Thu bank. kind of a European time zone. Good afternoon or good day if you're further to the east. Welcome for this little morning session with the topic of breakthrough commoditization. My name is Christian. I am with Implement for the past 20 years and I have the pleasure of hosting this session with you. So what we're basically going to cover today is how to counter some of the commoditization drivers out there so that you actually get to actually increase your pricing power and also see your win rates hopefully improving from the level they are at today. With me from London, we have Christian Hede from Grundfos who is going to share part of their journey into this and also some of the benefits that they have achieved by working with some of the things we're going to introduce today. Christian will be on in roughly half an hour. So our intention for the next hour or so is to first of all cover a little bit about what is the reason that we have to change, what are the consequences of not doing anything and what can happen to us as a result of that. Secondly, we have looked into what does maturity look like. So the companies who perform best within this topic, what do they do as opposed to what do companies on lower maturity levels do that do not harvest the benefits to the same extent. So there will be a maturity ladder walkthrough and also with some specific examples of what does it look like on the higher levels of maturity. Then we're going to look at how do you champion trade change and to introduce that, Christian Hede, Senior Director from Grundfos, is going to share parts of their journey so that we get to see what does this look like in real life. So that is the intent for the remaining 55 minutes of this session. And before we dive into the content, it would be really nice if you wouldn't mind sharing your name, your role, your company and also where you're located. Just do that in the chat. We're not going to use it for anything. It would just be nice to see who is here and where are you dialing in from. And you can just do that as I go on speaking. Now, the simple logic of what we see out there when talking to our customers and clients is that many companies are grappling the challenges of commoditization. And it basically puts a lot of pressure on margins and on win rates. And there are a few often quoted sentences that we hear across the board. One is, when we want to acquire new customers that we haven't worked with before, it often comes with an investment or quite a significant discount, an investment to show them that we are willing to embark on a collaboration with them. So already when acquiring a customer, you know, we are down to being a little bit more, let's say, likely to give discount to actually get that customer on board. Then as we introduce new innovations, new upgrades to our products, etc., the willingness to pay is not coming to the extent that we would have hoped it to do. So behind the intent of acquiring the customer, giving a little bit of a discount to get them on board, we often think, okay, we can catch that up by the next introduction of a new product innovation. But they don't really seem to be willing to actually pay for the full value of those innovations. Then when we come to the time, if we are in a contractual relationship where the customer wants to re-embark on a renegotiation, they want to put the contract or the volume out for a little bit of a competitive benchmark, most companies end up reducing prices by between 3% and 8% every time there is a renegotiation. So we give a discount to acquire the customer. They are not willing to pay significantly more when we introduce new products. And if and when we then renegotiate the contracts, we often end up granting even more discounts. And then when, for example, high inflation hits the market and the world and we want to increase our prices, or in general, when we want to increase our prices, we don't really get the price increases through. So we start off with a lower margin and then it kind of starts to decline from there from some of these logics. Of course, we see companies out there who can counter that, but we also see companies who are highly victimized by this logic. There's a very, very simple explanation to this that I will delve on in just a couple of seconds. But before I continue with the slide, let me just share one recent example that we had with a global customer. So with this global customer, we were doing a global value engagement program, basically enabling them to know how do we lead any customer interaction with the value first, so that the customer would be aware of, you know, how much value will be derived from either staying with this company or starting to work with this company. This company was faced with one huge renegotiation in the US. It was a contract with an annual worth of roughly 15 to 20 million US dollars. The company we worked for wanted to introduce a price increase of roughly 5%. The customer would expect to have prices reduced because that was what they were accustomed to from the previous year's renegotiations. And when we started to prepare that renegotiation with the account team, we asked the question, what additional value have we delivered to that customer during the course of this contract period? And they were all question marks. So the next step in that discussion would be to then say, okay, what kind of improvement projects or initiatives have we had with that customer during the course of the last couple of years contract? They came up with a list of projects that had been completed with that customer. Then we discussed project by project, what is the assumed value that project has actually given to this company? The combined value assumption across these initiatives totaled roughly 100 million US dollars from production savings, from productivity improvements, from supply chain cost reductions to new product introduction that has increased their revenue and thereby their margin. So the combined value add on top of a project purchase of roughly 20 million US dollars were north of 100 million US dollars. Now, when that number was verified and then taken into the renegotiation, guess what? This company actually managed to get their price increase, whereas in all previous years, they would have lost margins in that renegotiation. So the dilemma here is, or the paradox is, is that this company have been delivering this size of added value every year during the course of the contract periods and the previous contract periods, but they have never really harvested the benefit of that. And for that reason, they have been in a commoditization spiral and granted the customer a little bit of extra discount every year, both in fear of losing them and also because competitors were extremely aggressive on their pricing to try to recover that company. So the simple logic in this story can actually be displayed in this graph. And when as a company, you look at yourself compared to a customer, then you can be aware of the value or the unique value you add to that customer and the