Who Should Lead the Value Modeling Programs?

by | Apr 10, 2013 | Empower Sales Conversations, Pricing, Quantify Customer Value, Sales

Guest Post by Stephan Liozu

Value modeling requires teamwork. Best practices show that this exercise demands the involvement of several functions in the organization: marketing, pricing, sales, finance, innovation, R&D, operations and others when needed. By working together, teams converge to reach consensus on value driver measurement models, the level of driver economic value and the value messages for every stakeholder. Convergence is critical for collaboration between functions and managing the complexity of value management. Generating great multi-functional team conversations eventually lead to reaching consensus on the concept of value.

Two of the questions that I am most frequently asked are how to get the sales force on board with the process of value modeling and who should lead the value modeling initiatives. Let us look at both questions in greater detail:

  1. Role of sales in the value modeling program: The role of the sales force and account managers in the value modeling process is very critical. They certainly have to be involved to validate many of the inputs and outputs of the process. The sales force should be involved from the get go and should be the ones executing the value approach in front of customers. Here are a few examples of where sales and account management play a critical role:
    • Validating the voice of customer in the overall process: terms, vocabulary, expressions, perceptions, preferences, behaviors
    • Validating the quantified savings or incremental revenues in the value driver quantification process
    • Validating the selection of the reference product in the mind of the customer
    • Getting access to the customer sites and to the relevant gate keepers at the customer locations
    • Conducting value-in-use analysis with the help of marketing, engineering and innovation
    • Validating that the right value drivers are selected in the value models out of a large potential pool of drivers
    • Validating that the value messages are powerful and relevant to the customers
    • Testing and piloting value concepts, value models and value stories in the field
  2. Who should lead the initiative: I am a firm believer that the project leadership role for any value modeling initiative should be an influencer from the sales organization. It does not have to be a sales leader or a high level executive. It is better to assign this leadership role to a top sales talent with charisma and influence to get the sales force on board and bring a high level of credibility to the project. Having someone from the sales team or with tremendous sales experience lead the project reduces the resistance to the process, the objections to the value modeling process, and the rejection of value-based pricing.
Value modeling is a challenging process that requires skills and sweat equity. Many companies have embraced the methodology and have communicated best practices. I have shared with you two of them: get sales and account management deeply involved in the process, and give the project leadership to a top sales influencer. If marketing runs the process and simply delivers it to sales, I can guarantee that you will experience pains, failures and slow adoption. All functions are partners in value modeling to bring the value story to customers and to capture superior value through pricing.
Be bold. Model value collaboratively! Join the value-based pricing revolution!
Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management.  He earned his PhD in Management from Case Western Reserve University and can be reached at sliozu@case.edu.

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