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Embedding Customer Value in Your B2B Enterprise: Transcending the Revenge of the Nerds

February 24, 2015

Posted by Peyton Marshall

Posted in Empower Sales Conversations, Increase B2B Sales, Presales, Product Management, Product Marketing, Quantify Customer Value, Sales, Why LeveragePoint?

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“Customer Value” is a hot topic. If you Google it, you get 119 million hits. That compares to 52.7 million hits for “Lead Generation” and 15.4 million for “B2B Sales.”

Yet when you try to find someone who understands Customer Value in many B2B enterprises, it is often a highly specialized role. Customer Value is frequently the domain of a “Value Office,” a “Value Engineering” group or a SWAT team of internal consultants who come in to provide value analysis.

By design, a typical group of value specialists is meant to be a lighthouse, a center of excellence that will drive broader organizational emphasis on Customer Value. In practice, however, these groups sometimes morph from lighthouses into siloes, where Value becomes an exclusive domain for specialization. “Customer Value” becomes too important to be communicated by the sales rep who routinely talks to customers. If you are looking for a customer conversation about your product’s value proposition, take a number, get in line and a value nerd will be available shortly.

One major reason that Customer Value becomes a specialized domain or a siloed business function is that a bias develops about sales aptitude. Value specialization often becomes one example of the bigger trend toward routing technical discussions toward pre-sales specialists, relying on Subject Matter Experts (“SMEs”) as the rockstars to deploy in key customer meetings. When it comes to value conversations with customers, SMEs are often a great place to start. SMEs tend to get technical details right and they tend to understand how a product relates to a customer’s business.

But an embedded view that SMEs are essential to having the right value conversation can gather momentum, usually from afew great meetings or success stories. Once the rockstars start to deliver, managerial resistance to changing the formula takes hold. Customer Value is perceived as precise and mathematical. The view develops that understanding Customer Value requires specific training in finance or accounting. Management’s observations then ossify into a presumption that generalist sales reps are incapable of understanding quantified value and that a specialized skill set is required.

A managerial predisposition that Customer Value takes special mathematical skill misses the point. Understanding Customer Value is a language capability, not an engineering proficiency. Embedding the language of value in a B2B organization supports clear thought and communication in the language of the customer. Speaking the language doesn’t require mathematical prowess or engineering talent.

Like it or not, however, there are two general approaches to building organizational capabilities in any language: (1) hiring specialists/translators or (2) building broader fluency. Both approaches are used in speaking the language of Customer Value.

Specialists/Translators/ Subject Matter Experts. The translator approach makes Customer Value expertise available to operating units, often through some combination of outside consultants and internal specialists (SMEs, internal consultants, centers of excellence). Specialist SME capabilities may be directed toward internal decision-making on pricing and offer configuration for a product launch or for a product relaunch into a new segment. SME resources can also be aimed at communication and customer dialog through a specialist value team.

Relying only on Customer Value SMEs, whether for internal decisions or for customer dialogue, works best when there are discrete points in time where Customer Value really matters. For internal decision-making, these discrete points are often gates in a well-defined product development or launch process. Product launch decisions, including pricing, segmentation and offer design, are frequently the domain for outside consulting support and analysis. Outside consultants can be effective but can also be expensive, both out-of-pocket and in terms of time. There are invariably lags in deploying outside consultants due to scheduling constraints, the time it takes to negotiate work orders and the time it takes for outside SMEs to learn about products and a business unit’s operating context.

For customer dialogues, value SMEs are often designated for deployment at specific points in a sales cycle, for example in a bake-off or at the point where a sponsor is building a documented business case for purchase. Value expertise frequently has the most impact when it is deployed near a decision-point, often in conversations with senior customer executives. The SME approach is often a good way for organizations to start deploying Customer Value in their customer conversations.

Deploying specialist translators for Customer Value dialogs only works when the availability of SMEs is well publicized within an organization, when incentives for collaboration with SMEs are clear and when the SMEs themselves build the confidence of their operating peers through their professionalism, consistency and success. Even when all these elements are present, relying on SMEs to have a Customer Value conversation often results in bottlenecks in the sales process. Customer meetings and sales cycles can only proceed at the speed at which SMEs are available.

The right SMEs can be very effective, but relying exclusively on value specialists for Customer Value conversations is rarely efficient or sustainable. Outside consultants are seldom an appropriate or economical approach to ongoing, continuous customer dialog. The best internal SMEs turn over rapidly as their market values rise and as they switch to better compensated roles within an organization (e.g. management, commission sales). Continuity of SME content and methods are often impaired by SMEs’ use of complex spreadsheets for one-off situations and by poor document management practices. Scalability is seldom prioritized in a customer-facing SME job description. As with specialists in any domain, turf and misaligned incentives can be problematic for Customer Value SMEs.

Broader Organizational Fluency in Customer Value. Broader fluency in Customer Value often happens virally, even when the original value strategy design was based on specialists. When Customer Value SMEs are effective, the best members of the broader sales team pick up value messages and SME language naturally and start to speak it. When an existing product or solution has strong underlying value propositions, product management teams often discover individual sales and pre-sales people who have been quantifying value and selling it to customers on their own, all along, without support from marketing. Uncovering spontaneous, quantified value propositions is a good indicator of the likely return from broadening fluency beyond the top decile of sales personnel. It also helps in working through critical questions product managers should ask about how Value Propositions will be used with customers.

