conversation. Does your product line, sales force, technology, brand or customer service really provide a differential financial impact by helping your customers increase sales or trim costs versus the impact provided by your competitors?
Quantify Differential Value
The structured, in-depth conversation allows you to take the critical next step to winning: quantifying how much more money your customer makes doing business with you versus your competitor in real dollars and cents. The new metric is called the “Differential Value Proposition Percentage,” or DVP%. It’s a rigorous financial measure of how much additional operating income your customer earns by using your products or services – no more wishy-washy discussion about your value proposition and how it differs from competitors. The DVP% is developed specifically for use in B2B.
Creating More Value Over Time
In addition to the current measure of the value you bring, customers also provide a forward-looking view of how you can help them make even more money in the future. These opportunities are called “The List”, and include the top three to five things the customer identifies to help them make even more.
D. Keith Pigues is senior VP and CMO of Ply Gem Industries and co-author of “Winning with Customers: A Playbook for B2B” (Pigues and Alderman, Wiley & Sons 2010). He is currently working on a new book, titled, “Get Over the Fear and Live Your Dream Now.” His blog can be read at Get More.