Dollarization Discipline: How Smart Companies Create Customer Value... and Profit from It
  • Dollarization Discipline: How Smart Companies Create Customer Value... and Profit from It
  • Dollarization Discipline: How Smart Companies Create Customer Value... and Profit from It

Dollarization Discipline: How Smart Companies Create Customer Value... and Profit from It

by Jeffrey J. Fox, Richard C. Gregory
     
 

Jeffrey Fox introduced the concept of Dollarization in his bestselling books How to Become a Rainmaker and How to Become a Marketing Superstar. Now, he and Rick Gregory present this compelling,effective principle in full detail so you can apply it to your business.

The Dollarization Discipline shows organizations how to effectively communicate the economic value

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Overview

Jeffrey Fox introduced the concept of Dollarization in his bestselling books How to Become a Rainmaker and How to Become a Marketing Superstar. Now, he and Rick Gregory present this compelling,effective principle in full detail so you can apply it to your business.

The Dollarization Discipline shows organizations how to effectively communicate the economic value created by their products and services. Every day, good companies suffer because they create financial value for customers but aren’t able to keep their fair share. This is because most marketers cannot fully articulate the value customers get from their products, and the argument falls to the lowest common denominator–price. The solution is an approach to sales and marketing that goes beyond articulating features and benefits, but calculates the monetary gain a customer receives in exchange for the price paid. This book offers step-by-step strategies for doing just that.

Dollarization is simple in theory but complicated in practice. Authors Fox and Gregory include helpful charts, how-to steps, and dozens of real-life examples featuring leading companies that illustrate important techniques and help you shape an effective marketing and selling strategy.

This book offers strategies and techniques that will interest CEOs, marketing VPs, field salespeople, and everyone in between. Salespeople will learn how to handle price objections, shorten sales cycles, protect business from competition, get appointments, and more. Marketing professionals will learn to apply Dollarization to new product pricing, market segmentation, even advertising and communications.

Successful companies prosper by discovering how their customers make money and then aligning resources to help those customers make more money. Dollarization is a core discipline that enables firms to put this strategy into practice. With this book, Fox and Gregory include the step-by-step guidance you need to make Dollarization the foundation of your business strategy.

If you believe your company is under-compensated for the real value it delivers to customers, this book will help. Packed with practical advice and real-world wisdom, The Dollarization Discipline presents all the tools and techniques businesses need to turn their value-added into real money.

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Editorial Reviews

Soundview Executive Book Summaries
At the heart of The Dollarization Discipline lies the concept of understanding the financial impacts a product or service has on its buyer. Although this involves the idea of "total cost of ownership," it focuses on more than just cost reduction and cost avoidance. In The Dollarization Discipline, marketing guru Jeffrey J. Fox and management consultant Richard C. Gregory describe how organizations can also measure the financial impact of noncost benefits, including increased market share, increased sales volume, and increased pricing power.

Getting Started With Dollarization
You are shopping for paint and find many choices at the local paint store. Product X costs $12 a gallon; product Y costs $20 a gallon. Which paint should you buy?

The salesperson says, "I strongly recommend product Y. Its price may be higher, but it will last eight years, while the other paint will last four at best. That means that over eight years, you'd have to buy product X twice, for a total of $24 a gallon, versus just $20 a gallon for product Y. In reality, product Y costs less!"

You reply, "That's very interesting, but I'm preparing to sell my home, so I don't care about how long this paint will last. I think I'll go with product X for $12."

The salesperson listens and responds, "I understand, but I think product Y is still your best choice. You see, product Y contains 50 percent more pigment, which results in better coverage than product X. This means you will need to apply only one coat to your house. Product X will require at least two coats. This will also cut your labor costs in half. Plus, you are guaranteed that your house will look freshly painted, which will improve your success in selling your home. Wouldn't you agree that an extra $8 per gallon is a great investment to sell your house at the price you want?"

Finally, you decide. The $20 paint is actually less expensive than the $12 paint.

Financial Consequences of Choosing
When businesses make purchases, too often they are myopic and overemphasize the importance of price. They overlook the many other financial consequences of choosing one offering over another. This is a failure on the buyer's part, because it may very well result in financial harm to the organization. But more importantly, it is a failure on the seller's part because the seller has missed the chance to demonstrate the true financial impact that could be provided to the customer.

The meaningful way to compare the cost of two offerings is by evaluating the total cost of using each. In order to help customers to understand the true net cost of your product, you must dollarize the product's true value.

Dollarization is figuring out what your offering is really worth - in dollars and cents - to your customer. It is the management discipline that is missing in many sales and marketing organizations, and its impact can be great, and its applications are many. Dollarization can help your company better understand, articulate and profit from the value you create for your customers and clients. Dollarization should become a standing discipline that guides your thinking about pricing, selling, positioning, new product development, and nearly every other area of your sales and marketing.

Value Is a Number
In sales and marketing, value takes the form of value-added, value chain, value proposition, or value engineering. When sales and marketing people talk value, they use words - words that lack precision - and rarely use numbers.

The solution is an approach to sales and marketing that goes beyond articulating features and benefits, but in fact calculates the full economic value a customer receives from a product or service; the seller is then able to price the product or service as a true reflection of that value. This approach is called dollarization.

Businesses do not buy; they invest. Every time a company makes a purchase decision, it is committing company capital. In theory, that capital is constantly being allocated and reallocated to achieve the best available return. Too few companies exercise this discipline for all purchases. And far fewer companies market and sell in a way that permits customers to understand the economic value provided in return for the investment. Whatever you do, you must map exactly how your offering translates to value for your customer's business. Copyright © 2005 Soundview Executive Book Summaries

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Product Details

ISBN-13:
9780471659501
Publisher:
Wiley
Publication date:
09/28/2004
Pages:
272
Sales rank:
569,609
Product dimensions:
6.00(w) x 9.00(h) x 0.75(d)

Meet the Author

JEFFREY J. FOX is the author of the Wall Street Journal and New York Times bestseller How to Become a CEO. He is also the founder and President of Fox & Company, Inc., a management consulting firm that specializes in marketing strategy development and sales effectiveness.

RICHARD C. GREGORY is a Senior Consultant with Fox & Company. He leads Fox’s Dollarization Consulting and Training practice, which helps clients develop innovative approaches to articulating and quantifying the value they deliver to their customers.

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