For one particular client of ours, providing innovative technology and professional services as a leading supplier to the telecommunications industry is only part of what makes them a global business leader. As a notable Fortune 100 technology company, they continually seek to positively impact their customers’ business outcomes by solving business problems to lower costs, reduce risks and increase revenue. With that being said, both technology and customer operating models are evolving, demanding strategic adaptability. The competition had become stiff, causing products to become less differentiated than before. For our client, such significant changes meant that their original business strategy was declining in relevance. Therefore, the goal was to develop a strategy to accelerate growth and profits.
Together, we identified professional services as an area for strategic business advancement. Our focus included enabling the client to understand their current professional services differential value proposition, including the operational and financial impact on their customers’ business. One key customer, highlighted in this case story, is a European-based global telecommunications services and media company. A company’s value proposition is the most valuable currency in the marketplace. An unclear, undifferentiated and immeasurable value proposition represents the greatest threat to business growth and sustainability.
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Understand and Measure – The first step was to develop an internal perspective of differential value and quantify the operational and financial impact to the customer. We led the client’s cross-functional team in developing an internal perspective of differential value, which included four specific areas of impact on the customer’s business during the most recent fiscal year.
Validate – Next, we assessed differential value from the perspective of our client’s customer by facilitating the all-important customer validation meeting. We met with specific customer representatives who directly experienced the impact of our client’s value proposition and were able to validate the impact on their company’s key operational metrics and financial performance.
Result of Customer Validation Interview – The validation discussion resulted in actual differential value from the customer’s perspective, along with additional customer insight and competitive intelligence to understand the differences from the hypothesis. The customer agreed with the four areas of Professional Services that contributed to differential value; however, with differing contributions and a reduction in total differential value from 46% to 37%. The differential value from the client’s perspective was $12 million in contrast to the customer’s perspective of $10 million.
Improve – Following customer validation, we identified several customer-driven innovation and growth opportunities. We compared the customer’s highest value and priority future growth opportunities with our client’s current priorities for new professional services offerings. This comparison resulted in opportunities for reprioritization of new professional services development and associated investments to better align with the customer’s growth strategy—shaping our client’s new growth strategy for the future.
Scale – Lastly, we sought to help our client build organizational capability to continuously improve customer value throughout the organization over time. Our client gained insight to address customer needs and begin scaling this capability across the organization.
RESULTS AND RECOMMENDATIONS
CVX supports the development of growth strategies and plans for key accounts, market segments and new products—providing specific actions based on validated customer insight and competitive intelligence captured through the process.
Continue – Keep doing what’s delivering differential value today.
Fix – Adjust the offerings that are eroding customer value today.
Enhance – Make improvements that can deliver more differential value.
Expedite – Introduce current offerings that provide immediate impact to the customer.
Create – Develop and implement the highest priority and mutually profitable new offerings.
Validated customer value insights help organizations to make more confident decisions. Using these insights, we guided the client through the development of a winning strategy and account plan, while enabling them to take immediate action on the newly identified short-term sales opportunities.
Our client secured a new $10 million sales opportunity within 90 days of the engagement—resulting in an attractive ROI. They also gained $75 million in estimated sales of new non-product professional services and a 10% margin improvement for new professional services development. Through CVX, they now possessed a deeper understanding of the customer-driven future opportunities to pursue and why these areas are critical for the customer’s success.
Furthermore, they were able to understand their differential value from the customer’s perspective, capture immediate sales growth and formulate a new growth strategy for the important non-product related professional services business. As our client includes even more customers, they will gain an improved view of the customer value portfolio—based on customer profitability and differential value.
Your organization can begin improving its winning score with customers by taking the following steps:
- Develop the key strategic growth questions that shape the organization’s organic growth.
- Identify the priority major customers, market segments or new products that are most critical to your organization’s organic growth.
- Select an initial group of customers to engage in an initial introduction of CVX.
- Select a cross-functional internal team and begin developing your perspective on the differential value provided for the selected customers—we’re here to help.
Contact Luminas for help getting started.
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“Luminas has had a definite impact on the way our sales team thinks about how to sell value. We wouldn’t be where we are today if we hadn’t gone through the process with them and gained such meaningful insights.”
“The whole team was engaged in the work with Luminas, it was impressive. As a result, we discovered areas where we can grow, become more nimble and think strategically about our business. We are now better prepared to partner with our customers and manage through big changes.
“Our customers were very appreciative that we took the time to ask the right questions about what is important to their business. Luminas helped us to create a more customer centric organization and to focus on what they value.”
“We saw the Luminas team as our partners, they were humble and cared about our business. Our customers found immense value in having conversations with us; the process showed our customers that we were interested in their feedback and wanted to hear their insights.”