customer can be aware of that unique value or you can both be unaware. If you're both unaware of the value, you will both undervalue the offering. So you will not go to market with the right price because you undervalue your offering. The customer, on the other hand side, is also undervaluing it and because they don't know the value of it, they are not willing to pay more for it. So that's a quadrant you don't want to be in. Another quadrant, which is also slightly annoying, is that you are aware of the value and the differentiated value that you provide, but your customer is not aware of it. Then we can discuss that maybe you had a communication problem or that your sales reps were not capable of explaining it right, but you know it, you know you have a better product that performs better and makes your customers perform better, but they don't know. In that case, you are likely to over sort of price your product because your customer doesn't have the willingness to pay that you assign to the price of your product. And, on the other hand side, your customer is not going to see you as any different even though you have a better product. That is also not a really good spot to be in. Another place which is not a good spot is where you have no clue that your product and its performance or your services is actually significant, superior to competition, but your customer knows that because in that way you have an asymmetry of information which means that the customer with a procurement logic is still going to play the procurement game, let you know that you are more expensive than the rest and every dollar or every euro that they can save on a contract with you is saved or translates into profit for them. So, in that quadrant they are probably likely to renew with you and to buy from you but they are still likely to give you a significantly high pressure on your prices. Now, the magic quadrant so to speak is when you know that your offering is unique and that it adds value to customers and the customer know and they know you know and you know that they know because in that case your offering is perceived to be significantly more valuable and both parties know it. So, this is basically the quadrant you want to be in if you want to counter some of the commoditization drivers that you see in the market. In this quadrant you have higher win rates and higher pricing power. So, if I just pause again the slides here and come with another anecdote we work with a customer at a time who were also embarking on a huge renegotiation on one of their largest contracts across the globe the customer has reached out to them and told them that their competitor had come towards them with a very aggressive price of minus 20%. So, 20% lower price than what our client were actually offering on this huge contract. So, the customer let our client know that you're going to lose half of your volume unless you follow that pricing. And the client we work for didn't want to go for that lower price and you can then say then the risk is that they actually would lose half of that business. But they did another thing. They let the customer know that if the customer would grant 50% of the volume to someone else that customer would no longer have the size for our client that would justify the amount of services that they had today. And our client let the customer know that they would then withdraw a couple of services from that client. What happened as a result of that was that the customer or the customer to our client actually suddenly saw that this customer we work for would take away a significant value add. They would actually take away a number of people who had provided service to the collaboration over the course of the contract. And these service people were actually seen from this customer side as extremely value adding and they didn't have to hire people themselves because our client were actually submitting those resources into the collaboration. So as a result of our client telling their customer that they would withdraw these services their customer actually granted them a significant amount of the volume back because suddenly it was explicit to both parties that there was a service component involved that had huge value to both parties. And of course if you are unaware of the value of those added services you are much more likely to either lose the volume and or to sort of follow your competitor's lower price point and there will always be a competitor with a lower price. So when you know and they know that you are significantly higher on value add than competition you are in a really good spot to either secure the volumes and or to raise your prices or to keep higher prices than market average. Now we have looked a little bit into what correlates with companies' ability to actually maintain a high price and here are just three data points from a recent survey that we did. First data point shows that if you have top management being focused on let's say having the commercial organization being value driven that translates into a significantly lower average discount rate. So if you can mobilize a coalition of top leaders in the organization to say proving value to customers when we go to market when we renegotiate you are much more likely to end up in a situation where you grant lower discounts. Second data point is when you have internal functions like product development marketing and sales collaborating seamlessly on putting value messages together then you can see that those agree who agree that they have high maturity on that in average grant a significantly lower discount. So in average they grant a discount of 6% as opposed to those who disagree who grant a discount of 25%. So if your internal functions are aligned on developing value messages on your differentiators you are more likely to actually get a higher price. Last data point is when as a company you develop value proposition based on customer needs and values you are actually those companies who agree to that statement also gives a significantly lower average discount rate. What's interesting from this data point is that those who don't they actually say that they give an average discount rate of 38%. We would actually like to fuel this little study with significantly more data so we are going to share with you the link after this webinar so that you can also give your input and then in return we are going to return the report to you where you can see you know your own discount percent and then you will have an idea of the benchmark that you compare to and where you have opportunities to actually improve from. Now the core of the issue is that we have many European global companies who actually have significantly better products than their peers around the world. They know it and they know they create value but their customers don't really perceive that value or acknowledge that value so that is one of the core reasons why you keep on being exposed to a high price pressure. Now what procurement often sees when we look at proposals from our clients to their customers