Building broad, team-wide capabilities in Customer Value has clear benefits. The team speaks the customer’s language. The team approaches product differentiation in a consistent, quantitative way that will resonate with customers. Sales has a way to articulate value and build trust using a framework consistent with in-depth follow-up by technical pre-sales. Sales can deliver summary value messages to get the next meeting or to keep a seat at the table while pre-sales can highlight distinct sources of value and respond to detailed customer diligence questions. A Value Proposition becomes a common platform for customer engagement by sales and marketing teams. A broad emphasis on Customer Value aligns the commercial team with its B2B customer, promoting fluency in what matters most, customer profitability.

There are three keys to building broader fluency rapidly in the language of Customer Value:

1. Keep customer-facing language simple and direct. Consultants and specialists often overcomplicate Customer Value. For purposes of decision-making, a deep and detailed understanding of value can be a good thing, helping to design better products, offerings and segmentation strategies. An in-depth, detailed value proposition can help in those situations where a customer representative either is doing deep diligence on a product or is willing to engage in an in-depth conversation about their business.

But for communication purposes, quantified value propositions should be simple and direct, addressing the key elements of a customer’s decision between competing alternatives. Clarity and focus are critical:

  • Highlight at most 3-4 key points of product differentiation and communicate directly what they are worth. This often means summarizing or simplifying a larger number of modest quantitative benefits arising from case studies and interviews. Identify a broad theme of product differentiation and quantify it, suppressing the detail, possibly keeping the detail in reserve for diligence discussions, but simplifying the basic point. Unnecessary information is usually distracting.
  • Make clear, direct comparisons, focusing wherever possible on the choice that the customer is actually considering. Multiple product comparisons can take a conversation in the wrong direction relative to what the customer was originally considering. Pulling out the wrong ROI (ROIs are always a comparison between two alternatives) can lose the customer or result in the customer drawing the wrong conclusion.
  • Wherever possible, include customer-specific information or data. Making value propositions relevant makes them more powerful.
  • Be prepared to highlight value that matters to individual customer stakeholders, expressing it in the language of those stakeholders. Operating personnel often focus on operating costs and think in terms of costs per unit of their own production output. Senior executives want to understand the impact on revenues, risk and the quarterly or annual bottom-line. Many finance professionals have been programmed to ask for an ROI. Sometimes customer teams are not aligned. Sometimes individuals within a customer team speak different dialects of their own language. Direct dialog with individual stakeholders in their own dialect takes the conversation to the next level.

Product management teams sometimes go on auto-pilot, falling into the habit of communicating their deep and detailed customer understanding in the same complicated way, over and over. Most customers don’t have the bandwidth or interest to engage in this way. Nor do many sales personnel. Starting simple is much better.

2. Get Started. Don’t hold out for perfect value propositions and precise data. The perfect can be the enemy of the good. Good customer conversations based on the best available information can and should be iterative. Customer dialog starting with solid but imperfect data can do the rest, continuously improving value messages, data and customer understanding.

When sales reps start laying down an absolute requirement to have accurate, bulletproof customer data, it is usually a sign that they don’t see the benefit of a value conversation; it may even be an excuse for sales to avoid trying to have one. When product managers start laying down requirements for accurate data, it may be a sign that they don’t trust sales to have effective value conversations or that they don’t trust their own understanding of the customer.

Sales conversations about quantified Customer Value can be productive based on benchmark or representative data. (“…our estimate of the value created for you is based on the experience of other customers…”) Sales conversations can be effective based on a value proposition customized for only a few pieces of specific data. (“…based on our understanding of your business, our product could improve your profitability by x…”)

Offering to improve on a quantified value proposition or to drill into detail is often a useful chip for sales to play in broadening the stakeholder audience, in building trust or in getting the next meeting. Getting to that point doesn’t require perfect data. Making the accuracy of customer data central to a value conversation is a good way to lose the interest of stakeholders with short attention spans and to have meetings disrupted by stakeholders looking to be the smartest person in the room. It is usually better to deal with stakeholders focused on details in small group follow up calls, after summary quantified Customer Value is already on the table, in front of a broader customer audience.

3. Take an agile approach. Continue to refine value propositions and estimates based on customer feedback. Good teams start with value hypotheses, refining their understanding of product differentiation and what that is worth through a series of interviews, research and customer interaction. They continue to improve the quality of their value statements and data based on testing and validation from the marketplace. This is the essence of the agile approach where early delivery, testing and adaptive planning are central to continuous improvement and adoption.

The agile approach is collaborative with customers. It responds to customer information and feedback. By moving fast, an agile approach positions a value strategy for early validation and early success. But for agile methods to work, a team needs to have a flexible attitude toward its own value proposition. The team needs to continually modify and improve its value proposition based on the messages that resonate, adapting to new information that becomes available through customer interaction.

In sum, sales teams deploying a value proposition have a central goal:

Have the right people deliver the right message to the right audience at the right time.

A great value proposition can be flexibly deployed and can help sales maintain control over which conversations happen with which stakeholders. A great value proposition becomes a common platform for customer engagement. Broad use of a consistent value proposition for general sales conversations and for specific detailed conversations when a specialist is available maintains sales consistency in customer dialog. Broadly shared value propositions help great B2B organizations speak the customer’s language.

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