Value-based selling has experienced a meteoric rise in popularity as companies strive to reach profitability, drive revenue growth, and stand out from their competitors in an increasingly challenging market. To meet their goals, companies are constantly looking for new ways to create value for their customers. However, it’s not enough to simply create value. You also need to be able to help your customers truly realize that value.
In this blog post, you’ll learn the differences between value creation and value realization–and why a solid customer value-based strategy requires both. Plus, you’ll understand the benefits of a holistic, end-to-end value-driven approach.
How are Value Creation and Value Realization Different?
Value creation refers to the process of identifying customer needs, developing products or services that meet those needs, and creating a unique selling proposition for the business. Creating value for your target customer is the fundamental groundwork for the entire customer value journey. To learn more about how to create value, see our blog post, Co-Defining Customer Value.
Value realization is how you deliver that value–and, perhaps even more importantly, how you ensure that customers understand the value that you have created. In other words, value realization is how you close the loop on the customer value you created in order to build long-lasting trusted partnerships with your customers. To learn more about value realization, see What is Value Realization and Why Does it Matter?
Why You Need Both Value Creation and Value Realization
Ultimately, value creation and value realization go hand in hand. Without value creation, there can be no value realization. However, without value realization, your customers may not understand or appreciate the value that you’ve created.
If you’ve done value creation right, you’ve likely invested time and money into understanding your customer, honing your offerings, and crafting a solid customer value proposition. Value realization not only builds off of that work, but it also helps you maximize the impact of your investment so the effort spent on value creation won’t go to waste.
This is why it’s so important to incorporate both value creation and value realization into an end-to-end customer value-driven strategy. To learn more about how to execute and build out value at every touchpoint, see Customer Value Best Practices throughout the Entire Customer Journey.
4 Benefits of an End-to-End Customer Value-Driven Approach
By taking a customer value-driven approach–from value creation through to value realization– your organization can reap a number of advantages, including:
1. Build Trusted Customer Relationships at Every Touchpoint
Creating value for your customers opens up many possibilities for your organization. With value-based selling, you can quickly engage new customers, close more deals, and compete on value instead of price. However, once you’ve acquired these new customers with promised value, your organization needs to be able to deliver on those sales promises – or your customers will quickly become frustrated when their expectations don’t match reality.
This means you need to provide a seamless transition from sales to customer success, where your customer success team can continue the customer’s value journey and immediately begin demonstrating the real-world value of your offerings. That’s what value realization is. Delivering value in this way– at every touchpoint–will help you build trust and credibility with your customers, increasing customer loyalty and ensuring repeat business. To get started, learn how to establish a value realization framework.
2. Improve Customer Retention
It is a well-known fact that it costs far more to acquire new customers than it costs to retain, or even upsell, your existing accounts. On average, it costs 4-5x more to acquire a new client compared to retaining an existing client. That’s why ensuring a value-driven customer experience is key to a successful customer retention strategy. When customers understand the value they’re receiving from a company, they’re more likely to stay with their current vendor. That’s why leveraging both customer value creation and value realization can help you drive customer loyalty and reduce costly attrition.
3. Create Brand Advocates
Beyond customer retention, when your customers are happy with the value they’re receiving, they are also more likely to become brand advocates. A brand advocate – which is essentially a B2B influencer – can be one of your most powerful marketing assets, helping you generate new revenue via word-of-mouth marketing and referrals.
4. Drive Revenue and Achieve Profitability
Whether your goal is profitability or growth (or both!), a customer value-driven approach can help bolster the revenue you need to reach your objectives. By creating and delivering value to your customers, you can increase customer satisfaction, retention, and advocacy. Happy customers are repeat customers, which not only secures ongoing revenue, but also opens up opportunities for cross-selling, upselling, and referrals.
Conclusion
In today’s competitive landscape, organizations like yours need to focus on both value creation and value realization. By taking a holistic, customer value-driven approach, you can build trusted customer relationships, improve your customer retention, create brand advocates, and ultimately drive the revenue you need to reach your targets. So, don’t just focus on creating value. Make sure you’re also helping your customers realize the value you create as well.
To get started with value realization, we invite you to get in touch with our team of experts. We are here, ready to help. Not ready to chat yet? See 7 Questions to Refocus your Customer Journey Management Strategy.
