Competitiveness and Innovation

Calibrating Your Value Model

13 Jan 2014  

The holiday break provides us an ideal time to calibrate and refocus our efforts and build for the year ahead.  Given the dynamic nature of the business environment, I recommend you consider these two simple questions:  If I were starting my enterprise today, what would I be doing different from what I am doing now?  And what (other than inertia) is holding me back from doing those things now?

The changes we don’t see

Changes in the competitive business environment come slowly.  In the heat of battle — producing and selling what we produce and sell — we often don’t see change…until it has already passed us by.  We tend to do the same things we did last year — maybe a little faster, a little better, a little more efficiently.

But we forget that the market, the competition, the entire business environment is different from what it was a year ago, or even a quarter ago.  Ever so slightly different, perhaps — but then, big changes typically begin life as small changes.

Consequently, the value model that is central to our product or service offering may not be as, well, valuable as it once was.

Six questions about your value model

I spoke recently with the co-founder of a start-up company in the B2B sales outsourcing business.  Acquiring new clients has proven more challenging than her business plan originally anticipated.

In helping her “mind-game” her team’s go-to-market strategy, I encouraged her to answer — concisely and clearly — six key questions about her value model:  Who? What? How? Where? When? and Why?

WhoWho is our client or customer? Literally, what is the individual’s job title who will sign the contact for our services, and/or who will benefit from those services?  This will begin to give you insights into their incentives, challenges, and priorities.

WhatWhat is that client’s problem or challenge? People do not buy products and services, they buy solutions to their problems — things that will enhance their own value, both organizationally and personally.  Things that make life easier for them and make them look good.

HowHow does our product or service offering address this client need? How do we add value in specific qualitative and quantitative terms?  How do we add to our client’s own value?

WhereWhere does our product or service fit within this client’s overall work flow or production chain? Where does it stand in relation to his or her organization’s overall needs and priorities?  To sell in, you need to understand the interfaces and linkages between your client’s own processes and value models and the solution you are selling.

WhenWhen is the optimal time to engage this client? Is his or her need tied to a fixed time cycle, like an annual budget?  Or is it event-driven?  If it’s the latter — which to some extent things always are — it’s essential to understand what those events are, how they are trending, and what their impact is.

WhyWhy would this client choose our solution over other available solutions? Thinking creatively about the range of solutions — as seen from the client’s point of view and not your own —  will help you position your solution to the greatest mutual advantage — for both your client and you.

The six value model questions are not sequential, nor are they listed here in order of importance.  It’s best to consider them together as a whole, since the answer to one (WHO your customer is, for example) will have a big impact on others (HOW your product adds value to that customer, for example.)


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