Demonstrating your value to your customers has become a high priority for many top SaaS companies, as the economic market has made winning deals and increasing customer retention and expansion even more challenging. This is where value management comes in.
In this article, we will cover what value management is, why it’s important, and how to go about taking a holistic approach to value management to improve productivity, internal alignment, and ultimately revenue.
What is Value Management?
Value management is the practice of collaborating with your customers to map out the potential value your solution can offer or the demonstrated value the customer has derived from your solution in the past. It requires your front-line sales and customer success teams to take a holistic look at your unique offerings for your customers and work with your customers to align on their business objectives and how your solution can be of value.
Why is Value Management Important?
Without value management, it is difficult to demonstrate your full unique value and the value realized of your solutions for your current customers. A holistic approach
to value helps you create a framework to demonstrate your value throughout the entire customer journey, helping you to increase win rates and improve customer retention and expansion.
Through value management and value management platforms like the Ecosystems SaaS platform, you are able to better align your customers on their business objectives so you can better market your value proposition.
Creating a Holistic Approach to Value Management
1. Value Management as a Journey, Not a Calculator
When thinking about value management, think of value management as a journey and not just as a calculator. Often, we have the tendency to provide our customers with value calculations in an effort to prove our value instead of first asking what the strategic objectives of our customers are. Value management is not just about the numbers–it is also about helping your customers align on their own objectives and the impact they are trying to make for their organization. This leads us to the five dimensions of value.
2. The Five Dimensions of Value
To take a holistic approach to value management, you need to address the five dimensions of value:
- Objectives: First, you must align your customers on their key strategic objectives. What are your customers trying to achieve? What value are they looking for?
- Tactics: Once you and your customers are aligned on their business objectives, you can now work to align on what tactics you are going to use to achieve their objectives. How can your product or service help them achieve the outcomes they are after?
- Metrics: The next step from there will be to align with your customers on what metrics, or key performance indicators (KPIs), you will use to measure your progress and success at hitting your customers’ objectives.
- Targets: After defining your metrics, you can work to establish specific targets for success to help you measure the effectiveness of your tactics.
- Timelines: Finally, you need to align with your customers on a timeline for achieving the established objectives, tactics, metrics, and targets to ensure accountability.
To dive deeper into these five dimensions of value management, check out Brent’s Breakdown.
3. The Three Types of Value
Another element of taking a holistic approach to value management is ensuring you are addressing the three types of value in your process:
- Corporate Value: Focuses on how the decision will benefit the company, such as the financial impact and revenue gain.
- Job Value: Targets emotional elements of decision-making and demonstrates the benefits to the individual’s job and career.
- Personal Value: Focuses on the benefits gained by the individual person, such as how it improves their reputation.
Targeting each of these elements of value will help you create a holistic approach to value management at your organization. You can learn more about each of the three types here.
4. The Golden Thread of Value
To create a full holistic approach to value, it is essential to align your entire organization around it. No one person should be the owner of value. Instead, each member of your company should understand their role in demonstrating value to your customers.
Aligning on value is made easy through digital customer value platforms like Ecosystems. Our SaaS platform provides you with a space to align and collaborate on value with our customers, stakeholders, and internal team. Learn more about our platform here.
