Articles

Defining added value for customers and delivering the value throughout the organization

Written by Lotta Schütt, Marketing Analyst at Marketing Clinic

High production volumes and price competition have traditionally been the main strategies for industrial companies to maintain business. Today, however, industrial companies need to rethink this approach, and move from a commodity business to selling value added solutions to customers. This transformation requires a change in all aspects of the industrial companies’ sales- and marketing process.

The consolidating paper industry is experiencing challenges, and it has driven Marketing Clinic’s client Stora Enso to rethink its processes with the mission to become more customer oriented.

For commodities, such as paper, product differentiation is practically impossible. Competitiveness in the sector has been defined by price, with the inevitable risk of profit erosion, says Pasi Piiparinen, Senior Vice President Sales and Marketing, Stora Enso Fine Paper.

But rather than solely focusing on the efficiency of production, the emphasis needs to be on offering solutions that respond to customer business issues and needs. For example customer satisfaction and customer loyalty are tied to the services and expertise offered, and these, in their turn, defend a B2B company’s price position.

As part of this change process, Stora Enso teamed up with Marketing Clinic to find ways of restructuring the company’s offering and the right sales argumentation, tools and support. The simple conclusion was that Stora Enso needs to create added value to its customers and deliver it throughout the customer value chain.

Marketing Clinic Approach

In the industrial sector, the knowledge of customers’ business issues has traditionally been weak. Marketing Clinic’s approach has derived from the consumer industries, where the customer is constantly in focus. Working with Stora Enso, the aim has been to change the company’s focus from its production-oriented approach to one that emphasizes the customer and end user needs.

Value creation among Nordic B2B companies is also stimulated by external price competition from Asia, especially China. These low-cost production forces challenge Finnish industrial companies to improve their marketing and sales competencies. For the B2B market, approaching the sales argument by offering comprehensive solutions instead of just products has become a requirement, says Marketing Clinic Group CEO Catharina Stackelberg.