Find Compelling Value – BV6

 

The prior briefing described what is considered the MOST compelling value. 

 

Now let’s look at what is considered the LEAST compelling value for potential customers and their products/services:

 

• Cost reduction initiatives: while it is true that reducing costs can positively impact profitability, executives often view these initiatives as less desirable and of lower importance. These executives were often promised reductions in costs in the past that did not happen or fell far short of goals. In addition, it is impossible for a company to become great solely by cutting costs.

 

• Cutting headcount: this is a weak approach, especially if you are proposing this to a manager or executive whose department will be impacted by a reduction in their workforce. If your solution does in fact reduce the number of humans required to complete certain functions, position this as a way to redirect staff to work on another, more productive project. These could help with strategic initiatives where staff is reassigned to solve specific problems in other areas. So rather than cutting twenty employees, your value proposition can explain how twenty positions can be “re-purposed” to work on other important initiatives. Your value proposition should also include the value from these other initiatives. 

 

Sometimes these are considered “low hanging fruit” and get approved because they seem easy, but usually, their relative value is quite low. 

 

The top priorities of company executives revolve around increasing sales because revenue growth strategies will have a more direct and immediate positive effect on their business. This is not to say that reducing costs to increase efficiencies are not important. It’s just that when compared to increased revenue, market share, and opening new markets, merely reducing costs rarely gets attention and interest from executives. 

 

I’m DJ Sebastian, and we will continue this discussion on creating customer value in the next briefings. 

 

Find Compelling Value – BV5

 

The Most Compelling Value

 

Great companies constantly pursue ways to become even greater. A key part of this pursuit is to engage with business partners who can help them accomplish greater things. You want to be sure they come to believe you are one of those partners who can help them pursue “bigger and better” by creating compelling value propositions.

 

Let’s look at what is considered the most compelling value for potential customers and their products/services:

 

• Increase sales and revenues: how your customers can drive more of their customers to buy their products and services and to buy with increased frequency. Generating increased revenue will help your customer expand operations, hire additional talent to accelerate establishing new key projects.
• Increase net profit: how your customers can charge a premium for their products and services. Increase shareholder value and increase capital available to invest in new initiatives.
• Achieve a unique capability: how your customers improve their position in specific markets, gain entry into new markets, or enhance their brand reputation. 
• Gain a competitive advantage: how your customers improve their competitive position or even dominate specific markets. This will in turn, generate additional revenue and profit to create more operating capital. 

 

Company executives are usually measured by their success in increasing company revenue growth and profitability, which has a direct correlation to increased shareholder value. Their top priorities revolve around increasing sales because revenue growth strategies will have a more direct and immediate positive effect on their business. Project initiatives that can increase revenue, market share, and open new markets, most often get a high level of interest from executives. 

 

I’m DJ Sebastian, and we will continue this discussion on creating customer value in the next briefings. 

 

Find Compelling Value – BV4

 

Find Compelling Value 

Your customer is bombarded every day with phone calls and emails from salespeople like these:

 

“I will show you how to save money.”

“I would like to talk with you about your business pains.”

 

How do you separate your message from that tired, ineffective dialogue? How can you be sure your message is unique enough to cut through the glut of fruitless sales pitches that do not get the attention of your potential customer? 

 

The secret is to dig deeper and find value that will be compelling to your customer. Compelling value is substantial, achievable, and motivates your customer to engage with you in further discussions. To find compelling value, you need to understand how business decisions are made in average companies as opposed to great companies. 

 

Average companies tend to focus on reducing costs and competing on price rather than looking for ways to increase profits or position themselves for growth. Average companies might lack a strong vision, or they might compete in a mature market. They believe they must compete on price and often view cost-reduction projects as the only way to get there. However, it is nearly impossible to slash your way to profitability. That could be why these companies remain average. 

 

Great companies, on the other hand, prioritize business decisions based on two things: 

1. Capabilities that will create new differentiators and better position them against their competition.
2. Capabilities that will increase revenue and profits, gain market share, and position them for entry into new markets. 

 

I’m DJ Sebastian, and we will continue this discussion on creating customer value in the next briefings. 

 

Create a Winning Value Proposition – BV3

 

Value-based selling is comprised of several elements that make up a winning value proposition. These are discussed in the upcoming briefings.  

 

Value Exploration 

Once you’ve identified a specific account target, you will need to explore the potential value you and your solution can deliver. 

 

First you want to do some preparation to understand the customer’s situation. Learn about their current performance, their profitability, their growth, and key initiatives. Then work to uncover their key business challenges and their key strategies to address those challenges. 

 

When Your Target Company Is a Public Corporation, you can gain a lot of great information by accessing the company’s quarterly (or annual) reports, and investor presentations. These documents contain a section titled “Management Discussion and Analysis of Financial Condition” as well as one titled “Risk Factors” to describe potential challenges and risks the company is facing. 

 

When Your Target Company Is Privately Held, you can still get good information about the company’s status and initiatives from its social media feeds, online presence, press releases, and business-related websites.

 

Turn the relevant information into a powerful message describing how your solution will deliver greater worth and provide substantial business benefits to your customer. 

 

Develop three new ideas for how results can be increased for consideration by your customer. Be sure to:

• Make these ideas as specific and as innovative as possible. 
• Avoid mimicking ideas that appear in your competitor’s brochures. 
• Don’t focus on your solution’s features and functions. Instead, focus on articulating exactly how your solution will help solve your customer’s problems and deliver needed benefits. 
• Highlight areas where you have strong differentiators. 

 

Providing these ideas is an early step in building the confidence that will lead to a productive and mutually beneficial business relationship.

 

I’m DJ Sebastian, and we will continue this discussion on creating customer value in the next briefings. 

 

Business Value Not Just ROI – BV2

 

Value-Based Selling Approach

 

Rather than focusing solely on ROI, a better approach is to emphasize the benefit your customer will achieve in terms of the overall value the initiative will deliver. This is the value-based selling approach, which focuses on business value realized and combines all the aspects of the initiative (internal and external) that should be taken into consideration. 

 

Using value-based selling, you will engage with your customer to jointly build a vision around the value the customer will receive; along the way, you will articulate exactly how your solution is uniquely positioned to help your customer achieve substantial benefits. 

 

Let’s turn the earlier ROI proposition into a value-based statement. Let’s say your customer spends that same $10,000 and that your solution will enable your customer to realize $100,000 in business value in the first year—along with expected additional value in future years. This business value could be stated in terms of additional revenue, additional profit, increased productivity, or increased market share. 

 

Articulating your solution benefits using a value-based approach is much more compelling. This leads to more productive conversations about how this benefit can be achieved and the actual process that will lead to how the value is realized. You are creating a vision for your customer about how these benefits will positively impact their business.  

 

You are also positioning yourself and your company as the experts to lead your customer on the journey to understanding how this business value can be attained. This opens the doors to deeper discussion about how the value generated could be used for investment in new programs, new systems or equipment, and human capital that could generate future additional value. This approach creates a multiplier effect that is much more effective than a simple ROI calculation. 

 

I’m DJ Sebastian, and we will continue this discussion on creating customer value in the next briefings.