Value Added? It Depends on Who is Paying

I’ve lost track of the number of companies who proclaim that they are embracing a “value-added” strategy in order to differentiate themselves in an increasingly commoditised market. They often see it as their way of breaking away from relentless pricing pressure and a highly competitive sales environment.

So why do so many of these “value-added” initiatives manifestly fail to deliver the hoped for results? And why in many - maybe the majority - of cases, do the initiatives turn out to be nothing more than “cost-added” strategies that further depress the profitability of the organisation without materially moving the dial when it comes to win rates?

In my experience, most of these initiatives make no meaningful attempt to confirm that the various so-called “value-added” activities have any meaningful value to the prospective customer, or are likely to positively influence their behaviour. In fact, all-too-often they reflect the misapplied imagination of a product marketing manager about what matters to customers they have spent all-too-little time trying to really understand.

I’ll propose the following test of value added: “that which a prospective customer proves by their behaviour they are willing to invest their time or money in, which materially advances their buying cycle, or increases the chances of them making a positive buying decision”. In other words, we shouldn’t be doing anything that a prospect isn’t prepared to pay for with their time or money.

Of course, there is a big problem implementing this thinking in an environment which is focused primarily around a vendor’s sales process. But when you turn the telescope around and look at matters from the perspective of the buying process, and what it takes to persuade the buying team to move forward from stage to stage, you can much more easily identify where the real value added lies … and where all the potential sources of wasted effort might sit.