there is a simplicity to this because what procurement often sees is a couple of price points from different vendors and then they see sort of a general argumentation about this is our product these are the features these are the benefits it is quite general and it often doesn't reflect the value that that company will gain from that so in this case if you are procurement you see true prices one is 10 US dollars one is 15 US dollars you get roughly the same text you don't really get what's worth to me obviously you are going to go for the lower price because in comparison it seems to be roughly the same that you are getting what should ideally happen is that you as the most value adding customer when you communicate to procurement or whoever decides on the customer side you should actually be able to say what is the unique value add you will get from us over competition by working with us that might come with a slightly higher cost but the total economic value to you is still significantly higher compared to what you will get from competition so in this case if we tell the customer yes you pay 5 US dollars more but on top of that you actually gain 10 US dollars so there is a significant upside for you in actually going with the higher price but you need to prove that value in the context of the customer and not just in the context of your product now one example to showcase how simple this can actually be we did a project with a global market leading towards and maritime support service company they were bidding for multi billion dollar contracts who would run for several decades they would be faced with a win rate of roughly 23% when we did a review of the proposals they made to these big RFPs they would basically have a huge outline of the solution and then there would be a price in the bottom what we jointly transitioned to do was to figure out what is our core differentiator we interviewed a lot of existing customers to actually figure out what is this company's core differentiator and value add they came with super clear answers what we then did was that we embarked on a journey with the marketing and sales organization so that in any future response to a tender we would not only describe our solution we would also just before introducing the price have a statement of how much money that particular customer would save or gain as a result of this company's core differentiators and that would be you're going to save 50 million US dollars a year as a result of kind of statements and then there would be a price that was slightly above competition the result of this simple exercise was that this company actually doubled their win rate from adding actually adding the real value add to the specific customer to the proposal or the answer to the tenders so that is one way of actually dealing with the commoditization trap is that you become extremely more explicit about how you create value to that specific customer now when we look across companies that we work with we see significantly different maturity levels and we have used those maturity levels and those observations to actually come forward with a maturity ladder that shows roughly what are the sort of levels of maturity that any customer can be with and how does that correlate with pricing power and ability to win significantly more business than competition and it looks like this so the graph here says you can have low, medium or high pricing power you can have low, medium or high win rates and I'm stating the obvious hopefully all of us would be in the top right corner where we have extremely high pricing power we can actually charge prices above market average and we have extremely high win rates which means we win significantly more share of the business that we actually bid forward that we work to renew now we see companies who are sort of scoring low on pricing power and low on win rate they are most of them are characterized by the way that they communicate their offering is very much on an attribute level so they communicate this is our product these are the specs of our product that does not convey any value to the customers those who are slightly more mature they will actually add a benefit statement for that so they will say this is our product this is what it does and what it looks like and these are the expected benefits you can get from that product it's not doing a significant uplift in pricing power win rate but it's doing some difference now the first step to actually make a difference is for the next maturity level those companies who are capable of both communicating features advantages and benefit but who are also capable of communicating how do we then compare to competition so it's the energy saving you get from us 5% higher than what you will get from competitors as an example so if they add to it difference or delta to competition that is a slightly higher maturity level and that slightly higher maturity level actually drives higher win rates and also a little bit higher pricing power because suddenly you can start explaining to the customer why is it worthwhile dealing with us that is because we have a positive delta to the ones you compare us to now the next maturity level is kind of a step change because what characterizes the next one is that you can actually quantify the value in application with the customer so going from generic statements that our product is 5% more efficient than competitors to say in your application with the numbers we have derived from you from the way you operate your business you can actually save 200,000 in energy savings or in water consumption or whatever the measure is on an annual basis for these reasons so this is where you take your value messaging from a generic on product level to actually say what is it worthwhile in the customer's use of it so you tailor the value to the customer's specific situation we see companies on that maturity level having significantly higher win rates and significantly higher pricing power when going to market with their offerings then there is a fifth and we don't see many companies there we see a few and those few they are actually capable of winning almost everything and they are capable of charging a significantly higher price relative to competition what characterizes those companies is that they cannot only quantify the value of their product in application but they can actually quantify the total value of all the offerings and services they bring to their customers during the course of a contract life cycle so not only the value of the product also the value of the services the value of the joint improvement initiatives etc and when you can come to a customer and say you know our other customers who are buying this product is confirming an annual added value add of 25 million US dollars on inventory savings on cost reductions in production on production efficiency on energy savings or whatever and by the means of our advisory service or whatever your services are you know we have also examples of granting them this kind of value if you can communicate the full