In prospect and customer interactions, the term “business value approach” is often thrown around, but do we really understand what it means?
Recently, I was asked to define this concept, and it got me thinking about how critical a business value approach is for both providers and customers. Let’s delve into what a business value approach entails, what it looks like in practice, and how to measure its effectiveness.
The Why of a Business Value Approach
The essence of a business value approach is to:
- Ensure customers can receive tangible value from proposed solutions.
- Confirm customers are actually gaining the promised value from purchased solutions.
- Leverage on-going value achievement to assure a healthy and mutually beneficial relationship between you and the customer over time.
When executed correctly, a business value approach can serve as a cornerstone for long-term customer satisfaction, trust, and loyalty.
What Does a Business Value Approach Look Like?
Adopting a business value approach involves several interconnected steps that must be aligned with the customer’s needs and expectations. Here’s what it entails:
- Discovery around Challenges and “Do Nothing” Costs – The first step is to understand the customer’s pain points and quantify what it would cost them if no action is taken—often referred to as “Do Nothing” costs.
- Align Solutions to Challenges – Once you comprehend the challenges, align your product or service offerings as solutions to those specific problems.
- Understand Business Impact and Value – Before making any commitments, assess the potential impact your solutions could have on the customer’s business and what tangible value they offer.
- Assure a Solid, Risk-Adjusted ROI – Be transparent about the return on investment (ROI), factoring in any potential risks, so the customer can make an informed decision.
- Understand Value Metrics Post-Deployment – Establish metrics that will help measure the value provided by your solutions after they’ve been implemented.
- Measure and Articulate Realized Value and ROI – After the deployment, continually monitor these metrics to assess the value and ROI realized, adjusting strategies as needed.
- Adjust Solutions for Value Achievement – Leverage the value customers expect and realize to drive your product roadmap, focusing on the solutions, use cases and features that actually drive business outcomes.
We like to think about the business value approach across the customer lifecycle, from attraction, through engagement and selling, and through retention and growth, described in this blog article here: Defining the Value Lifecycle: A Comprehensive Approach
How Do You Know If You’ve Gotten It Right?
If the business value approach is working as it should, measurable results will become evident across different facets of your organization:
- Marketing – Expect an increase in higher-quality engagements and more qualified opportunities entering the pipeline.
- Sales – Watch for elevated win rates, accelerated deal velocity, and larger deal sizes, all while maintaining lower discount levels.
- Customer Success – Notice more assured renewals and find more expansion opportunities, which in turn will generate additional revenue.
- Product – See faster releases and streamlined development with increased focus on what customers care about the most.
By adopting a business value approach, you’re not just selling a product or service; you’re building a customer relationship founded on trust and mutual benefit.
This approach ensures that you’re not just marketing and selling better in the near term, but aligned with the customer’s needs from the get-go, significantly increasing the chances of a long, profitable relationship for both parties.