Introduction to Evidence Based Value (EBV)

Evidence Based Value is a simple, organised approach that will assist you to tell a compelling story about the value of your product and how it will assist the customer achieve their strategic and business goals. Having this type of story can help you expand both the types of customers you can approach, and the types of individuals within a given customer that you can engage.

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Click 'start' to begin, you will need to set aside an hour to complete the module in one sitting.

You can save your progress at any point and come back to it.


For more information contact your NZTE customer manager or Michelle Malone. (email: michelle.malone@nzte.govt.nz

This tutorial contains general information and tools and is not formal advice. NZTE is not liable for any loss or damage arising.

Evidence Based Value: Proving and Improving Your Value Proposition

  1. 1 Stage 1: Understand your customers
    1. Introduction
    2. Step 1: Selecting target customers
    3. Step 2: Understanding customer goals and strategies
    4. Step 3: Identifying customer key success factors and worksheet 1- customers goals strategies and key success factors
  2. 2 Stage 2: Map product capabilities to customer needs
    1. Introduction
    2. Step 1: Selecting a product for mapping
    3. Step 2: Identifying the customers' strategies and key success factors that your products can assist
    4. Step 3: Understanding product benefit mechanisms & their relative impact and worksheet 2 - procurement capabilities mapped to customer goals, strategies and key success factors
  3. 3 Stage 3: Estimate product value
    1. Introduction
    2. Step 1: Selecting key product benefits to estimate
    3. Step 2: Developing a theory of benefit
    4. Step 3: Identifying data sources and gathering data
    5. Step 4: Building a benefits model and the return on investment spreadsheet and worksheet 3 - theory of benefit and data sources for the benefits model
  4. 4 Stage 4: Refine product value estimates
    1. Introduction
    2. Step 1: Identifying gaps in product benefit models
    3. Step 2: Identifying sources of additional product value data
    4. Step 3: Overcoming data collection and analysis challenges
    5. Step 4: Revising benefit models and worksheet 4 - refining the benefits model
  5. 5 Stage 5: Produce product value deliverables
    1. Introduction
    2. Step 1: Identifying different uses of product value data
    3. Step 2: Selecting product value deliverables
  6. Summary

Selling Your Value Proposition Tutorial

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  1. Stage 1: Understand your customers
    1

    Stage 1: Understand your customers

    1. Introduction

      Introduction

      The first step in developing a compelling evidence based value story is understanding the business objectives and strategies of your customers. What are their goals, and what strategies do they use to accomplish their goals? Also, what are the key success factors that will determine the success of these strategies? The relationship between goals, strategies and key success factors is illustrated in Figure 1, below. Some goals may be supported by more than one strategy, and some strategies may share key success factors

      Once we understand our customers’ goals, strategies and key success factors we will more clearly see how our products can help them meet their goals, and we will be able to more easily quantify our contribution to their success.

      This Stage includes the following topics:

      1. Selecting target customers
      2. Understanding customer goals and strategies
      3. Identifying customer key success factors

    2. Step 1: Selecting target customers

      Step 1: Selecting target customers

      A vendor may have many different products, and each product may have several different types of customers. For example, a large vendor like McKesson Corporation sells and distributes drugs, medical supplies and information technologies. Their information technologies solutions include many products for the clinical, financial, supply chain and strategic management functions of hospitals, and for primary care doctors, clinics and other provider organisations. But even a small vendor may have several products that they sell to both general practitioners and to hospitals. 

      Each of these customer groups will have different goals, strategies and key success factors. For example, a community hospital may have a goal to reduce the use of acute care services by increasing preventive care using chronic disease management services.

      Their strategies (the actions they will take to accomplish those goals) may be to buy local general practitioners' practices, partner with home care, nursing and physio providers, and to connect these groups and individuals with an information system to promote coordination of care.

      Their key success factors, the conditions that will determine the success of their strategies, may be their ability to form relationships of trust with local doctors, their ability to get providers to use their information system, and their ability to generate the money to fund these investments.

      In this case, the products that a vendor sells to the community hospital must affect one or more of the customer’s strategies and/or key success factors – else there is not a compelling reason for the hospital to buy the product. So the vendor in this case should try to figure out how their product helps the hospital form better relationships with doctors, or makes it more likely they will use the information system, or helps them increase their profitability or generate donations.

