Our client, Cisco, is a global business leader, providing innovative technology and professional services and leading supplier within the telecommunications industry. 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 Cisco, these 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 Cisco 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.
Watch these video clips from Steve Yager, VP of Customer Experience at Cisco
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 Cisco’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 Cisco’s customer by facilitating the all-important customer validation meeting. We met with specific customer representatives who directly experienced the impact of Cisco’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 Cisco’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 the Cisco team 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 Cisco 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.
Ultimately, Cisco 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 Cisco includes even more customers, they will gain an improved view of the customer value portfolio—based on customer profitability and differential value.
GET STARTED
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.