Value Creation - The New Core Competency - CallSource

1 Re you sure that you reproviding Value to your cus-tomers? Even if your answeris an emphatic yes, you mightwant to take a closer to my experience,50-plus percent of all compa-nies feel that they aren t get-ting true Value from their sup-pliers. That number almostcertainly includes some ofyour customers. The dangeris you may be assuming thatthe fault lies with them -maybe it s an implementationissue or maybe they re frus-tratingly blind to the valuethat you can see in flashingneon. It doesn t matter. Value truly is in the eye of thebeholder. If your customercan t perceive the Value youprovide, it doesn t That s the Value gapwe explore in my book, andit s one of the biggest road-blocks to sustained growthand maximized Value gap can often betraced back to cross-function-al dysfunction, a term thatbasically means your depart-ments are not working togeth-er, or even worse, they maybe in conflict with each example, R&D createsnew products that have littleconnection with the cus-tomer s real generates leadsbut is not held accountable forthe results.

2 Salespeoplemerely present solutionsinstead of seeking out rele-vant information on what thecustomer s real requirementsare. In the confusion, cus-tomers default to the lowestcommon denominator - price -which they do various departmentsare operating with cross-pur-poses, a company s valuestrategy is likely diluted bythe time it reaches the cus-tomer. The customer per-ceives, rightly or wrongly, thatthe Value he is being offeredsimply isn t there, it isn tunique amongst the alterna-tive solutions, or he doubts hewill receive the Value beingpromised - all of which leadsto what is referred to as com-moditization.

3 Companies ulti-mately watch their marginserode as price becomes thedriving force of the cus-tomer s order to close the valuegap, companies must create Prime Solutions - solutionsthat: a)Deliver optimal results,capable of leveraging valueto the highest level of thecustomer s business, b)Ensure that customershave identified and pur-chased the best answer totheir problems, and c)Provide solution imple-mentation and valueenhancement strategiesthat enable customers toachieve the Value that achieve this goal, a com-pany must end cross-func-tional dysfunction.

4 It mustreplace cost cutting as a corecompetency with Value cre-ation as a core Competency . In other words, creating andselling Value must becomeeveryone s responsibility andmarketing is the most logicalfunction to assure success. So how can you build a cul-ture in which Value creationbecomes the mantra oneveryone s lips? You musteffect sweeping changes infour areas of your company:R&D, marketing, sales, andcustomer service. Here aresome suggestions to get youstarted:R&D:Begin with a tangibleand compelling customerAValue Creation : The New CoreCompetency for Growth-Minded CompaniesBy Jeff Thull, CEO and President, Prime Resource GroupIf you re competing on price, you ll never achieve maximumprofitability.

5 You must make Value Creation everyone more information, contact Prime Resource Group800-876-0378 When R&D is isolat-ed from customers, it candevelop products based onfaulty assumptions aboutvalue. Chances are theseassumptions could be incon-sistent with the customer sperspective. By the time acompany discovers the dis-connects, time and moneyhave been lost. Not only mustyou look through the eyes ofyour customer and developproducts and services thataddress your customer sfinancial well-being, but youmust constantly validate yourvalue assumptions.

6 We mustassure we can convert ourvalue assumption into valueachieved for our is no such thing as asolution without a may not be awareof the problem that the solu-tion addresses (that is a mar-keting challenge), but theremust be an actual problemwith physical symptoms. Tobe commercially viable, solu-tions that sellers define asopportunities must be inti-mately linked to actual cus-tomer problems. A solution,or, if you prefer, an opportuni-ty, without a problem is a con-tradiction in terms and a dis-aster in the :Commit toDiagnostic Marketing.

7 Youhave your solution, which hasbeen designed to solve aproblem that your customer iscurrently facing, or will expe-rience. Next, you need to cre-ate your message based on athorough understanding ofthat problem and its messages must bewritten in the negative pres-ent. They should say, inessence: These are the symp-toms of the problem you mayhave, and if you are noticingthis evidence, we may havethe solution. This type of mes-sage readies the customer fora diagnosis, a dialogue,rather than a presentation. Furthermore, marketing mustprepare the tools and supportmaterials that will be usedto diagnose the customers business problems anddesign the solutions.

8 Thesematerials must guide sales-people through the samediagnostic process that isused in solution developmentand marketing. They mustassist salespeople in identify-ing indicators and the conse-quences of the customers problems that their solutionsaddress. This alignment ofmarketing and sales voices israrely seen in companies but it is critical in creating andselling Prime Solutions :Teach the art ofdiagnostic , a salesperson sgoal has been to close thesale, to get the signed order,to hit the numbers, to bring inthe win. InPrime Solution companies,the desired outcome of thesale is the same, but thefocus and the process aredramatically different.

9 Thesales professionals workmore like physicians. Theyprovide high-quality diagnos-tic services, prescribe andtreat responsibly, and attemptto ensure optimal health fortheir patients (the cus-tomers). That means theirfocus is on a high-qualitydecision whether that deci-sion is to buy or not to suggest DiagnosticBusiness Development (DBD)or, more simply, The PrimeProcess as a model fortoday s approach to buildingvalue through the salesprocess. It has four stages:discover, diagnose, design,and deliver. It s easy to seewhy salespeople become keyplayers on both teams: theirown and their customers.

10 Notonly are they advocates fortheir customers (rather thanadversaries), but they alsofurther their own company scause by weeding out cus-tomers that are not right for itand involving every functionin the company from R&D tomarketing to customer serv-ice to refine its Value Service: Keep aneagle eye on impendingissues. Customer serviceemployees need to ensurethat customers attain thevaluable results they antici-pated when they purchasedyour solutions. That meansnot just solving problems thatcrop up, but actually watchingfor and diagnosing problemsthat customers don t realizethey have.