Climbing the Levels of Value Creation

Climbing the Levels of Value Creation

We talk a lot about value propositions and creating value for our clients. The word “value” is overused so much as to have lost a lot of its meaning. There are all kinds of things you can do to be valuable to your clients and your dream clients. But, ultimately, you serve your clients at one of four levels.

Providing Products and Services (L1VC)

You might help your client by providing them with the products and services that they need. Your customer needs something; you provide it.

This is the lowest level of value creation. It doesn’t provide enough value to be differentiated, and it doesn’t generate loyalty from your customers (usually these businesses have customers, not clients). The problem with being undifferentiated and not creating loyalty is that it is the fast track to commoditization.

Where little value is created, there is an equally small ability to justify higher pricing. Hence, commoditization.

You may work for a business that aspires to more for their clients but that at present only exists at this lowest rung of value creation. Moving up a level requires a bit more.

Providing Experiences (L2VC)

One rung up the ladder, and a small step above commoditization, are businesses that create great experiences. They may offer outstanding customer service. They may have killer support offerings that help their customers or clients use the products or services that they provide. And, they may even be able to create great relationships with their customers or clients.

This is a higher level of value creation, and for some businesses, this level is pretty good—especially for business-to-consumer sales organizations. But for business-to-business sales organizations, this is still a relatively low level of value creation and one that does little to ensure that you are valuable or that you retain your client.

Moving up a level requires quite a lot more.

Helping Solve Business Problems (L3VC)

Helping to solve real business problems is a giant step up from simply providing products and services or providing experiences. At this level of value creation, you help your clients and dream clients by providing solutions to their business challenges. You help them move from their current state to their desired state by helping them create real and tangible business results.

The trouble with this level of value creation for those of us in business-to-business sales is that this isn’t that uncommon. As much as you might be tempted to dismiss your competitors, a good number of them are more than competent at this level. And, for many of your clients, this level serves them well—it serves them much better than either of the two prior levels.

But if you would truly be at the top of your game in the way of value creation, this level doesn’t get you there. It may not be enough to really differentiate you, and may not be enough to create the loyalty that insulates your relationship from threats, internal or external.

Becoming a Strategic Partner (L4VC)

The highest level of value creation is becoming a strategic partner.

This isn’t an easy level of value to create or to maintain. At this level, you provide all of the value of the prior three levels, plus you help your dream clients see and build their future. You work with them as part of their management team on the most strategic issues, like how what you do helps your client to better serve their customers, outsell their competitors, and to compete in their own space.

You work proactively. You bring them ideas that help them generate new opportunities, new or greater revenues, new or greater profits, or new or more substantial cost initiatives.

At this level, you truly are a trusted advisor. It’s more than solving the problems of the past: you are someone who your clients and dream clients turn to for help shaping their future. Your success is tied to, and intertwined with, their success—and they feel the same way about you.

As a salesperson, you are the linchpin in the level of value you that you and your company creates.

Questions

Make a list of your clients. What level of value creation do you presently provide them? What would you have to do to move up a level? Two levels? Three levels?

For how many clients can you claim that you are truly a strategic partner?

Do you serve some customers or clients where the lower levels suffice to meet their needs? Are there some clients or customers for whom it doesn’t make sense to move to higher levels of value creation?

What are the activities that underlie each level of value creation?


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