The Digital War Room for analyzing customer

The Digital War Room
for analyzing customer-perceived value, release 2
Bradley T. Gale and Donald J. Swire,
Customer Value, Inc. (617) 227-8191 September 2003
CVI's Digital War Room software is a superior solution for assessing your products’ competitive
strengths and weaknesses and honing your value proposition. Release 2 of the software adds
important new modules for analysis and ease of use.
Assess your Competitive Position – using the DWR's Enhanced Value-Mapping System
Value Map for Commercial Filtration
220
200
Walter
High
Price
180
160
Clarion
Price 140
($)
Filto
120
Brite
100
Low
Price
80
Envir
60
5.6
6.0
6.4
6.8
7.2
7.6
Worse
Better
Performance Index
Fair-value line passes through average price and average benefit. Slope = $32 per benefit point.
1. Plots your brand's price and overall performance (functional and emotional) versus
competing brands
2. Includes reference lines for average price and average performance in the market
category
3. Establishes a fair-value reference line that represents average relative value (performance
for price) in the category
4. Calibrates the price for performance trade off that customer make -- the incremental
monetary worth per point of overall benefit
5. Defines a fair-value zone – the fair-value line and automatically-set zone boundaries
show quartiles in the distribution of customer-perceived value (new in release 2)
1
6. Highlights frontier products that have the best performance at each price point. These
products are likely to be the market-share winners in the future (new in release 2)
7. Allows price to be measured on a scale of price attractiveness (1 to 10) or as a monetary
amount. The latter enables a monetized analysis of customer-perceived value, by
attribute.
8. Allows the vertical axis of a value map to be the selling price of the product or the total
cost to the customer of using the product.
9. Enables you to estimate how much each of your product’s advantages are worth to the
customer
Refine your Value Proposition with the Value Scorecard
•
•
•
•
Highlights the key selling points of each brand
Quantifies the difference in monetary worth to customers associated with these selling
points
Reveals the customer-perceived value positioning of each brand in monetary terms
Quantifies key weaknesses in each brand's economic value
Prioritize Performance Improvements based on the Attribute Analysis Module
(new in release 2)
Attribute Scores for Selected Suppliers
Chloroform
Removal
Lead Removal
Filto
Walter
Taste
Envir
Brite
Clogging
Clarion
Reliable supply
Average
Technical support
Relationship
-5.0
0.0
5.0
10.0
15.0
Performance Scores
1. Produces a powerful visual display (above) of the performance of your brand versus a
selected set of competing products, by attribute. This display also reveals the degree of
differentiation in performance among brands, by attribute
2. Produces a plot of attribute importance weights versus your performance scores
2
3. Produces a plot of attribute importance versus your performance-difference versus
competitors. Contains a reference line showing your average performance-difference,
which is used to calibrate halo effects
4. Quantifies the monetary worth to customers of your performance differences versus
competitors, by attribute
Filto Improvement Opportunities
Chloroform
Removal
Lead Removal
Taste
Catch up
Benchmark
Breakthrough
Clogging
Reliable supply
Technical
support
Relationship
0
10
20
30
40
Value of Improvements ($)
5. Reveals the added value to customers of "catching up" to average performance on
attributes where you are behind (above)
6. Reveals the added value to customers of "pulling ahead" to achieve best-in-category
(benchmark) performance, by attribute (above)
7. Shows the increased economic value to customers of making a one-point improvement in
performance versus competitors, by attribute
3
Shift from Cost-Based Pricing to Value-Based Pricing with the Pricing Module (release 2)
Value Map for Commercial Filtration
220
200
Walter
180
High
Price
160
Fair price
140
Price
($)
Clarion
Price
Filto
120
Brite
100
80
Low
Price
Envir
60
Cost
40
20
5.6
6.0
6.4
6.8
7.2
7.6
Worse
Better
Performance Index
Fair-value line passes through average price and average benefit. Slope = $32 per benefit point.
•
•
•
Produces a value map for pricing where the automatically-set zone boundaries show
quartiles in the distribution of actual price expressed as a percent of perceived price.
Customers often think in terms of percentage differences
Enables you to superimpose your total cost per unit on the value map along with a line
that connects your total cost, price, and fair price, per unit. This enables you to price
based on value while visualizing cost and margins.
Generates a pricing scorecard showing pricing metrics and the customer and vendor
perspectives on prices
4
Filto Implied Strategic Intent **
Balance
Share
Margin
Dominate segment
Grow share
Balance between growth & margin
Build margin
Harvest position
** Based on ratio of Selling Price to Fair Price
•
Draws a pricing strategy dial (above) that indicates the inferred pricing strategy
(margin or share) for each brand
Prepare for Value Selling with Head-to-Head Appraisals of Economic Value
Filto Value Relative to Walter
Chloroform Removal
Lead Removal
Taste
Clogging
Reliable supply
Technical support
Relationship
Capital cost
Disposibles cost
-20
-10
0
10
20
30
40
50
60
Relative value impacts - Filto vs. Walter
Weaknesses
Total= $100.7 ( $37.7 from benefits, $63.0 from price)
Strengths
The DWR automatically produces a series of head-to-head charts that appraise the monetary
worth of your brand versus each competing product, by attribute (Us-vs-them module, new in
release 2). Practitioners use these charts as an input to their value-selling kit for sales reps and
key account executives
Shift your Data to DWR Release 2 using Import Forms Feature (new in release 2). This
enables you to import input forms and user worksheets from prior versions of the DWR.
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