Vanishing value propositions

 

INSIGHT - HELEN BLAKE

Working with clients this week highlighted an increasingly common pattern in the B2B world – significantly over-engineered processes in all areas of the business in an effort to protect the company from risk. 

Process and procedures are essential for any business, particularly given how complex the legal and regulatory environments are for international working and how easily layers of digital procedures can be implemented. The challenge is that overly rigid workflows and vendor management systems, with elaborate controls and rules designed to reduce uncertainty for the company, can too-easily become the end in itself.

The impact on the customers? You’re just too hard to do business with. 

The customer feels they have made a simple request, but the over-engineered processes have built in additional time and cost to the project. Result? The customer starts looking for more nimble, efficient providers.

We all want speed, transparency and personalisation when working with key providers, our chosen partners.  OEM customers in particular need business partners that can work with them co-creatively and undertake more exploratory work without having to go through lengthy quotation or approval processes for the smallest of jobs e.g. waiting 2-3 weeks just for the purchase order.  This is the type of process that kills iterative development and good working relationships. Once the fear of risk becomes embedded culturally, with employees no longer understanding the ‘why’ behind process design decisions, the ‘computer says no’ mentality becomes the norm, alienating the customer by ignoring what they want and value.

Sound familiar? @Futurecurve we call this the vanishing value proposition effect.

When the value you have traditionally delivered to customers - the value that they cherish about working with you - becomes eroded by the barriers built in the name of compliance, risk and protection, then the customer will ultimately go elsewhere. 

Don’t let your value proposition becoming a vanishing act

To avoid your value proposition becoming a vanishing act, take time to step back and reflect on what is happening in your business. Look for these tell-tale signs:

  • Increasing number of quotes for add-on work are not being converted into sales

  • Process-heavy legal and procurement frameworks applied to increasingly small jobs

  • Quotation processes that take weeks (and months) rather than days

  • Regular comments from customers that your prices are too high and/or timescales are too long

  • Increasing churn within your sales team because they can’t say ‘yes’ to customers as the internal approval process takes longer than the customer’s project timescale

  • Seeing new competitors entering your space

  • Customers confused about what work they should or should not come to you for.

 

Then take a look at what is happening with your customers. Look for the signs that dissatisfaction and frustration are creeping in:

  • Increasing complaints around timescales and unrealistic pricing

  • Reducing numbers of smaller jobs and add-on work to bigger projects

  • Not returning calls or avoiding contact (‘ghosting’)

  • Grumbling that their contact has no authority to make straightforward decisions

  • Competitors being given jobs you believe you could do better

  • Belief that you’re only interested in yourselves and not working in the customer’s interests

  • Customers having to adopt work-arounds to avoid your bureaucracy

By the way, we are not suggesting anyone should drop all their processes and open themselves up to the immense business risks out there. The key is to consider how to bring the pendulum back into alignment with what customers value. 

If you recognise the start of your vanishing value proposition, then consider the options for change you may need to make. Perhaps your vision and market positioning has changed but your customers may not know or are unclear about what you can offer them. Or are you spread too thinly and need to consolidate? Maybe a more nimble process is required to support innovative / developmental work with customers, or a better hand-over process internally between protype development and scaled production.

Whatever the underlying issue, finding the best solution starts with understanding your customer and what they value about working with you.  Customers are hugely invested in their working relationship with providers and partners. They want the win-win.

If the time is right for you to undertake some in-depth customer analysis, then consider a qualitative approach https://futurecurve.com/services/customer-experience-research-insights  or evaluate your current value proposition https://futurecurve.com/services/value-proposition-builder .  If you just want to continue this conversation, then get in touch: helen.blake@futurecurve.com

 
Mary PasbyAuthenticity, Authentic customer value, Customer Value