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Is Your Company Ready To Deliver Value As A Service?

by Rob Bernshteyn, author of “Value as a Service: Embracing the Coming Disruption

Waitress serving customers Traditional product companies are fast converting the delivery of their offerings to the as-a-service model. We are now approaching the final frontier of that model: Value as a Service (VaaS). As we shift to VaaS, customers will focus less on the delivery model and more on the value delivered.

Effectively delivering VaaS requires a new kind of relationship between vendors and customers, one that is outcome-based, rather than a transactional exchange of goods and services for money. It’s more of a partnership in which both parties are empowered to support each other as well as hold each other accountable for achieving measurable results they’ve both agreed upon.

Making this shift is the hardest part of transitioning to VaaS. Vendors must lead the way by creating a culture of quantifiable value that permeates everything they do.

Signing up for value.

From their first engagement with your marketing, prospects should get a sense of the value customers are achieving using your service. Sales discussions should focus not only on features and functions, product demos or even product benefits. Instead, they should start as authentic and open learning sessions about the customer’s business strategy, resources, culture and unmet needs.

Since value is the foundation of the relationship, it is a policy at our company not just to sign a contract, but to reach an agreement on specific business success criteria that we will work together to achieve. In our line of business, a typical agreement might be that together we are going to save a hospital network $50 million on syringes, scrubs, bed linens, IT and maintenance and cut their order fulfillment and invoice processing times by 60 percent.

By working together to establish these very specific, measureable goals, we are already setting the tone for a different kind of relationship.

The handoff.

The focus on value doesn’t stop once the deal is inked of course. These success criteria must become the framework for all subsequent interactions.

The professional services team must be oriented to pick up right where sales left off, mapping the deployment and change management programs to those same success criteria. The product and technology teams must be listening to the customer, and digging below the surface of feature requests to understand the deeper needs that could be met to drive long-term value.

Ideally, everyone is moving in lockstep with their eyes fixed straight ahead on those success criteria. One way of achieving that is to emblazon them on everything associated with the project—communications, collateral material, t-shirts, screen savers and mousepads. 

The handoff.

This effort has to be supported by an internal culture of value creation. This cannot be mandated from on high because it is based on employee empowerment.

Inevitably conflicts arise in the course of a technology implementation project. In a transactional relationship, in the face of these frustrations, the customer often beats up on the vendor, and the vendor takes it because the customer must be satisfied. This is what often happens in the product world.

But in the VaaS world, that approach is not going to get us to where we need to be. Both parties must stay focused on what they’re trying to do together. This is where your employees need the culture supporting them.

Keeping value front and center.

As with the customer success criteria for any project, building this culture starts with clearly and frequently communicating the company values. Leadership should repeat them until they’re tired of repeating them, and then keep repeating them.

Your customer stories should focus on value achieved. Your employees of month should be consistently rewarded for exemplifying these values, as voted by their colleagues. Every employee should be evaluated on how well they execute on these values within the context of their role.

Culture in action.

Here’s an example of how a culture of value impacts employees. We had a customer with a large number of open tickets and support requests. They were getting frustrated by how long it was taking to resolve some issues, and rightfully so. The customer success representative was getting frustrated with the number of requests and unreasonable customer expectations for turnaround time. Their egos clashed and they got caught up in a you-versus-me dynamic and lost sight of the big picture.

That employee came to an all-hands meeting where they saw a presentation of a case study where the customer achieved seven-digit savings. They saw someone get an award based on having delivered measurable success for this customer. They compared that to what they were doing and realized they should be aspiring to something greater than this back and forth at the ground level. They reengaged with that customer in a different spirit, refocusing on the success criteria and the bigger picture. They got back in the game, and resolved what actually mattered for their business.

The mind shift.

That takes maturity, diplomacy and the knowledge that you have the support of the organization behind you. When the customer asks for something employees are acculturated to ask, not why, but, “How does that support what we’re trying to achieve?” They ask clarifying questions. They dig deeper and map everything to what they are trying to achieve together. They listen and build trust and get customers to problem solve together with them.

Delivering Value as a Service puts a greater burden of responsibility on employees. That’s why they need a strong culture supporting them. The skills are easy to learn, once you’ve made the mind shift. It’s the mind shift that really delivers the value for both companies, and for everyone involved.

Is your company ready to deliver Value as a Service? To learn more, check out valueasaservice.com. Rob would love to hear your thoughts on this topic and how it applies to your company or industry.

 

rob-bernshteyn

Author of “Value as a Service: Embracing the Coming Disruption” Rob Bernshteyn is the CEO and President of Coupa, and drives the company’s strategy and execution. Rob has more than two decades experience in the business software industry. Rob is a guest lecturer at Harvard and Stanford business schools, and a frequent contributor to Forbes and Fortune magazines. He can often be heard providing commentary on major news programs including Bloomberg’s Money Moves and NPR Morning Edition.


This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.

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