Some products do not have any unique strengths. Customers view them as commodities, and price and speed of delivery become the main purchasing considerations. You offset this situation by accentuating the unique strengths of your company. These can be warranty policies, quality-assurance programs,
You can also win sales by making your sales approach a unique strength. When competitors use sales
You probably sell your products
Home Depot sells assorted toolboxes and tools on an individual basis. Occasionally, they package selected tools with a toolbox as a new Handyman special product. The tool and toolbox selection will vary with the level of expertise of the
Home Depot made a competitive product with unique strengths out of commodity items.
Options are product accessories. They are the features
Of course, options benefit you when they are merely a matter of a customer's personal preferences, such as whether to order the telephone's leather case in brown or black.
If you are not careful, a major pitfall with options lurks ahead. You might end up with the syndrome of "one from Column A, two from Column B." You
Fundamental to the principle of "you can only manage what you can measure," you assign features a numerical value. To represent their significant difference in value, unique strengths get a 5; regular features receive a 1. In Chapter 7's Connecting Value sheet, you select the features that produce the measurable benefits of customers' goals, and then calculate their value rating. You compare this rating to a value-neutral rating, which would mean all the features were a 1 because your products had no unique strengths that connect to customers' measurable benefits.
For example, if you selected five features that matched a customer's goal, their competitive neutral rating would be a 5 (5 × 1). If two features were unique strengths, and three were not, you multiply the two unique strengths by 5 and the three features by 1 for a total value rating of 13 (5 × 2 + 3 × 1). Your value rating would be 8 more than value neutral (13 - 5). What is the significance of this number?
A lot when you tie it into the gross margins (sell price minus material and labor costs) of your proposals. In future sales, you use past results to determine if you are receiving the margins you deserve for the value (numerical score of your proposals) you are providing. Use these ratings to
the value your proposals produce for customers, how they compare
For example, a value rating of 12 might coincide with a 40 percent gross margin while a rating of 8 might coincide with a 30 percent gross margin. If your proposals with similar value ratings have significantly lower gross margins, you are not receiving compensation for the value provided. You need to find out why not.
You can also assign a competitive value rating by filling out a Competitor Product Profile sheet. You only fill in competitors' unique strengths because all their other features would be the same as yours. You then compare the number of unique strengths you have with those of competitors that match up to customers' goals. This connection is critical to outvaluing competitors. For example, if you have two unique strengths while a competitor has only one, your competitive value rating would be plus 5 over theirs.