Productivity Benefits for Customer Value Management:  Hard or Soft? 

Productivity Benefits for Customer Value Management:  Hard or Soft?

Mark Camilleri
Director of Value Engineering
DecisionLink

Do you position improved productivity benefits of your solutions as a hard or soft dollar savings as you work towards improving customer value management?  Most practitioners place productivity improvements in the soft bucket, however, I would argue that depending on the benefit and how you position it, they could be counted as hard savings as well.  Ultimately, it’s going to be whatever your customer / prospect buys-off on, but if they can be convinced to count them as hard dollar savings, that just further improves your customer value positioning.

So, what kind of benefits are good candidates for hard dollar savings to help sell value?  It is going to be difficult for any customer / prospect to agree that “generic” productivity gain benefits are hard dollar savings.  However, if you can tie benefit to the actual cost of something (typically some sort of event) it can potentially be brought to the table as a hard cost savings, especially if it is tied to an important KPI for the customer / prospect.  Taking a simple call center example.  If you articulate your benefit as improving call center agent productivity by 20% you are going to have a difficult time convincing any financially savvy customer that is a hard savings unless they have plans on downsizing.

However, by simply positioning the benefit differently, you may have better success with your customer value selling efforts.  Imagine their cost per call center call is $5.  If you still claim your 20% productivity improvement, the cost per call is now $4.  If you are saving $1 per call (a vital KPI in the call center world) on 1M calls, that $1M savings can now be better argued as a hard dollar savings.

Again, it’s always going to be boiled down to what your customer accepts, but to simply always categorize your productivity gain benefits as soft savings allows your potential customer value of your solutions to be diminished.

What are your thoughts?  When / how have you been able to achieve hard dollar saving buy-in for productivity gain benefits?