      The first step is to select a target group of customers to study. Their goals, strategies and key success factors will be different than those of other customers, so you must focus your attention on one group at a time. Some of the things to consider in selecting a target group of customers are:

      • How large is the group (the more potential customers, the better)?
      • Do they have similar goals, strategies and key success factors?
      • Do you have access to key individuals to clarify goals, strategies & key success factors?
      • Do these customers have the resources to buy your product?

      It may appear obvious which customer group you should select, or there may be several good options. Or perhaps you cannot think of any really likely group of customers. It is important to involve your senior management in the selection of your target customer group, because it’s a lot of work to prepare an evidence based value story. You do not want to do all that work and find that others do not agree with the customer group you have targeted.

      If you think the answer is obvious, put together a written argument, using Worksheet 1, Section A (at the end of Step 3), including the rationale for selecting this group, and distribute it to your organisation's senior management to review, then meet to make a final decision.

      If the answer is not obvious, prepare several copies of Worksheet 1, Section A for possible alternatives, or interview you organisation's senior management to get their thoughts, or distribute blank Worksheets to your organisation's senior management and ask them each to make their own recommendations. Once you have several good options, meet to discuss which customer group best fits the criteria listed above, and select an initial target.

    3. Step 2: Understanding customer goals and strategies

      Step 2: Understanding customer goals and strategies

      Once you have selected a target customer group you need to do some research. That means reading about your target companies and talking with their representatives. A simple approach is to locate the strategic plans of several target customers and carefully read these documents, writing down the goals and strategies they describe. Public companies may make these plans available. Private companies may reveal their strategies in their marketing materials or on their web sites. 

      Most companies are seeking a competitive advantage. A way to beat the competition. Their competitive advantage could be lower costs, higher quality, better service, etc., or a combination of those factors. Your customers’ goals and strategies are likely to focus on ways that the customer can gain or improve their competitive advantage.

      If you have senior level contacts at target customers, speak with them for half an hour, and ask them about their goals and strategies. Some may be reluctant to engage, but others will be flattered, or impressed that you care enough to want to understand them better.

      Use Worksheet 1, Section B to help you organize the information you collect. There may be differences between individual customers, but if you have selected a coherent group there should be many similarities as well. You are looking for a short list of common goals and strategies (no more than 5 strategies) that will help you prepare a meaningful evidence based value statement for this customer group – adjustments to the needs of individual customers will come later.

    4. Step 3: Identifying customer key success factors and worksheet 1- customers goals strategies and key success factors

      Step 3: Identifying customer key success factors and worksheet 1- customers goals strategies and key success factors

      Company goals and strategies are usually fairly straightforward and written. You may find the company goals and strategies in the customers' marketing material, on their website, in their annual reports or in other documents of the company. Key success factors are harder to discover.

      This is because companies have not always taken the step of formally identifying the key success factors that drive the success of their strategies. If you interview senior leaders at target customer organisations, you may be able to identify the organisation's key success factors by asking the following types of questions about each of their major business strategies:

      • What circumstances would help you achieve success with this strategy?
      • What will you have to do well for this strategy to succeed?
      • What could prevent you from succeeding with this strategy?

      Use Worksheet 1, Section C to define the key success factors associated with customers’ major strategies. It should look something like this when you are done.

      Figure 2, Worksheet 1 Example

      Once you have completed Worksheet 1, review a copy with the customer representatives you interviewed, to validate that you have identified their goals, strategies and key success factors. They will help you correct and improve it.

      NOTE: It can be a lot of work to complete this first Stage. You may be tempted to skip the steps of reaching consensus with your senior management on a target customer group, or to spend just a little time reading about and talking with target customers, or to pick a few likely key success factors based on your own logic, or a few short customer conversations. Resist the temptation! Doing a halfway job of these first three steps will result in a lot of wasted time down the road, and an end product that doesn’t really reflect the insight that can engage customers.

      Action Items

      • Complete Worksheet 1 using the Worksheet 1 Example as a guide
      • Propose a target customer group to your organisation's senior management, and get their agreement, as described above
      • Do your research, as described above, and fill out Worksheet 1, Sections A and B
      • Do your research, as described above, and fill out Worksheet 1, Section C
      • Share Worksheet 1 with your organisation's senior management and get their approval to proceed

      Worksheet 1: Customer Goals, Strategies and Key Success Factors

      • Customer Group

      • Rationale for selecting this group

      • Section A: List 5 typical company goals

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

      • Section B: List 5 typical company strategies

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

      • Section C: List typical Key Success Factors that are under the customers' control

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

  2. Stage 2: Map product capabilities to customer needs
    2

    Stage 2: Map product capabilities to customer needs

    1. Introduction

      Introduction

      Once you understand your customers’ strategies and key success factors the next step is mapping the capabilities of your product to customer's key success factors. How will your product positively affect your customer's key success factors? Which key success factors will your product affect the most? This will be the basis of your evidence based value message – the specific ways in which your product can help the customer achieve their strategic goals!

