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How is Value Engineering different from Value Consulting

In the first blog in this series, I shared my experiences with value practices and what I think value consulting is all about. As is good practice, I ended it with a bit of a cliffhanger:

These practices build on a lot of the approaches developed in the on-prem software & software license + annual maintenance world, but they aren’t SaaS & subscription revenue native. Just as AE, SE, CSM roles have evolved, value consulting needs to as well. That’s where Value Engineering as a reimagined discipline built on the learnings from Value Consulting comes in.

Both in the value practice community as well as other disciplines, I get asked frequently about the difference between Value Consulting and Value Engineering. The difference starts with what the words imply - as a consulting practice, a value team is an expert organization that is brought in to help articulate either predicted or delivered value to a customer. As an engineering organization, it’s not only capable of execution but has the skills to build in a value practice into the business itself.

The best way to determine whether a value practice organization is a consulting one or a higher impact engineering one is to look at its charter and sets of activities. In the last post I listed the most common sets of value consulting activities:

  • Interview prospective customers in later stages of a deal to help build a joint business case with them in close partnership with Account Executives (AEs) and Solution Engineers (SEs)

  • Build outside-in business cases to support later stages of a deal working with the account team (AE + SE) without any customer interviews and instead utilizing publicly available information, and benchmarks from industry / other customers

  • Help support a challenging customer renewal with a value realized estimation exercise

  • Present business cases to economic buyers

  • Provide guidance on how to structure the commercials of a complicated deal in line with a business case that they’ve helped build

  • Work with marketing teams in building out the value components of customer case studies (could be outside-in or interview based)

  • Assist account teams with deal strategy and identify need for business cases in their pipeline, acting as a deal qualification sounding board

In order for a practice to grow from consulting to engineering, its charter first has to be broadened to work with all functions in the company, not just go-to-market. The result should be participation in a broader set of activities than for a consulting practice:

  • Help Marketing act on a common framework for articulating value of products across web, advertising, customer stories, demand generation, blogs, etc

  • Define new Professional Services offerings that map to common value drivers & uses cases

  • Identify key onboarding and Professional Services project completion metrics that directly or proxy customer value for Customer Success team to track

  • Work with Customer Success teams on identified successful accounts to run business value realization projects to build out detailed proof points

  • Assist with updates to solution engineering proof-of-concept criteria that map to value drivers and differentiators

  • Design cross-team and perpetually maintained artifacts that capture key elements of value such as use case maps and data flow diagrams

  • Help generate proof-points and customer stories with multiple layers of metrics depth

  • Establish a scaled value engineering skillset in the company through incorporation into career ladders and associated learning tracks, in particular for SE and CSM teams

  • Work with Product teams as early as ideation and Product Requirement Document (PRD) phases to incorporate the language of expected value to delivered from new capabilities / products, and support the team during customer interviews and research

  • Provide guidance to Product & Engineering teams on direct & proxy measures that track customer value & success to be incorporated both as tracking capabilities as well as features themselves to allow customers to be exposed to realized value directly in product

  • Contribute to pricing & packaging strategy ensuring that they scale with value delivered to customers, minimizing long term price-to-value challenges as the company grows

  • Assist in designing how data should be captured and exchanged between all of the company’s operational systems that are related to customer value, including product analytics, CRM, demand generation, and customer success

The key differences to note here between the value engineering activities that are in addition to the value consulting ones is that they are structural in nature and influence the company as a whole. They’re designed to influence not just the work with a single customer or a point in time activity but instead impact all customers and influence all customer touchpoints.

Done right, a value engineering function provides a consistent framework for understanding the value of your company’s products in terms of qualitative and quantitative customer outcomes. It makes hand-offs easier between teams, reduces the cycle time between initial and expansion deals, improves customer success & advocacy, product adoption, and accelerates the revenue pipeline. All of these can (and should be) measured so that the value of a value engineering function can be measured over time.

Value Engineering as I’ve described it here is not easy to do and requires sponsorship and ongoing support from the company’s entire C-suite. This is an evolving approach in SaaS and as such there aren’t any full developed models that I am aware of, although what we’re building at Twilio Segment is the closest that I’ve seen (the activity list is distilled from our projects).

I’ve written about the intersection of Value Engineering and CSM teams on the Customer Success Field Guide and for part three of this series, I’ll plan on sharing some thoughts on why a value engineering mindset and skills can be a career booster for SEs and uplevel the performance of SE teams.

Abbas Haider Ali is currently VP Customer Success & Value Engineering at Twilio Segment. Past roles he has held include Field CTO, sales engineering, customer success, consulting services, product management, product strategy, product marketing, and business development. He enjoys the opportunity to bring his expertise to other enterprise startups both as a management consultant as well as an advisor. Connect with Abbas on LinkedIn!

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