If you work at a services company, like me, you probably haver already heard someone stating “we must increase the value the customer is receiving”. That, for sure, is a mission that everybody who interacts with customers, should complete and seek for constantly and naturally. But first of all, what is the “value” for the customer?
Perception of value is relative
Each customer (we are talking about people, not about companies! They are who hire and pay for our services) will have its own conception of value. If you understand perfectly what your customer wants the most to add value to its initiatives, it will be very easy to answer the requirement of “increasing the value the customer is receiving”.
A good way to start would be to understand what is the objective of your project. Since the customer is investing money to allow our work, we can think on the same thing as “what the customer wants to get back from his money?”. The answer will ALWAYS be one of this two alternatives: a) save money OR b) make more money. Some instances can be:
- Making a factory line faster to produce will help the customer to sell more -> makes more money;
- Changing people from this same factory line to robots, will help the customer to spend less money on employees -> saves money;
- Improving an internal HR process so the customer can hire people faster -> saves money requiring less time from people;
So, what am I really doing every day? What is the objective of my project? How all of this small tasks will be gathered in the future so they will produce a big and helpful product?
- If I produce software I will have a lot of tasks to solve every day. But what this group of tasks will solve to that customer?
- If my job is to research the market and deliver a high qualified content to the customer, what would be the actions of the customer when they get this result?
Once we know the true answer for those questions, the team posture will change naturally. We will stop from being just code generators, and start being critical, we start being consultants: “Why am I getting huge amounts of tasks to create a calculator inside the system. Let the user use it’s own phone! Let’s move forward to something that will really add value to the product!”
Probably the posture above shown will be the true answer for “what is value for your customer”. But remember to check that your understanding of the customer needs are right and if the customer will approve all of your opinions about changing the project direction and even those small tasks.
Perception of value is also dynamic
Once we know our customer perception of value, have the operation stabilized and heading to the right path, we must always keep in mind that, sooner or later, our customer perception of value will change. It can be due to a market change (Eg: we are an insurance company and nobody is buying insurance now. For sure we will have to change our product) or even because the project was unsuccessful (Eg: we released that new product to the market but it didn’t reach our expectations on ROI (Return Of Investment)), maybe the project is reaching its end, etc.
So keeping a close and straight relationship to the sponsors and to the right people on each customer will help you to prevent changes. Knowing your customer plans and where he’s heading to will always help you to understand and plan in advance.
How the customer pays
We will find new contracts and will increase our services revenue if our customers find more value on us. But the customer will always pay for what he receives and for what will happen to him after he receives the product. He is the one who sets the price to the product or service. If he can see a lot of value, he will pay a lot of money. If he doesn’t see much value on your product, he just won’t pay much money.
I consider the Acceptance Criteria as the root of customer perception of value. If your delivered tasks fit exactly what the customer is waiting for, under the time you agreed, under the quality he’s expecting, he is satisfied and accepts your deliveries, you have a good starting point. Whatever comes after this will be very honorable to discuss.