value beyond your product but also including your services then you are significantly more likely to win the business that you bid for but also to keep the business that sometimes might be facing renegotiations and procurement logics with your customer because if you know that you have added significant value procurement is less likely to actually have the power to squeeze your margins down when they compare you to market benchmarks so we would actually like to ask you and in a couple of seconds my producer Andreas will put up a little survey so if these are the five maturity levels so product attributes product advantage benefit statements product advantage benefit statements plus how much better than competition we are quantified value when customer use the product or the total value of dealing with us including our total stack of services could you please give us an indication where is your organization on these five maturity levels so until now 50% on level 2 25% on level 3 25% on level 4 those numbers will keep updating Andreas can we show the poll on screen at a certain point in time we can yes I'm getting not so what I see now is that level 2 and 3 are the levels that most organizations are most likely to be on which also fits very well with our observations we will share the result of the poll the reason for the majority of companies typically being on either 2 or 3 is that the next step is actually quite challenging so going from generic propositions around a product or service to actually be able to do it quantified in customer application requires not only a marketing effort but a joint sales and marketing effort so there is a transition to the next one and also a reason why we only have 3% of you actually confirming that you are on level 4 now just a couple of examples of what does the very best do those who sort of skyrocket on maturity level here is one example from a client we work with so one of the things they are capable of doing is when they talk to customers they can quantify and they can build it up in kind of a waterfall logic as you see here these are the different value drivers we add to the collaboration this is the exact value you get from each of these value drivers and this is how it's staggered up as a total value proposition to you as a customer this is not a generic proposition saying our product X is 5% better than competitors product Y this is translating our value into what is it worth when the customer starts to use it in a combined value offering with reduced transport reduced water consumption etc. etc. and not only the indirect value from the specific product so that's one example another example which actually if you sort of walk through it from a theoretical level is not is maybe not perfect but this is a real example that was used by one of our clients in the very beginning of a pilot project it was taken into a renegotiation with a customer with procurement who would normally always get 5% additional discount in either one of these what this account team did was they actually just made assumptions to the value add that they made to that company they made assumptions as you can see to the right of what is the competitors staggered value add and then they showed in the middle without any number that there actually is a difference just taking this one into the procurement actually ended up in them being granted a higher volume of the customer's business even though it didn't entail any numbers when they started to put numbers to it they saw significantly more added benefits of higher likelihood of getting price increases through higher renewal rates etc so so so what let's say what's the logic here the logic is that to arrive at maturity level 5 and 4 you need sales to be able to convey the value in a customer context but you need marketing as an engine behind that to foster all of that information so that it's easy for sales to actually do it now what should you then do to counter commoditization first of all so you need to know as a company if and how much unique value you add to your customers so you need to research and document your differentiated value add to existing customers so where and what is delta 2 competition it's actually simple go and ask all the loyal customers that you have what do you better what do you do better than competition what is that worth to you but do it outside their procurement cycle because during the procurement cycle they don't really want to display those informations and what is the value of those differentiated offerings to your customers so you need to know that as a company because if the answer is you are not unique you are not value adding then you need to be if you want to avoid commoditization but if your customers confirm that you are unique and you are value adding then you start to know that you are second step is you need to get your customers to know that you are significantly more value adding so that requires two disciplines one is that your marketing engine your product management and your marketing engine is wired up for value messaging and for communicating that to customers and putting material in the hands of sales so that they are capable of conveying the value to customers and then you need to work with a value selling approach that enables your sales people to actually come into a customer understand the context and then prove the value of your products and service in the context of the customer's business not as generic claims but in the context of the customer when you succeed combining those two you will actually end up being in a position where your offering is perceived to be more valuable and if you think back to the beginning that corresponds with higher pricing power and higher win rates so that's the simple solution to a very complex problem so that if you find out that you are actually delivering something that is better than competition and that customers see that and confirm that you need to translate that in a way such that customers also get to understand that not generically but in the context of their own business their production processes their internal processes their go-to-market approach or whatever their value driver is now this has a number of benefits so when you are capable of doing that you are going to win more new customers at higher margins you no longer need to say we need to invest a significant discount to get this customer because now you can acquire new customers on the basis undocumented significant value add which is better than what competitors can do you are going to be more likely to grow existing customers because you can both document to them the value you have already delivered which is going to make them feel even more comfortable buying more from you but you can also showcase what are the added benefits of going with extra products or extra services from us if we can convey those in the context of how they are valuable to the customer and not least for those of you who are on a contractual model whereby sometimes you renegotiate the volume you will also be able to