Value realization is an important concept in the sales and business landscape, but it’s not always well-understood. Via business value realization, companies can develop a deeper understanding of how strategic changes influence the overall impact and success of the company. Essentially, this concept helps business leaders to determine whether the full value of their service or product is being recognized by customers, shareholders, and leaders.
What is Value Realization?
Sometimes referred to as “customer success value”, value realization is the ability to measure the direct impact of projects, people, and strategies to business objectives. It’s how companies track the specific results a strategy has on the outcomes of business goals.
For instance, if a company wanted to “create value” by improving the efficiency within a sales process, they might implement new technology tools to assist sales professionals. Value realization would involve implementing strategies to track how the use of those tools influenced the performance of employees in terms of deals closed, time spent on cases, and so on.
By tracking the value the business, stakeholder, or customer actively receives from each initiative, companies have a better way to determine the “ROI” from each effort.
Why is a Value Realization Framework Important?
Value realization initiatives are often important when companies are implementing change management strategies, new campaigns, or exploring new directions for success. By creating a value realization framework, companies can create an environment where they can more effectively track the impact of each change made in the organization.
To facilitate effective change and growth in a business, companies must be able to establish clear metrics for success. Value realization allows for a quantifiable view of value, and provides evidence into the success of different projects throughout a transformational journey.
Without a business value realization strategy, companies may struggle to connect the outcomes of certain initiatives to wider company goals. This makes it harder to prove Return on Investment, direct future strategies, and gain buy-in from stakeholders.
How to Measure Value Realization
Measuring “value realization” is complicated because there’s no single definition of what “value” might look like to a business. In general, to measure a value realization strategy, companies need to define what “value” means to their customers or shareholders.
The process of implementing and tracking value realization begins with defining what value a company wants to accomplish with an initiative, and how they’re going to track specific results. For instance, the value created by a software company in the B2B world could include everything from better productivity and time-management, to increased top-line profits.
To measure value realization in any business, companies need to first understand what kind of “values” they can create for their stakeholders and end users. Then, the next step is implementing measures to measure each value. For instance, if you determine your software solution can help B2B customers by allowing them to improve their revenue, you would use an analysis of the earnings of your top clients to see whether the value of your service is being realized.
What is the Value Realization Framework?
Business value realization can be a complex concept to understand. Often, it’s helpful to look at examples of how companies might use a value realization framework to assess possible success levels. One of the most common ways companies examine “value realization” is to look at the impact an initiative has on the revenue or sales of the company.
If a company introduces a new sales strategy, it’s easy to look at the revenue generated by the campaign and determine whether the effort has monetary value for the business. However, a value realization framework should generally involve more than just a focus on monetary outcomes.
Researchers from Bain and Company determined there are at least 40 different elements of “value” in most B2B offerings, which are divided into different categories:
- Inspirational value: Such as social responsibility or business vision
- Individual value: such as network expansion from a career perspective, improved growth and development opportunities from a personal perspective
- Ease of doing business value: Such as improved productivity, better relationships, operational simplicity, ease of access, and strategic bonuses.
- Functional value: Such as an improved top line or cost reduction, or better product quality, innovation, or scalability.
- Table stakes value: Such as regulatory compliance or ethical standards
Adopting a business value framework of your own can help your company to identify the most significant areas of value for stakeholders influenced by your company, so you can measure exactly how effective you are at delighting your target audience.
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