This blog was originally published on LinkedIn Pulse.
For those of us in service industry, we often live on daily feedback and our personal sense of accomplishment. All too frequently, we forget the big picture. Are we bringing real value to our customers? Are we making a difference? We need to prove value continually to maintain and expand business with our customer. Value is one of those terms that is easy to say, but very difficult to prove. Why is that? Because value is personal – each person has their own concept of what is valuable to them. To complicate matters, a person’s sense of value can change over time. So how do we even attempt to provide value to our customers? We do this by:
1) Building a better understanding of our customers’ wants and needs
2) Delivering beyond their expectations
3) Creating compelling stories to communicate this value in a meaningful, memorable way
Understanding our Customers
Many people in our business spend little time trying to understand their customers. We have a statement of work that defines our job. Isn’t that sufficient? Not really. We must also consider the variety of customers because there is usually not one customer. This is a concept I will never forget. I had a marketing professor in business school that, whenever a student said “the customer”, would stop writing on the chalkboard, turn around, and throw his piece of chalk at the offending student. This would seem amusing if we weren’t seated in a four-tiered semicircle of closely packed chairs. There is no single customer. We need to spend time with each customer group and listen to their concepts of benefits and value as well as what they perceive they are receiving today. These conversations must be focused on business or mission outcomes to align the benefits to the end-users, the customers, and the organization. From these conversations, we should arrive at what our customers want now and in the future as well as what they have today.
The Want/Have Gap
To address value, let’s look at the classical definition of a problem. A problem can be defined as the gap between what a person perceives they have and what they want. The size of this want/have gap is the magnitude of the problem. Anytime you find someone who is unhappy with your service, you merely need to figure out the extent of the gap between what they expected (the want) and what they are experiencing (the have). A benefit arises when the have matches or surpasses the want. The more the gap is exceeded, the greater the benefit to the customer. Of course, the topic of the want/have analysis needs to be linked to business outcomes. For example, focusing on time to deliver code is meaningless if the code fails in production.To link benefits to value, we need to understand our customers. We can deliver all the functionality the customer desires and still provide a software product that is not useful. We could blame our customers for not providing good requirements and point back to our statement of work, but in the end we are not providing meaningful value to their organization.
Delivering Beyond Expectations
Once we know the wants and needs of our customers, we need to do everything in our power to exceed these expectations. We must prioritize activities that deliver the highest value to their organization. For software development programs, it would be stable, usable software that is delivered quickly with high quality. For IT service management programs, it would be service availability and responsiveness to user requests and issues (for a deeper discussion, see my post “The Three ITSM Metrics that Matter”). Pick the most meaningful areas, craft how the value story should read, and then work to make that story a reality.
Telling the Value Story
Once we understand the business benefits and value to our customer and deliver these benefits, we need to craft compelling stories that communicate this success in a way that resonates and is worthy of remembering. Several years ago, we launched a campaign with our large federal agency customer to reduce the number of aging request tickets. These are service desk tickets for software, hardware, or account access that tend to linger in the open state for months, either forgotten or passed off to another service provider. We reduced the average age of an open request ticket from several weeks to a few days. How should we communicate this type of success? Look at the statements below to determine which is the most compelling story:
Activity: We reduced the number of open tickets by 70%
Outcome: Our efforts resulted in an average fulfillment time of a 2.5 days, down from 12.5 days.
Benefit: Users will now receive their requested items approximately 10 days faster
Value: The agency is now more productive by 230 staff days or $430,000 per year.
Each of the statements above represents a different approach to communicating the results. As an activity, we can say that we reduced the number of tickets. However, there is no value in that statement. If we look at the value, we address the business impact of our actions. Of course, we need to be careful how we calculate the cost savings, since we need to estimate the additional productivity of users for receiving items faster. When doing these calculations, we need to openly share our assumptions with our customers to build credibility and acceptance of our value. So, which statement tells the most compelling story? It’s a trick question. A compelling value story would have all elements, from activity through value, as well as some user interviews or quotes to enhance credibility. We can then use these stories at monthly program reviews, award fee determination reviews, and in future proposals.
Concluding Our Story
Telling a compelling value story requires a clear understanding of customer wants and needs, delivering outcomes that meet or exceed these want and needs, and crafting of a meaningful story that articulates business or mission value. To motivate teams, try using these “to-be” stories at the beginning of a program to set a “future state” that can be used to focus the team on creating value. For example, imagine starting a software development project with the following statement: “After this program, I would like us to be able to tell the following story: As a result of hiring us, this agency was able to deliver a software program that increased user productivity by x%, saved the agency $x, and did so with less than x defects ahead of schedule by x days.” Each person on the team can now aspire to fill in the numbers to show meaningful value.
About the Author
David Page is Director of the IT Service Management Innovation Center. David has over 35 years of technical, business, and organizational development experience and brings the expertise and strategic perspective to help Salient CRGT stand out from its competitors. He created and developed CONNECT, a web-based tool to manage and track staffing on large programs and provide complete real-time visibility to customers. Prior to Salient CRGT, David was a vice president at SRA International where he held multiple positions leading complex customer programs, heading new initiatives, and improving organizational effectiveness. David has consulted across numerous federal agencies and led a program of over 200 individuals supporting the Joint Staff at the Pentagon.