Why Quantifying Customer Value is so Hard Part 2

by John Porter, CTO and Co-Founder for DecisionLink

This blog is the second in the series on why quantifying customer value is so hard.  (If you missed the first in the series you can read it here)

The key topic here is understanding and audience.  One of the biggest challenges a Business Value Consultant (BVC) or Value Engineer (VE) faces effectively communicating the customer value quantification of your solutions.  An old adage says “it very easy to make the simple complex, but simplifying complexity is a true art” and let’s face it most of us are consultants and engineers not artists.  We focus on spreadsheets and data to convey very detailed and complex topics and many times we are the only one in the room who can explain.

Herein lies the issue!  In most cases, the collective “we” (BVC, VE, SE, etc.) is not in the room when the real decision is made to buy and are completely dependent on our business sponsor to sell on our behalf.  If our buyer, who is not an expert in our solution or the value it brings them, is ineffective in positioning the need for our solution to solve the business problem and demonstrating the payback the customer will achieve, the chance of the dreaded “no decision” is very likely.

I pose these questions:

  1. How have you simplified how your sellers and ultimately your buyer’s ability to communicate your business case during the buy cycle?
  2. How many benefits / areas of value do you find effective as focus for engaging customers?

 

Productivity Benefits for Customer Value Management:  Hard or Soft? 

Productivity Benefits for Customer Value Management:  Hard or Soft?

Mark Camilleri
Director of Value Engineering
DecisionLink

Do you position improved productivity benefits of your solutions as a hard or soft dollar savings as you work towards improving customer value management?  Most practitioners place productivity improvements in the soft bucket, however, I would argue that depending on the benefit and how you position it, they could be counted as hard savings as well.  Ultimately, it’s going to be whatever your customer / prospect buys-off on, but if they can be convinced to count them as hard dollar savings, that just further improves your customer value positioning.

So, what kind of benefits are good candidates for hard dollar savings to help sell value?  It is going to be difficult for any customer / prospect to agree that “generic” productivity gain benefits are hard dollar savings.  However, if you can tie benefit to the actual cost of something (typically some sort of event) it can potentially be brought to the table as a hard cost savings, especially if it is tied to an important KPI for the customer / prospect.  Taking a simple call center example.  If you articulate your benefit as improving call center agent productivity by 20% you are going to have a difficult time convincing any financially savvy customer that is a hard savings unless they have plans on downsizing.

However, by simply positioning the benefit differently, you may have better success with your customer value selling efforts.  Imagine their cost per call center call is $5.  If you still claim your 20% productivity improvement, the cost per call is now $4.  If you are saving $1 per call (a vital KPI in the call center world) on 1M calls, that $1M savings can now be better argued as a hard dollar savings.

Again, it’s always going to be boiled down to what your customer accepts, but to simply always categorize your productivity gain benefits as soft savings allows your potential customer value of your solutions to be diminished.

What are your thoughts?  When / how have you been able to achieve hard dollar saving buy-in for productivity gain benefits?

If you’d like to schedule a free customer value assessment, please visit this page:

https://www.decisionlink.com/free-stuff/