For our April Webinar, Todd Snelgrove, Fractional VP of Sales, Powered by Sales Xceleration and the Founding Partner at Experts in Value, shared actionable strategies and real-life examples of value management successes and failures, drawing on over two decades of first-hand experience. After the session, he answered questions from the webinar audience. In this blog, we share his live answers.
At what stage do most companies you work with embed value in the new product development process?
I guess this is the real question because, in my experience, it’s often not there at all. Even when they launch the offering, what they call the value package or the value statement is pretty weak. There may be a few elements there, but it’s pretty weak overall. Throughout the Stage-Gate process, that’s how the term value is used.
Sometimes this causes people to get confused, are we talking about value to the supplier? The manufacturer? The person who’s creating the product? That’s interesting. That’s the business case value, but what’s the value for the customer? I’ve been in meetings where people have been talking across each other because of this misunderstanding.
If a company doesn’t account for value in the NPD process, then they’re probably not going to capture any because people won’t buy something unless it delivers value for them. So, defining what the term value means is important – and that’s the whole point of having a person involved there to ask that early on. To be that challenger asking “How come? Who cares? Why would I, as a customer, spend the money?”
What type of value tends to be most underweighted by B2B companies that deploy value in the Stage-Gate process?
The qualitative stuff is much harder to do, but it’s not impossible. It might take a little more creativity. It might take a little more creativity. For example, competing against Asian suppliers as a local supplier. You can quantify reliability and risk. Another example is ease of use. We talked before about the benefits of a more comfortable helmet. It turns out people that who are more comfortable with their hard helmets wear them more often, leading to improved safety outcomes.
To get there you just need to start asking more questions, but you need to get past the qualitative and get to the hard quantitative. With a little bit of work, you can put a lot more meat on the bone without just giving these blanket statements that are kind of big or worthless.
How do companies embed value in Agile / Continuous Development methodologies?
I think the key thing is always to measure against what the customer’s existing situation is. When you go back, what was the improvement? You can start getting some interesting stuff. I’m amazed at how many companies don’t measure that the customer was happy because their solution lasted longer, but they didn’t specify how much longer. How can they not know some of this stuff?
Instead, by constantly putting that in your Agile development process – what didn’t work, what was it worth to a specific segment – it can prevent teams from continuously adding functionality that end up being benefits the customers aren’t willing to pay for. The starting point (for product managers) should be asking the customer whether improving speed, longevity, ease-of-use – whatever the benefit is – and start asking those questions before developing the functionality, not waiting until it’s launched and then throwing a bunch of stuff out there after the fact.
How do you bridge the gap from the innovation process to help sales stick to Value-Based Prices?
I think for me, the first thing is for sales to believe it. And what I see too often is when the sales and marketing package comes out, there’s a lot about why this new product or service is amazing. And the people look at it and just laugh. They go, “That’s not true. There are no competitors here.” The sales enablement documentation needs to be credible for sales to successfully defend higher prices, and get into how the solution will deliver more financial value for the customers in their regions and market segments, backed by statistics and examples of how other customers have done it.
