Pankaj M Madhani. Pankaj Madhani. A short summary of this paper. Download Download PDF. Translate PDF. Madhani the supply chain, but also on the demand chain. The demand chain comprises all the demand processes necessary to under- stand, create, and stimulate customer demand and is managed within demand chain management DCM.
The Need for Marketing and SCM Integration As customers are increasingly becoming more demanding, firms place more emphasis on customer service.
Achieving better levels of customer service requires working together across different departments or functions of a firm. When working relations between marketing and SCM are poor, the coordination and communication that is crucial for the provision of overall customer value proposition may be lacking. Collaborative behavior is based T he supply chain comprises all the supply processes on cooperation willingness , rather than on compliance necessary to fulfil customer demand and is managed requirement.
The deleterious results of not integrating within supply chain management SCM. SCM the marketing and SCM efforts are becoming increasingly focuses on the efficient matching of supply with demand evident. A firm cannot reach its full potential in terms of but does not help the firm to find out what the customer per- developing, refining, supporting, or delivering products ceives as valuable, and how this customer-perceived value can and services without using marketing insights to shape and be translated into customer value propositions.
In addition, functional departments may efficiency by itself will not increase customer value and sat- divert considerable attention and effort from serving cus- isfaction. Providing customer service in the value chain is tomers to internal issues like turf protection, and blame largely the domain of two functional areas — marketing and game for errors and shortfalls.
The inability of marketing SCM. Supply chains capable of implementing and execut- and SCM to effectively integrate create significant barriers ing an integrated and coordinated marketing strategy at the to identifying and responding to customer demand, opti- supply chain level focused on the ultimate customers will gain mizing inventories, and servicing the customer base. Marketing and SCM often operate as self-optimiz- ing, independent entities.
Demand Chain Management other, leads to sub-optimal solutions. In the DCM, the mar- Functional managers often consider marketing and SCM as keting and SCM functions are not separate; rather, they are separate and distinct entities from one another as they do intertwined as explained below in Figure 1. Despite strong arguments for The view of the consumer as an integral part of the chain an integrated approach, in many firms, the supply side still is perhaps the most important issue in the shift from SCM to seems to be disconnected from the demand side and supply DCM.
The focus of DCM is on real-time flow of demand- chain managers have only a faint idea of the drivers behind related information from point of inception end-users to the customer demand. The goal of DCM is to coordinate the relations tend to be characterized by conflict and lack of demand creation and the demand fulfillment processes to gain communication rather than by collaborative integration.
The demand creation processes tional areas. This implies that a their customers. Hence, along with supply chain, firms need framework of DCM may be constructed based on two inter- to focus on demand chain. The demand chain is defined as related parts: marketing and SCM as shown in Figure 1. Demand chain design is based on a thorough market understanding and has to be Sub - Sub - managed in such a way as to effectively meet differing cus- optimal optimal tomer needs.
A demand chain strength that is not linked to a supply chain strength may result in a high-cost base, as well as slow and inefficient product delivery; while a supply chain strength that is not linked to a demand chain strength could result in sub-optimal outcome. Figure 1: DCM: Marketing and SCM Integration for Optimal Outcome Source: Compiled by author DCM: Marketing and SCM Integration for Optimal Outcome Examples of major demand creation processes are strate- Marketing is focused on the demand chain and addresses gic marketing planning, market research, market segmenta- the sell-side of the firm while SCM is focused on the supply tion, product development, and marketing and sales,5 while chain and deals with the buy-side of the firm.
A comprehensive, scalable CVM platform will contain a collection of benefits that constitutes the content foundation for the value program.
This foundation is critical to every stage of the CVM journey — creating a value hypothesis with your internal account team; building and refining a defensible business case with the buyer team; measuring value realized post-solution implementation, and creating persona relevant assets along the way. Overly simplistic ROI Calculators fail to bridge this gap; in fact, they may widen the gap. Thus, the challenge is: how do you build a value model that can be used to generate interest with a provocative value hypothesis , then move on to refine the hypothesis into a compelling business case, and finally, close the loop by using the baseline model to measure value realized.
The answer is: build a rigorous Value Data Model with the ability to abstract data to suit a variety of needs. The Value Model is a collection of precisely-defined benefits that constitute the baseline financial model to be used and customized by sales reps in building a unique business case for each customer.
So, what is a precisely-defined benefit? A benefit is the fundamental building block of a value model. A well-defined, reusable benefit consists of the following elements:.
The figure below highlights the key attributes and considerations involved in the Excel vs. In summary, Excel is useful as a helpful model prototyping tool to initially load the baseline value model into the automation platform, and to provide financial types with visibility into the quantification logic for a business case. However, it does not pass the test of a secure, industrial-strength, sales self-service enterprise-scale application to support value selling in the steady state.
The chart below provides a checklist of CVM automation platform capabilities that elaborate on these requirements:. There are a number of considerations that should be kept in mind when evaluating Customer Value Management solutions. Below, are different considerations for evaluating or comparing value management platforms:.