keep more customers while increasing your prices because what you can do as a result of this is you can continue documenting to your customer what is actually the value we have delivered and if you document that and have it confirmed take that into the next renegotiation and I promise you the procurement person will have absolutely no power over you anymore so that is kind of the benefits of embarking on this journey I am just going to refer back now to the maturity level 9% of you said that you are on maturity level 1 basically communicating product attributes 56% of you said that you are on level 2 communicating features advantages and benefits 31% is on level 3 being able to also communicate delta to competition and only 3% are on maturity level 4 and 0% are on the last level of the maturity ladder so there is still room to improve so that was kind of the conceptual introduction and now we thought it would be worthwhile exposing you to someone who have actually tried this in real life not a consultant talking about it but actually a real person out there with a real job with a real business responsibility who have embarked on this journey so I am going to welcome Christian Hede a senior director from Grundfos Christian is dialing in from London and Christian is going to tell us a little bit about how Grundfos has worked with it and also what are some of the benefits being harvested so far over to you Christian thank you very much Christian I hope you can all hear me and good morning here from London could you please give me a second Christian where you can hear me or not we hear you now we had some technical issues this morning wow Christian that you just gave us here the last 30 minutes it is really amazing to kind of get that recap because essentially I can only echo what has just been said to me it's really about you know that you really need to invest in this journey it's not just something you do with a few meetings it's something that you basically have as your habit habit sorry that is basically how we should write this so to me it's really really great to listen to this again one more time so today with me here I brought a few slides with me that hopefully should exemplify the things that we are working on in Kronfors I'm going to exemplify how we're selling on value I'm also going to talk a bit about what were the triggers why we went on this journey I'm also going to give you a few examples basically how we consistently drive the change and also make it stick in every aspect of our sales efforts that we are doing in this company so with that you know I look forward and of course I know there will be a question session later on and of course feel free to shoot any questions and we will have a Q&A session later on if we take the next slide you know we should basically see a typical example of how we are selling the value in Kronfors so you might think that we are selling on component specs of course we are it's important that the specs are there but if we end up in a sales discussion where we are just talking about datasheet versus another datasheet that's simply just missing the point of talking about the added value that the entire organization is bringing of course also that your system is so smart or your product is so smart that it's not just about the perceived value right here now it's also the perceived value over a lifetime of a product and this is really what this slide here is talking about and it's quite extreme actually there's actually real numbers behind it so you know with our intelligent control you know we can simply guarantee that the lowest possible energy consumption in any application simply by embracing new controls and by embracing things like you know digital aspects of running our products which of course are pumps so this is quite unique and again when you show a picture like the one on the right to a client to a purchaser or maybe to another important stakeholder of the organization it is quite breathtaking and of course they want proof and then you have started a dialogue and that's exactly where you want to be moving forward here there's another example on the next slide which is essentially again similar but again a little bit about what else could you talk about besides total cost of ownership you can also talk about you know if you have been designing a product here on the left hand side you know it's a pump it's a frequency converter and a motor that's very traditional typical when we are selling our products if you somehow put that together and you design it together and you bring it in a box together you make it convenient for the customer first of all to buy your products but if you also do that at the same time also kind of let's say optimize that the size is smaller the efficiency is better then you have a total new discussion with your customer and that's exactly also what you want to drive new dialogues with new stakeholders essentially bypassing the traditional purchasing department that's essentially also what Christian reminded us of here the last 30 minutes before me and again the last very concrete example on the next slide is essentially talking about some of our sorry I'm not sure if the clicker is working here it is just talking about that we are now seeing a situation where we are now also putting much more focus on our sustainability targets are you still with me Christian could you go into the camera sorry you're there perfect somehow the slide the slide is kind of skewed on my end maybe it's the right the right one we need to see on the slide that is now showing 90% what we use that's good perfectly it's not shown on my screen but I'm happy that you see it guys again this is again talking about that the sustainability focus is something that is really really important to us in our dialogues with our customers because it's something new and again it's not talking about metal or specs or features it's really talking about that you know with something like a solution like we produce here you know the totally the total let's say efficiency gain of the system will just dramatically change and what we did with the use case which is actually also available online is for Carlsberg and I can say the name because they agreed to it you know we have been reducing their water consumption by 90% 9-0 right and when you have a company target of lowering your CO2 emissions or lowering your water consumption I think this is exactly a dialogue you need to have with some of your products that supplies equipment to you like Carlsberg and us in this case so I would again I'll come back to you later on but I would really advise you guys that is listening here on this call here this morning is to let's say stay focused on what you're good at but also try to embrace what can you do in the whole trend area about sustainability can you somehow solve your customers sustainability targets that's another value driver that will simply just take off here the next couple years that actually leads me to the next slide which is talking about you know how we did it in Grotefoss because