Value Analysis: How to make the value of your solution tangible

Make customer value tangible, quantify assumptions and develop a pricing hypothesis you can test. A practical guide to the four steps of Value Analysis.

Many companies know their solution is valuable. They sense it in customer conversations, see it in successful projects and hear it in feedback. But when it comes to putting a number on that value, things become more difficult.

This is where Value Analysis helps.

It is not a tool that calculates the perfect price at the push of a button. Nor is it an exact science. It is a structured way to develop an understanding of a solution’s value, step by step. Iteratively, pragmatically and always with a specific customer in mind.

That last point matters. A Value Analysis should not be conducted in the abstract for “all customers”. It works best when you have a specific type of customer, or better still an individual customer, in mind.

An example: workflow management in a convenience store

Consider a workflow management solution for convenience stores. The following example illustrates the approach. Its figures are illustrative assumptions, not verified customer results.

The idea is simple: help staff coordinate work on the shop floor more effectively.

When a shelf is empty, a member of staff receives a message asking them to restock it. When a delivery arrives, someone is notified to open the stockroom door. At closing time, there is a reminder to lock the entrance. If a till runs short of change, a colleague is notified automatically.

In short, the solution helps organise everyday store operations. It gets information to the right people faster and helps prevent tasks from being overlooked.

From a pricing perspective, this is interesting. Intuitively, the solution creates value. But what exactly is that value? And how much of it can the provider monetise through pricing?

Value Analysis provides a structured way to work through these questions.

The four steps of Value Analysis