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Closing the Gaps Between Value Creation and Value Delivery
Sellers must be able to link their solution to buyers' business strategy and address the absence of value.
Posted Sep 1, 2005
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Executives continually voice their frustration as they can't get their price for the products and services they have painstakingly developed and marketed. Their sales cycles are chaotic and increasing in length. It is impossible to accurately forecast for the future. Their customer base is eroding, retention rates are dropping, and lucrative opportunities for expanding customer relationships are being missed. The high stakes B2B sector is confronting a substantially unaddressed value gap. Sellers are creating complex, value-laden solutions, but their customers are unable to achieve the promise of those solutions. Either the customer buys the solution, but fails to gain the value promised, or the customer can't comprehend the value. In either case, this is disastrous for the seller. There is a huge opportunity in this value gap. The key is the ability to bring a prime solution to your customers. A prime solution has three critical capabilities. Leveraging value First and foremost a prime solution leverages your value capabilities to impact at the highest level in your customer's organization. Complex solutions deliver benefits to customers at three levels of value: product, process, and performance. The source of customer value at the product level derives from the quality, availability, and cost of the product itself. This solution is likely to be seen as a commodity by the customer. At the process level the source of value is the ability of your product and your expertise to improve your customer's business processes. If so, the solution now has a value that extends beyond its base characteristics and the seller can be seen as a more integral part of the customer's business. The performance level delivers strategic customer value. This solution enables companies to better serve their customers, provide distinct competitive differentiation, and perhaps expand their markets. In the buyer's mind the seller now becomes a true business partner. A prime solution is designed to leverage value across all three levels with the primary impact at the strategic performance level. To accomplish that level of impact, sellers must be able to link their solution to buyers' business strategy and address the absence of value. They must understand the business drivers that critically concern customers, and understand markets and the customers of their own customers.
Creating a quality decision process As problems become more complex, it is unlikely that your customer will have decision process with which he can recognize the value you can provide, and so will not be able to fix an accurate valuation to your solution. A decision process that enables customers to determine the optimal impact of your solution can be defined at three levels: reactive, proactive, and interactive.
  • At the reactive level customers drive the purchase decision; the seller is trapped in that flow and is providing the information requested. The RFP resides at this level.
  • At the proactive level the seller tries to determine the customer's "buying criteria" and attempts to create the "perfect presentation." However, when the customer doesn't have a high quality decision process, the seller is constrained by the limits of the customer's comprehension. The outcome is random and unpredictable.
  • At the interactive level the seller provides the decision process. The seller collaborates with customers in obtaining an accurate diagnosis and determining financial impact of the absence of value, the design of the optimal solution, and the implementation of the solution to ensure the delivery of value. A prime solution incorporates a decision process that leverages the relationship to the interactive level. This process, characterized as multiple decisions, mutual understanding, is driven by an interactive questioning sequence. It verifies that the absence of value truly exists and that the solution will address the customer's business objectives. The customer is empowered to make a rational and high-quality business decision. Ensuring successful implementation Finally, a prime solution includes an implementation plan that ensures that the customer is able to capture and measure value. Solution implementation is defined at three levels: purchase, installation, and results.
  • At the purchase level a seller delivers the solution and leaves customers to achieve the value on their own. This might work for commodities, but customers need more help with complex solutions.
  • At the installation level the seller does ensure that the solution is properly installed and operational, but leaves customers to achieve the value on their own.
  • At the results level--the higher standard of value accountability--the seller thinks beyond installation and focuses on solution outcomes. The seller gives the customer a process for and assistance in the implementation of the solution, and then helps measure the value achieved. This approach will not only impact your business performance and profitability, it ensures that your customers purchased the best solution for their hard-earned dollars, and that you will assist them with a successful implementation and then quantify and maximize their return on investment. About the Author Jeff Thull is president and CEO of Prime Resource Group. He has designed and implemented business transformation and professional development programs for companies like Shell Global Solutions, 3M, Microsoft, Citicorp, Intel, IBM, and Georgia-Pacific, as well as many fast-track startup companies. He has gained the reputation for being a thought-leader in the arena of sales and marketing strategies for companies involved in complex sales. He is the author of the best-selling book Mastering the Complex Sale--How to Compete and Win When the Stakes are High and the newly released The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale. He can be reached at http://www.primeresource.com
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