the value lifecycle

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The Value Lifecycle

The definition of a value proposition is

"a combination of resulting experiences, including price, which an organization delivers to a

group of intended customers in some timeframe, in return for those customers buying or

otherwise doing what you want rather than taking some competitive alternative".

Value Propositions

Good value propositions address the positive business and personal impact that

your offerings deliver to your customer. This value represents your competitive

advantage in the marketplace. Value propositions find the markets addressed by

our solutions and identify the potential value of our solutions offer to that group

of customers. They should be framed to an individual customer in the specific

terms of the customer's likely business situation, problems, and objectives.

Value Assumptions

Value assumptions are the hypotheses referring to the value you believe you

could bring to the specific customer. The key point here is that you are not

making boastful claims but, that you are discussing possibilities. This value

assumption becomes the premise for all diagnostic relationships.

The value assumption is a preliminary hypothesis that the value capability you

have can be matched up to the relevant value requirements within a customer's

organization. They define the potential financial risk to the customer in the

absence of your value. This assumption should be one that you and the

customer agree on as a premise for further discussion and investigation. The

agreement is that there will be a mutual contribution of resources to investigate

to what degree the hypotheses holds true. The critical difference being that you

are willing for the hypotheses to be true or not true. The value assumption is a

critical component in your credibility, differentiation, and your relationship.

To develop and test the value assumptions you have made about the definition

and scope of the customer situation, you need to determine to what degree your

assumptions are correct. That is that the symptoms and indicators are occurring

in the customer's business. Then, identify and quantify the impact of the absence

of your value.

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Value Agreement

To the degree your assumptions are correct and the customer agrees with you,

you have the beginnings of a Value Agreement with the customer on the

dimensions of the problem. With a complete value agreement in mind, you can

move to the final step of delivering value to the customer. Value achievement is

the ultimate and highest goal of salespeople. This enables sales professionals to

leverage the value they deliver to customers at three distinct levels.

The Product level. The value focuses on the product or service itself.

Quality, availability, and cost are the major sources of value. At this level

you are typically dealing with purchasing and competing with like

products and services. This is a commodity sale subject to price

pressures.

The Process level. The delivery of value is expanded from the product or

service being sold to the process in which the customer will use it. The

optimization of the process becomes a major source of value at this level.

At this level you are creating a limited partnership with the customer and

delivering a greater degree of value in a commodity-based transaction.

The Performance level. This level offers the greatest potential for value

leverage and is the highest value level which a sales professional and

achieve. The development of the customer's business becomes the major

source of value at this level. In the customers’ side, the sales and

investment in a more profitable future and the relationship with the seller

is a valuable asset. Relationships like this are not easily uprooted.

*When an agreed-upon value assumption is reached, it marks the beginning of the customer engagement, and it's

time to begin the process of validation. The first step in validation connects directly to the one area that has the

greatest power to compel customers to act-the absence of your value that is creating the opportunity. The absence

of value is where the customer's dissatisfaction resides. This is the customer's negative present and this is where

and when customers make the decision to change. When the consequences of the absence of value are identified,

quantified, and deemed worthy of addressing, you have reached the plateau on the value life cycle.

Value Required

The value required is when the customer's value requirements are confirmed and

their incentive to change is established. This is where the customer's value

expectations are confirmed and their confidence to invest is established. You and

your customer are now working to establish the parameters of an effective

solution, its characteristics, delivery timing, the appropriate investment, and so on

and so forth.



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Value Achieved

The last step of the value life cycle is value achieve. This is after your solution is

delivered and implemented, and that value is measured and reported.

Value Frame-Working (IDBD Map)

An IDBD Map (Integrated Diagnostic Business Development) is a sequence of

events that forms a path from the corporate vision and value proposition to the

ultimate goal of the business which is the establishment of profitable, loyal, long-

term customer relationships. When the IDBD process is successful, market

strategy is realized, value is delivered to customers, and value is returned to the

business in the form of increased margins.

*The map is focused on the creation of value. An organization's ‘concept of value’ grows out of its vision. Its vision

provides the framework from which its corporate strategy evolves and in which the value proposition is derived.