      Many vendors do not have a clear idea of exactly what the benefits that their product achieves for their customers. In this Stage, you will come to understand at a detailed level exactly what your product’s benefit mechanisms are, so that you can explain them to the customer.

      This Stage includes the following topics:

      1. Selecting a product for mapping
      2. Identifying key success factors affected by your product
      3. Understanding product benefit mechanisms and their relative impact

    2. Step 1: Selecting a product for mapping

      Step 1: Selecting a product for mapping

      If you sell just one product to your target customer then that will be the product you will map in this Stage, and focus on in the other Stages. 

      If you have several products for those customers then you would typically select the product with the greatest sales revenues or potential revenues. However, in some cases you may want to focus on a new product, or a product that has under-performed in the past. Make sure that your organisation's senior management agrees with the product you selected.

      Enter the name of the customer group and product you selected into Worksheet 2, and complete the “rationale for selecting this product” section.

    3. Step 2: Identifying the customers' strategies and key success factors that your products can assist

      Step 2: Identifying the customers' strategies and key success factors that your products can assist

      In Stage 1 you identified the key success factors that affected your customers’ ability to execute their strategies and thereby achieve their goals.

      An example of your customer's key success factors might be the customer’s ability to form relationships of trust with local doctors, their ability to get providers to use their information system, and their ability to generate the money to fund these investments.

      The vendor in this case should try to figure out how their product helps the hospital form better relationships with doctors, or makes it more likely they will use the information system, or helps them increase their profitability or generate donations.

      Of course, not every product will do those things. If your product has no effect on your target customers’ strategies and/or key success factors then you need to select a different customer or a different product!

      How do you know which of the strategies and key success factors are affected by your product? By asking your customers and the most knowledgeable individuals in your organisation. Ask your engineers, your clinicians, your trainers, and those who interact at a detailed level with users, what it is that is most valuable about your product, and what product capabilities support the things that users value the most.

      If possible, get permission to speak with users or potential users of your product at your target customers. Show them Worksheets 1 and 2. Make sure they understand what their organisation's strategies and key success factors are. Ask them how they use your product, and what it is about your product that helps them do their job, execute their strategy or accomplish their organisation's goals.

      It is possible that neither your employees nor your customers have a specific idea of how your product affects customer strategies and key success factors, especially if this is a new product. In this case you may need to go on-site to early customers, or pilot testing sites, to observe how the product is used and how it affects strategies and key success factors. It may be helpful to have trained industrial engineers or performance improvement staff or consultants available for this analysis.

      An example from an emergency department tracking system vendor is shown below. It relates to their primary customers an acute care hospital with an emergency department.

      The vendor thinks about how it affects the hospital's key success factors. The vendor's thoughts are listed in the bullet points below.

      • Hospital Goals (what the hospital believes will achieve a competitive advantage): Become the lowest cost provider, increase emergency department visits
      • Hospital Strategies (what the hospital will do to accomplish the goals): Focus on improving the efficiency of care delivery, change processes to reduce emergency department wait times and lengths of stay, implement updated emergency department information system
      • Key Success Factors (conditions that affect success of strategies): Ability to identify and understand new ways of working in the emergency department (vision), ability to get emergency department doctors and nurses to change their behaviour, ability to get emergency department doctors and nurses to use a new information system
      • How the Product Affects the Strategies and Key Success Factors: In this case the product being sold is an emergency department tracking system that allows doctors and nurses to see where patients are in the emergency department, what tests and procedures they need, what they’re waiting for, how long they have been waiting, what doctors and nurses are scheduled to see the patient next, etc.

      What the vendor needs to understand is exactly how their emergency department tracking system promotes a new way of working, how it helps doctors and nurses change their behaviour to shorten wait times and lengths of stay, and how the system makes it easier, not harder, for doctors and nurses to do their work, so they will want to use the system.

