The Case for Buyer-Aligned Value Models…Part 1 of 4

The Strategic Importance of Value Models

Whether you sell a commodity product or a complex business solution, a value model is the foundation for your positioning and messaging strategy because it determines how you communicate the purpose, value, and differentiation of your products and services. Like the product-feature-function model shown in Figure 1, value models provide the taxonomy for collecting, organizing, and sharing the marketing and selling knowledge that drives the three critical marketing deliverables that I mentioned in the introduction. 

Figure 1: Value Models Drive Three Key DeliverablesFrom an operational standpoint, value models are a lot like a sales process in that they provide management with an opportunity to reinforce fundamentals and best practices. They also share five other important similarities with sales processes.
 

1. They can be formalized and managed or they can be spontaneous and ad hoc. 
2. They can be seller-aligned or buyer-aligned depending on their perspective and context.
3. Seller-aligned value models reflect the seller’s perspective where value, and differentiation are defined from the inside-out, in the context of the product or service
4. Buyer-aligned value models reflect the customer’s perspective where value, and differentiation are defined from the outside-in, in the context of solving the customer’s problem
5. And most importantly, they don’t require 100% compliance to have an impact on culture as well as results

Unfortunately, while most sales executives clearly understand the importance of managing their sales process, few marketing executives pay much attention to their value model. In fact, most are unaware that there are actually three different value models (See Figure 2) that their organizations can employ, depending on the perspective and context that they want to emphasize.

Figure 2: Three Different Value Models to Choose From 
In the Seller-Aligned Value Model on the left, a product’s purpose, value, and differentiation is defined and communicated through product-feature-function logic. This is a simple, straightforward, and universally understood model that reflects our natural tendency to think inside-out (i.e. it’s all about me). This is why product messages are  easy to create, communicate, and understand, and it’s also why product messaging doesn’t require much management focus or a systematic process… it just happens organically.
 
When companies want to move from selling products to selling solutions however they need to change the way they think about purpose, value, and differentiation. This transition from a seller-aligned to more of a buyer-aligned model does require management focus and attention.
 
The Hybrid Value Model (middle of Figure 2) is what most B-to-B marketing organizations end up adopting when they decide to support a solution based strategy.  The hybrid model combines both buyer and seller perspectives and it supports high level problem-solution messages along with more tactical and explicit feature-function messages.
 
The Buyer-Aligned Value Model on the right is the only model that truly supports a solution focused strategy because it enables high-level problem-solution messages as well as explicit cause-capability messages. Explicitly aligning causes with capabilities is the most effective way to communicate your understanding of the problem as well as your value and differentiation from the customer’s perspective. This is why the buyer-aligned value model has been universally embraced by what are arguably the most solution oriented organizations in the world… pharmaceutical companies.
 
Companies that sell cholesterol reducing drugs for example, focus on educating the market that plaque in the arteries is the key underlying cause of high cholesterol. By explaining the underlying cause before they talk about the solution they build additional credibility. This makes them more believable when they describe how their drug breaks up plaque better than the competition.

In the next posting learn more about the differences between hybrid and buyer-aligned value models, and the simple steps that B-to-B marketing executives can take to catch up to their brethren in the pharmaceutical industry and more effectively support a solution strategy.

To be continued… The Case for Buyer-Aligned Value Models Part 3 of 4 will post Tuesday, March 16.

Want to learn more about Solution Marketing and Buyer-Aligned Value Models for Sellers? Join SPI and Bob Schmonsees for an upcoming webinar: Equipping the Sales Mind of the Future, March 23. To register, click here.

The pressure on B-to-B product marketing organizations to increase their strategic relevance and their impact on sales has never been greater. They have to quickly find a way to:

• Create more customer relevant positing and content
• Do a better job of generating, cultivating, and nurturing leads
• Improve their alignment with sales anddeliver tools that enable salespeople to have more meaningful business and value conversations with their customers

These are tall orders, and for a lot of marketing organizations they’ll require a fundamental transformation in their thinking as well as their day to day behavior.

So, what can marketing executives do to start this transformation?

First…Get Serious About Solution Messaging

For the past few decades, thought leaders like Pragmatic Marketing have been telling product marketing organizations that one of the best ways to increase their strategic impact was to make the transition from product focused messaging that reflects the inside-out perspective of the seller to more problem focused messaging that reflects the outside-in perspective of the buyer.

The good news is that some companies have finally got the memo.  As a recent best practices study by CSO Insights showed, companies with marketing organizations that explicitly focus on communicating their understanding of the customer’s problems along with how their solutions help the customer solve those problems experience:

• 25% higher quota attainment
• 20% higher win rates
• 3 times the competitive win rate
• 5 times less discounting

So, why haven’t more marketing organizations figured out how to create customer relevant messaging that truly supports a solution based strategy? Unfortunately, while some companies have successfully transformed the way their sales people sell through rigorous sales training programs and buyer -aligned sales processes, most of those companies haven’t applied the same kind of strategic focus or transformational emphasis on product marketing.  

As a result, few marketing executives or their organizations understand some of the key fundamentals, nuances, and implications of solution messaging. Most give little thought to the underlying value model their organizations use to communicate the purpose, value, and differentiation of their company’s products and services, and few have implemented any systematic processes to reinforce solution messaging fundamentals and best practices.  

To be continued… The Case for Buyer-Aligned Value Models Part 2 of 4 will post Friday, March 12.

Want to learn more about Solution Marketing and Buyer-Aligned Value Models for Sellers? Join SPI and Author Bob Schmonsees for an upcoming webinar: Equipping the Sales Mind of the Future, March 23. To register, click here.