Communicating the value

Identifying the essential value elements and being able to create that value and thus fulfill the selected customer needs on the market is not alone enough. The customers must be made aware of the value potential the supplier carries. Superior communicating of the value is a cornerstone in, for example, value based selling. Communicating the identified value in the most efficient way will, for example, increase the supplier’s potential to ac-quire new customers and to reduce customer churn, both of which have a positive impact on the total profitability of the company.

Communicating the value to the customer may not always, however, be as simple as de-scribing all the value potential to the customer. To effectively communicate value Ander-son & Narus (1998) suggest creation of value-based sales tools. These tools can be, for example, documented cases of realized customer value, value case histories (Anderson &

Narus 1998). Providing actual realized history data of a certain value proposition may aid the company to demonstrate the true value potential of the proposal. Töytäri et al. (2011) also support this importance of providing credible reference of realized value. In his text, Keränen supports the documentation of the realized customer value as well (Keränen 2014, p. 57). Keränen also mentions that the collected customer case histories may help

the company to benchmark their offering by accumulating the knowledge over the cus-tomer value (Keränen 2014, p. 57). Thus, the documented cuscus-tomer cases do not only serve as the tool for communicating and proving the customer value to the customer, but the documentation functions also in benefit for further development of the offering.

Another method for demonstrating and communicating value for customer that Anderson

& Narus (1998) address in their text is spreadsheet software applications. The supplier may develop such tools and utilize them on sales managers’ laptops in real time together with customer, on-site, and iterate with different numerical values for predefined varia-bles (Anderson & Narus 1998). Customer may also give their input and estimates for certain variables and see the results in value estimates immediately. This kind of value consulting can be a strong tool in vale-based sales and value demonstrating, but achieving this requires precise understanding of the value proposition and the quantifying of this proposition. As previously mentioned, all value elements may not need to be quantified and thus included in numeric form in the spreadsheet software applications. Instead they can be included in more qualitative discussion.

Besides the methods, the focus of communicating the value to the customer is also im-portant. The question is, what value elements and value realization to communicate to the customer? The most obvious solution is of course to communicate all value elements as they are all positive to the customer. However, as previously mentioned, the value is best understood as comparisons between alternatives (Wouters & Kirchberger 2015). In their text Anderson et al. discuss more deeply the focus of communicating value (Anderson et al. 2006). They identify three main categories for the extent of focus in the communi-cating value. These categories are: all benefits, favorable points of difference and reso-nating focus (Anderson et al. 2006). Below in Table 2 is a comprehensive summary of the different categories that Anderson et al. (2006) identified in their text.

Table 2. Three different focus levels (adapted from Anderson et al. 2006, p. 6)

Value proposition All benefits Favorable points of difference

Resonating focus

Consists of All benefits cus-tomers receive

Benefit assertion Value presumption Requires customer value research

As previously described, the “all benefits” communicates all the benefits to the customer.

This option also requires the least amount of knowledge and understanding of the value proposition (Anderson et al. 2006). By definition, the favorable points of difference benchmarks the offering to the next best alternative and focuses on communicating the value of those elements, that are superior compared to the next best alternative. This method requires more understanding of the value proposition and of the rivaling propo-sitions and is thus much more complex and consuming to implement. However the results are more favorable since the method highlights to the customer, why they should select the supplier’s offering instead the next best alternative. (Anderson et al. 2006)

The last mentioned method or category, resonating focus, focuses only on one or two value elements (Anderson et al. 2006). Those elements are usually favorable points of difference, but can also include a point of parity (Anderson et al. 2006). The most critical factor is that the elements to which the communication focuses are elements which deliv-ers the greatest value to the customer (Anddeliv-erson et al. 2006). The point of parity can be, for example, purchase price, if the customer is very price sensitive. The supplier can demonstrate, that their offering is not more expensive than the next best alternative. Be-sides that the supplier may demonstrate one or two points of difference, which produce the most value to the customer. In their text, Anderson et al. mention as an example for a point of difference a possibility to link remote offices to project execution (Anderson et al. 2006).

The lastly mentioned resonating focus method is in line with the analysis presented by Keränen & Jalkala in their text. They argue, that companies should strive to build brands around the key capabilities in customer value (Jalkala & Keränen 2014). These capabili-ties should in turn be aligned with the customers’ goals (Keränen 2014, p. 58; Jalkala &

Keränen 2014).

In summary the literature seems to agree, although in different terms, that the communi-cation of the value is as important as understanding and being able to create it. The com-munication is most effective when it is credible, documented, based on historical data, and presented as comparisons between alternatives. The selection of focus is also im-portant. The supplier may choose to highlight only the most important value elements in their offering.