As customers, we are leaning away from being passive consumers. Our new, discerning behaviour is giving us the power to become active creators of the products and services businesses supply. And as businesses, rather than looking over our shoulders worrying about what our competitors are up to, we are starting to focus on developing and truly understanding the core skills, values and purpose of our organisations. Rather than busying ourselves forecasting mythical demand and angling for a bigger piece of the imagined pie for ourselves, we’re deciding to co-create new services and new markets and collaborate more with our customers and all stakeholders.

The more we discuss the idea of greater purpose with people, the more we are convinced this is a significant shift – a genuine moment of Zeitgeist. We are seeing that a true alignment of people, business and greater purpose enables the delivery of astonishing and genuine value to all your stakeholders.

To start with, you need to develop a deep understanding of your organisational value across three areas of your business: 1) products and services; 2) customers’ experiences and 3) greater purpose, for your business to become part of this shift. Your total value proposition must contain these three elements. It also enables you to articulate your organisational value clearly. This applies not only to your sales propositions and messaging but also to the design of your customer touchpoints.

If you have clarity about your organisational value and then articulate it compellingly, you will pull those customers who resonate with it towards you. You will attract the right type of customers for your business.

Why greater purpose?

Business-to-consumer (B2C) organisations and marketers have always known that brand is vitally important. Consumers who associate with a brand feel an emotional connection with it: they are pulled towards it.

In consumer markets, the emotional pull of the brand generated by marketing and advertising may not always truly reflect, for example, the company’s supply chain or how it treats its workers. Take the solar panel fitting company I encountered recently who claim they are sustainable and have green credentials and yet source their panels from a company in the Far East which is well known for polluting the rivers around its plant.

As the business-to-business (B2B) world is being influenced faster than ever before by the power of individuals and the knowledge we have available to us, the consumerisation of B2B is happening at a pace. Brand too is becoming an important part of the B2B buyer’s decision, but it goes much deeper than that.

B2B buyers are more discerning than consumers

B2B buyers are a lot more discerning than B2C consumers. They know the difference between marketing and brand spin and whether this has true depth throughout the business or is just window dressing.

B2B buyers are demanding a total value proposition that covers the functionality of your products and services, positive customer experiences across all touchpoints, and a greater purpose that they can engage with. This greater purpose is part of the integrity of your business. It tells the buyer that your value proposition extends far beyond the marketing hype. The passion and emotion that this generates will not only attract buyers but, perhaps more importantly in today’s markets, it will attract the best talent to work with you and want to keep on working with you.

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Please feel free to download and share and do give us your input.

If you missed our previous slidedeck Part 1 can be viewed here. Parts 3 and 4 will be available shortly.

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Here’s the first of our 4 slideshare decks.

The others will be up over the next week, so do look out for them.

Please feel free to download and share.  And do let us know what you think.

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In the same way, voice of the customer, customer satisfaction, and big data analytics are all important tools to show what customers do, but they cannot reveal why they do it.

‘Why’ is key.

Understanding the ‘why’ is critical for focussed innovation and improved future performance.  If you ask customers questions and listen from a purely rational angle, or only look at the data, you miss out on the context: three quarters of what they really mean, and all the emotional, social, political and cultural nuances which influence their buying decisions.

It is very important to ask questions and take note of your customers’ answers, but it is also vital to observe the finer points of their communication. You have to do all three – ask, listen and observe – to get a complete picture of their needs.  And the order you do it in is important.  Here’s why. It’s cheaper and quicker if you ask and listen first then observe second. If you ask first, you will define what you’re looking for, and therefore be more able to interpret the observation, cutting down the time and expense that this requires.

There’s a huge difference between what your customers explicitly say, and what they implicitly mean, and good researchers who are able to interpret their observations will uncover the implicit – gaining genuine and complete customer insight.

Now, once you have this built into a hypothesis, you can go and test your new model of asking, listening and observation.  Believe me, this is much quicker and gives much richer insights than either listening or observation alone.

Not only can this provide you with an invaluable base from which to create your value solutions and value propositions, but it can also give you powerful insights for use in sales and marketing.

