surviving the recession to perish in the recovery

Monthly Webinar Series - February 2012

Surviving the Recession toSurviving the Recession to Perish in the Recovery

Jay Manson

Copyright © 2012 by LeveragePoint Innovations Inc.No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means —electronic, mechanical, photocopying, recording, or otherwise — without the permission of LeveragePoint Innovations Inc.

This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.

COMPANY CONFIDENTIAL

Sponsored by LeveragePoint the Software Solution for Value-based Pricing

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Today’s Presenter

Jay Manson is Vice President of Sales at LeveragePoint.He joined LeveragePoint in June 2010 and is responsible for b i i L P i t t k tbringing LeveragePoint to market.

He brings over 15 years in business development, sales and sales management experience, and has spent the past 10 years in the value-based marketing, pricing and sales industry.

Formerly, a National Account Executive at Vendavo. Prior to Vendavo he served as Director of Business Development inVendavo, he served as Director of Business Development in Monitor’s Strategic Pricing Group and as Managing Director for Benchmark Partners.

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Market Forces Drive Relentless Margin Pressure

THREE CS OF PRICE PRESSURE:

PriceTHREE CS OF PRICE PRESSURE:Powerful CUSTOMERSGlobal COMPETITORSProduct COMMODITIZATION

COST – “RUG” – DYNAMIC

TIME

CostsRISING in an UNPREDICTABLE manner based on GLOBAL factors

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TIME

Polling Question

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Companies Have Recovered Revenue . . .

but what happened to margin???15.5%

. . . but what happened to margin???

$1.5B$1.5B

Margin

$

$0 232B

Net Revenue13.0%

$0.232B

Net Revenue

Gross Income$0.195B

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2007 2008 2009 2010 2011

Is Passing Through Raw Material Costs Enough?

Year 1

100 it ld t $1 000

Year 2

R t i l t i b $200100 units are sold at $1,000 each. Therefore, Total Revenue = $100,000.

Raw material costs rise by $200 per unit. All cost increases are successfully passed through to

H it d t b ld i Y 2

the customer

How many units need to be sold in Year 2to get $100,000 in revenue?

Answer: 83 units

Sales has fought hard for revenue but selling fewer units at a lower

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margin. This is why companies are not surviving the recovery.

So How do We Address This?

In order regain our margin we need to pass through the value we deliver above and beyond our cost

What is required:

• Products priced based on the value they deliver

• Sell based on the value you deliver

How to do it:

• Continual effort to understand how we improve our customers business and operations.

• Systematic approach to capturing and quantifying the economic benefits we are delivering

• Collaborating with customers to build a common understanding of these economics

• Understanding of the value of the competition

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Understanding of the value of the competition

Products Priced Based on Value

Traditional approach

Product PriceCost CustomersValue

What is the best product we can offer customers?

V l b d h

ProductsPrices Costs Customers Values

Value-based approach

What is the best value we can offer customers?

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Key Questions for Products Priced Based on Value

Product Development Process

OpportunityAssessment

BusinessCase

MarketingPlan

How do I determine the value of my new

offering?

Should the new offering be a stand-alone

product a feature or an

How do I determine a value-based price?

offering?

How do I segment my market for pricing

purposes?

product, a feature, or an extension of an existing

product based on:

What will differentiate us

What are the right pricing metrics?

most from the competition?

What delivers the most value for the customer?

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value for the customer?

Sell Based on Value

V l b d lli thValue-based selling answers the question:

What are the three or four thi th t k b tt ththings that make you better than

the competition and ….

What is that worth to your customer?

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customer?

Sell Based on Value

• Fact-based approach that quantifies the f ll i i f h hfull economic impact of the purchase

• Provides a comparison of your product• Provides a comparison of your product against competitors

• Quantifies the value in financial terms

• Links the price and the value together

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What Value-Based Selling Looks Like

LeveragePoint allows the user to develop the unique

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user to develop the unique value with the customer

Try LeveragePoint for 90 Days to Pass Margin On!

• Delivers tangible, usable marketing/sales content within hours!

– Use the application to price new products based on value

– Use the application to sell based on value

• Initiate the effort to understand how we improve our customers business d tiand operations.

• Provide your team with a systematic approach to capturing and quantifying the economic benefits we are delivering

• Unlimited use of LeveragePoint for your marketing/ sales teams to build value models and test value propositions

• Includes initial training and coaching throughout the entire process• Includes initial training and coaching throughout the entire process

• All for $15,000

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Our Next Webinar – March 20th

• Stephan Liozu, President & CEO of ARDEX A iAmericas

O i ti l T f ti t V l• Organizational Transformation to Value-based Pricing: Case Study of a Mid-size Industrial Companyp y

• NOTE Earlier Time! 11:00am Eastern

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Thanks for Watching!

www.leveragepoint.comjmanson@leveragepoint.comJay Manson(781) 727 – 5977(781) 727 5977

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