Do you develop customer business cases – a financial evaluation of your solutions’ value to your customers? If you do you’ll know that it can be a challenging exercise; so is all the effort and investment justified? There’s no point in expending effort and cost in materials that no one will use.
In our experience there are three reasons why developing a well-structured and clearly articulated customer business case can be a valuable exercise.
1 Justify marketing claims
Customer business cases help product management, marketing and sales to focus on the reasons why a customer would benefit from your solution(s). The reasons may appear obvious, but generic messages such as ‘reduce costs’ and ‘scalable’ often go unchallenged internally, only to fall down in front of the customer. Having a fully worked business case helps with the credibility and justification of your solution. It also enables sales people to take the discussion to a detailed level when challenged by the customer, encouraging customers to consider and quantify the benefits to their own business.
2 Align solutions to customers’ needs
Having a good knowledge of your customer’s current costs or the cost of a competitor’s solution helps you align with your customers’ needs and differentiate your solution in both marketing communications and sales meetings. For example, you may think that having a smaller footprint, fewer truck rolls and lower cost is important, but if the customer’s main concern, and your main advantage, is reducing churn, then it’s important to be demonstrating a knowledge of all the customer-acquisition costs and customer-retention benefits your solution delivers.
3 Uncover new sales strategies
Sometimes the business case reveals some significant but unknown or little realised benefits that can be used to change the sales strategy. For example, we developed a business case for a mobile device vendor that showed that our client had a significant advantage in the way its devices were re-programmed for different users and situations. This reduced the number of devices required vs the competition, resulting in a saving for the customer equivalent to a 20% reduction in device cost. Unlike a price reduction, this advantage could not be replicated by competitors. The business case also exposed operational advantages of benefit to other customer decision makers, that might not be accessible to competitors.
Generating an ROI figure, whether it be the payback time, NPV or IRR, is only one outcome of a business case. The real benefit is in bringing clarity to how and where your solution will deliver business benefits to your customer. It doesn’t replace the softer marketing messages, but it provides a more convincing source of information as the sales progresses.