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A renewed value proposition can bring directness, clarity and simplicity into what you do, how you think about your company and how you portray this to customers, both through your offerings and communications.

From the customer’s perspective value works at many levels.  There’s the overall brand value perception of the company, belief in the marketing messages and trust in the sales and operational staff. Also the ‘jobs-to-be-done’ value of the actual offering as well as the communication and relationship value of customer service and account management teams. Codifying and harnessing this for all your customers and prospects is the total value proposition.

Here is a list of things we often see as symptoms that point to a weak value solution or value proposition:

• Not enough sales leads
• Poor quality sales leads
• Weak conversion rates
• High cost of sale
• Selling on price and always discounting
• Struggling to enter new target markets
• Offerings the same as everyone else with poor differentiation
• Lack of customer retention and loyalty
• Marketing that has no impact, often highlighted by a website that only talks about the
company rather than its value to customers
• Brand perceptions and expectations that are not experienced by the customer

Here are more detailed questions to check whether your total value proposition is in good shape or whether it needs attending to. These questions address the company level, offering level and marketing and sales levels – all are important. If you can’t answer these questions in detail then your value proposition needs updating.

1)    Are sales faltering?  Do you know precisely why?

Because sales is where the rubber hits the road in most organisations, it is sales performance that’s one of the leading indicators if there is a problem with the total value proposition.

Can you honestly answer the question in detail looking at all the structural, people and market factors; the soft factors and the hard factors?

There could be many reasons for poor sales.  It could be due to sales people, their skills, poor sales leadership, inadequate products and services, weak marketing and little exposure, any of these reasons and many more against a backdrop of a weak economy.  However, we have seen businesses buck the economic trend and turn themselves completely around in recessionary times by focussing on creating and building a new total value proposition.

2)    Are you always chasing new business?

If you’re always chasing new business and find it difficult to extract more repeat business from existing customers, then you need to find out why your customers are not totally happy.  It could be that solutions are badly constructed or that sales compensation structures may be largely geared towards new wins only. For most businesses it’s too costly to continually go chasing new business.

3)    What do your customers value and not value about working with you?

It’s equally important to know and be very clear about those 3 or 4 things that make customers come back to you repeatedly and also those few things that customers could do without.  These might be aspects of your solutions but they are also likely to be more emotional things such as trust, reliable relationships and valuable insights.

Customers have an implicit hierarchy of why they do business with any company.  Finding out what that hierarchy is and making it explicit is at the heart of developing your total value proposition.

4)    Who are you targeting? (Geography/sector/sub-sector/job title/stakeholders)

Can you be precise about all of these:

a. what countries you are selling in or want to enter
b. what market sectors and sub-sectors you’re going to focus on targeting in each
different country
c. within each market sector/sub-sector who are the  different types of buyers and
influencers you’re going to target
d. what are the job titles of the various buyers and influencers
e. what does the whole stakeholder map look like and can you map it out by who holds     the power

You need to be very clear and detailed about targeting plans including target markets, target buyers and influencers, power maps and how your solutions will fit each.

5)    For each of the above target groups, what risk do your customers perceive if they choose to work with you?

Understanding risk means that you can attempt to mitigate that risk. This requires honesty, insight and research. Typical risks for smaller companies include size, they’re perceived as too small both financially and in number of staff, for larger companies it can be lack of evidence or proven ability in a particular sector.

6)    What pain are you relieving for your customers?

A basic selling point – you need to be able to explain what pain your solutions will take away from customers. If you can’t answer that then more customer research is needed.

7)    What are your offerings that will both relieve this pain and add measurable value?

Can you describe your offerings in detail and how all your offerings fit together e.g. what products and services might go together to make up a solution?

Can you describe what the ‘job-to-be-done’ is by each offerings and what the outcome of each ‘job-to-be-done’ will be for their customer?

If you can’t, then you need to spend more time with your customers understanding how your offerings make a difference to their lives.  You need to know and be able to quantify in detail what each offering does, how it saves time, reduces costs, increases revenue, increases productivity etc.

8)    How are you different from your competition?