you know we also we realized we were basically a couple years back we were pretty good at selling value but you know when we kind of listened to let's say we would take 20 sales in a year and kind of let's say read your code at them and try to understand how they did it it was 20 very very different ways of doing it and that is something you know that's not including a learning loop and that's something that is really really difficult to kind of scale beyond from that so what we identified quite soon was that you know we need to have a structured approach on value selling we need to be better at explaining and qualifying of course the added value to our stakeholders and there were tons of things tons of ways we did that in the past but what we realized is if you want to move from a generic selling approach where some salespersons are super good at selling on value and others are not why not give that tool to the entire sales force and enable them to kind of customize and come with a dedicated value selling approach so that's the journey we have been on and that we are still on but we are really really now on the good side so what we changed from was like we communicated like well we have the best product in the market it's I think hopefully that's something you can recognize as well and in your companies it's not bad it's not wrong but I think if you want to trigger a value discussion you need to talk about the value drivers you need to talk about the hidden needs of the customer so if you can help him to kind of let's say solve his problems if you can help him reduce or improve his business impact by a certain amount of percentages or if you can secure his differentiation through some of your solutions or through some of your knowledge and through some of your people that's exactly where you want to be in the future and we are on that journey and you know it has really transformed the organization quite largely here at the last couple of years we started back in 2019 and what actually is is quite important for me to stay here is that you know when we did this journey right we had some super nice products if you can click next my clicker doesn't work Christian thank you very much you know what you see here is some really really nice products from us well we love pumps and I do as well and what you see here these are not the usual products that you have in your own home back at home these are super intelligent products and you could start to sell this on specs you could start to sell it on well we have a fantastic display and computer inside but you will simply miss the point so what we actually have been now investigating is you know how can you instead of doing that sell on how we bring lowest energy consumption to customers how we ensure that the service and maintenance costs are the lowest you've ever seen right so we utilize the product as a platform but again it's how we communicate it is completely different and that is something that I hope that you will all kind of say think about when you get back home after you've been listening to this start to have a conversation with your sales guys and your other colleagues and maybe also a dialogue with some from your engineering department if you have something like that you know how is it really that these guys are talking about your product is it specs is it features is it value or is it really customer value and I will bet you guys that that you could do better on discussing customer value drivers instead of discussing features and specs it is fantastic company I'm proud of being part of you know now with the 76 years history right we are doing fantastic quality products and it's a fantastic place to work but again we are also super engineering focused we want to create the best quality and it is so hard to break out of silos because we every time we are in a management call we talk about features so it's also hard for us but starting some place in the organization and let's start in sales you know it will enable you to have much better dialogues and it will also something that you should adapt into the engineering department because you should not talk about features only you should also talk about what is the added value for the customers when you do this on the next slide it is a similar example it's just another product range and it's just to show you have we have multiple products that is much more different than the small circulars that you are so much that we're so much known for what we try to sell on here in this example is that you know with our intelligent control well yes there's a cost to an intelligent control but what we actually do is it really really guarantee a super easy operation and a super easy commissioning for all customers you know here we sell on time saved or convenience factor you could say that's also what we try to sell on in this case here and to us you know it is again something brand new to kind of sell on convenience instead of selling on the bare metal that we produce as well but again it is a journey and I think the journey will show you when you embark on it it will show you that you will have new discussions with your customers and you will arrive at a destination where you have much more discussions about value and not just the 5% that Christian reminded us of a couple minutes ago you could also talk about maximum performance right because the performance is important to us it's important that the production doesn't go down because one of our products is failing right so here again you know we need to have dialogues about how we can improve how we can move beyond just selling our products but how can our products enable their production or their facility that's about you know daring to take the first steps being crazy enough to kind of convince the customers well we can do something to maximize your total performance that's that's quite a thing we should remind ourselves of this leads into the next slide which is talking about the things that you need to build this and this slide looks like one of the previous slides I just showed early on but it has different words to it because value selling is really about again building new competences and of course utilizing the existing competences that you have in your organization and this is not just sales I'm talking about here this is end-to-end in your company big or small or mid-size you know we are basically all in sales that's something I try to remind myself of and my colleagues every day and every hour so again you know we were this kind of we have the best pumps in the body right that's where we were right we still have it right but that's not how we communicate so what we now talk about is you know our competences what are the competences inside the organization that we can use in frontline sales right can my application engineer or my software engineer can they help me articulate you know what is the value that we basically give them right in a way so my sales guys are equipped with tools features facts that would enable their dialogues because this is not about