Showing full value Sarah Hinchliffe explains the importance of translating your market offerings into customer value in your written proposals

Value is important throughout the entire business development lifecycle. While value is often covered in sales methodologies, it’s easily forgotten in proposal development, especially if the brief from the sales team to the proposal team is scant or non-existent. So, what is value, why is it so important and how can you express it?

Simply put, value is the net result of a purchase. By “net result” I mean the difference between the investment you make in terms of cost, time, effort, risk and emotion – and what you gain in tangible or intangible outcomes. As the seesaw opposite shows, the gain must outweigh the investment.

A tangible outcome can be measured in terms of a clear metric of some sort. In businesses, this will usually be related to improving a financial position, such as increasing revenue/profit or reducing costs, or decreasing risk, for example better legal compliance or stronger security. Ideally, these outcomes can be quantified by calculating an actual value like a cash or percentage gain. For consumers, a tangible outcome could be measured in the same way, especially when it comes to property and pensions.

An intangible outcome generally relates to feelings or emotions. It may be hard to quantify in metrics. In businesses, think about things like staff satisfaction and morale. For consumers, think about prestige, safety or even just sheer enjoyment.

A word of caution, however. You may find that your direct customer – the business sponsor or user – will take the intangible benefits into account when considering their internal business case, only to have the financial director discount them when asked to approve the expenditure. The stronger the tangible business case is financially, the better.

So, think of value as a business case showing return on investment (ROI). At the end of the day, no one – neither business customer nor consumer – buys anything without a reason. The key to value in the world of sales is to find the reason.

Building value Let’s go back to some good old sales 101 theory. Remember FAB – features, advantages and benefits? Features are simply facts about your product or service, such as colour, size, weight or other specification: “Our survey system can be used for customer and employee satisfaction surveys and comes with over a thousand predefined questions.”

Advantages are outcomes that can arise as a result of the feature that may or may not be important to your customer: “The predefined questions in our survey system will save you the time of formulating your own questions and are proven to test key aspects of customer and employee satisfaction effectively.”

A feature or advantage only becomes a benefit when it addresses a desire or requirement

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Strong value statements clearly show that the outcomes to be gained outweigh the investment expressed by your customer. For example, a customer that has a longstanding manual survey system with well-established questions may simply want to automate the process and not be interested in predefined questions. But a customer that has never had a system at all may see predefined questions as a benefit.

To build value, the first step is to uncover what’s important to your customer and then convert your features and advantages into benefits. The next step is to quantify the benefits.

A good way of determining when you have got to the bottom of the quantification element of the value equation is when you have passed the “so what?” test. If you apply this test, you should be able to drill down to a hard metric. You may even distil intangible benefits into tangible ones.

Let’s imagine that your customer is showing interest in your survey system for employee satisfaction surveys and you are explaining that by taking action on the results of the survey you should be able to improve staff morale. So what? Staff will be less likely to leave. So what? Hiring and training costs will go down. So what? You will

save £x per annum, which is x% of your annual budget. Now, you have a solid business benefit.

On the other side of the value balance, you will also need to understand the factors the customer will need to invest – including cost, time, effort, risk and emotion. Learning about these elements from the start of the business development lifecycle will set you up to build the value case in your proposal.

Why is value important? If the customer has built their own business case for ROI, you may ask why you have to bother. There are two good reasons. First, in order to build confidence and trust in you as a supplier, you need to show your customer you understand their business. Second, you need to show them how your offering will satisfy their business need, ideally better than your competitors’ offerings. If you don’t show them, who will? If you leave it to them, they may miss something or do it wrong.

Here’s a story to illustrate the point. A major automotive company made the safest, most comfortable lorries in the world, but they were also the most expensive. A key customer needed to replace its lorry fleet, but told the salesman that it was unlikely to choose the same lorries because it needed to cut costs. The salesman organised research into lorry driver motivation and proved that the make of lorry was an important factor in keeping drivers because they value safety and

comfort. He also did research on lorry driver turnover and the cost of recruiting and training drivers. He built up a case that, over a period of years, it would be cheaper to buy the expensive lorries because the company would keep its drivers for longer and avoid high replacement costs.

He won the business. But if the value calculation had been left to the customer, he may well have lost it on price, which is an all too familiar story.

value is specific, not generic Value is in the eye of the beholder. Features and advantages are for marketers – communicating to the masses with ideas that might appeal. Benefits and value are specific and for sales – addressing individual and company motivations and desires.

Sarah hinchliffe is a director of i4 Sales Performance, which focuses on helping small and medium-sized enterprises (SMEs) achieve bid excellence. i4 is a Shipley Business Partner. See www.i4salesperformance. co.uk or email sarah@i4salesperformance.co.uk

Learn about your customer’s business – what do they measure on their corporate dashboard and which of those measures relate to your offering? Find out about the members of your customer’s buying committee. What are they measured on as individuals and within their departments? And what do they care about personally?

If you can gradually build a picture of all these elements and demonstrate how and when your offering will deliver outcomes on all levels – personal, departmental and business, logical and emotional – you have all the ammunition to make a cracking value story in your proposal.

hoW to express value If possible, express value throughout your proposal. I say “if possible” because sometimes your proposal will be structured in accordance with a customer’s prescriptive instructions and you may not be able to work value into certain sections or responses. Whether you have the luxury of designing a fully branded, bespoke proposal or you are constrained to a strict formula, you should still work out your value and include as much as you can.

Working with the sales team as early as possible, the value story should be built up during the sales stage of the business development lifecycle, before being given to the proposal team to work into the final document as part of the win strategy – the compelling reasons for the customer to choose you.

Once you have worked out the value story and the structure of your proposal, you must then

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the graph shows the projected return on investment for the XYZ survey system. Within two years, aBc could save £90,000 on its annual recruitment and training budget

determine which elements of value you can include in which sections. You may have defined financial, operational and human components of value that you can bring into corresponding commercial, solution and people sections. You should aim to create a high level concluding value statement for your executive summary. You may also include a very detailed breakdown of an ROI model in a key section or as an appendix.

You can express value in words and/or graphics. When creating a written value statement, include payback (quantified outcome), investment, timescale and, of course, the solution: “ABC Company will save £90,000 per annum on current £200,000 recruitment and training costs within two years by implementing XYZ’s employee satisfaction survey system for an annual investment of £10,000.”

While the best value statements are definitive, you may not be able to guarantee such results, so you may wish to soften the “will” to “could”, or preface with wording such as: “Based on average results from our customers over five years…”

As written statements can become quite complex, by far the best way to express value is by using a graphic (such as the graph above).

value makes a difference By working out your value story, you will show your customers that you understand them and their business. By doing this, you will be seen as credible and helpful, inspiring confidence and setting yourself apart from your competitors.