Value. Benefit. Same same right? WRONG.
Value is the things our customers want, what matters to them. Benefits are all the stuff we get for doing a good job (profits, efficiencies) and generally don’t mean squat to a customer.
In this first video in a 2-part series I explain the difference between value and benefits, as well as why it’s important to distinguish clearly.
Next week we’ll be back to apply this thinking to reinvent some of our projects in-progress with a super simple productivity hack.
Video transcript and useful links
Hey it’s Danelle and today were talking about value and benefits, and the difference between those two terms
Now it may sound like just a couple of words and a bit of language stuff but for me it’s one of those critical concepts that we’ve just got to get across if we want to start thinking differently about how we build and run our organizations and what it means to interact and organise ourselves at scale.
So these two words probably get used interchangeably in a lot of the organisations I work with. We will talk about value to customers, we’ll talk about the benefits that customers are getting. I like to keep those two words very very separate they have very very different meaning whenever I walk into an organisation.
So first up value. Value is defined, by customers in their words, it’s the things we do to make their lives better, to solve their problems and it’s about what customers want, when they want it, how they want it, what matters to them, what’s important to them. Value is something that has to come from our customers.
On the other hand, benefits – well those are all of the things we get, all of the stuff we get for doing a good job. So I’m talking profits I’m talking process efficiencies I’m talking capability Improvement. And those things are generally things that we’re pretty pleased about with ourselves for having achieved but actually customers don’t care squat about benefits, they’re really interested in value.
And just as a side note, if I hear one more executive tell me that our customers value us being a profitable company, so that we can continue to deliver to them… you’re gonna get a slap through the Internet
So what does that look like in practice? Well, I always make sure that in any program of work or any initiative or any client that I’m working with we set up a really clear distinction between those two words, because that helps us to create a greater focus, in terms of being honest with ourselves about the reasons for why we’re doing work and why we might be prioritising one thing over another.
Think of it this way. If you were a bank and you wanted to sell more mortgages… if we were to construct a program of work where the outcome was sell more mortgages… clear benefit to the organisation improve sales revenues, yep got it understand why we would want to do that. If we set the outcome as sell more mortgages you can imagine the types of projects that might fit under that outcome and the types of things that we might try and do to achieve that outcome. It could be things like a digital mortgage broker; improved home loan rate calculators; maybe there’s a sales push out to new home buyers because that’s the new target market; or conversely maybe it’s a push out to some of those people who already have an investment property and are looking to scale up because they’ve got the capital available. You get a very clear sense of type work that comes through in that program.
Now if you flip your thinking over and say “well what is it that is really a value to customers?”
Straight-up I don’t know anyone who’s ever actually said to me that they want a mortgage. I have met a whole bunch of people that have said they wanted to move into a home. So if we were to construct a program where the outcome that we are looking for was to help customers into a home, you can imagine that the type of work, the type of projects that fall out of that would be entirely different. We might start to look at things like understanding of the neighbourhood is the right fit for a customers; proximity to local schools, public transport. Starting to work out what are those things that are going to help our customers to feel at home and to fit into a home. And yeah as a result they are going to buy a mortgage with us because we’re able to talk to them about things that actually matter, as opposed to getting into a really cold conversation about the hard sell around interest rates and those sorts of things.
So what we’re looking for in the distinction between those two terms is the shift in thinking that is going to help us to refocus on what’s really important. When I say that what I mean is, focus on what’s important for our customers.
So, to recap… Value. Something that is defined by our customers. It’s what they want, when they want it, it’s how they want it, what matters to them as an end user, as an end customer as an individual. There ain’t no such thing as internal customers so just put that to one side.
Benefits are those things that we get for doing a great job. We get profits, we get efficiencies, we get capability development – all of incredible benefit to the organisation. I’m not saying that money is not important, we must run a sustainable business to ensure that we can keep delivering on our purpose but let’s get really really clear about the distinction between: when we’re working on something that is for our customers, and adding value for our customers. Versus. When we are working on something that’s going to give benefit to the organisation and then we can be honest about balancing out those priorities.
Next week I thought it would be really cool to talk about curves! Now that you’ve got this concept of value and benefit, next week I reckon we dive into this idea of value curves and how that happens within regular projects that are run in the traditional sense, or what that looks like when we start to shift it up and to reprioritise, to refocus and I’ll teach you a quick couple of cool techniques that will make sure you’re delivering more value more quickly.
Have an awesome day wherever you are and I will see you next week.