Value Frameworks Part 2: What is a Value Framework?

Next in my series about value frameworks.  As I said in my first post, getting customers to articulate real value is hard.  Too often, companies simply ask the customer to articulate the value they’re getting from a product or service and the answer is anything from “well, we think it’s worth it and it’s absolutely worth it because…”.

There’s too much at stake here (as in every single renewal) to leave this value articulation up to chance.  Using a Value Framework is the answer:  it a)drives the customer to identify the specific value they are looking for and b) arms your teams with the activities and artifacts they need to deliver on that value. 

So, what does a Value Framework look like?  It comprises three things:

·      The reason or reasons the customer is buying

·      The outcome or outcomes the customer wants to realize

·      The activities and workflows  required to get from the purchase to the outcomes

What does this look like in real life?  Imagine that you decide you want to join a gym (for me, this will likely always remain imaginary ;) because you want to lose weight and keep it off.

So, you join the gym, paying your monthly subscription fee, go to a ton of stretching classes and, at the end of the year, you haven’t lost any weight.  Do you renew?  Probably not. 

Now let’s play through this one more time.  What if, when you went to the gym to sign up, they showed you the gym’s “value framework” and asked you to choose your primary reason for joining and to indicate your “why”:

 You select “Lose Weight” with your “why” being long term weight loss and maintenance.

Then, the gym either gives you a self-serve program designed for weight loss or offers the services of a personal trainer who specializes in weight loss.  Now you are much likelier to achieve your desired outcomes and will renew when the time comes.

Again: 

·      Ask the customer why they are buying:  give them a list to choose from

·      Align on expected outcomes

·      Coach/work with the customer to do the activities in your product that are related to that purchase reason

How about a software example?  Let’s say you decide you need a CRM because you need more accurate sales forecasts.  So, you buy a CRM, some people use it and some don’t and, at the end of the year, your sales forecasts are still a mess. 

Now let’s play through this one more time.  What if, when you were looking at CRMs, one vendor showed you their “value framework” and asked you to choose your primary reason for buying and to indicate your “why”:

You select “Accurate Sales Forecasts” with your “why” being predictability.  Then, the vendor works with you to implement both the software and the workflows (including business process changes) required to achieve that outcome.

 So, that’s it.  Your Value Framework comprises:

·      All the reasons people might buy your produce or service (the value drivers)

·      The measurable outcomes customers will achieve, by value driver

·      The work the customer and you must do together with your product/service to achieve those outcomes

Without a value framework to anchor all that you do with your customers, you are leaving outcomes to chance, presenting significant risk of churn.

 If you’re interested in talking to me about ValueMax, my program for developing and implementing value frameworks to drive retention, email me at dgordon@customergrowthconsulting.com.

Next up:  How do different parts of the organization use it across the lifecycle?