Why is one building automation controls solution chosen over another?
While many may assume it’s primarily based on price or product quality, it’s worth contemplating that, even though those factors can be significant, most of our products and price points are quite similar.
So, what truly sets them apart?
Intangibles. These intangible elements are often challenging to articulate, frequently underestimated, yet consistently play a pivotal role in influencing purchasing decisions.
Industry veteran and marketing doyen Marc Petock offers insights into uncovering your company’s intangible strengths and harnessing them to gain a competitive advantage.
Marc Petock: Vice President, Chief Marketing & Communications Officer Lynxspring
Intangibles. Are You Leaving Them on the Table?
Intangible assets. Often overlooked and not brought up in most sales and marketing conversations.
So, what is an intangible asset? Intangible assets typically refer to elements of a company offering that are not physical in nature. They are part of the overall value propositions but cannot be physically touched by customers. They include elements that reflect the company providing the products and services, such as longevity, experience, integrity, domain knowledge, brand, trademarks, goodwill, reputation, flexibility, trust, reliability, consistency and more.
In today’s market environment, not including intangibles as part of a sales and marketing conversation can no longer be the case. Intangible differentiators must be an integral part of value propositions. They are an integral part of your company’s brand.
You should know what your company’s intangible value(s) are. Do you? Formalizing intangibles is not an easy task. How do you get started?
I recently came across the following five steps that you may find useful:
1. Identify the list of your critical intangible differentiators: gather a multi-functional team and go through a brainstorming session. List all potential intangible differentiators after you remove all duplicate answers. You should end up with a shortlist of a dozen intangible elements.
2. Prioritize those differentiators: Rate your differentiators using the VRIO framework: V = does this bring economic value to customers; R = is it rare to find in the market”; I = can you be imitated in the market? O=are you organized to exploit the intangible differentiator? Use a 1 to 10 scale and calculate a total score out of forty points. Select the top 3 to 5 by considering the highest score, the highest score on the V, then a highest score on the I. You need to focus on the intangibles that bring the highest economic value to customers. For example, if you have the greatest level of operational flexibility, you might save customer money by reducing the operation risk of shutting down their line if they did not plan properly.
3. “Productize” them by translating them into formal activities and programs: This is the most crucial step of the process. Intangibles must be translated into concrete programs and activities. They cannot stay in the form of actions, ideas, or intentions. For example, if you offer great operational flexibility, you need to list the specific activities that are included into the program: change-order time, capacity allocation, volume allocation for the next budget cycle, ability to adjust production planning, stock availability, minimum order quantities, etc.
4. Estimate the economic value of each of the programs and activities: This is the value-modeling exercise during which we turn intangible differentiators into customer benefits, and then into value drivers. We then quantify the financial impact of the program and/or activity for the customers. This step requires a deep knowledge of the customer process and profit-and-loss statement. If, for example, production flexibility is a key differentiator, it means we can avoid the risk of shutting down customer plants or we can save the customer money by not having to expedite shipments or hold high quantities of stock. That is translated into dollar savings per order, per production run, or per shipment. You repeat this exercise for each intangible program or activity.
5. Produce relevant value documents: The last step is to capture the richness of these exercises and to design formal customer-value-proposition documents, value selling sheets, battle cards, value case studies, etc. These value assets are used to train the sales team on the “intangible” products so that they can use them to justify price premiums and resist the need to offer discounts.
Companies, no matter the industry including building controls, can no longer ignore the importance of intangible dimensions of their customer value proposition. Intangible value drivers cannot be an afterthought. It is no longer an option. It is a must-do.
Well said Marc! One behalf of the ControlTrends Community, thank you!