Value Prop Aligned With What The Customer Values?
Not long ago, in speaking with a top executive, he expressed great frustration with all of the sales people trying to sell a major new system for his team.
Shaking his head, he said, “Dave, they just don’t understand what they are trying to do. All they keep talking about is how much money they are going to save me. I really don’t care about that, I want to know how they are going to help drive my revenue growth!”
It was an interesting situation. The team was an extremely high performance team. Every performance metric showed performance far ahead of competitors and the organizations they benchmarked the performance against.
I asked him, “Don’t you care about saving money?”
He said, “Well, yes and no. Our spending is under control. Our people are very productive, there isn’t a lot of overspending in the system. In fact, I’m not adverse to spending more. My biggest challenge is driving revenue growth. None of the sales people we are seeing will talk about how they will help our team grow and produce more revenue. All they talk about is how much they can save us at current performance levels! I care but I don’t care—revenue growth is my most important business driver!”
Reflecting on our conversation, it struck me that most “value propositions” and business justifications sales people develop focus on what the customer will save. Stated differently, they are almost all focused on expense reduction. That’s important in any organization, but sometimes it’s not the most critical strategy driver for the organization. As a result, our value propositions aren’t really aligned with what’s most important to the customer.
It’s critical to understand the key strategic priorities of the enterprises our customers work for, as well as the consequent priorities in their functions. Some organizations are driven by revenue growth, some by expense control/reduction, some by improved asset utilization, some by improved cash flow, some by improved shareholder value…….
Presenting an expense control/reduction business justification to an organization focused on driving growth is less impactful than changing your argument to demonstrate the growth your solution can drive. Expense control/reduction over the long term may not be as important to short term cashflow–particularly if there is a long/costly implementation cycle or long timeframes to results.
Sometimes the customer will have multiple priorities–grow revenue, cut costs. We need to understand what’s most important and how we present our value in the context of what they care about most.
So few sales people understand value, communicate and deliver value effectively. So few do rigorous business justifications as part of articulating the value the customer will derive from the solution. As a result it might seem crazy to critique anything a sales person might do in terms of presenting quantified savings, investments, ROI’s and so forth.
However to have most impact, we have to understand the strategic priorities of the organization. We have to connect our value propositions and business justification directly to how we help the customer achieve their objectives.
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