Friday, February 5, 2010

Sell me quick with your value. Wait, what’s value?

Maybe you don’t think you make a sales pitch. But if you are a blogger, your post's title is a sales pitch. If you tweet, your Twitter page is a sales pitch to follow you. Your Facebook or LinkedIn page sells to your friends and followers. If you merely work for a business and mention their name, you are a part of an image that you become a part of when the customer is ready to buy.

Can you sum up what you do in a few words?  Do you know what you offer that is of value to your customers/readers? Do you know what your value is and how your customer/reader sees it? Do you understand what kind of sales pitch you are making to your customer/reader?

You need a pithy summary more than your customer needs it. That’s because the customer will buy your sales pitch only once and then see the reality of it. If you’ve made the wrong summary, the customer won’t trust you anymore. You want them to need it more than once and to do that you need a clear and accurate focus for your service or product.

This series of posts will cover what goes in to making value through the help and guidance of Information Technology Infrastructure Library (ITIL). In the future posts you’ll see:
Service composition

The type of product or service that you are selling, writing, promoting, or creating can be words, music, speech, action, or manufactured. It’s all in how the customer perceives what you have. Your service (my favorite word for any of the fruits of your labor) is a combination of many things that the customer wants and sees.

I typically riff off the Information Technology Infrastructure Library definitions of a service during my certification classes where the formal ITIL definition of a service is split into utility and warranty. Most people haven’t a clue what that is and dutifully memorize the definitions for the test.

Utility is the British word for what we would prefer to call the functionality of the service. Warranty is the word for what we might propose the non-functional parts of the requirements to cover but doesn’t include everything there. Because people listen to these kinds of definitions and then go right back to charging what they think they are worth is why I wanted to write about value.

I don’t know how many times I’ve had discussions with artists who talk about their skills and talents but turn out ghastly art. They put themselves in the position of the customer who conveniently loves their artwork. They then feel that it’s worth thousands of dollars or at least an hourly wage because they should get paid for their time on the canvas. Most of the time it’s worth fifty bucks at the most which would cover their meals while painting that mess. And studying utility and warranty definitions wouldn’t help. But understanding value would.

Customers choose positives

The customer is the final word in what makes up the value that you cobble together. If you are writing about the endangered life of a Physiculus, you’d better make sure that the customers you have or can get really care about that. The more they care about the product or service you have, the more they put a positive difference on the value of your goods or services and choose them over another competitor.
To make the most out of your positives, are you paying attention to what you can improve? If you are writing the best blog possible, are you
  • on a dependable schedule, say once or twice a week?
  • using the best SEO techniques for title and content?
  • crafting the sharpest titles?
  • working the StumbleUpon angle the best you can? etc.
That’s being efficient. You are effectively taking care of the outcome that that customer wants. But the real question is whether you are fulfilling their needs. Being efficient doesn’t equate to customer satisfaction. You have to have a match with the customer between your service utility and their perceived value. I enjoy reading serial entrepreneur and teacher Steve Blank’s blog that talks about Customer Development which is really matching up your product with the customer instead of matching up a customer with your product. He knows why the customer chooses value and has implemented a huge portion of the value formula in the right way.

Value is not just you producing a product at a low cost or best quality. You could have the most cost-efficient, most functional, best looking ice cream glove in the whole world and still not raise an eyebrow. I like Eric Ries’ comments last year on the difference between Ali G’s ice cream glove hoax and a Snuggie where he concludes that
the biggest source of waste in product development is building something that nobody wants.
IT people and organizations think they provide a great product but many times, business can’t figure out what to do with it to support the business. Maybe you’ve tried to introduce social media into your business. If you didn’t find out what the business goals were before and came on with a sales pitch based on the coolness factor of Sales 2.0 and cutting edge acronyms, you might have ended up not satisfying the needs of your customers.

Profits come not having negatives

What we’re dealing with here is basic economics. That’s the stuff that rarely gets out of the classroom and discussed in the board room. Sometimes governments hire an economist so they can take the flak for the economy. But one of the fathers of economics, David Ricardo (he was English, born in 1772 and never on I Love Lucy) is believed to have said that
profits are not made by differential cleverness, but by differential stupidity.
So if you blow it and turn out poor quality or include hidden costs, then you will start seeing the flip side of the value coin which takes away value from the customer’s eyes and becomes a negative difference between you and your competitor. The end result is that your Physiculus piece is ignored for some other fascinating treatise on a fish endemic to Saint Helena.

The negative value difference causes managers to be very averse to negative press reports and recalls like Toyota has had recently. In a competitive environment, the slightest edge of benefit through slinging mud at a industry peer is worth it. Politicians manage to get equal footing in a race on the issues because they listen to the voters. But even though they talk about how sad it is to have to degrade the reputation of another fellow candidate, they will still throw some mudballs because it’s a strategy that works.

So like Bing Crosby sings in the song:
You've got to accentuate the positive
 Eliminate the negative
 Latch on to the affirmative
 Don't mess with Mister In-Between

 You've got to spread joy up to the maximum
 Bring gloom down to the minimum
 Have faith or pandemonium
 Liable to walk upon the scene
Bing Crosby via last.fm


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