The value proposition, along with the products and services it generates, is delivered to the customer through a

series of strategies that together comprise the Go-to-Market Strategy. The Go-to-Market Strategy defines the

marketplace in which the company will do business. It identifies the markets, and market segments, in which the

company will sell its products and services.

A Go-to-Market Strategy includes a competitive strategy which defines a

company's position with regard to other organizations within its marketplace. It

identifies other companies vying for business in the same marketplace, evaluates

their strengths and weaknesses, and offers a plan to successfully compete against

them. It likewise includes a product strategy that defines the company's products

and services. It determines how each will fit the particular segment for which it is

designed.

You want to confirm that you can leverage the combined value of the product,

process, and performance levels within your customer’s organization. You want

to be sure that your strategies are capable of delivering value during their

planning stages before you devote the full resources of your organization to the

project.

You want to ensure that each strategy works as well as planned and that you can

make any necessary corrections in real time. You want to ensure that each

strategy succeeds and ultimately that it fulfills the value proposition you are

bringing to market; that it creates the expected value assumption, value

agreement, and value achievement.



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Identifying Value

The following questions must be answered simultaneously. They provide a value

maximization check. They confirm that all of your organization's value

capabilities have been tied to relevant value drivers within your target market.

You can be assured that there is a valid market for your solution and that it is

possible to identify and quantify the absence of the value you provide to an

individual customer.

From your perspective, what are your sources of differentiated

value? The answers to this question confirm that your organization

has considered and clarified all of its capabilities and competencies

and will they add unique value to a customer's business.

From your customer's perspective, what are your customer’s uses

of your value? Just because you can deliver value, you cannot assure

your customer that your solution will resonate with their value drivers.

Answering this question will ensure that the sources of value within

your organization are aligned with your customers uses of value, as

specified by their value drivers.

What are the indicators of the absence of the value your solution

provides? Once the uses of value are verified, its absence and the

consequences thereof must be quantified. You will not be able to

identify your best customers until you know what the customer's

world looks like when the solution is not in place. How and where

does the absence of your value physically manifest within a customer's

organization? What has your customer experienced in the past, what

might they be experiencing right now, or what might they experience

in the future in the absence of your value? These indicators are

physical signs. They are evidence of the absence of value and can be

detected and measured. You cannot properly value a solution until

you know the impact of its absence.

*Customers want to know how your offering is going to add value for them. They want to know how it will reduce

their costs. They also want to be assured that your product will deliver as promised. They don't want value added,

they want value of assurance. They ask themselves, "Show me how this dream will become reality and give me the

confidence to invest in your remedy. What is my incentive to change?"

All business objectives can be placed neatly into one of three major

categories.

Financial drivers. These are manifested by goals specifying either

top-line growth via increased revenues or bottom-line growth via

reduced expenses.

Quality drivers. They are manifested by goals based on increasing

dissatisfaction of the organizations customers and employees.



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Competitive drivers. Are manifested by goals related to making

offerings unique and ensuring the availability of products or services

to customers.

What are your sources of value? These are the elements of the remedy that

are capable of creating value for the customer. The value proposition is nothing

more than the capability and, your primary responsibility is to make it relevant.

Your ability to translate value propositions for your customers is the requirement

for sales success.

If you can define value in stages that enable your customer to understand the

absence of value and build confidence in their ability to acquire and achieve that

value for themselves, you will compel them into action. This results in your

customer understanding how your offering relates to their world and enables

them to evaluate its worth.

Sources of Value. Sources of value or value capabilities are the elements

of value inherent in your company and its solutions. That encompasses

the ability of the elements of your solution to create value for customers

or that enable customers to create value for themselves. What are your

offerings most compelling value capabilities?

Uses of Value. In what way will your customer be able to use the value

you provide or require the value you provide? What can the customer's

do with your solution that they can't do without it? Where are your

customer's most compelling value requirements?

Absence of Value. The absence of value is what it looks like within

organizations that do not have your value creating solutions in place.

What are the physical signs, or observable indicators of the absence of

your value? What costs did those organizations incur that your solution

enabled them to eliminate? What revenues were customers not receiving

that they now are? When we make initial contact with prospective

customers one of our first tasks is to verify that these generic absences of

value actually exist. What are the observable indicators of the absence of

value among your customers?


the value lifecycle

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