For our July Webinar, Rick Cantril shared his experience initiating, dialing up, and maintaining Value Selling at scale, improving win rates by 10% and decreasing sales cycles by 50-75%.
At the end of the session, he answered a handful of audience questions, but there were several that we were unable to get to in the allotted time. In this blog, Rick shares part two of his responses to the remaining questions.
How do you keep the program fresh? How do you continue to publicize wins? How do you use tracked results internally?
To keep the content fresh, we complete at least annual reviews with the product management, business development, finance, and sales experts for our solutions/services. We also use client performance that we track to further refine our valuations in our LeveragePoint value propositions.
We have a number of channels we use to share success stories. Some are likely more effective than others, but we have not scientifically studied the impact from various media. Whether you use simple “thank you notes,” company intranet articles, or annual awards ceremonies, the important thing is to just constantly provide recognition and reinforcement. Building traditions and a positive sense of competition can also lead to accelerated results.
Did you start a pilot using a specific product and sales team(s) or was it more customer opportunity focused?
You might do a pilot differently as I am not sure there is a right or wrong way to get started. We focused on creating a strong value proposition first. We tested that value proposition for both internal and external validity (i.e., with sales and an existing client, respectively). Once we confirmed the model’s relevance and accuracy, we then felt confident introducing the content into a live pursuit.
What kind of KPIs have you used in a real life scenario and how have you used it to formulate your value proposition?
I am not sure that an example from our specific organization or industry is as useful as the process, so let me address the process here. Assuming you have differentiated value, each product or service will have a unique value proposition as well as a very specific set of value drivers. Let me be clear on this point. Successful value proposition models (as with the offerings they represent) are not “something for everyone.” They are “everything to someone!”
Formulating a value proposition appears to be very difficult. From my experience, even product or service experts who have significant experience with their offerings and market can struggle with formulating a strong value proposition. For some individuals, it clicks, and they see it in their minds. What makes a great modeler? From my experience (and what I look for when I hire someone), great modelers have an innate talent for logic. They are those people who get out of escape rooms. They love riddles. They grew up playing strategy board games (and can easily list more than a dozen if asked).
When I create a new value proposition, I first identify the three to five value drivers I want to emphasize. That is, how does this offering make clients more money, save clients more money, or deliver some other strategic/economic advantage. Next, I take each value driver and determine how that driver interacts with the client to create value, and I inventory the components or steps. Finally, I translate the interaction/relationship into an equation to proxy the financial impact. My team will tell you that I often say things like “you do not have to know the values of all the variables, but you do have to identify all of the variables.”
Here is a simple example. Suppose we have a solution providing fraud protection. I might start by asking some questions. What type of fraud does this solution mitigate? Who is at risk? What is the probability of an incident? What is the cost of direct fraud loss? Are there other indirect costs? How often is the client/user at risk? What is our measured ability to reduce the risk? These questions might lead to a simple calculation to estimate the economic value such as the following:
Risk Activity Volume * Fraud Rate * (Direct Fraud Loss + Indirect Fraud Loss) * Frequency of Activity * Measured Solution Mitigation = Expected Value of Implementing Solution
How were you able to democratize the definition of quantified value given the myriad concepts like TCO, ROI, EVE, Payback, NPV? Did you need to develop a common language and terms to start?
To have a common language, you have to get to a point where you have a common culture. Organizational structure plays a significant role in how to best approach creating the right cultural conditions. This may sound like an oversimplification, but the LeveragePoint system helped to reinforce terms and concepts that we were teaching in our development programs. The “builder” interface (the marketing view where you create content) is designed to take your users through a “paint-by-numbers” kind of experience. These workflows helped us to ensure our users were thinking about the same things and seeing the same instructions.
LeveragePoint follows the EVE/EVA approach, but to this day, we still have team members who refer to their models as ROI analyses. In fact, all of the calculations listed here can be completed within LeveragePoint. As an enterprise shared service, my goal was less to get every business unit to follow the same process and more to ensure that we have evidence-based, quantified value propositions supporting the way we build solutions, price solutions, or sell solutions. Whether a business unit wanted to show a straight ROI model or an NPV model over time, they needed to quantify how their product or service made our clients more money, saved our clients more money, or delivered some other economic/strategic benefit.
To us, the metrics and methods were not important. The deliverable of the quantified value proposition was the goal, so be flexible in how your colleagues conceptualize what this means. Some of your team members may feel more comfortable taking what is familiar and using that foundation to get to value. This is perfectly fine as long as you get to a deliverable that quantifies your value proposition for your customers.