More companies are now turning to value management practice to sharpen their sales strategies. Instead of focusing on product features, they highlight the exclusive benefits their solutions offer customers. This holistic approach showcases the real value—product, advantage, and benefit—delivered to clients. By aligning customer goals with vendor capabilities, businesses can demonstrate the additional economic profit and savings their solutions provide.
Value management has been gaining popularity for more than 20 years and is now a must-have. However, to build an effective value management practice, you must avoid the following five pitfalls:
1. A talented team without the backing
Today it is relatively simple to identify and recruit individuals with relevant experience. In the value management field and companies are enthusiastic to recruit straightaway. However, it is important to be able to fully integrate your new value management team with company structures and processes. Without the right competencies, sponsorship, training and tools to measure success, efforts to implement value management practices mostly wither and fail.
Even with the perfect team and tools, lacking the right support can cause problems. Without the appropriate competencies and backing, sales teams may find approaches that focus on business value cumbersome, complex and time consuming. As a result, they may avoid using them. This leads to extra costs, no solutions, unproductive internal discussions—and lots of frustration. Value management practices need to have the right backing to succeed
2. Not using the best tools
When building a value management practice from scratch, it is tempting to build tools in-house.
In most companies, sales executives have already developed their own tools, so it might feel appealing to continue using them but, with different team members developing varied approaches to analyses and presentation formatting, this tactic can deliver large differences in results.
When looking at your current in-house tools, are you sure you are focusing on the KPIs that will convince your customer? Are you sure all your formulas are accurate? Are you sure you can explain them? Do you have a menu of business case success measures, such as NPV, IRR and ROI? Is the tool user friendly and can you easily demonstrate various scenarios and confidently discuss the value you aim to deliver to your customers?
The benefit of arriving late to this party are the key learnings gained from other companies’ experiences, that can help save time and effort. Investing in the right tools is a necessary expense to enable your value management and sales teams to collaborate effectively and seamlessly.Value managers need to be equipped with the right tols
3. Inadequately equipped sales executives in your value management practice
In our experience, some value management reports are poorly structured and complex to explain. Sales teams have varying levels of mathematical literacy, interest and availability to become familiar with such complex reports.
This means they either need the support of business value managers that can deliver the reports on their behalf, or in-depth training to ensure they understand the value of the document and feel comfortable to deliver it. Support and training in this field is indispensable and it needs to be refreshed. Your value management team needs to work hand-in-hand with sales and must be available to answer questions, at any time.Sales teams need training and support from value management practices
4. Failing to build a unique collateral
The value management reports used for each stage of the sales process require different levels of detail. One document will not suit all customer needs and will not be sufficient for the end-to-end sales process. Each document needs to be customised for each business case, based on the level of available information on the market, the industry and the customer; it should include benchmarks of your prospect, relative to the industry, competitors and best practice.
It is fundamental to build a unique collateral and develop different types of reports that are flexible enough to accommodate all needs, easily.stomers expect unique and customised value potential estimations
5. Limited value management practice scalability
At the beginning, a small practice with highly customised reports works well. However, as your teams become familiar with this approach and you start seeing rewards—such as better success ratios, fewer discounts, and more sales pitches—that drive higher sales volumes, the need arises to scale simply and cost-effectively.
This requires the right balance between customisation and time spent on manual research and tasks. Build your practice with scalability in mind: how will you create and deliver 10, 100, or 1,000 value management reports per month? If each report takes a month or longer to complete, you will quickly hit your operational limits.
The Value Search Team builds, operates, and scales your value management practices efficiently, anytime, anywhere. Our next post will cover how to increase your average deal size!
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