The Importance of High Quality ‘Value Engineering’
It’s not a new concept that B2B buyers are increasingly well-informed and are becoming less dependent on individual sales interactions to get the information needed to make buying decisions. However B2B buyers are now demanding more expertise and support from sales people than ever before, which Professor Neil Rackham equates to the increasingly polarised nature of B2B buying behaviour. As buyer behaviour is increasingly split to being either highly transactional or highly consultative, the importance of high quality ‘value engineering’ in the consultative sale is growing.
What is value engineering I hear some of you ask? By definition this is the process of understanding and illustrating to a prospective client the business value your offering will deliver in relation to their specific goals and objectives. Whilst this sounds easy enough, the critical term here is, of course, ‘business value’. This means sellers are expected to show more than just the product or solution’s features and more than just the general savings it will confer; clients in a consultative engagement expect to be shown exactly how you will help them deliver their broader business goals.
This immediately creates a challenge for the business developer, seller and sales engineer. No two businesses have exactly the same goals and perceptions will differ about how these goals are best realised. The challenge faced by a sales team in demonstrating value in a consistent but specific way is all about linking your capabilities to real business issues, communicating value in the customer’s language and capturing the attention of those in the buying centre who might have had minimal exposure in the sales process till now.
There are a few distinct phases that the sales team needs to work through in order to engineer real business value:
- Develop a hypothesis – what do we think or understand the organisation’s problems and objectives to be? What information can be established from existing sources that support this?
- Capture the information that allows value to be determined across the various client stakeholders whilst simultaneously testing and refining the hypothesis
- Identify how this value might be represented or articulated by different stakeholders (profit, cash flow, operational KPIs etc.)
- Ensure access to the right senior stakeholders – the people that can translate thoughts into action and who recognise the value at more of a monetary level rather than just a KPI level
- Relate the business value you feel you can deliver in an engaging way both in terms of medium and platform
- Distribute this business message effectively (directly and indirectly) to all stakeholders in a way each will recognise as tailored for their needs
The order of these points is by no means strictly linear. For instance it may involve starting at the top of the business with a ‘hunting licence’ to gather the necessary insight from contacts lower down in order to prepare a business case, it could equally start near the bottom of the business’ hierarchy with intelligence and insight being gathered in order to develop a case to take up to those in a position of authority and leveraging that information to make assumptions about the financial impact on the business to help gain the access required.
Whatever approach is taken, today’s go-to-market business model needs to adapt to manage both transactional and consultative opportunities. Organisations need to support their sales people by providing the tools to understand and deliver value engineering and invest in heavily resourcing the most attractive high-value opportunities.
About the author
David Meyer is Managing Director of Clarify; a company that works with large blue chip enterprises engaged in high value complex sales. It designs and builds specialist ‘office based Business Development teams’ that combine the coverage and scalability of a demand generation team with the business development skills of high-end field sales.
Clarify’s innovative approach enables its clients to create influence and engage where existing go-to-market models struggle. As a result, growth is accelerated; market share increases and access to new markets are enabled.