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Value Modeling


Value modeling is an easy-to-use online tool for building value models, using Economic Value Estimation (EVE™). This tool calculates and displays the amount of differentiated value your product offering actually delivers to your customers' business. Value modeling enables a company to:

  • Assess key strengths and weaknesses of its products versus the competition
  • Decide which products/features are worth investing in
  • Determine which customer segments are most promising
  • Model "what-if" scenarios for making strategic pricing decisions

Economic Value Estimation (EVE) methodology has been used for years by leading companies as the foundation for their successful pricing strategy. EVE was pioneered by Tom Nagle and John Hogan in their ground-breaking book, The Strategy and Tactics and Tactics of Pricing.

LeveragePoint's online value modeling tool enables users to build an EVE model within minutes. The process is significantly faster and easier to manage than that used for conventional one-off spreadsheet-based models. Other benefits are:

  • Step by Step Instructions - Makes it easy to build a value model even if you've never built one before
  • Resources - Links to a variety of reference and learning resources, which can be customized by client
  • Collaboration - Individual users/teams can share their value models with others via a secure, hosted central database
  • Consistency - Establishes a standard, easy-to-read format for value models to support company-wide value management initiatives
  • Accuracy - Formulas used for value calculations are validated by experts and cannot be altered by other users (accidentally or otherwise)
  • Integration - Can be integrated with other enterprise applications, such as CRMs

How it works

  1. Start: Begin by defining your offering and target customer. Then identify the competitor you wish to benchmark against using an appropriate reference value.


  2. Benefits: List all your offering's features and then translate them into functional customer benefits.


  3. (+) Value Drivers: Map your customer benefits to positive value drivers. These describe the specific, favorable, economic impacts your offer provides to your customer. Choose from a comprehensive value driver library, developed by leading pricing experts. Or, add your own custom value driver library.



  4. (-) Value Drivers: Be sure to identify any unique costs or competitive gaps of your solution which have an unfavorable economic impact on your customer.



  5. Quantify: Input relevant customer and product data into the value driver formulas that precisely calculate the economic impact of your solution on your customer's business. Document your assumptions and source notes.

  6. Summary: See the results of your model, namely the amount of differentiated value and total economic value created. Use the interactive chart to conduct "what-if" analysis.



  7. Next Steps: Review the checklist and select appropriate follow-up options. These include export, sharing, and/or using another value management tool, namely value communication or price setting.




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