Why Sales, Marketing and IT make a FIERCE value proposition
If the last 2 years has taught us anything is to expect the unexpected and to adapt … and it’s not over yet. The UK is in significant economic and political turmoil with an onset recession, increased utility costs and mortgage interest rates set to triple! All these elements make planning and budgeting for 2023 tricky.
Leaders will need to strike a balance between making opportunist moves whilst mitigating risk. All this in the pursuit of maximising revenue growth, profitability, and resilience while cutting spending in areas prone to waste.
How does a value chain analysis create customer value?
The value chain calculates the total value of the product or service for the customer (the price that the customer is willing to pay) which must be greater than the cost of producing the product or service. There are 2 activities:
- Primary activities – These are directly involved in producing and selling the product.
- Support activities – These all support the primary activities throughout the process.
Regularly reviewing the 9 value activities continuously improves a company’s competitiveness. Customer’s preferences change over time and new market technologies that could increase productivity in the chain.
What changes have happened in the value chain?
The model was created pre-digital world.
The point of academic models is that they were developed and validated by a panel to be a method to assess a certain thing, but models are meant to be adapted to your situation, industry or product.
Whilst the value chain may seem rigid, it still allows you to determine how to add more value to the customer and all the elements of the value chain are still valid, but some elements have changed that identify a new power trio in the value chain…
The Fierce value proposition trio of Sales, Marketing, and IT
1. Marketing and Sales:
Customer value is even more critical today than at the value chain mode’s creation because now we have a 2-way engagement with customers instead of the old fashion broadcast. Marketing and Sales are the key owners of customer insights, engagement, relationships, and data. Therefore, their position should be at the front of the primary activities as customer insights should lead all the primary activities.
2. Technology Development – IT
The company must be able to be creative and ready for change with incremental innovation and digital processes becoming a mandatory part of customer interactions and, in some cases, a differentiator. Technology Development is no longer just IT, but IOT, that can connect and exchange data between devices and systems… and THIS is an area where customer value can be created… both internally and externally. Improving customer’s lives through simplicity…. So this suggests that Tech Development should sit in BOTH supportive and Primary roles – for they could also adding value to the customer. Examples of this are Dominos pizza ordering, tracking your amazon delivery, sms confirmations to name a few.
How can the new Fierce trio create significant margin?
If Marketing, Sales, and Technology Development (IT) grouped together and aligned their activities to a single strategy, they would create significant customer value and margin!
Our study revealed the 3 key challenges shared by all these functions which can be flipped into value creating opportunities:
- Processes and Tools can be a key differentiator (read how Dominos did it) and create customer choice. If Sales, Marketing and IT understood, reviewed and aligned their CX processes, systems (tools) and data, they would increase the outcomes of teams and, in the end, increase customer value and margin.
- Alignment ensures that all value chain leaders agree on a strategy (like ABM) that creates maximum customer impact. Insights would facilitate decision-making by identifying their competitive sweet spot, kick starting combined strategies and determining the required cross-functional resource support, budget and reports for joint revenue creation.
- Insights is the language of alignment and decision-making as it’s unbiased and based on fact. Combining Sales, Marketing and IT insights would create a combined picture of the customer which identifies a cutting edge customer offer and the steps each function would need to take to create this combined value.
All these reviews and insights could be performed internally or, if you’re looking for a fresh perspective, you might benefit to utilise an external resource. This would challenge the status quo and encourage lateral thinking with an unbiased review all the KPIs and CX touchpoints combined with external insights (analysis of competitor, the marketplace and customers). The outcome would align the 3 functions’ objectives and activities plus optimise processes, tools and systems to create a differentiated CX, competitive sweet spot and value proposition that increases customer relationships and revenue.
Pause for thought – The scary part
Now here’s the scary part … those 3 examples we mentioned (amazon, dominoes and sms tracking) were once differentiators, but now they are mandatory expectations. Over time a customer value proposition degrades… something that was once a customer-resonating offer becomes a mandatory expectation. All customers expect SMS confirmations, order tracking etc … so what next? What else will you offer your customer that makes you relevant and how do you know what that should be?
Insights and reviews are key to understand:
- What is the value of your internal resources? – How can you leverage or improve those resources, and which are unique?
- What opportunities lie externally? 1. What gap can you spot in the competitor market? 2. What do customers need?
So, the question is…how often are you performing internal and external research? As your organisation is evolving, do you really know the true value it offers? Does it meet evolving customer needs?
To survive and thrive, your value proposition needs to be resonating and sustainable.
If you perform reviews and research this will
- Create insights and recommendations that ..
- Identifies the right tools and processes.
- Aligns teams to create an excellent customer experience/value proposition.
Keep your value proposition fresh and relevant by reviewing your value chain and the external market.
If you’d like to know more about value proposition, CX or ABM, read the links provided or drop us a message.
