The purpose of all this discovery process is to determine how the functional capabilities of your products and services tie to and support the tactics and strategies your client will use, or is already using, to reach their goals and objectives. Once you understand that, you can position your offerings in terms of producing the specific business results that your customer is already trying to produce.
Once you have an understanding of the various tactics your client plans to utilize to support the strategies they will employ to pursue their goals, the question becomes, ‘Where do the functional capabilities of your products and services fit in? Looking at your customer’s value model, where do they need help? What exactly do your product and services solutions do that will enable them to take action on the tactics and strategies you’ve identified?’ Once this is understood, you simply connect the dots between your functional capabilities (what your products and services do), and the tactics that your functional capabilities enable and support.
This figure shows how your functional capabilities, which in this example are the abilities to . . .
Increase Forecast Accuracy & Demand Planning . . . by collecting and distributing real-time data from multiple disparate sources such as retail point-of-sale (POS), warehouse management, distribution, manufacturing, and procurement systems, which enables the manufacturer to ‘solve’ for the best possible production and distribution plan to properly balance supply with demand.
. . . enable your customer to do four key things:
- Increase order fill-rates (i.e., the percentage of customer orders that are filled and delivered on time, which many manufacturers call ‘customer satisfaction rating’ or ‘customer sat.’) by making the right products at the right time to meet customer demand.
- Reduce waste and obsolescence by not overbuying raw materials or overproducing finished goods that will end up sitting around until they become obsolete and are ultimately discarded.
- Reduce overtime pay by being able to better plan and anticipate proper staffing levels and reduce having to hold workers overtime to expedite shipments.
- Reduce inventories by buying the raw materials that are needed when and where they are needed, as well as producing and completing finished goods when and where they need to be completed to meet customer demand.
Your solution, which in this example is a ‘Supply Chain Management & Collaboration Software’ solution, is not what your customer needs or wants. What they need is the ability to improve forecast accuracy and demand planning. By connecting the dots and tracing the business effects up through the BVH model, we can clearly see what this particular customer wants to achieve:
- Increased order fill-rates, increased customer loyalty, and increased revenues
- Reduced waste and obsolescence, reduced materials costs, and lower overall costs, which drives profitability
- Reduced overtime pay and lower direct labor costs, which also lowers overall costs
- Reduced inventories, which converts current assets to cash that can be reinvested and improves their return on assets
Let me emphasize here, that what we ‘connect’ are the functional capabilities of what we sell, not the products or services themselves. The name you choose to give your product or services means nothing to your customer. What matters are its functional capabilities, what your products and services can do, to support the tactics and strategies they will use to achieve their goals.
This approach represents quite a change from simply positioning your products by their superior features and functions. It’s also very different than reciting a prepared list of advantages and benefits, or offering a description of all the different ways your products and services can be used. What I have found is . . .
Benefits are only beneficial if they help your customer to produce the business value, or the business results, they already want to produce.
You may be coming to market with, for example, a ‘whole new way’ to get your client’s product in front of potential buyers. So, in one sense, how can they already want something they don’t even know exists? Well, they can’t, obviously. But even after you introduce your new idea to them, they still don’t want whatever it is that you sell. What they want are the business results they can produce by using it. So, we have to understand those desired business results, their desired point ‘C,’ before we can properly position our product or service as the ideal ‘B’ to take them there.