FutureSight eBrief
Welcome to the first edition of our FutureSight Executive Brief service. Our goal with this ebrief service is to help you and your colleagues in maximizing market impact for your B:B solutions.
"Research shows that over 75% of executives at companies whose new products failed to achieve their objectives blamed poor value propositions as the root cause" -- Siebel Report
Given this statistic and evidence from our own work with our customers, the first few FutureSight EBriefs will focus on the incredible importance of having a market differentiating value proposition to drive solution sales and market success. We will begin with offering insights and guidance for adding a business perspective to your value proposition, and how to evolve it to be more compelling over time.
Best regards,
Bruce Scheer
Add a Business Perspective to Your Value Proposition
And take steps to evolve it over time...
Having a compelling value proposition, and then successfully delivering on that promise, is not just a 'nice to have' - it's the price of admission. Companies are constantly vying for decision makers' attention and the opportunity to sell their products or solutions. Unfortunately, once given the chance, many lose sales by failing to adequately communicate the business value in a way that compels a decision maker to act. While many sales and marketing staff tend to think of their value proposition in terms of discrete 'features,' 'functions' and 'benefits,' business decision makers often think in a completely different way. This means that in order to close more sales, you need to build a 'business' perspective in your 'value proposition.
After working with numerous organizations challenged with communicating and delivering a business value proposition, we have identified five levels of evolution:
Do Nothing - where most companies are today.
Provide Framework - companies are able to describe the potential impact of their product or solution within a customer environment. An easy way to think of this is to ask yourself, 'What is the direct revenue enhancing, cost reducing, and strategic business benefits associated with your offering?' Providing customers with a business value framework is an effective way to capture attention and interest in moving to the next level.
Predict Value - your sales organization works with the customer to model the potential business impact and return on investment (ROI). This vastly reduces decision making time and helps generate a budget. With a compelling ROI, how can a competent decision maker not purchase from you knowing they are leaving money on the table?
Deliver Value - measure the previously forecasted business impact, identify where value is missing, and swiftly take corrective action. This is a powerful way to build customer loyalty and drive associated services and add-on sales opportunities.
Share Value - enter into shared risk, reward and gain arrangements. Most companies ultimately want to do business at this level when they are confident of the value being delivered to their customers, and want to maximize the amount of money earned from any client. However, you can think of these levels as 'stairs.' Take one step at a time when evolving your business value proposition, and don’t jump ahead until you’ve successful mastered the previous levels.
FutureSight Client Case Study - IQS has evolved their business value proposition with great success. IQS utilizes a white paper, case studies and sales discussions to help provide a framework for communicating their business value proposition. Once a customer can see the areas of business impact, IQS consultants and customers work to predict the business value of the solution through a collaborative financial impact analysis process with a supporting tool. For example deliverables used in this process, please visit the IQS Download Center at www.iqs.com. You will want to download the white paper, 'Quality Counts - White Paper.pdf,' the value proposition quantification process overview 'IQS Return on Investment Tool.pdf,' and the actual modeling tool 'IQS ROI Tool.xls.' You can also click here to access the IQS White Paper, 'Quality Counts' through the FutureSight Consulting Knowledge Center, Example Client Deliverables section. With this approach and these tools, IQS increased its average deal size by 30% in the first year.
For an example of one of FutureSight Consulting's Flash-based ROI Modeling tools to support customers in predicting value, please see our Business Value Calculator page.
Where is your company in its business value proposition evolution? Where would you like your value proposition to be? Are your sales being hindered through lack of a compelling business proposition? If so, evolve your value proposition to be more compelling by adding a strong business perspective.
Darrin Fleming is a partner at FutureSight Consulting. For feedback on this article or for more information on this topic, please reach Darrin at (440) 893-0187 or via email darrin.fleming@futuresightconsulting.com.
Did you know?
Facts you can use...
In a recent IDC survey, 67% of senior-level executives felt that having a strong understanding of their businesses environment and needs was imperative in their selection of vendors.
email: feedback@futuresightebrief.com
phone: (206) 686-5800
web: http://www.futuresightconsutling.com
Our Next Executive Brief will profile the three specific levels of a value proposition, and the interplay between marketing and sales in communicating and quantifying a compelling value proposition.