Value Estimator Overview
- Ondřej Tesař
Analytics
Description
The business goal of Value Estimator is to support value-based selling by using value propositions / value drivers. It empowers the sales reps for value-oriented sale conversations.
Value Estimator calculates (based on predefined value drivers) the real value of the deal/solution for the customer. This value is then compared to the current solution and/or competitor solution. The calculation results are shown in the value comparison (waterfall) chart.
Key Points
Value drivers for particular solutions
Comparison of the offered solution to the current or competitor one
Presentation of what the total value consist of
Comparison with the next best competitor(s)
Transparent overview of value differentiations
Covers various business models
Business Models
Value Estimator allows for choosing between two business models (and eventually their variations).
Direct Offering Comparison
A seller providing a higher value alternative to an offering of similar price.
The waterfall starts with the competitive product price and defines the total economic value with the addition of items showing value for customer and our solution price.
This traditional concept is based on the comparison of the current and proposed price and on the particular Value Drivers differences for both current and proposed solutions which determine the added value.
Services Model Impact
A seller providing a service, at a cost, to provide significant upside benefits to a customer.
The waterfall starts with the current state of the business and involves only the drivers of the proposed solution to have an impact on the current status.
A typical use case would be a reduction of the current run rate cost of operating for a particular solution.
These two approaches affecting the value development in the output comparison charts are available:
Total Cost of Ownership – Cost oriented (the lower the target value is, the higher the benefit is).
Profit Growth – Profit oriented (the higher the target value is, the higher the benefit is).
Direct Offering Comparison
Input
The inputs are:
List of Solutions to be considered (e.g. Current Solution, Competitor A, Competitor B,…)
Value Drivers for these Solutions and for Our Solution
Definition of Driver Attributes and of a formula providing the final result value of the particular Value Driver calculated from these Driver Attributes (optional)
Solutions Prices
Additional configurations (e.g. Drivers ordering)
From the list of Solutions one of them is selected to represent the entity which Our Solution is compared to.
Output
Comparison Chart
Comparison of the Selected Solution with Our Solution.
Price Savings
Price Savings for all the listed Solutions.
Value Overview
A value breakdown.
Value Driver Matrix
A list of Value Drivers for all the included Solutions and the Added Value of Our Solution to the Selected Solution.
Solutions Comparison chart
Comparison of all the included Solutions, their Prices and Values For Customer.
Comparison Charts for particular Solutions
Comparison charts for all the included Solutions compared to the Selected Solution.
Value Equivalence
Visualization of the “value equivalence line” concept – a simple comparison of Solutions Prices and Solutions Added Values (summary of Value Drivers per solution) in terms of its relative values compared to the Selected Solution’s (e.g. the current status or next best alternative) respective values.
Services Model
Input
The inputs are:
The sub-model definition (Total Cost of Ownership, Profit Growth)
Drivers Class definition (Absolute, Relative)
The Current Solution (Current Run Rate Cost of Operating) value definition
Value Drivers for Our Solution
Definition of Driver Attributes and of a formula providing the final result value of the particular Value Driver calculated from these Driver Attributes (optional)
Output
Comparison Chart
Comparison of the Current Solution with Our Solution.
Value Overview
A value breakdown.
Comparison Charts for particular Solutions
Comparison charts for all the included Solutions compared to the Selected Solution.
Value Driver Matrix
A list of Value Drivers for all the included Solutions and the Added Value of Our Solution to the Selected Solution.