B2B Product Differentiation Strategies – The Value Hierarchy

Cure Underperformance and Build Value by Traversing the Business Value Hierarchy

Why Review Your Value Hierarchy?

It is time to analyze your position in the Value Hierarchy when you have:

  • Customer pressure to discount pricing
  • Lower sales-close rates
  • Higher lead costs
  • Eroding market share

If your company is struggling to differentiate products and services to improve its value to customers and prospects, you are not alone. There is a great deal of noise in the digital marketplace and it is sometimes hard to be heard above the clamor. Truly understanding your company’s place in the customer’s widening array of expectations is difficult but also very necessary.

Simply adding features to a product or service without understanding the bigger picture leads to more complexity without an incremental gain in product value. Worse, incorrectly applied product feature creep can lessen value.

Rather than focus on the specifics of a single product or service, it’s often better to first look at your product portfolio. Your portfolio may be arranged with a lead product that drives additional product upsell. Or there may be multiple products that collectively meet a common type of business need. Regardless, you want to understand the portfolio and what can be done to improve your overall value in the marketplace.

The Business Value Hierarchy

The Business Value Hierarchy shows how products and services can be positioned to maximize opportunity and value. By understanding your position in the hierarchy, you’re starting down the path to improving performance. Your challenge is to either move within a category to a leadership position or move up to a more valuable category. An overview of the hierarchy is summarized on this Business Value Hierarchy Infographic.

business value infographic

Close the Value Gap: Increase Revenue and Profitability

Discovering the value of your offerings is an important first step in closing the value gap. You need to accurately understand your differentiation in the marketplace and how current customers perceive your value. There are four metrics important to understand; your perceived value, your hidden value, your potential value and your true value.

Next, by analyzing your value gap, you can pinpoint the factors that keep you from reaching your potential. Understanding these factors is critical in creating the action plan that moves your offering to a stronger position in the value hierarchy. It also will quantify the costs of moving within your category to a leadership position or moving up to a more valuable category.

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With the ongoing pressure of managing the day-to-day cycle of business operations, it can be difficult to build and execute on changes to your position in the value hierarchy. This is why you may need to bring in an outside expert, like Fusion Marketing Partners, to help you navigate the process. We bring a proven approach to help you develop a Value Growth Action Plan that will move you into a stronger position in your marketplace, thus raising your value in the eyes of your prospects and customers to ultimately generate more revenue.

Learn More: Download the Complimentary White Paper

Better understand how to use the Business Value Hierarchy; to improve your marketplace position and generate more revenue. Discover more about this strategic approach to cure underperformance and leapfrog your competition. » Click to download.

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Christopher Ryan
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