Value differentiation

In many cases, just offering the customer a review that sets out the value delivered is not sufficient. As considered in the opening section on the nature of the industry, consulting is a trade-based operation where the ability to sell products and services is a core competency. You must ensure that the closure process not only reinforces what you have delivered but how it stands apart from what a competitor might have delivered. The art of the closure is in reinforcing the factors that differentiate your outcome from that of your competitors as well as confirming what might be perceived as the commodity element of your proposition, as seen in Fig. 12.3. Value differentiation might be seen as the difference between the value of the work that you have undertaken and that which might be delivered by a comparable competitor. Value, like beauty, is in the eye of the beholder and is not always an absolute element. Although value might be defined as the savings or satisfaction that the client and consumer receive from the engagement, there are many factors that drive this level of satisfaction.

Consider the cost of a litre of petrol. This is a commodity that sells within a narrow price band no matter where you might be. As such you might quite easily define the value of the product and equate it as being equal to the economic cost. Now switch to a different scenario: you have run out of petrol and the garage is a mile down the road. How much would you be prepared to pay for the fuel now? The guess is that most people would be prepared to pay a price premium of 50 per cent to save the effort of walking down the road to get some more fuel. Now consider that you have run out of fuel on the way to an important client meeting. This is the final clincher in what has been a prolonged and difficult sales process and unless you are there to close the sale there is every chance that the client will switch to a competitor. Now consider what value a litre of fuel would hold. In cold economic terms, it can be equate to a percentage of the revenue that you will receive from the client contract, which in many cases might be the price of a new car.

The message in this analogy is that value must be measured from the perspective of the client and consumer, not from your perspective. Value is driven by the availability of comparable alternatives. So even if you have delivered exactly what has been specified in the contract, if the client feels that they could have achieved the result at lower cost via an alternative route, then your sense of value contribution will be minimized. In a simple world, this wouldn't be a problem as the client's view of the perceived value would be constant over the course of the change. However, the reality is that over the life of any change project the client's perception of the value that you are adding could well change. By the end of the project they may be willing to pay the bill but do so with a sense that true value has not been delivered.

Imagine you are walking down the high street and you see a shop that is selling your favourite brand of jeans at a third discount to the normal price. You decide to buy a pair and at the moment of decision you are convinced that this is a fair transaction and one where you will receive value from the purchase. However, as you walk out of the door, you notice that the shop on the other side of the street also has a sale but it is offering the same jeans for half price. Your sense that the jeans were a good purchase will be immediately reduced and in many ways you might blame the shop for ripping you off.

The same can happen in one of your consulting assignments. You begin the engagement on the clear understanding that you are responsible for reengineering one of the company's core processes. All goes well but at the end of the assignment, the client starts to ask questions about the bad press that process reengineering has received. They even start to question if the change was really necessary after all. Although they know in their head that you have delivered the agreed value, their heart tells them that something doesn't feel right and the only person they can blame is you. Here lies the quandary. From your perspective the appropriate and agreed value has been delivered but from the client's perspective the value is suspect.

Clearly, you can't prevent a change in the environment or how the client sees the world, but you can have an array of arguments that will help to ensure the client and consumer are made aware of the unique value that you have offered as part of the transformation. These arguments can be used to help the client to realign their understanding of value and in particular to see the value that your project has realized - even if there has been a significant change in the environment. Examples of the differentiated propositions might include:

• Service performance guarantees so that if the client is not satisfied with the final outcome, any part of the delivery will be re-worked free of charge.

• Faster delivery from the ability to mobilize resources such that any client demands are met without delay.

• Licensed proposition whereby you own the rights to the intellectual capital and no other provider is able to deliver the same product.

• Trusted client relationship where the closeness of the relationship means that no other supplier is able to get close to the client.

These differentiators are crucial because they offer options that the competition might not be able to replicate. Although they are not in themselves unique, any competitor wishing to replicate the proposition will have to mobilize the necessary resource - and this takes time.

So, when an engagement is being closed, it is important to ensure that the core added-value elements are communicated. But it is more important to ensure that the client understands how your particular differentiated proposition is embedded in your delivery. This reinforcement must be communicated on a logical and emotional level. The client must understand the cold logic of your differentiator, such that they are able to rationally compare it with the competition. Second, they must feel how your service is different so that they can sell you and your ideas to others with a sense of passion. Finally, wherever possible, get them to touch the difference. Wherever your solution has a tangible factor, ensure that the client touches, smells or feels how it is different from your competitors' offering. By ensuring that they understand the differentiated value there is a greater chance that the closure is successful and further repeat business can be won.