Page 126 - HBR's 10 Must Reads on Strategic Marketing

ANDERSON, NARUS, AND ROSSUM
Idea in Practice

To craft compelling customer needs by joining industry asso-
value propositions: ciations composed of key cus-
Understand Customers’ tomer segments.
Businesses
Substantiate Your Value Claims
Invest time and effort to under- “We can save you money!” won’t
stand your customers’ businesses cut it as a customer value proposi-
and identify their unique require- tion. Back up this claim in accessi-
ments and preferences. ble, persuasive language that
describes the differences between
Example: The resin manufac- your offerings and rivals’. And ex-
turer deepened its understand- plain how those differences trans-
ing of key customers in several late into monetary worth for
ways. It enrolled managers in customers.
courses on how painting con-
tractors estimate jobs. It con- Example: Rockwell Automation
ducted focus groups and field precisely calculated cost savings
tests to study products’ per- from reduced power usage that
formance on crucial criteria. It customers would gain by pur-
also asked customers to iden- chasing Rockwell’s pump solu-
tify performance trade-offs tion instead of a competitor’s
they were willing to make and comparable offering. Rockwell
to indicate their willingness to used industry-specific metrics to
pay for paints that delivered communicate about functional-
enhanced performance. And it ity and performance—including
stayed current on customer kilowatt-hours spent, number of

potential drawback: benefit assertion. Managers may claim advan-
tages for features that actually provide no benefit to target cus-
tomers.
Such was the case with a company that sold high-performance gas
chromatographs to R&D laboratories in large companies, universi-
ties, and government agencies in the Benelux countries. One feature
of a particular chromatograph allowed R&D lab customers to main-
tain a high degree of sample integrity. Seeking growth, the company
began to market the most basic model of this chromatograph to a
new segment: commercial laboratories. In initial meetings with
prospective customers, the firm’s salespeople touted the benefits of

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