I’ve had some great conversations with some really smart people in the past couple of months since I got started working with small businesses and new Entrepreneurs in this capacity. There is one common theme that seems to be emerging though as I work particularly with young technology entrepreneurs: unclear value.
Perhaps a good way to start this discussion is with a quote from the yoda of business management, Peter Drucker:
“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”
To illustrate an example of unclear value I’m going to use an example from a recent discussion (the names have been changed to protect the innocent). I was speaking with a technology professional, Thomas, who found himself in a position like many, restructured out of his former career and questioning the value and reliability of the corporate world. Thomas was looking to start his own company delivering a service based solution in his particular area of expertise, help desk management within the software development industry. Thomas had come to me looking for some feedback on his plan.
Thomas was looking at the help desk management segment and industry as a whole and believed that he could do almost anything within that area of a company. He was planning on offering generic consulting services to software companies in order to ‘help’ them with their help desk management function in order to generate efficiency and cost savings. Thomas has 7 years experience in the industry including management experience and has some history of generating cost savings in his resume.
In my opinion, Thomas makes a great employee in a help desk environment, bringing an affinity and passion for the function, experience across a broad group of help desk environments, and experience improving efficiency – a skill that most employers are (or should be) seeking right now. Unfortunately this broad approach to delivery doesn’t suit his chosen road as a consultant… when asked what his unique value proposition to his potential clients was he just froze.
In a world where ‘platform’ thinking is becoming the norm and vertical solutions are more a function of a configured solution within a platform than a specific solution designed with the deep needs of a vertical in mind, technology professionals are having a harder and harder time communicating specific value when they step out of the role of employee and start talking with potential customers in their own business. Developers build platforms and not industry solutions, consultants offer broad services rather than pointed value, and businesses serve markets rather than market segments. Platform thinking is diluting our specific business value and making it difficult for decision makers to commit to our services. It is time to bring solutions back to the fore if you are looking to communicate value to your clients and generate growth.
When I suggested this pointed approach to Thomas, asking him what specific area within the help desk he would say had the most waste, an area that he could have significant immediate impact for a client that was measurable, he gave me the same objections that I’ve heard over and over lately:
“There isn’t a consistent theme to the waste in [insert department name] processes. Every company does things differently and so I need to offer a custom solution based on my broad platform thinking to bring value.”
Unfortunately this is narrow thinking that is the same reason that these companies are inefficient in the first place. By believing that within your segment that you do certain things in such a unique way as to not be able to reuse the learnings from other companies will inevitably result in inefficiency. The value that a good consultant can bring to the table is their ability to look at the solution from an outside perspective, point out the common inefficiencies, and then apply industry best practices to solve those ‘specific’ problems in a way that an inside resource could not.
“I won’t have a problem communicating the value of my services to the decision maker once I get a chance to sit with them.”
While this may be true, the reality is that you are particularly unlikely to get an audience with the decision maker unless you can communicate a unique value that is relevant to their business quickly and in one line. A senior executive at a major software company has no time to sit with Thomas, a small one man consultancy shop, in order to discuss value. On the other hand, if that same senior executive receives a referral to Thomas based on his ability to reduce call resolution time on a software support help desk by 35% within 2-3 weeks without any capital investment he is much more likely to be willing to listen.
“I’m proud of my ability to ‘platform-think’. I believe that it gives me a competitive advantage over other consultants in my area who are too focused on individual industries or functions within the help desk.”
Your ability to platform-think does indeed give you a competitive advantage over other ‘spot thinkers’ but that competitive advantage doesn’t come into play until after you’re already doing work for a client. Particularly if you are a small company (or one man shop in the case of Thomas) looking to deal with top tier suppliers (like a Microsoft for instance) you have to recognize that you are not going to get any business that your client would deem ‘mission critical’ until you have proven your abilities – there is simply too much risk.
Your value based sales pitch should be designed instead to get the door opened to you, and then you can use that small opportunity to prove your worth and peak their interest in the other areas you may be able to help. A former colleague used to call this the ‘land and expand’ strategy. It works.
My suggestion to Thomas was as follows:
- Identify the one area of the help desk where you believe that there is consistently waste in most companies. This should be an area that he has significant expertise, has specific tools that can reduce that waste, and an area that he can make a specific value offer to a client. “I believe that I can cut 35% from your call resolution time within one month without any capital investment. I am willing to offer you a full satisfaction guarantee on my services and if I can’t achieve at least 20% savings in four weeks I will refund your investment in full.”
- Identify one specific segment of the software help desk market that is most likely to exhibit the symptoms of waste in the area you have identified. If business user support hotlines are significantly more wasteful than consumer direct hotlines (or are more successful in call resolution time reduction) then you should be targetting your sales pitch at this specific segment.
- Identify the people in your network who can help to get you introduced to key decision makers within this specific segment. You may need to look outside of your direct network into second and third degree connections, but the goal here is to get heard for 15 seconds – all you need is long enough to communicate your specific value offer.
- Land and expand. Once you demonstrate your ability to deliver on your commitment you will have build the trust necessary for that decision maker to listen to your ‘platform value’.
Don’t get me wrong, I am a platform thinker myself… I believe whole heartedly that either as an employee or as a service provider (or software developer) you bring more value to the table and more value to your own business (or career, or software) by using a platform approach than you would by solving spot problems. The trick is to recognize that in most cases you can’t sell the platform without the spot solution. Apple sold the iPod (spot solution) to create iTunes (platform). Salesforce.com created their CRM solution to enable the Force.com platform.
Before you head out to your next networking meeting or sales call, take some time and think about your value proposition from your clients perspective. Remember, value is in the eye of the beholder and if your client doesn’t see (or can’t understand) the specific value to their business from your ‘platform’ then they aren’t going to buy it. Deliver a unique spot solution that is relevant to their needs using your platform as a base and you will have built the relationship necessary to land and expand… and profit!
Feel free to share your comments and thoughts below. I would love to know how you communicate your value to your clients and your thoughts on ‘platform thinking’ when it comes to communicating that value.
Tim Empringham is a passionate advocate for Innovation in organizations of all sizes as a mechanism to drive growth, create uncontested market space, create new customer value, and drive efficiency into the internal organization. His focus is on disruption of thinking and markets through integrative thinking, structured Innovation frameworks, and leadership development of Innovation and Change leaders within the organization.