A Simple Formula for Creating Value
Whether you like it or not, you’re in a race for value. As you read this, existing and emerging competitors are figuring out new ways to replace you. Your only protection is your ability to continually create value for your customers.
What is Value?
Value is a perception of the worth of something. As a perception, it is defined by your customer and not by you. In fact, value is created by your customer and not by you. In order to understand your value, you need to be present when your products or services are being utilized. You need to understand how the use of your products or services move your customer closer to their goals. If you really want to understand how to create value for your customer on an on-going basis, aim to understand these two components:
1. Where are they going? What is the strategic objective of your customer? If you are not attached to their strategic objective, you will be commoditized. Understanding your relevance to strategic outcomes is the foundation for creating on-going value.
2. What’s getting in their way? This is where your opportunity lies. If you can remove interference toward the achievement of their goals, you will be sought after. Interference comes in two flavours:
a. External pressures. There are forces outside of the organization’s control that can negatively impact its ability to achieve its goals. Sometimes, these forces are not even perceived by your customers until it’s too late. Your ability to understand where they are going and how changes in their environment are exerting negative pressure on them, positions you to provide critical help.
b. Internal obstacles. No organization is perfect. More often than not, these imperfections get in the way of achieving their goals. Are you aware of the shortfall in internal capabilities that jeopardize your customer’s momentum? These might include: work processes, employee skills, employee attitudes, and structural elements, such as infrastructure and organizational design. Are you able to intervene and address these shortcomings? If so, you have enormous value.
Connect the Dots
Most sales people find it difficult to think beyond tactical needs and the products they sell. Without the context of strategic goals, your value is questionable. Make it a discipline to understand your customers strategically. For all of your key customers, connect the dots by answering these three questions:
1. Where are they going?
2. What’s in the way?
3. How can I help?
Products and services become old and obsolete. If you focus on these, you will be easily replaced. Helping people achieve their most important goals never gets old. Focus on this and you will win the race for value.