Adopting a Customer Value Model & the Culture Change
From a day-to-day execution perspective, the customer value model primarily touches product management, engineering, product marketing, sales and customer success. The culture shift however, absolutely positively starts in the C-suite.
Here are the three biggest reasons organizations use a customer value model.
- It simplifies strategy, tactical plans and the execution of both across the board because there’s little to no debate over the strategic priorities of your target customers.
- It drives your organization to consistently build, market, sell and deliver solutions with measurable strategic value because all customer facing functions are focused on common customer outcomes with high value.
- It makes your own organization’s strategic and financial goals easier to meet because it keeps new buyers coming and existing customers paying.
What is The Customer Value Model?
The customer value model is a simple approach for making quantifiable customer outcomes (with strategic value to them) the starting point for anything and everything that touches the customer.
In B2B, it forces your organization to fully understand what’s driving your target customers from the top down in terms of their strategic goals and priorities, why those goals and priorities are critical to their success, and the obstacles standing in their way.
Your product, marketing, sales and customer success teams then build their strategies and priorities around eliminating the obstacles standing in the way of those customer goals.
If you’re consistently eliminating obstacles that prevent your target customers from meeting their strategic goals, by default, you’re consistently delivering strategic value.
The last piece of the puzzle is your own organization’s strategic and financial goals.
Product, marketing, sales and customer success teams establish their priorities by first going down the list of customer obstacles that if eliminated, have the greatest value to the customer.
Then they’ll assess each of those customer priorities in terms of their contribution to your own organization’s goals. The ones with the strongest match on both fronts become your priorities. It really is that easy!
The end result is product, marketing, sales and customer success teams are completely focused on eliminating a common set of obstacles with strategic customer value while simultaneously returning maximum value to your own organization.
And there are no conflicting priorities because most of your target customers are trying to accomplish the same things and face the same obstacles.
The Unwanted Ripple Effect of Starting With Your Own Goals
Consider your current approach to establishing priorities across products, marketing, sales and customer success teams. If you’re like most organizations, your starting point is the strategic and financial goals of “your own organization.”
By default, customer value becomes secondary because everyone is focused first on doing things that support your own goals. It’s not that this approach is wrong, it just makes everything more difficult because there are too many “right” answers.
Every discipline has seemingly come up with a strong plan that’s conducive to your organization’s goals. Well, guess what? If every plan can make a strong contribution to your organization’s goals, then it’s a good plan.
But how many “good plans” can you realistically execute without conflicting priorities at every turn, not to mention limited resources? That’s the biggest reason your priorities keep changing and no one’s hitting their numbers.
You’re living this nightmare today. That’s why every product team, corporate marketing, product marketing, sales and customer success teams are going in seemingly different directions with different priorities. It’s frustrating for everyone because the end result is a series of starts and stops that slow everything down.
It’s an INSIDE OUT approach at its finest!
Don’t get me wrong. Your organization’s goals and priorities are hugely important! They’re your key to prosperity. But the easiest, most efficient, most straight-forward way to meet those goals is to consistently deliver strategic value to your target customers. So why not just start there?
The Most Difficult Part of The Customer Value Model
The most difficult part of making the shift to a customer value model is seeing your target customers through the lens of what they do first versus what you do.
It’s completely understandable. Products are what your company does. You live, breathe, eat and sleep those products. It’s only natural that products are your starting point.
Work on your proverbial muscle memory to make customers the starting point and everything gets exponentially easier regardless of your role.
General Guidelines for Adoption
Here’s the beauty of the customer value model. The implementation across product, marketing, sales and customer success teams uses a common foundation where customer outcomes (not to be interpreted as user outcomes) are the centerpiece.
Each discipline builds its priorities from that common foundation.
Here’s the good news if you’re a B2B/B2B2C organization. Markets and customer needs tend to evolve more slowly over longer periods of time (short of a global pandemic) versus consumer markets that can change on a dime for no reason.
Of the top 5 business priorities your target customers are focused on this year, at least 4 of them will still be a priority next year. That means building strategies and execution plans around their priorities should be fairly stable.
Your priorities shouldn’t change unless their priorities change!
The most critical change for product management starts with customer discovery. You have to approach customer discovery as if your products didn’t exist. Just find out what’s driving your target customers from the top down and the impact to areas where your products are relevant.
Once you understand their top priorities, why they’re critical, and why they can’t get there, their biggest problems will hit you right between the eyes. Your product priorities will be intuitively obvious from there.
Using the same set of top-down customer goals and priorities, it’s a matter of creating a value story and mobilizing it across the salesforce that convinces your target customers you understand them as well as they understand themselves.
Position existing products accordingly, execute demand generation campaigns, make it easy for your salesforce to tell the story and watch revenue grow.
Here’s the other thing. In a customer value model, your salesforce doesn’t need nearly as many tools and artifacts as they think. There’s a lot less minutia for product marketing in a customer value model.
Discovery, qualification, demos and negotiations take on a completely different tone. Remember, customers don’t buy because they understand you. They buy because you understand them.
That means your top priority in each phase of the sales process is to convince customers you understand them as well as they understand themselves. Make their priorities the focal point of every conversation.
SALES TIP: When buyers articulate a problem your product solves, resist the temptation to talk about how your product solves that problem. Instead, ask WHY that problem occurs. Then the product conversation will have full context and you’ll be better positioned to discuss value.
Here’s the psychology. If you can talk about their world the same as they think about it, they’ll assume your products are better than the competition. Your knowledge of their business is your best and easiest way to differentiate.
If you’re in the on-boarding side of customer success, your perspective changes.
Instead of teaching users how the product works, the onboarding process focuses on a well-defined list of specific job tasks and workflows and how your product supports those job tasks to give customers the outcomes they’re looking for.
Remember, by making customers measurably better at this list of high-impact job tasks, the customer is realizing operational outcomes that have strategic value.
If you’re in the account nurturing side of customer success, it’s the same formula with different action items.
As a customer success manager, your focus is on making sure customers get quantifiable value on an ongoing basis. Business outcomes with strategic value are still your center of gravity!
That means getting more value from products they already have or selling add-on products required to give them outcomes they can’t get from current products. It also keeps the competition out!
The Bottom Line on Customer Value
Take a hard look at how your organization establishes its priorities across products, marketing, sales and customer success teams. Is it possible you’re practicing an inside-out value model and you don’t even realize it?
Product Management University is the only organization that teaches a customer value approach using a common framework across products, marketing, sales and customer success.
Contact us about learning customer value skills that align product management, product marketing, sales and customer success teams to a common set of customer outcomes with strategic value. It’s the easiest way to meet your own strategic goals.
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by John Mansour on October 26, 2022.