You predict customer value differently for their process benefits than their product benefits.
When thinking about a value calculator, it helps to consider your possible customer value creation in two categories… process benefits and product benefits.
- Process benefits: Here you help customers save money… by taking out unnecessary costs, streamlining, saving energy, reducing material requirements, etc. If your team designs equipment or a service, these process benefits will likely be a large part of your value proposition.
- Product benefits: In this case you help customers make money… by improving their product to the point where they can increase its price and/or sales volume. If you team is designs materials or components that become part of your customers’ products, this will be an important part of your value proposition.
You can learn about customers’ process and product needs in your interviews… and mostly about their process needs during customer tours. New Product Blueprinting includes powerful skills that you and your team can learn to gather a lot of valuable process and product data. The more frequently and proficiently you apply these, the more useful your value calculator will be later. These skills are covered in detail in the following places:
Process benefits: New Product Blueprinting includes our AMUSE customer tour methodology. When you take a customer tour, it helps to break their process down into a series of discrete activities. Then for each activity, ask yourself: Could we Accelerate this, Minimize its input (capital, energy, labor), Upgrade its output, Simplify the transition to the next activity, or Eliminate the activity altogether? For more, see the BlueHelp article, How to conduct a Discovery interview and view e-Learning Module 8: Creating & Capturing Value at www.blueprintingcenter.com. You can also download the AMUSE Customer Tour Checklist at www.blueprintingcenter.com > BlueTools > Conduct Discovery Interviews/Tours.
Product benefits: Your best way to gather financial data about customers’ product needs is with great interview probing. During your interviews, use our “What and Why” probing methods covered at the bottom of page 2 of your Discovery Interview Quick-Start Card, downloadable at www.blueprintingcenter.com > BlueTools > Conduct Discovery Interviews/Tours. This is also described in the BlueHelp article, How to probe during customer interviews. Be sure to check out the BlueHelp article, How to gather economic data during interviews, where you’ll find some detailed guidance specifically for collecting value calculator data.
Both product benefits and process benefits have their “attractions.” In the case of process benefits, you can usually make accurate predictions of the value you are creating… especially if you probe well and keep your eyes wide open on customer tours.
It’s much harder to predict product benefits. After all, how can you predict how much they might increase the price of their product… or how much their sales volume will increase? Here’s one way: Interview some paid industry experts (from GLG, AlphaSights, or other networks) that have recently retired from companies’ like your customers… and ask them. What’s the “attraction” for product benefits over process benefits? The value you create may be very high compared to the cost of your product. So be careful you don’t leave a pile of money on the table.
You can download an Excel-based Value Calculator Example at www.blueprintingcenter.com > BlueTools > Skill-Building & Other Tools.
For more on gathering economic data during customer interviews, see the BlueHelp article, Economic probing questions. Also check out the 2-minute video, Build your interviewing skills, part of the B2B Organic Growth video series by Dan Adams.
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