Technology enables companies to implement new business strategies so they can capture opportunities created by changes in the market. This is the essence of every technology value proposition. To build value around your solution you need to understand how market change is impacting a customer’s business and how your technology solution can help them manage the change to their advantage.

Step 1: Define the Impact of Change

To define the impact of changing market dynamics on a customer’s business, you need to start with an understanding of the market drivers causing the change – rising transaction costs. Then you refine this general information into specific descriptions of how the market change is creating both new opportunities and new problems for your customer. Rising transaction costs are eroding the customer’s profit margins. The more specifically you explain about how market drivers are changing the customer’s business environment and the potential impact of ignoring them, the better. Rising transaction costs caused by the increasing complexity of Internet-enabled global competition is increasing the cost of raw materials by 7% per year, which translates to a 2.5% decrease in your gross profits each year.

Step 2: Identify Emerging Business Strategies

A strategy is what an organization does so they can benefit from the changes caused by market evolution. Smart companies use technology to help them respond productively to change. An economic market trend of rising transaction costs coupled with improved eTrading technology might cause a company to initiate a business strategy to lower costs through strategic sourcing, which is an automated approach to managing the purchasing process. The results of a business strategy – increased revenues, lower costs, improved productivity, increased efficiency, etc. – are the customer’s compelling reasons to buy the new technology-enabled solution.

If you use emerging business strategies to guide your early conversations with customers, you will develop a clear understanding of what they want to do and why. Ask the questions like…

• How is the current market trend “X” impacting your market sector?

• Are these changes threatening your ability to reach your strategic business goals? Revenue targets? Profit predictions? Market share? Stock price?

• What new business strategies are you considering in response to the changes in the market?

• What is your vision of the successful implementation of this strategy?

• What are your concerns about implementing this strategy?

When you understand your customers’ business strategies, you can figure out how your technology can help them achieve the strategy’s results faster, better or cheaper, which will be why they want to buy your technology.

Step 3: Clarify Your Prospect’s Compelling Reason to Buy?

Once you understand a customer’s business strategy, you will be able to identify their compelling reason to buy – lower costs through improved sourcing of raw materials and components. This is important because if they don’t have a compelling reason to buy, they won’t.

Compelling reasons to buy evolve as the market develops. Early adopters buy new technologies to increase revenues and gain market share. According to Geoffrey Moore they are looking for discontinuous innovations that “enable new strategic capability that enable dramatic competitive advantage.” Their business strategy is to leapfrog the competition by being first to market, so they are looking for fast results. They value being first to market. So you build their perception of value by showing them how your solution will enable them to speed their time to market, improve their responsiveness to market change, and create innovative products and services. You need to show them how your solution will produce strategic results, such as accelerating their growth, increasing sales and opening up new markets.

Geoffrey Moore also claims that the early majority customer’s compelling reason to buy is to “radically improve productivity on a well-established critical success factor.” Early majority buyers are more pragmatic. They have experience implementing change and they know how hard it is to do. They are interested in ‘evolution, not revolution.’ The ability to prove that your solution reliably delivers what you are promising becomes very important. So your ability to build value around the features and functionality of your solution become more important to your success.

In each account the customer’s compelling reason to buy is going to be different. To win the account you need to prove to the customer that your solution is the only way they will be able to achieve the results that want. When your solution is unique, you create value.

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