that our frontline guys should be experts in data privacy or cybersecurity no not at all but we should equip with tools and snips of nice little stories about how you know we as a company is securing your operation securing that cybersecurity standards are met as an example which is also stated on the slide so to me and to us it's really about you know using the knowledge we have in the organization but bring it forward to our super important client sorry employees which are of course the ones in sales office here so you know use your internal competences and of course also bring in new and the example here on the right hand side is for instance digital I guess many of you are already now embarking on digital journey and I can talk another hour on that topic so let's not do that here today but you know digital is of course something you should talk about because everyone wants digital right but you know what will differentiate you in that dialogue is not to talk about features and spec but talk about the added value right and you will always get questions like you are well is this secure enough and what we understood is that these questions came basically in every sales meeting and what we said is we need to equip our sales colleagues with kind of overview about what we do and what standards do we have so they can basically put that forward in meetings basically just saying well we comply with latest high standards if you want to know more this is the paper and if you're even more interested I can set up a call with some of our people that will let you know exactly what is we're doing so new competences but don't forget the ones you have bring your competences that you have in your design let's say back-end organization bring them forward right and bring them together with sales that's where the magic happens so now I'm into the phase where I want to show a few examples so just again it's very practical way we did it actually we here this example this is back in 2019 we brought together a group of our super talented people these are a mix of sales and application engineers and super senior technical people as well so what we did is actually just to map up a few applications we went through them and we tried to start with what is the real pain point of the customer and how can we go from there to something that will communicate how we solve that for them right and this is really again where we are utilizing competence as I just said put them together in a new setting put them together with sales and basically let the magic begin right what we also did is know we looked at how could we make sure that this is something that is leveraged on a daily basis right this is not something that is one workshop and then we just leave it so how do make sure that this is something that we retain that in right and there are tons of ways to install that in your organization and even though have identified one perfect platform and one way of doing it might also realize that need to tweak a little bit anyhow it's different from region to region and country to country but if your mandate is we need to do this let's get started and start in a practical way that would be my best example call in for a few workshops but when you've done that need to think about how we can make this stick and this is really why we introduced something we talk with this network team and they might get assistance and at some point they will be confident enough to do it themselves so it's a self learning mechanism on the next slide it is also a friendly reminder on how to do this and what I said is if need to communicate values and need to bring forward good examples simply have to look at how can ensure a continuous engagement and one good way is to look at what content can create link it back to marketing as Christian is reminding us here early on 50 minutes ago so here need to activate your content need to ensure that it's continuous feedback so the content is improved that's why need to do this how that is to create this flywheel of topics that distribute it with marketing campaigns this is really how the flywheel should work right because then have expert knowledge create a nice look around it and communicate about it right and what this will give is something that is remarkably different compared to just sitting on specs and features this will give questions from your customers on how could solve this XYZ and that's exactly the dialogues want the last slide before I wrap up is again a last friendly reminder from my side and I think now we are about to open up questions as well it is really to stay curious on what can learn from your customers and partners what is it they want and if identify what is they want don't just stop there have to stay curious to understand are the new stakeholders is there a new digital officer hired that didn't know a week ago stay curious on that they might also get wiser they might have new needs a month later so this is again where value based selling is important because it's a structured way to identify stakeholders it's a structured way to identify the value and also to uncover the hidden needs that is in the organization and the last reminder on this slide is for instance sales channels right this is a sales channel it could be one from of course it could be similar to yours there are super many stakeholders and last comment for me is need to have a value driver or value proposition for each of these stakeholders otherwise will never end at the end said I think that concludes my few minutes here Christian and thanks for the opportunity I hope this was a good insight for all of back to Christian it was Christian but we are not going to let but the question first is what kind of benefits have seen from doing this have elevated discussions to other stakeholders what have been business benefit side of doing this it is Christian there are many benefits and of course both financially and also let's say more holistic level could say but what we feel and what we know is that we need to continue this because what we see is we meet new stakeholders we basically bypass the traditional discussions on price we go beyond we are now having dialogues around how maybe we could support a customer on their sustainability targets and then are outside of the room of the purchasing department then are suddenly in a CXO office maybe in a CIO office and that's exactly where want to be of course we recognize cannot do that in all sales meetings but if are in a dead locked situation and want to fight the price discussion and think are stuck in the middle somewhere between competition this is a good way to fight yourself out of that because again we do fantastic products but there are also competitors right so to me this is how we drive growth question right if guys are looking on web page we did a fantastic first half year report this time better we haven't seen so nice performance ever I would not say it's value selling only reason why but we stand out in the market we talk about different things and it's not just about pushing more and