Wednesday, August 11, 2010
The Customer: Post #4
The Value Account Plan (VAP): The value account plan lays out the value proposition for the client—expressed in business terms (cost reduction, revenue enhancement, etc.). As the author notes: “Translating the customer’s needs into a unique offering with well-defined business benefits is the crucial distinction between value creation selling and the traditional approach” (p.57). Charan has a few hand-drawn sketches in his book that are worth noting (I’m a huge fan of visuals). See his sketch on p. 59. In short, he notes that the VAP needs to include three elements: A brief description of the customer; the value proposition (consisting of the customer need, your offerings, and the financials and costs of your offerings); the direct benefits to the customer (ROI, brand equity, cash flow, reputation, etc.). In creating the value proposition, the sales leader has to coordinate the effort. And finding insiders who can help you understand key pain or touch points is beneficial. I would suggest using Linkedin as a great assist in this area to learn who in your network knows an insider. Charan recommends listing the Total Value of Ownership (TVO) to the customer. To do this, he suggests looking at the entire value chain starting at the consumer and moving backwards. He has a couple of good examples at Thompson Financial and Mead Westvaco (be sure to see the VAP sketch on pp. 78-79). Also, benefits that hit many different parts of the business (like marketing, finance, even legal) will be able to tap into various budgets, not just rely on one. Finally, the sales leader has to be the conductor of this effort where there’s a match-up and integration between your organization’s departments and the customer’s.