Why Is It So Hard to Quantify Customer Value?
Customer Value Management Is Key to Solving the Problem
by JOHN PORTER
This is the first in a series of blog posts that will cover why quantifying value is so hard.
Value Engineering, in its purest form, is designed to align the value of what you sell to the opportunities that buyers have, quantitatively. The hope has always been that by doing this, it would help create budgets where they don’t exist and/or protect your margin against erosion when negotiating. Doesn’t seem too difficult. Right? Think again!
So why has automation eluded us for the most part? One of the main reasons is your value constantly changes.
Take for example a software company:
- You have at least one major release per year which adds to your value
- Your customer use cases are constantly evolving
- Your competitors are doing the same
Should you look to automate the process of Value Selling or Value Engineering, you need to catalog and evolve your value constantly and consistently. You also will need to make sure this catalog is something your sales team can understand, or you will not be able to enable the “tip of the spear.”
Failure to constantly evolve your value or put it in terms so that your customer-facing resources can understand, articulate and defend, is to maintain the status quo. The effective management of your customer value is key. This is a major reason why we think that Customer Value Management is a huge deal and why companies who master using the right technology and discipline will win!
As I look at the market at the present moment, granted from my DecisionLink point of view, I do not see a lot of companies that seem to be getting this right.
So, I pose a few questions:
. How have others done this effectively?
. What has worked and what has not?
. Why are we only supporting a small fraction of deals?