Do you know who your competition is and also what substitutes and alternatives there are for your offerings? Where do your offerings have parity and where / how do they differ? How do those differences translate into benefits and real value for customers?

If not, you need more research and to be able to demonstrate and differentiate your value against your competitors’ or alternatives’ value.

9)    How do you provide evidence to support your claims of value?

Do you have:

a. case studies (ideally with customers named but generic if not)
b. customer testimonials (ideally with customers named but generic if not)
c. total cost of ownership or ROI tools / models
d. articles or papers written together with customers
e. independent or proprietary research that supports your claims about your results that
can be made public

Are you providing enough proof to your prospects and customers and is a lack of evidence prolonging your sales cycle.  Providing evidence acts as a de-risking of the purchase and will often help to speed up the sales cycle.

10) Have you clearly constructed your value stories and messages across all internal and external communications?

External messaging is about layering, using a mix of channels and mediums to build confidence in your potential buyers that you can deliver their expectations of value.

Buyers do more research than ever before they begin any discussion with sales and the brand can no longer be just corporate promotional activity that has no relevance to the sales process – customers expect a positive brand experience at every touch point with the organisation.

Internally all staff need to understand how their behaviour impacts on customer experience – the way they act or speak with customers either supports or taints customer value.

Value is defined by your customers and their experiences and not by you.  We are all aware of functional needs but how many sales and customers are lost because emotional needs are not understood or even considered?  Customer’s buying decisions are rarely one dimensional.

All the questions above need to be addressed equally because all the points are interconnected. If your answers to the 10 questions above indicate a one dimensional value proposition then it is time to reassess your core value and how you’re delivering it to your customers.

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Customers will implicitly prioritise why they buy from you and what your value is to them. They develop an implicit hierarchy of why they do business with you. Through our 10 years of understanding what customers value, we have found that people always put emotional factors first.

The rational factors such as price, ease of use, convenience, security, sustainability and many more are always important, but they are not the most important factors in customer’s buying decisions, they are much further down the priority list.

Most people (this includes customers!) work this out for themselves implicitly, but they are not always fully aware of their buying decisions – it often ‘just feels right’.

Our latest white paper explores this in more detail. I hope you enjoy reading it and I’d love your feedback on it.

You can download it here Harnessing your customer truth

Cindy

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One of our many global challenges for business is how to thrive and create value in a world of finite resources. Nearly a third of profit warnings issued by FTSE 350 companies in 2011 were attributed to rising resource prices. Here are some stats to bring home the importance of this. 98% of the resources that flow into the economy become waste within only 6 months. The UK alone produced about 290 million tonnes of waste a year.

The Ellen MacArthur Foundation estimates that the EU could save at least £220bn a year if we were to design products in a way that reduced and standardized the resources used to make them. This model of a circular economy is a major shift from the old take, make, waste linear business model to one of lease the resources, make the product, recover the resource and then remake it. They have calculated that if washing machine manufacturers were to lease high-quality machines, capable of more cycles, rather than selling low-quality ones, they could create significant savings for themselves, consumers and the planet. Replacing a washing machine capable of 2,000 wash cycles with a 10,000 cycle model results in 180kg less steel, a reduction in carbon-dioxide emissions of more than 2.5 tonnes and a fall in the cost per cycle to the consumer from 17 pence to 8 pence.

This goes way beyond sustainable or eco design where the use of a recycled material would be enough. Making this happen requires complex co-created design with all stakeholders involved in the lifecycle of a product including capturing and recirculating materials.

As you’ll probably know by now – we passionately believe that value is not simply a transaction. It’s not something you push to your customer – rather it’s part of a system and process. Value is contextual and co-created with customers and therefore we all have responsibility for it.

In the UK the RSA and the Technology Strategy Board have just launched a programme called The Great Recovery which seeks to fill the knowledge and innovation gaps associated with designing for a circular-economy model. They would like to hear from anyone with expertise in manufacturing, design education, waste or sustainability. Contact Sophie Thomas, sophie.thomas@rsa.org.uk

As a final thought, while we’re examining the concept of waste, resource and responsibility, I thought I’d share a little story with you. I went on a training course some years ago that was held in an eco centre and a sign stuck to the toilet lid said “Where is away?” This simple idea conveyed all sorts of things to me including that it is my responsibility where things end up and that life is full of circular systems with feedback loops. This idea stayed with me more than anything else I learned on the course.

