Understand your value chain

Glenn Guilfoyle, Founder & Principal of The Next Level, writes…

I stopped counting and running ratios a few years back now, but at last count around 80% of the B2B sales organisations I asked failed the value chain question. I find myself in workshops with heads of Sales, Marketing, Customer Service, Finance,  and Operations seeking clarity from the group in terms of identification of their customers by value chain segment with justification as to their nominations. Around 80% of the time the group response falls somewhere between succinct nuances on identities and / or parameters, through to lengthy verbal disagreements and intransigence.

It becomes important as part of the annual Sales and Marketing strategy review to go back to basics and define and articulate the value chain in which an organisation operates. Too often this step is ignored. The consequences manifest as muddled marketplace targeting, “silo-ism” between State, Regional or Divisional Sales units, and sub-optimisation of the synergy between Sales, Marketing and Customer Service resources.

“The value chain question” is actually a series of eight questions. Try running this by your key leaders of Sales, Marketing, Customer Service, Finance, and Operations.

  • What players make up our value chain environment?
  • Who ultimately “consumes” our product / service in its form as we know it?
  • Who starts our value chain depiction?
  • Where are we in this picture?
  • Who is / are our customer(s)?
  • Who are not?
  • Why?
  • How many distribution channels exist in your value chain?

Wait a minute – what is the difference between a distribution channel and a value chain? The clarity of answers to these questions are business critical.  Yet too many businesses feature lack of uniformity across the key business leaders’ answers. Click here for a tool to assist.

Once you have nutted all that out (your value chain structure and strategy), then you should review the sales (team) strategy you employ within your value chain environment.

  • How do the value chain structure choices you made impact on which segments you harness your Sales Team to engage with?
  • How do you determine which segments to direct the Sales Team to employ a push sales strategy? A pull strategy? Both?
  • When do you gear them to ply the “gentle” art of sales specification?
  • Who do you transact with commercially and directly and who do you commercially transact with indirectly? Click here for a tool to assist.

For more insights like this, check out The Next Level’s proven sales process.

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