How do you make sure your value-selling initiatives are a positive experience for both sales force and customer? This was the question confronting Cole Sandau, manager, marketing strategy with StorageTek, a $2 billion storage solution firm. StorageTek research discovered that its customers needed solid business cases to justify storage spending.
How do you effectively communicate an economic value proposition? Sandau and his team put together a set of guiding principles, which they referred to internally as the “3 Cs” for “collaborative, credible and customizable.” With the 3 Cs, you, too, can take your value-selling initiative to the next level.
The “black box”—a 30-page report sent to the printer with no input—won’t ensure compelling value propositions. Key stakeholders must selectively input and review the business case at all stages of the sales cycle.
- Customer collaboration
For a business case to be effective, the customer must actively participate in its creation. How can a customer endorse the results of an ROI evaluation without an intimate understanding of the methodology and logic used to quantify value?
- Internal collaboration
Sales reps don’t always understand the granular details of every product and/or service in their list of offerings. Through internal collaboration channels, agents in the field can consult with experts to define the business case.
- Business case library
Rather than beginning each sales cycle with a blank slate, representatives browse the library of archived business cases for a relevant baseline.
- Proof of value delivery
Post-sales collaboration is invaluable at proving value delivery, fostering customer relations and setting the stage for up-sell opportunities. Customers are not apt to purchase more without understanding the value of existing investments. Additionally, you can use post-sale evaluations to build convincing assumptions to prime the next generation of business cases.
For the customer to be compelled to invest, the company’s decision-makers must perceive the value proposition in the business case as credible.
- Third-party validation
You cannot be the sole source of content. As much as possible, you should source inputs, assumptions and even the methodology used to quantify value from a third party, such as value-selling practitioners, industry research organizations and the government.
The customer must understand the internal workings of the business case. The customer must be able to explore the value proposition from summary metrics, such as annual totals and cash flow reports, down to granular calculations for individual value components. This transparency ensures the customer understands the building blocks for how the business case is defined.
Customers must have the ability to include or exclude portions of the value proposition depending on applicability to their environment. They should be empowered to include soft benefits (such as user productivity enhancements, risk mitigation and technology preferences), hard benefits (which have a direct impact on costs and revenue) or both within the value proposition. Customers should also have the ability to risk adjust and phase the recognition of value over time, addressing change management issues that may prevent the immediate recognition of full benefits.
Solid business cases incorporate the full cost of the initiative, including internal project management costs, consulting and contractor fees and changeover costs associated with adopting new technologies and business processes.
The business case must address the customer’s perspective. The configuration of the value proposition that is most effective depends on the customer’s industry, business environment and location and the role of the direct audience within the management structure.
- Role based
The CxO is interested in high-level financial summaries, such as cash flows and income statements. Operational managers are interested in line-item impacts to revenue and costs, as well as influences on employee productivity. Technical stakeholders consider configuration details and technology options and peg value to specific feature/function controls. Although part of the same meta-model and driven from a common set of inputs, the role-based platform provides custom views of value that resonate with the audience.
- Industry sensitization
Your product and services are commonly implemented to address different business concerns depending on the customer’s industry. Therefore, the business case needs to be organized around the business problems of the current audience. This could involve small changes based on industry-specific terminology—or material changes to the methodology used to quantify value. For example, when constructing business cases for the private sector, revenue and the impact to the market value strike home. In the public sector, however, there is no concept of revenue or profitability (with the exception of the U.S. Postal Service).
Although English is often the official business language for offices around the globe, a business case presented in a language other than the audience’s primary dialect can impede adoption and understanding. Robust platforms for value-selling are multi-lingual and empower users to review the business case in the language of choice. Effective value-selling initiatives also provide real-time monetary conversions, letting customers review value in terms of local currency. And they acknowledge local variance in laws. For example, in the United States, Sarbanes-Oxley polices the customer’s financial and accounting procedures. Basel II regulates similar activities in the European Union.
A requirement in today’s market, a value-selling initiative is a considerable undertaking, involving research and data gathering; value modeling; and field training and rollout activities. To maximize the return on these efforts, maintain focus on the 3 Cs. A collaborative, credible and customizable program for value-selling will foster adoption from both vendor and customer. A well executed campaign transforms customer discussions, positioning you as an insider, a partner, an advisor—not a vendor. Sales are not based on price sheets and discounts but value—defined, validated and presented from the customer’s perspective.