As the need to distinguish yourself from your competitors grows, value realization should be at the forefront of your mind. Proving the value of your business to your customers is essential to retaining and growing your customers. However, proving value goes beyond just quantitative metrics and return on investment (ROI). Value can be anything from your impact on sustainability to the ease of use of your software.
This article will explore what value realization is, why it matters, why value realization is a universal best practice, how you can begin to measure value realization, and a blueprint for aligning on value at your organization.
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Value realization is the ability to track the quantified value a business or stakeholder receives from a solution implemented within the company. Value realization provides a tangible way to track the actual business impact that solutions have on customers’ business operations, stakeholders, and ultimately shareholder value.
However, to realize value, your sales team must first align collaboratively with the customer on desired business outcomes through tactics, metrics, targets, and timelines. Once the customer has co-created and brought into the business case, the proposed value and metrics can be automatically passed off to the implementation team and customer success, as discussed in Brent’s Breakdown episode 41. This is made easy through value realization platforms such as Ecosystems’ SaaS platform.
Monitoring value realization lets your customer success teams proactively identify and act upon areas of risk or potential growth. It provides business leadership with early warning signs for churn within accounts, letting them focus strategically on the accounts with the largest risk and the greatest impact on revenue. Further, in today’s environment where everything is as-a-Service and customers can switch vendors quickly and effortlessly, it is expected from your customers and becoming a requirement in the competitive marketplace.
Qualitative Value Realization
Value realization is not just based on quantitative measurements like ROI, it can also include customer satisfaction, reduced effort or ability to avoid hassles, Environmental, Social, and Governance (ESG) impacts like the number of trees saved, or more subjective elements like providing an innate sense of affiliation and belonging. These are all non-monetized types of value that customers today are looking at more closely when evaluating the value of your service.
In Ecosystems’ Customer Value Community on-demand webinar on Storytelling for Value Management, we dive deeper into qualitative metrics of value.
Take this chart, for example, which highlights two areas of value realization: functional and emotional.
In today’s as-a-Service economy, customers are no longer making significant upfront investments, meaning signed contracts on their own may not introduce any customer investment. Instead, for software providers, it is not until customers use licenses that revenue is recognized. Customers will only expand their licenses if they are seeing an appreciation of value, making value realization crucial to expansion opportunities.
According to IDC and Ecosystems’ inaugural benchmarking survey on Value Selling Excellence, 42% of leaders found that one of the largest challenges for their B2B sales organization is the inability to articulate and quantify their unique business value. This begs the question…
The answer relies on the provider’s ability to navigate the following people, process, and technology challenges:
Actionable metrics Not all metrics are easily measurable. Suppose your company is interested in a 5% productivity improvement in your sales team. Would you measure this in time-saving changes? Productivity metrics using tools? Regardless of how the company decides to change its outcomes, it is essential to have tangible, actionable metrics to compare against that will determine whether or not those initiatives have been successful.
Strategic, Operational, and Experiential [$ and non $] Value realization platforms allow organizations to have healthy, credible conversations with their customers and stakeholders. While tools like Net Promoter Score (NPS) can assist in a broad understanding of value at any given time, value realization frameworks allow companies to get highly personalized and specific. The data model will speak for itself, monetizing impacts and providing a more credible way to prove value.
Stakeholders/MBOs The number of stakeholders and their roles within a company can make aligning everyone on value challenging, as they each have competing priorities. Not only this, but stakeholders can also evolve as mergers and acquisitions occur, often causing employee churn. Value realization platforms allow companies to deliver on priorities, mitigate risks, and ensure positive business outcomes by giving stakeholders a platform to collaborate and align. This helps you align and focus on what matters most and revalidate priorities as priorities change, ensuring you are always on track.
'As Sold’ vs. ‘As Deployed’ Operations are not always as straightforward as intended. This is especially true in the presale process. Value realization allows companies to be flexible and agile when comparing metrics presale and post-sale. Additionally, the implementation team often has different initiatives from the buying team which should be explored and documented. And, since implementation timelines can look different for each customer, being able to have an early opportunity to expand by showing a quick time to value through a value realization platform can be beneficial.
Customer Engagement [Joint Success vs. Provider] Although significant ROI is critically important for any business transaction, customer engagement is the most crucial metric a value realization framework can utilize. Value realization platforms like Ecosystems’ Revenue Operating Systems show you what customers are actually collaborating with you on value, giving you a key indicator of who might be interested in a deal, renewal, or expansion opportunity.
To make achieving value realization easy, having a framework for a world-class value-based commercial operating system can be beneficial to help you align your entire organization around value, from sales to marketing, customer success, service, enablement, and operations. Ecosystems’ value blueprint helps you determine what level of value maturity your organization is at and how to up-level your value to better provide value realization to your customers. You can download it here.
Although it may be easy to measure certain aspects of value, such as quantitative measurements like money or time saved, other qualitative elements of value can be more difficult to analyze and measure. While a company can make a product cheaper, deliver it faster, or update its features, it isn’t as easy to isolate the way a product makes someone feel or how a superior product affects the marketability or reputational assurance of a company.
While large companies can employ advanced data specialists to assess quantifiable value, revenue operating systems like Ecosystems, allow companies to monitor and quantify value realization efforts with intuitive programs through tactics, metrics, targets, and timelines, allowing for tangible, scientific analysis of previously intangible, emotional elements. Ecosystems also offers Ecosystems Web Services to help you transform the way you deliver value to customers. Eco Web Services helps you grow customer partnerships by coupling product consumption with quantified business value. You can learn more here.
Example of Ecosystems Value Realization Platform. This chart demonstrates the monetary value of various elements.
By applying a value realization framework to your renewal process, you can increase your Net Recurring Revenue (NRR). Through a value realization platform like Ecosystems’ Revenue Operating System, you can track value promised through tactics, metrics, targets, and timeliness to see the overall value realization achieved. This is made easy through Ecosystems’ partnership with Gainsight, making the handoff from sales to customer success seamless. To learn more about how you can achieve NRR with customer value, check out Ecosystems’ joint on-demand webinar with Gainsight here.
How Do You Tie Value Realization to Go-To-Market Strategy?
Value realization is not only an aid in value selling, renewals, and expansion opportunities. It can also assist in providing case studies for your go-to-market strategy to help generate potential new customers within your pipeline. In Ecosystems’ Connecting Value Realization to Go-To-Market Strategy on-demand webinar, Qualtrics discusses the value of a retroactive vase study and an ongoing model of value realization to help you with your go-to-market strategy. Through a retroactive study, you can determine the value a customer has generated from your product or service, and with an ongoing study, you can measure and track value in real time to aid go-to-market strategy. Check out the webinar to learn more.
Could your company benefit from value realization software? Schedule a demo of our SaaS platform for digital customer value today.