Understanding Customer-Perceived Features and Price Analysis

Customer-perceived features and price analysis are important indicators of how well the company’s product is perceived in the target market. These analyses help the company understand the product features that the customer perceives as good, as well as the features that need improvement.

They also provide an understanding of how customers perceive the product pricing in comparison with competition. They can also indicate whether the efforts to increase value for a particular feature are headed in the right direction. The scores can be calculated using a comparison of all, a select few, or individual competitors. The customer-perceived features and price analysis should preferably be done separately for the product features and the price.

The customer-perceived features analysis can be done using these following steps:

1. The customers of both the company and competing companies are asked to list product features, other than price, that are important in their purchasing decisions. The senior management or corporate sales team can also add to the list of features, based on their knowledge of the products and customers.
    
2. The various features are weighted. This can be done through a survey or from senior management inputs, based on their understanding of the importance of the features.
    
3. The customers are then asked to rate the features of the products or services offered by the company, as well as the features of their competitors’ products and services.
    
4. Finally, the score on each feature is divided by the competitors’ score. This is called the product feature ratio for that feature. For each product feature, a ratio of less than one indicates that the particular product feature is perceived lower in quality than the competition’s; a ratio greater than one indicates that the product feature is perceived better than the competition’s.
    
5. After getting the ratios for each of the product features, ratios are then multiplied by the weights for each attribute and added together to get the overall customer-perceived score for all the product features of the company’s product. An overall customer-perceived features score of 100 indicates a position of relative parity with the completion for the overall product. A score greater than 100 indicates that the product is perceived to be better than the competition’s with respect to overall product features.

The customer-perceived price analysis is similar to the process used for customer-perceived features analysis, and helps the company understand how the product price is perceived with respect to competitors’ prices. However, instead of product features, the calculation uses attributes that affect perceptions of a product’s overall cost.

The customer-perceived price analysis is intended to illustrate customer perception of where a company’s pricing sits relative to the prices of their competitors in areas where the product or service has several pricing factors.

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Customer Business Outcome Evaluation

Evaluation of business outcomes is not easy. For a corporate customer, products are purchased to deliver positive business outcomes. So it is very important for the selling company to come up with a product that significantly and quantifiably brings positive business outcomes for its customer or their business. It is therefore necessary to identify quantifiable, positive business outcomes that the product can provide, to develop the sales value proposition.

A quantifiable outcome represents the tangible value of the offering to the customer. This value is typically expressed in numbers, percentages, and timeframes. In addition to this, there are also intangible outcomes. E.g. Opportunity Cost. Opportunity cost is the loss that is incurred when one option is chosen over the other. It is something that must be identified and considered in establishing the sales value proposition.

The information that the company gathers after evaluation helps it to understand the desired attributes of the offerings according to market segments. The customer business outcome evaluation documents business outcomes based on these attributes.

Another way of doing customer business outcome evaluation is by interviewing existing customers. Customers being the user of the product validate the evaluation process by their practical experience. Interviews can be conducted across different areas and positions in the customer organization to determine the impact of the offering. New, desired, business outcomes may emerge and existing business outcomes can be validated.

Internal analysis is another way to do customer evaluation. The collective sapience combined with experience of the company holds a broad overview of business outcomes from a customer’s perspective. However internal analysis must be validated by customers to escape the risk factors associated in it. Direct input provided by the customers is typically more valuable and reliable input when determining customers’ business outcomes.

Strategists evaluate investments and actions in terms of likely cost and benefit outcomes. The product offering must draw substantial improvements in client’s business in terms of customer satisfaction, service delivery etc. The seller must narrow down its focus and align sales and marketing activities around its customer. The segment specific sales attempt combined with customized offering helps develop sales value proposition.

"To learn more about Customer Business Outcome Evaluation and related analytics, visit “SMstudy.com”.

Back Talk Can Be Good for You; Customer-Centric Differentiation and SMstudy

“I wandered in and out of the brilliant stacks of cans following you…”

– Allen Ginsberg, “A Supermarket in California”

When potential customers “wander in and out of the brilliant stacks of cans,” what sets your product apart from all of the others on the shelf? What makes buyers begin following you?

