Value Driver Effectiveness: The Competitive Intelligence and Win-Loss Components

After having a role heading up Competitive Intelligence (CI) and Market Research with ties to providing win-loss analysis and customer success, I know they are infinitely intwined with each other. When tied together as part of a closed-loop process, the benefits are incredible for an organization in terms of value driver performance and effectiveness, win-loss ratio, level of qualified leads and pipelines, improved sales velocity, and greater client success rates to name a few.

According to Gartner, Value Drivers are factors that increase the worth of a product, service, asset, or business. In the case of a product, it could be a differentiating capability that makes the product a must-have for customers. For a business, it could be economies of scale, skilled staff or a loyal customer base that increases the value of the business for shareholders and potential buyers.

In the software technology industry, this translates to competitive edge and revenue growth. So how does one determine what the value drivers are that uniquely position the company and then how does one measure the effectiveness. Why they seem different to executive teams is the perspective of what CI and Win-loss analysis provides and the data sources and technologies that support each one.

What Gets Measured, Gets Improved… Why Not your Value Driver and Proposition?

When effectively integrated into a cohesive set of quantifiable metrics, the value drivers become a common language spanning marketing, sales, service, and the executive team. The value proposition and drivers when measured improve and accelerate client win rates up to 40 percent in one case and 50 percent improvement in sales velocity in another. It is essential to know the answers of the “how and why” a company wins and losses against specific competitors for example.

A culture then to act upon the causes, refine the value driver, and proposition messaging addresses all aspects of prospect and customer interactions from initial opportunity creation through post implementation success.?

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Measuring Value Driver Performance for All Organizational Teams

Obtaining market perspectives. Understanding the market and competitive intelligence (CI) landscape is the process of capturing, analyzing, and activating information related to your competitive environment. CI gives your organization a sustainable competitive advantage that ties back to your specific growth drivers.

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Obtaining the seller and buyer perspectives. Deploying an effective Win/loss analysis is the process of understanding the influencing factors that contribute to your sales team’s ability to win new business opportunities in selling value. It is necessary for becoming more effective at winning customers, reducing the amount of customer churn, and improving the chances of winning. Incorporating this data with customer success teams on the value desired with deployed drives improved client reference rates, retention, and upsell/cross-sell opportunities.

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Improving Your Value Proposition

One of the basics of business economics is value proposition: why do customers come to you and not to the competition? Unfortunately, not all companies give enough thought to this important question.

Sure, most companies have a sales and product methodology connected to selling value: Solution Selling, Value- Based Selling, Customer-Centric Selling, Force Management, and a host of others. The question is how effective these methodologies are executed across the organization and are they being measured for continuous improvement across the organization based on multiple data source feedback.

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Defining What Your Customer Wants

Every organization believes they have something great to offer. There are two approaches here. Make another product and try to sell it to customers or, listen to customers and let them tell you what they need. The latter is the secret to finding an organization’s growth driver of true value. Fulfilling a customer’s desire that will help your company grow.

To do this effectively you need a systematic approach vs. asking random strangers. Gathering data from the market, competitors and trends is one source. Understanding buyer views on what value they are looking to receive from existing pipeline and closed deals both won and lost, and finally understanding your own perspectives of the value you are presenting to the customer. Do all these inputs resonate with the value you are portraying to the customer.

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Embracing the Power of Data

Insight and data are the engines of growth and innovation. First, this insight comes from listening to your customers that you have won…?and lost. They provide information on the value they are looking for and how they perceive the value you are providing from the sales process, product, and services. If the customer perceives the greatest value for your offering, in most cases data has shown that price becomes significantly less important in the decision to buy process.

Secondly, obtaining the seller perspective on how the client reacted to the value they presented. Did they understand the customer pain points, did they translate that to value throughout the meetings, presentations, demos and even contracting process? How about after the deal?

The third data point in evaluating the growth driver performance is the market. By integrating competitive intelligence data and understanding trends in the market, are you effectively positioning your value and growth drivers aligned to the customer needs. Were you effective in differentiating your value based on an understanding of the competitive landscape and what makes your value of greater value than others in the sales opportunity?

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Conclusion:

Measuring an organization’s value driver effectiveness is one of the most invaluable programs that companies can run for a multitude of reasons. Obtaining invaluable insights into your customers, their motivations, their challenges, and what is driving their buying decisions gives you a better understanding of your competitive landscape. When you can begin to understand the “why” you win … and lose and the key insights into emerging competitors you are on the start of transformation. Understanding “how” your customers perceive you from a product, sales process, prices, or the level of time you took to understand their business needs are critical in determining value driver effectiveness. If you do not do this, your competitors will. To start the process, contact me…