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A big shock in the world of consulting a couple of weeks ago was when Monitor Group filed for bankruptcy in the USA. Monitor was the multi-million dollar strategy consultancy started by Michael Porter in the 1980’s based on his famous 5 Forces model. The premise of Porter’s model is excess profits can be found by focusing in industries and companies whose barrier to entry or barrier to competition is high. Monitor’s consulting revenues streamed in from doing the data and financial analysis for companies to show them how and where to maintain this competitive advantage. Safe and highly profitable havens of industry were identified for those companies who could afford Monitor’s fees. This was a way of analysing markets to keep structural barriers high and make more money than, potentially, the merits of a company’s products or services deserved.

This competitive, defensive view of the world is surely not good for customers or society as a whole. With globalisation and the internet, it’s the customer today who is in charge of the marketplace (except in those heavily government regulated industries) and not the old paradigm of the seller in charge, blocking out the competition.

As Clay Christiansen showed, disruptive innovation destroyed company after company that believed in its own competitive advantage. The only safe haven today is to engage with customers and continuously add more customer value through redefining and redesigning what you offer and how you engage. Continuous innovation in many areas, including product and service design and customer experience design, is how to win.

For new companies this new model is easier. Established companies have a harder job to move themselves towards being willing and able to make this shift from the anxiety of fending off competitors towards the open and collaborative culture that continuous innovation needs. Letting go of the corporate anxiety around this shift is key to making it happen.

What doesn’t deliver bottom line results in the long term is a strategy of focusing on only defeating rivals or only pursuing shareholder value. What does deliver results (from many studies) is managing people well and continuously adding customer value. To do this well requires deep customer understanding and the creativity to know what to do with this new understanding and customer insight.

Are we witnessing the death of competition and the growth of collaboration and innovation and a new type of company overall?

This piece was born out of an article on Forbes.com “What Killed Michael Porter’s Monitor Group?” by Steve Denning

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A couple of weeks ago, John Lewis* started running a tv commercial starring a snowman buying a Christmas present for his snow wife of a hat, scarf and gloves. It’s simple, heartfelt and beautifully created (by Adam&EveDDB for those interested).

UK journalist India Knight claims that by espousing simple virtues and values, John Lewis is making a clever anti-branding statement, designed to attract those near a John Lewis store to pop in, buy their Christmas presents and feel virtuous at the same time. This, says Knight, is deluded because John Lewis is another big chain store keen to grab your money just like every other chain store.

I feel she’s missing the point.

This advert comes at a time when most TV advertising in the UK is either focusing purely on function or low price. Everyone (including the manic Christmas shopper) has a sense of value that isn’t only rational. We all have an emotional view on the kind of business we spend our time with/in. Value is emotional just as much as it is rational and this is where John Lewis has got walloping amounts of value-in-trade. People know that John Lewis is a co-operative and that their employees are also ‘partners’ in the business – they treat their employees well and remain ‘never knowingly undersold’ for the benefit of the customer which translate clearly into a good experience for the shopper.

I personally love John Lewis and I actively choose to shop there for many items where I have a clear choice, simply because the emotional value for me (belief, trust, reassurance, pleasant staff, social values) is higher than the rational value (internet deals/price).

Bring on the snowman. My handkerchief and my wallet are at the ready.

* a UK based, employee-owned high street retailer and major brand

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APMP UK is Europe’s premier event for bidding and proposal management professionals and is expecting more than three hundred delegates from within the UK and overseas.

Although the conference is oriented around the bids and proposal industry; it is increasingly attracting delegates from across a broader spectrum of new business acquisition.  Futurecurve specialises in Value Proposition and Sales Proposition creation and implementation and will demonstrate how these can deliver exceptional results.

The conference is taking place at the charming Chesford Grange Hotel in Warwickshire on the 24th and 25th October 2012.

To buy tickets for this event click here

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