      Examples of how the capabilities of the emergency department tracking system supports the customer's strategies and key success factors:

      • Tracking data collection is automated from required clinical documentation. It is not a separate data entry step (this saves nursing time and encourages use)
      • Emergency department level of service is reported efficiently and effectively by the vendor's emergency tracking system. This is a new way of working and changes behaviour)
      • Real-time tracking is available for time out of the emergency department, e.g., for testing (this is a new way of working and changes behaviour)
      • Real-time data display of patient location, acuity, status (waiting for what?), assigned physician and nurse, order status and timing, helps prioritize patients for care delivery (this is a new way of working and changes behaviour)
      • Real time display of staff assignment, equipment location and status (this saves staff time, encourages use and changes behaviour
      • Acuity and status change automatically as a result of clinical documentation and provides result availability in another system. (this saves time, encourages use and changes behaviour)
      • Key events and requirements display as “flags” on tracking board with new color, flashing and text highlights. (this changes behaviour)
      • Tabular status display can be sorted by location, physician, nurse and status. (this is easier to use, encourages use and changes behaviour)
      • Graphical status display mirrors emergency department layout and by area (this is easier to read, encourages use, is a new way of working and changes behaviour)
      • Ability to enter patients into the system and see their acuity before their arrival, e.g., in the physician office and in the ambulance (this is a new way of working)
      • Algorithms and mechanisms alert emergency department leadership and staff when diversion is imminent (this changes behaviour)
      • Users can easily track turnaround time for orders (this saves staff time, encourages use)

      By completing this analysis, the vendor understood at a detailed and specific level exactly what it was about their emergency department tracking system that supported the strategies and key success factors of their most important customer group.

      Enter what you have learned about product capabilities that affect key success factors into Worksheet 2, Section A.

    4. Step 3: Understanding product benefit mechanisms & their relative impact and worksheet 2 - procurement capabilities mapped to customer goals, strategies and key success factors

      Step 3: Understanding product benefit mechanisms & their relative impact and worksheet 2 - procurement capabilities mapped to customer goals, strategies and key success factors

      There may be many or few benefit mechanisms, or ways in which the product helps produce the benefits the customer wants. It is important to understand which mechanisms are most powerful, so those can be highlighted for the customer. A long list of features and functions that help improve emergency department efficiency isn’t as compelling as a short list of the key drivers of efficiency. 

      Continuing the emergency department tracking system example, the vendor determined that the capabilities of their product that affected customer key success factors the most were:

      • The graphical view of the emergency department showing where each patient was in real time, and what they were waiting for
      • The automation of tracking data from clinical documentation
      • And the availability of accurate, easy to read information about wait times and delays for each patient.

      This understanding is not only important for establishing credibility with customers, but for developing a meaningful and accurate benefits model (covered in Stage 3).

      Once you have identified these key capabilities, briefly describe the benefit mechanisms – how these capabilities affect one or more customer key success factors, strategies or goals. For the emergency department tracking system, one of these benefit mechanisms is described below:

      The graphical emergency department view is easier for nurses and doctors to read than a tabular data view. Seeing the data on a physical map gets them oriented quickly, and that time savings encourages them to use the tool, which promotes a new way of working (more logical prioritization of who gets what care next) and changes clinician behaviour. This reduces wasted time and gets care to patients faster, allowing patients to move through the emergency department more rapidly.

      Highlight the 3-5 most powerful product benefit mechanisms in Worksheet 2, Section B, and review the entire worksheet with your organisation's senior management, and with the close-to-the-customer members of your staff that you interviewed as part of the work for this Stage.

      Action Items

      • Complete Worksheet 2
      • Propose a product for mapping to customer key success factors
      • Do your research, as described above, and fill out Worksheet 2, Sections A and B
      • Share Worksheet 2 with your organisation's senior management and customer-facing staff, and get their feedback.

      Worksheet 2: Product Capabilities Mapped to Customer Goals, Strategies and Key Success Factors

      • Product Name

      • Rationale for this product

      • Section A: List the Customer Goals, Strategies, and Key Success Factors

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

      • Section B: List your product's most powerful product benefit mechanisms that help any of the Customer Strategies and Key Success Factors in Section A

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

  3. Stage 3: Estimate product value
    3

    Stage 3: Estimate product value

    1. Introduction

      Introduction

      Once you understand the ways in which your product can have the greatest impact on customer goals, strategies and key success factors, you are ready to estimate the value of your product to the customer. These initial estimates are driven by existing evidence from published sources, your organisation's records and customer case studies, and logic.

      You may be able to create a convincing estimate of product value using this “easily found” information, or there may not be enough information readily available to do a really good job. Stage 4 explains how to perform studies or do more advanced data collection to obtain more detailed, specific and credible information, if that is required.