more it's also about doing something for the climate and that different discussion will uncover different stakeholders and will eventually have new enlightened discussions question from Mark and I'm going to address that to Christian what are your take on comparing your customer value with your competitors so how do provide that benchmark of over them well this is of course what we call next best alternative right we will never say that our competitors are doing bad or they're doing bad for us so I think this is where need to have respect because this is not going to end up in a situation where we are fighting people and our beliefs because we have great respect for our competitors I think that's a good starting point but then need to create next best alternative framework could say and can look that up on how should do that or maybe can call Christian from implement here he might have a good idea on what's the next best alternative and sell against and it is of course on support it's about lead time it's about quality level it's about flexibility those kind of things the soft values around your hardcore products that is mostly what we talk about there and sometimes it is a head to head competition and it is they are likely good as us and then it's people related and people relationship is also what get when you're doing value selling because that's about long term relationships and I hope we will be good at that also in the future because people is really what we that's how we drive our growth I think that's a really good point question and also we often get the question how detailed and how many specific measures or decimals should we be able to explain delta to competition and the answer is make some qualified assumptions don't need to do the big study of do they perform X over Y over Z make some qualified assumptions have it confirmed with a couple of customers and the more bring your value assumptions and your value dialogues and how do we address your problems as a customer and maybe even challenge their perception of the solution so that they save even more water the more likely are to actually stand out on the value that comes out of your mouth more as towards whether are 1-2% better than your competitor product so don't have to have scientists investigate Delta II competition you need to be aware of it have a qualified opinion that somehow test with the market sometimes but that is not the core of the discipline that is how we change the dialogue with customers there's another question I can maybe short the question if that's okay and I would say that know be respectful in your dialogues be respectful when create the selling against arguments know this is what we do right and being respectful is a long term driver right it's not just about saying well competitive A and B they're just bad because that's exactly where close your eyes because they might be better than next year right so it's about bringing respect into dialogues show that you're professional that is know that that's really how the sales is being close is that have a long term relationship and that treat people with respect I think this is something that we should remind ourselves that's maybe one of the rules of engagement in any dialogue right yeah can also argue your competitors is also going to make assumptions towards customers about how they're better than so it's about how convey that difference and how to take it into the context of the customer and then might end up having two products who are less alike but have the most convincing story around them and then obviously most companies have something that differentiates them which is also good to have into the dialogue I think we might have more questions that we have time to ask but Christian I know that Grundfors is also sometimes in a distribution channel and there is a question here that when as a company find out that have a value proposition to the end user but actually sell your product through a distribution channel what do do to make sure that your value proposition comes through that channel well it's a super good question and I love it and I think it's of course about basic strategizing about the push-pull effect right so know of course create an end user demand communicate case stories like the one that showed with Carlsberg as an example right know that that's that's creating a pull to to be better at selling to their customers right so essentially it's about creating a push-pull being very firm on that but at end being low practical right it means need to identify the core value drivers also to the distribution guys because they are important if you're relying on them need to define a value proposition to that person right and if you're just talking about in user value that is often forgotten right but need essentially for every sales channel need to articulate what is the value that as and as your company can help this person or these personas to overcome their challenges right that's the structured approach that value based selling is about that's why I talk about stakeholders because stakeholders that is not just end users it is everyone it's a consulting engineers a contractor to start it is not getting easier right and have to start in small steps so that's maybe also a friendly reminder to my side is get started essentially right start your own little test and go on then I think in the interest of time we have one more question from Matteo who asks what is the biggest challenge in moving from a value selling to value organization and then there's from a feature selling to a value selling organization so what are the major obstacles or challenges we have 20 seconds I would say it's not that one part is better than the other respect for each other the feature selling organization is also important but the combination of this plus the other is important so I will keep it short here right investment is important and the belief that this will do the job is what need thank Christian we're going to go back to the slides now just to make an ending thank so much Christian also for taking time from your business trip to London also to all of thank for your time unfortunately our time is up if have more questions send them to us what we will do is we're going to send the presentation afterwards we will also send the link to the survey that we touched upon in the beginning we would actually really encourage to answer that survey we're going to send it back to in return for your answers and then can also start seeing how compare and where your potentials are we would like to continue our research on how these elements actually influence companies ability to charge the price that they are worth to customers can also see here a number of examples of programs done with global customers who have actually yielded quite significant value so if are interested in hearing some of those reference stories reach out to us but thank so much for coming and taking the time here we hope that take some inspiration away for at least the weekend have a great day everybody and thank Christian