The Dollarization Discipline: How Smart Companies Create Customer Value… and Profit from It
by Jeffrey J. Fox and Richard C. Gregory
Dollarization “is figuring out what your offering is really worth—in dollars and cents—to your customer.” The book discusses the role of dollarization in sales, marketing, and product development.
Rather than saying your product reduces downtime, demonstrate that the product can save $15,000 by reducing 30 minutes of downtime at $500 per minute. If the price is sufficiently less than the dollarized benefit, it’s easy for the customer to justify the purchase.
Chapter 20 includes five steps to dollarization:
- Determine who is your competition.
- Articulate your differentiating features.
- State your benefit.
- Quantify your benefit (convert words to numbers).
- Dollarize the quantified benefit.
Dollarization is especially suited for business-to-business (B2B) selling because all businesses are motivated by profit. Most examples in the book involve component or maintenance suppliers selling to industrial customers. There is one chapter on selling services.
There is also a chapter on business-to-consumer (B2C) marketing. Customers buy for one of two reasons, to feel good or to solve a problem. Dollarization can only be used with the latter. For example, the cost advantages of a water filter could be demonstrated, compared with the annual cost of bottled water.
I think in some situations it may be less obvious how to apply this principle, or difficult to obtain good data. Nonetheless, I think this is an excellent book.
Fox, Jeffrey J., and Richard C. Gregory. The Dollarization Discipline: How Smart Companies Create Customer Value– and Profit from It. Hoboken, New Jersey: Wiley, 2004. Buy from Amazon.com