      Stage 3 includes the following topics:

      1. Selecting key product benefits to estimate
      2. Developing a theory of benefit
      3. Identifying data sources and gathering data
      4. Building a benefits model

    2. Step 1: Selecting key product benefits to estimate

      Step 1: Selecting key product benefits to estimate

      Start with the list of the most powerful product benefit mechanisms you wrote in Worksheet 2, Section B. Think about what the main effects of these benefit mechanisms are on customer key success factors, strategies and/or goals. 

      Continuing our example, the most powerful benefit mechanisms for the emergency department tracking system are:

      • The graphical view of the emergency department showing where each patient was in real time, and what they were waiting for
      • The automation of tracking data from clinical documentation and
      • The availability of accurate, easy to read information about wait times and delays for each patient.

      The emergency department tracking system vendor's would show benefit mechanisms for these three product capabilities as:

      1. The graphical emergency department view is easier for nurses and doctors to read than a tabular data view. Seeing the data on a physical map gets them oriented quickly, and that time savings encourages them to use the tool, which promotes a new way of working. It enables them to logically proritise who gets what care next and changes clinician behaviour. This reduces wasted time and gets care to patients faster, allowing patients to move through the emergency department more rapidly.
      2. The automation of the patient tracking data from clinical documentation, which nurses and doctors are already doing, instead of making the clinicians enter tracking data as a separate step, saves clinician time. Research shows that an emergency department tracking system that requires separate data entry will not be used as frequently, and the data will be of lower quality and completeness. So the system’s automated data encourages system use which helps reduce emergency department lengths of stay.
      3. The accuracy and ease of use of the patient tracking data is essential to making the system effective. If data is not accurate or is slow or hard to access, then it will not be used. The system’s accuracy and ease of use encourages system use. This helps the customer reduce emergency department patients' lengths of stay.

      The product benefit that is associated with each of these capabilities is reduced emergency department length of stay. Therefore, this is the key benefit we would estimate for the emergency department tracking system.

      On Worksheet 2, Section B you will see your 3-5 most powerful product benefit mechanisms. In Stage 3, Step 4, write these 3-5 most powerful product benefit mechanisms in Worksheet 3, Section A. These are the key product benefits.

    3. Step 2: Developing a theory of benefit

      Step 2: Developing a theory of benefit

      Now that you understand the key benefit mechanisms and product benefits, you are ready to develop a theory of product benefit. A theory of benefit is an idea about how to quantify (put a number to) the benefits your product provides. It involves making assumptions, based on the amount of impact that you think your product will have on customers' goals, strategies and key success factors.

      It is helpful to do this step with a group of several people. Gather sales and marketing staff, technical experts, experts in the practical use of your product, and others who have a good idea of what your product really does and how it is used, and review Worksheets 2 and 3. Talk through their ideas about how much of an impact your product could/should have on the outcomes or results listed in Worksheet 3, Section A, and the reasons why they believe this. Write these reasons down, as they will be helpful in completing the rest of the work in Stage 3.

      Try to reach agreement about the amount of benefit, or range of benefits that your product can provide. Write down your theory of benefit on Worksheet 3, Section B. Try to be concise. If possible, state the theory of benefit for each outcome or result in a single sentence. An example is shown below for an e-prescribing system:

      “The computerized physician order entry drug selection and dosing guidance, and bar-coded medication administration capabilities of the system will prevent transcription errors and reduce drug selection, dosing and administration errors, thereby preventing half of all adverse drug events within a year of its implementation.”

      This “benefit sentence” includes four parts:

      • a description of the technology
      • a description of the resulting process change
      • an estimate of the amount of change in outcomes, and
      • an estimate of how long it will take to realize the benefit.

    4. Step 3: Identifying data sources and gathering data

      Step 3: Identifying data sources and gathering data

      As you are meeting with the group of internal experts in your organisation, ask them to identify sources of data to support your theory of benefit. These could be published studies about your own product or similar products, internal or customer-developed case studies, product research results, pilot testing results, benefit studies, internal or customer-developed business case documents, etc.

      Enlist their assistance in gathering internal and external documents, or giving you contact information for customers, or links to internet data sources, etc. Supplement what you learn from your internal experts by performing internet literature searches using Google or other search engines, and domain-specific literature repositories such as PubMed (for clinical research results).

