Analytics-Based Customer Value Proposition Development in B2B Supply Chain

Abstract

The customer value proposition is the heart of an organization. The internship provided an opportunity to examine this critical process at a wholesaler-distributor firm, in business-to-business supply chain. Distributors cannot expect a premium return on their value proposition of superior service if they cannot persuasively demonstrate it to the customer’s own satisfaction. To address the same, the process is analyzed by focusing on three aspects of value proposition – value proposition development, demonstration and customization. The study formulated analytics to assess these aspects of value proposition process. Based on extensive survey data and in-depth interviews, the study identified four key elements of value proposition and six aspects of customer value. The value proposition framework is developed by mapping distributor’s capabilities to financial drivers of customer’s business. The framework is applied to subject firm in order to develop value proposition map. Using the value proposition map as blueprint, customer profitability analyzer is developed as a value proposition demonstration tool. Applying value proposition map and leveraging existing customer classification, the guidelines for customizing value proposition to individual customers is developed. Finally, a business case is established by linking recommendations and tools to return on investment and risk assessment. The value proposition map and associated sales enablement tools act as a catalyst to solving industry-wide challenge of transforming salesforce to value advisor state as part of counter-commoditization strategy.