Good morning. Value stated in your units is a claim. Stated in theirs, it's arithmetic.
Sales.
The Value Word Equation
For the deal on your desk right now, could you finish this sentence with numbers a sceptical finance director wouldn't strike out — using us instead of what you do today moves your hours, or your scrap, or your days of stock by this much, which at your own rate is worth this much a year — and how many of those blanks would you be guessing at?
James C. Anderson of Northwestern University's Kellogg School and James A. Narus of Wake Forest spent years arguing that business buyers judge worth in monetary terms, and that suppliers should build customer value models out of field research rather than assertion — the case they set out in Harvard Business Review in 1998. The instrument a seller can carry into a meeting came later. In Customer Value Propositions in Business Markets (Harvard Business Review, March 2006), Anderson, Narus and Wouter van Rossum set out the value word equation: a sentence stating, in the customer's own operating units, what changes when they use you instead of the next best alternative available to them. Not what your product does — what their number does. Hours of downtime a year, kilograms of scrap per tonne, days of stock, shifts of labour. The discipline that makes it survive is where the inputs come from. The data is meant to be collected out of the customer's own operations, by your people and theirs working side by side, rather than modelled at your desk — slower, and it's the only reason the resulting figure holds up in front of their finance team. Anderson, with Nirmalya Kumar and Narus, pushed it a step further in Value Merchants (2007): go back after delivery and measure what actually happened.
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