Is it the need that you meet? Or the value proposition you offer? Is it your product’s packaging? Or placement on the shelf? Is it the reputation of your company that shines a special spotlight on your offering?  If your answer is, “Yes,” then you’re ready for a trip into the sometimes puzzling world of creating a product’s differentiated positioning. Grab your cape, Alice; you never know what you’ll run into down the rabbit hole.

A well-planned and executed differentiated positioning of a product sets it apart and attracts buyers. The process of creating a differentiated positioning “involves creating a positioning statement that clearly articulates, in a succinct sentence, how the company wants the customers in its selected target markets to perceive its products,” says Marketing Strategy, book one in theSMstudy™ Guide series.[1]

In our previous article, “What Turns a Ford into a Lincoln,” we looked at the use of features to set one product apart from another, to make it attractive to targeted market segments. This same list of features is used when writing the positioning statement. In this blog we consider the influence of the target segment itself and customer feedback on preparing that “succinct sentence.”   

Once your company has completed the process of selecting a target segment, it will have “detailed information…, such as specific wants and needs, customer personas, segment size, and so forth,” according to Marketing Strategy. The company then can “analyze the target segment information to determine areas where it has, or can, create a competitive advantage when positioning its products.” 

Where does a company get a clear statement of the “specific wants and needs” of their potential customers? From customer feedback, of course. “But, they’re potential customers!” someone is saying, “How can we get feedback from customers that aren’t customers, yet?” There are ways down this rabbit hole.

One way is to use industry benchmarks and Key Performance Indicators (KPI). “Comparing the company’s performance against industry benchmarks and KPIs helps prevent a company from focusing its positioning efforts on creating differentiators that are of little importance to customers in the industry,” the SMstudy™ Guide says. Your potential customers will have significant similarities with others in the targeted segment for similar products.

Closely related to benchmarks and KPIs, are existing marketing research reports. Your company or an industry group may have already conducted research that is relevant. “This research can help identify the best possible product features and associated product positioning based on how purchase intentions vary with changes to particular product characteristics. Furthermore, analyzing customers’ attitudes toward competitors’ products provides additional insights into how well the positioning strategies of competitors are working, and whether there are some gaps in their positioning that the company can exploit,” says the SMstudy™ Guide.

Another way is to talk to your company’s present customers. “No one can articulate your strengths better than your clients,” writes Cidnee Stephen in her article “How to Differentiate Your Business from the Competition.”[2]

As the SMstudy™ Guide puts it, “Understanding the customer experience and obtaining customer feedback about a company’s existing products (a concept referred to as the “Voice of the Customer”) helps a company to determine the positioning of its products. Such customer feedback includes improvement suggestions, compliments, and complaints.” Your company has probably been collecting feedback of this nature through post-purchase surveys, product registration processes, and the “Contact Us” tab on its website. This data is usually reviewed through a product or service improvement filter. Now is the time to look at that data with a filter emphasizing positioning.

Product piloting and conducting focus groups are two additional ways to collect feedback on a product or service that is not yet in wide distribution.

Our trip seems to use product and company differentiation interchangeably. Does that make sense? Down this rabbit hole, it does. The two are membrane on membrane close. The differentiated positioning of the company as a whole should guide all positioning of the company’s products and services. 

Does this article say it all about creating differentiated positioning? Absolutely not! In fact, the part of our treatment of this topic will discuss using SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats).

As good as back talk can be, so can a good SWOT across the backside … or at least, across the corporate office!

For more interesting and informative articles on sales and marketing, visit SMstudy.

[1] The SMstudy™ Guide is available athttp://www.smstudy.com/SMBOKGuide. 

[2] Cidnee Stephen. “How to differentiate Your Business from the Competition.” Bplans; Starting a Business Made Easy. Retrieved on 4/5/16 from http://articles.bplans.com/how-to-differentiate-your-business-from-the-competition/#.VwLfWKs56mM.linkedin