SELF TEST #14: Identifying Reasons for “Hidden” Negative Volatility
What is hidden Negative Volatility?
Hidden Negative Volatility events are those occasions when the company is not invited to bid on the business of prospective Core customers or when the company is invited to bid but is not selected in the customer's evaluation process.
Why do we need to understand the reasons for hidden Negative Volatility?
The reasons for hidden Negative Volatility are often different than are the reasons for actual Negative volatility. Often these reasons for hidden Negative Volatility reflect a reputation the company has from its Value Proposition some years ago. In those cases, the company does not need to improve that part of the Value Proposition, but it does need to communicate better with the prospective customer base on what it offers today.
Where should the company perform better than competition in both hidden and actual Negative volatility?
The best performing companies will outperform their market competitors in Negative volatility due to Reliability failures or Price failures.
How do you know when you have created Net Value for the customer?
You have created net value for the customer when you are able to assure yourself that the customer saves costs with your Value Proposition after consideration of the performance (Function, Reliability and Convenience) you have offered for the price you have charged the customer.
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