In our experience, successful businesses always are at least adequate in all three of these areas, and excel in at least one:
- Product excellence – Delivering the best product or service at the best value
- Customer intimacy – Cultivating relationships and satisfying the unique needs of customers
- Operational excellence – Creating efficiency, offering low costs, and doing business in a simple, hassle-free manner.
Of course, where they excel depends on their chosen strategic focus for delivering outstanding customer value.
For distribution companies, the product excellence category is normally at the forefront. A Product Benefits Analysis (PBA) is a useful tool to help fine tune your product strategy. We have used the following process with our clients in the distribution industry to help them develop action plans for strengthening their product strategy.
Step by Step:
- Establish a list of the products you wish to assess.
- Brainstorm and select factors and benefits that are relevant to your business, such as profit, sales volume, perceived customer value, and ease of market penetration. It is best if your selections apply to all of your products. You can select as many factors and criteria as you like, but we recommend no more than ten.
- List your factors and benefits in the left column of a spreadsheet under the heading “Factors and Benefits,” as shown in the example below.
- Weight your factors and benefits according to their importance. The result must total 100.
- You can now score the individual selection factors for each of your products. Your score for each option cannot exceed the weighting you have allocated to the selection factor.
Sample Product Benefits Analysis
Going through this exercise allows you to assess the target score for each product, determine how each of your products scored, and assess whether there is a minimum score each must achieve to stay in your portfolio.
How can you improve your scores?
The real benefit of the Product Benefits Analysis is what comes next: determining what changes are required for each product to achieve or exceed its target score. Every product and service in your portfolio must be a contributor to your company. Imagine if every product outscored its target. What effect would that have on your competitive position? How would it impact your sales and profits?
It is recommended that you review your product portfolio at least every six months. Using a Product Benefit Analysis to conduct this review refines your strategy and creates action plans, providing a professional approach to a common problem.