QUANTIFYING a value proposition is all about creating and communicating a clear and compelling picture of how a solution will drive business results for the customer. It requires the translation of the benefits of the solution into high impact measurable outcomes that matter to the customer. If done effectively, it enables sales people to maximize the competitive advantages that differentiate them from their competitors.
Procedure: Quantifying a value proposition involves three steps.
• First, list the business outcomes of the solution (e.g., improvement in the percentage of just-intime deliveries).
• Second, calculate the customer metric(s) that will demonstrate the impact of the business outcome (e.g., reduction in inventory times annual inventory carrying costs = value of Just in time deliver).
• Third, determine the most compelling display of the customer metrics (e.g., compare the outcome of the solution against the status quo or compare against your estimate of the competitor’s solution or against other companies in the customer’s market space).
Best Practice: The procedure for quantification is relatively straightforward. As is often the case, the level the difficulty and creativity lie in the execution. So, it is useful to explore some best practices. Four seem particularly important:
• Sell the Concept First. Top performers do a superior job when it comes to the quantification of their value proposition but they don’t just “sell by the numbers.” Even a great set of numbers will fall on deaf ears if sales people have not established a foundational level of understanding of their solution and a high level of trust. The worse possibility is that the quantitative analysis is viewed as a selling ploy and therefore discounted accordingly.
• Remember the Ripple Effect. Often in addition to the primary impact of a solution, there are, as well, secondary and tertiary positive outcomes. The other benefits might occur in another division, in a different time frame or for an alternative set of players in the customer organization. When creating a value proposition, it’s that sales people make sure they have uncovered and demonstrated the payoffs of the Ripple Effect.
• Translate Soft Differentiators. If a company’s only major competitive advantage is price, the challenge of the quantification of the value proposition is simple and straightforward. On the other hand, if that limitation is not true, then the challenge of translating soft differentiators (e.g., integrity, superior integration, creativity)
probably exists. It is easy to quantify that part of the value proposition
that is easily measurable. However it is equally important, although of much greater difficulty, to generate quantifiable proxies for soft differentiators.
• Tell the Integration Story. Many companies have created integrated solutions – but most still just talk about integration and continue to sell the individual pieces – hence a huge opportunity for differentiation for those companies that get it right.
One solution: when it comes to quantifying the value proposition sales people should think collaboratively as a team. Helping the customer connect the dots and understand the power of an integrated solution by displaying a unique set of
numbers that tell the story.
Our Ignite Your Value simulation will better position your team to win large, complex sales by mastering the value conversation and quantifying the value of your solution. We will help your team discover and identify the needs, the economics, and the metrics that matter most to key influencers.