We know our solutions have to create value for our customers. The challenge, however, is making sure that value we create is important to our customers.
Too often, we focus only on the cost of our solution. We compete on the basis of price, too often making sure our price is less than those of the competition. Sometimes we try to create some justification for our higher price—“We have more features, functions, bells, and whistles…..”
Implicit in this approach is the customer already knows the benefits of implementing the solution, so the most value is created by the lowest price.
Sometimes, we might go further, we create a business case. We look at all the benefits the customer will get, from the solution. We try to quantify them in dollars and cents. Then we look at all the costs, not just the price of our product, but the implementation costs, and other costs of managing and implementing the solution over time.
Not only is this much more helpful to the customer, but it enables us to really start differentiating our solution from the alternatives. In the business case, we can start highlighting things that we do that are different from the alternatives, and the value of those differences.
Then we can go further, we can do a before/after analysis, basically a risk assessment around the change. In this we look at the consequences of doing nothing versus the what they realize if they make the change. This is really important to the customer–though sometimes they may not realize it.
Often, we can develop a fantastic business case, present a great ROI or payback. But the customer may choose to do nothing. But what happens if they do nothing? What’s the impact to them? Why should they–why must they change? Even if we have a great business case, if there isn’t a compelling reason to change, then why should they? Why should the buy?
But then there is the next level the next level. Let’s imagine we’ve done a great job with the customer–they buying team. We’ve developed a great business case, we’ve helped them understand the consequences of doing nothing. They want to move forward.
Then they go to executive management for approval and they are stopped. Particularly in these difficult times. We find “critical” projects being stopped every day.
The problem is, our customers are are focusing their investments only on things that align with the top priorities to the corporation. Top management sees proposals from all over the organization. Top management is only going to fund projects that address the top priorities/focus areas of the organization. Even if the business function may have the budget, funds won’t be released for things that aren’t mission critical to the organization.
Even our buyers may not recognize this. They may not be used to needing higher levels of approvals for projects. But connecting every initiative to the top priorities of the organization has become critical in helping our buyers get what they want.
Then there’s the final case. Often, our customers don’t recognize they need to change. That there are better ways of achieving their goals. Or they are missing opportunities. It’s human nature, we tend to become prisoners of our own experiences. When we look at innovation, we look at our past experience, or we may look at what our competition is doing.
They don’t recognize there are things that may be very important, but they are missing it. Here’s where we can create, perhaps, our greatest value, helping them discover what they may not know, but that which can be very important.
If we are going to create our greatest value, we have to understand what’s important to our customers. Too often, we think it’s price, but, in reality, it’s so much more.