A platform:. Ability to quickly adapt to business changes caused by adding new solutions; product enhancement; acquisitions, etc. With Excel, dozens of spreadsheets are required to support variations. Business cases accounting for the integration of multiple solutions that may have overlapping benefits can be created to support real-world selling situations Usability Usable by all sales reps with basic business acumen for all qualified deals in the pipeline.
Consequently, use of the spreadsheets are often constrained to the largest, most strategic deals. An automation platform is specifically engineered for use by sales people — providing quick access to explanations and assistance to drive more effective adoption.
An automation platform provides full visibility of adoption and usage by sales team members. A dashboard shows all business cases in process — highlighting sales team members that need guidance or further training Value Realization Measurement Periodic assessments of value achieved relative to the ROI baseline An automation platform provides a value realization methodology as an integral part of full CVM life cycle support Integration to other enterprise apps Integration with other processes and tools in the sales ecosystem CRM, Customer Success An automation platform provides APIs and is fully integrated with the current sales ecosystem including CRM, SSO, LMS, and other tools What is Value Engineering?
Value Engineering is a practice that is critical for a business to achieve higher close rates, increased average deal size, improved customer retention, and increased account growth through cross-sell and up-sell. Regardless of label, there are a number of Value Practitioner roles depending on personal goals and strengths. Generally speaking, these opportunities fit into two broad categories:.
Sales enablement content can be packaged and delivered in a variety of ways — including recorded sessions on a Learning Management System; formal face-to-face venues like sales roadshows; Sales Kick-off events; onboarding events, and one-on-one coaching sessions. The table below suggests different assets that value engineers can prepare for value management enablement:.
Model, and sales team roles and responsibilities for the customer engagement process. References and links to the key sales assets previously developed; specifically:. What is Customer Value Management?
Both the buyer and seller need a reason to initiate a meaningful conversation. Value Delivery. The goal: create a transparent business case, transfer ownership to the Economic Buyer, and implement the B2B solution, successfully setting the stage for periodically quantifying value achieved. Value Realization. Following a successful implementation, value realization measures actual value achieved relative to the original baseline ROI model — helping the customer showcase business value.
In addition, customer testimonials and case studies along with benefit proof points should be captured and fed back into the value models for continued refinement and enrichment. What is the History of Customer Value Management? Why is Customer Value Management Important? These goals can be achieved by three key actions: Grab attention with a provocative Value Hypothesis.
Consequently, the value hypothesis provides a strawman model to drive a business case working session. Build a credible, transparent business case. The objectives of the business case modeling exercise should be to: a gain buyer team consensus on the metrics required by the Economic Buyer to justify investment; b provide complete traceability from the ROI and payback calculations down to individual pain point-value statements pairs that comprise the business case; c help quantify the cost of delay, and d move the seller solution up the investment priority stack.
Lock in an on-going relationship as Trusted Advisor. The final business case model also serves as the baseline for periodically measuring and showcasing value realized following solution implementation. This part of the seller experience is critical to locking in renewals and setting the stage for expanded implementation through cross-sell and up-sell opportunities. This stage is about developing the Value Data Model and validating it with customers.
User Experience UX Validation. The next stage of validation requires assessing the best way to implement the value model and associated assets in the steady state. Can the delivery of the Excel-based Value Model be scaled?
Is it easy for the sales teams to use it? Does it support iterative refinement as you move through the sales cycle? Will customers accept the transparency and quality of the resulting deliverables?
Can these outputs be quickly and efficiently regenerated during the business case refinement process? Here is where Excel falls short and a CVM platform makes a tremendous difference. Over the past few years, books have been written and significant research has been conducted on the benefits of selling business value. Reed K. Miller Heiman, in its CSO Insights Study, reports some eye-opening statistics on the buyer-seller experience as shown in the table below. Stakeholder Benefits of Customer Value Management Executive Management CVM helps the C-Suite of an organization to increase profits in their net new sales division by reducing discounts, growing their deal size, and increasing the deal velocity in their pipeline.
In the existing base, CVM helps leadership teams to achieve a higher Net Retention Rate, which generates profits and shareholder returns. CVM enables leaders to reduce discount levels, improve win rates, accelerate deal velocity, and increase deal size while differentiating from the competition and elevating conversations to the C-Suite.
Sales Reps A scalable CVM process ensures that sales reps can deliver consistent, high-quality and value-based analysis to every deal in their pipeline. In turn, they will be able to reduce discounts, increase deal size and velocity, and create strategic alignment with customers around their business challenges. Sales Engineers CVM enables Sales Engineers to deliver true quantified value to their sales teams through assisting in the value hypothesis development and business case development, and automating their RFP processes, which are very manual and arduous tasks.
Sales Enablement Deliver impactful value selling resources to sales teams with real, quantified proof points from customers. Download citation. Published : 07 June Issue Date : June Anyone you share the following link with will be able to read this content:. Sorry, a shareable link is not currently available for this article. Provided by the Springer Nature SharedIt content-sharing initiative.
Skip to main content. Search SpringerLink Search. Google Scholar Frennea, C. Google Scholar Kamakura, W. Article Google Scholar Mittal, V.
0コメント