Moving From Value Creation To Value Co-Creation


Share on LinkedIn

As sales people we have been drilled and drilled in “Value Propositions.” Over time, our concepts of value propositions have changed–as they should. Value propositions used to be generic claims (usually generated by marketing) about value, perhaps statements about our products–things like “best quality,” “richest functionality,” “highest performance.” and so forth.

At one point (decades ago), these generic generic value propositions became meaningless and undifferentiated as everyone started claiming the same. How were we to set ourselve apart? By the way, too many companies are still stuck in this mode!

In the past 15-20 years, we have adopted the view that “value is in the eye of the beholder.” Sales people are now trying to understand what customers value, then present their solutions in the context of what they value. Marketing provides tools to help sales people do this, whether they are questioning guides, justification guides, or other tools. This is and continues to be important. Rather than generic value statements, we focus on specifics that are relevant to the customer—each individual involved in the decision-making process. We, also, focus on quantifying and justifying the impact of our solutions in terms relevant to the customer and what they are trying to achieve.

While this approach is not new, too many organizations are not doing this. There is still tremendous opportunity to grow in this area.

In the past 3-5 years, we’ve started seeing the early stages of a much richer approach. A few organizations and thought leaders are starting to recognize the importance of value creation. The shift here is profound and important. Value propositions have focused on the value our solutions will create for the customer–solving a problem, helping address an opportunity, reducing coast, improving their customer experience, improving profitability, increasing share and so on.

Value creation focuses on how we help the customer buy. I like to call it “the value we create in the process.” It could start with Insight, a Challenging Idea, a Provocative approach. Getting the customer to recognize and commit to changes that improve their ability to achieve their goals.

It continues by positioning the selling team as facilitators to the buying process. Helping the customers to buy— how do they organize and align themselves, how to they manage the change within their own organization, how do they establish their priorities, how do they make a decision. It moves through the sales process to implementation in helping the customer implement and achieve the results they seek.

We focus on how we create value in each interchange we have with the customer.

In many ways, value creation is the most sustainable differentiation a sales person or an organization creates. Products come and go. We may be superior today, but tomorrow a competitor releases a new product that offers superior value, and the day after, there’s something else.

We can only succeed in value creation by being intensely customer centric. Without deep engagement in entire customer buying and implementation process, we don’t maximize value creation.

Value creation is about our people, how we work together, and how we work with our customers. It is, currently, the most sustainable differentiation we can have in competing for our customers’ business. It is easy to copy and improve on products, it is difficult to copy what we do, how our people work with and engage our customers. Sure, competitors can hire people away–but that’s just a person. Value creation works only in a culture of extreme customer centricity. It is the way our people and organization put everything together and how “we” engage the customer through their entire process.

So value creation is important. Very few organizations and individuals are doing this well or consistently, but every day it improves. To be a little crass, we don’t have to do a whole lot, since most organizations are still prisoners of the “generic value proposition era.” Just thinking before each sales call, “What value will I create for the customer in this call,” is far more than most.

But we are on the cusp of a new era in value creation. It’s value co-creation. Where value creation is one directional—what value do we create in the customer buying process. Value co-creation, minimally, is two ways and can be multi directional.

A way to think about value co-creation is to think of synergy. Synergy was one of those $100 words consultants used to talk about a long time ago, but the concept is that 1+1=3 (or more). It’s premise is by truly collaborating, we can produce a better result than separately. In the context of what I have written so far we might think:

  • Generic Value Propositions: 1+1=1 (well maybe a little more)
  • Value propositions specific to what customers value: 1+1=2
  • Value creation can look like: 1+1=3
  • Value co-creation (as I hope we discover): 1+1=10 (or much more)

Value co-creation moves from teaching the customer to learning from each other. It causes us to leverage our individual and shared experiences together, creating something that we could not have produced separately or in the traditional ways I’ve spoken of earlier in the post.

Value co-creation is tough, it requires a much different and richer customer engagement/experience model. As a consequence, value co-creation, at least for the next few years, is probably best applied to very select cases (which we can learn from).

Value co-creation requires deep alignment. I’ve expressed some of the critical success factors in my posts on strategic alliances and partnering. (I’ve also written an eBook on this, email me at [email protected]. I’ll be glad to send it to you.) I’ve expressed in the following:

(SV)2 x (SR)3

Exploded it means: Shared Vision x Shared Values x Shared Risk x Shared Resources x Shared Rewards. (note, shared may not mean equal–which enables the small or individuals to co-create with giants).

Currently, we see value co-creation in very rich strategic alliance and partnering relationships. There are increasing numbers of organizations doing this very well—but these are usually separate from the main stream sales focus. Over time, we will see these practices become an important part of our customer experience and engagement strategies.

Companies focused on life cycle customer experience management — from prospect through the entire life cycle are starting to incorporate elements of value co-creation.

Social business will force more and more organizations into incorporating value co-creation into their customer engagement and experience models. Social business will also force organizations to look at value co-creation in their supplier, vendor, and procurement models. Customers and suppliers are on the precipice of entirely new relationships.

Social networking will extend value co-creation from just the customer and us to the community. This in turn will accelerate the ability and need for more to move into value co-creation with our customers.

The ability to co-create with our customers requires that we can first co-create within our own organizations. We must move beyond silo’s to working as fluid teams, building teaming and collaboration as a core competency within our own organizations. My friend, Vala Afshar (@valaafshar) and his colleague Brad Martin have written a must read book on the journey their company, Enterasys, is making in Social Business Excellence. They aren’t a client, but I really admire the work Vala, Brad, and the whole company is doing. Be sure to read this book and learn from it.

Value c0-creation is increasingly important. I’ll be writing much more in the coming weeks, but I wanted to get some initial thoughts into the community to have you start building on it.

What are your thoughts?

How do we move from generic value propositions through to value co-creation? Can we jump forward?

What are the critical success factors? How do we engage our people? How to we engage our customers? Who do we engage?

Republished with author's permission from original post.

Dave Brock
Dave has spent his career developing high performance organizations. He worked in sales, marketing, and executive management capacities with IBM, Tektronix and Keithley Instruments. His consulting clients include companies in the semiconductor, aerospace, electronics, consumer products, computer, telecommunications, retailing, internet, software, professional and financial services industries.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here