Resonating Focus / Value Word Equation
When you need this method
Your value proposition lists everything your offer can do. Procurement listens and still negotiates on price alone. Two errors sit behind this. The first is benefit assertion: you claim advantages for features that deliver nothing to the customer. The second is value presumption: you assume that any difference from the competition must be valuable to the customer. Buyers who are measured on cost reduction cannot rely on such claims. Whatever they cannot trace in their own numbers reads to them as marketing copy.
Approach
- 1Name the target customer's next best alternative, meaning the specific competitor or the status quo. Without that anchor you produce a self-description, not a value proposition.
- 2Sort every value element against that alternative into three classes: points of parity, points of difference, and points of contention where you and the customer disagree.
- 3From the points of difference, pick the one or two whose improvement delivers the greatest value to the target customer for the foreseeable future. The rest leaves the message, not the offer.
- 4Write a value word equation for each chosen element, meaning a spelled-out formula of customer figures and simple operators that converts the difference into money per unit of time or volume.
- 5Collect the input values together with the customer, from the customer's own operation, instead of estimating them. The calculation belongs to the customer, not to your marketing.
- 6Where the customer wrongly believes a competitor is ahead, use reference data to move that point of contention back to parity rather than talking around it.
- 7Measure the result in the customer's operation after go-live and record it as a value case history, so the next calculation does not start from zero.
Typical application
A typical B2B SaaS in the maintenance field sells against an established competitor and puts forward thirteen advantages. Procurement responds to price only. The team first names the next best alternative and sorts the thirteen points against it. Nine turn out to be points of parity that the competitor delivers just as well. Two differences remain: shorter setup time per work order and fewer missing parts on arrival. For setup time, a formula is built from work orders per year, minutes saved per order, and the internal hourly rate. The customer pulls the input values from its own work order system. An assertion becomes a number the customer can recompute. One point of contention, where the customer believed the competitor was ahead, is settled with data from two reference accounts. The price conversation shifts from discounts to the question of when the saving starts to accrue.
Limits and counter-indications
The method requires access to the customer's operation and to its numbers. Without a cooperating customer you get no substantiated calculation, only a better-looking claim. It works where value shows up in operating figures; for mainly qualitative advantages such as reputation or legal certainty it produces no number. Hinterhuber's survey of 131 sales managers finds no relationship for the intangible share of benefits and marks two further boundaries: value quantification capability relates to firm performance, not to the performance of individual salespeople, and its contribution is weaker in dynamic markets than in stable ones. Terho and colleagues point out that this selling approach is expensive and ties up effort upfront, which is why it presupposes customer prioritization and does not pay off in small-ticket business. Reducing to one or two elements becomes risky when the buying group holds several roles with conflicting interests. And the method repairs the message, not the offer: where no demonstrable difference exists, the honest result is that you are competing on price.
How to measure impact
Track the share of open opportunities that carry a monetary figure calculated against a named alternative, and compare win rate and average discount for those opportunities with the rest.
Related methods
Sources
- 1.Anderson, Narus & van Rossum: Customer Value Propositions in Business Markets, Harvard Business Review 84(3), März 2006, S. 91-99 (opens in a new tab) · Harvard Business Review (Reprint R0603F, frei zugängliche Fassung über On Target Partners) · 2006-03 · practitioner source · describes the methodCarries the full procedure: the three kinds of value proposition (all benefits, favorable points of difference, resonating focus), the matching pitfalls of benefit assertion and value presumption, the sorting of value elements into points of parity, difference and contention, the value word equation as a spelled-out formula in customer figures including a worked example, plus value case histories and value calculators as means of substantiation. Limit of the source: it rests on management-practice research in Europe and the United States and supports its effect through case examples, not through controlled measurement.
- 2.Hinterhuber: Value quantification capabilities in industrial markets, Journal of Business Research 76, 2017, S. 163-178 (opens in a new tab) · Elsevier / Journal of Business Research (Autorenfassung über hinterhuber.com) · 2017 · academic and scholarly literature · evidence of effectivenessA survey of 131 US industrial sales and account managers. Value quantification capability relates positively to firm performance, more strongly in stable markets than in dynamic ones. It shows no effect on individual sales manager performance, and the data show no relationship for the intangible share of benefits. The paper also reports buyer surveys in which purchasers expect a quantified value statement and treat its absence as a supplier weakness. Limit of the source: a cross-sectional self-report survey with a small sample, so no causal proof.
- 3.Terho, Eggert, Haas & Ulaga: How sales strategy translates into performance, Industrial Marketing Management 44(2), 2015 (Autorenfassung, Universität Turku) (opens in a new tab) · Elsevier / Industrial Marketing Management (Volltext über UTUPub, Universität Turku) · 2015 · academic and scholarly literature · supports the underlying mechanismA multilevel structural equation model with 816 salespeople and directors from 30 sales organizations. Value-based selling, defined as translating benefits into monetary terms based on a deep understanding of the customer's business model, relates positively to selling performance and mediates the effect of customer orientation on that performance. The authors also state that the approach is costly and ties up upfront effort for customer understanding and value evidence, which is why it presupposes customer prioritization. Limit of the source: a cross-sectional design that establishes association rather than causality, and it tests the behavior, not the value word equation as a single tool.
Origin: Anderson/Narus/van Rossum