      You may find good data that is directly applicable to your product’s benefits. Or you may find research that helps you estimate the amount of impact your product could have on benefit mechanisms or processes, which will help you in estimating its impact on your customers' goals, strategies or key success factors. You are likely to find that data from different studies show different results, which may indicate a range of potential benefits. Data sources may even conflict. Keep an organised list of each major data source, and what it says about product benefits, and enter this information into Worksheet 3, Section C.

    5. Step 4: Building a benefits model and the return on investment spreadsheet and worksheet 3 - theory of benefit and data sources for the benefits model

      Step 4: Building a benefits model and the return on investment spreadsheet and worksheet 3 - theory of benefit and data sources for the benefits model

      Once you have a list of the readily available data to support your benefit estimates you are ready to begin building the benefits model. A benefits model is a spreadsheet that accepts inputs related to customer characteristics such as size, staffing, costs, process performance, current outcomes or results, etc., and calculates an amount of benefit to be gained from using your product, based on a set of assumptions.

      Take a look at the spreadsheet provided

      Here is a Return on Investment Spreadsheet (ROI) that you can use to help you create your benefits model, financial payback and ROI calculations. Follow the directions to input your list of benefits, theory of benefit, and assumptions, to create a customized benefits model for your product.

      A “smart” intravenous pump company created the following benefits model for its software product. The smart pump helped nurses deliver intravenous drug doses in a safer, more systematic way.

      Once you have a good draft version of the spreadsheet, share it with your internal experts, and senior executives, and with your customers. Let your customers play with the model, inputting their own data, to see what sorts of results they get, and whether they are realistic and credible. It is likely you will gain valuable input to improve the model at this stage. It is unlikely you will get it completely right on the first try.

      Action Items

      • Complete Worksheet 3
      • List key product benefits
      • Write a short theory of benefit, or benefit sentence
      • Identify data sources and summarize the data
      • Build a draft benefits model based on the data and assumptions you gathered, as described above
      • Share Worksheet 3 and the draft benefits model with your organisation's senior management, customer-facing staff, and with your customers, and get their feedback.

      Worksheet 3: Theory of Benefit and Data Sources for the Benefits Model

      • Product name:

      • Section A: Key Product Benefits.

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

      • Section B: Theory of Benefits Sentence

      • Section C: Data Sources and Summary of Data.

        • Data Source 1:

      • Summary of Data from Data Source 1.

      • Data Source 2.

      • Summary of Data from Data Source 2.

      • Data Source 3.

      • Summary of Data from Data Source 3.

      • Data Source 4.

      • Summary of Data from Data Source 4.

      • Data Source 5.

      • Summary of Data from Data Source 5.

  4. Stage 4: Refine product value estimates
    4

    Stage 4: Refine product value estimates

    1. Introduction

      Introduction

      Your initial product value estimates (see Stage 3) helped you clarify your thinking about how your product delivers value to your customers. It also helped you gather readily available data on the value amount. However, in many cases additional work is required to find or collect data that is more convincing to your customers. This Stage covers advanced methods of identifying and obtaining product value data.

      This Stage includes the following topics:

      1. Identifying gaps in product benefit models
      2. Identifying sources of additional product value data
      3. Overcoming data collection and analysis challenges
      4. Revising benefit models

    2. Step 1: Identifying gaps in product benefit models

      Step 1: Identifying gaps in product benefit models

      You are quite fortunate if the easy models you developed in Stage 3 are detailed and credible enough to convince your customers of your product’s value. Usually, however, there are gaps in these initial models where benefits data are not available, or where assumptions about the amounts of potential benefit are not well supported. In these cases, you may need to do additional research to fill those gaps.

      Ask your existing customers and prospects, your internal sales and marketing staff and product experts to review your initial benefit models, and/or offer to estimate the potential benefits they could achieve using your product. Ask for their frank input on the structure of the benefit models, the assumptions the models make, the documentation of the models, and the resulting benefit estimates. What questions do they have? Where do they feel you need more backup for your assumptions or calculations? Where would they like more detail, or better supporting documentation?

      It is likely this process will identify some gaps in your initial benefit models.

      In Stage 4, Step 4, you will see Worksheet 4. List the gaps that you have identified in Worksheet 4, Section A

       

    3. Step 2: Identifying sources of additional product value data

      Step 2: Identifying sources of additional product value data

      In Stage 3 you gathered all of the “easy” data for your initial benefit models. Now you need to apply more thought and work harder to gather additional data to refine the models. 

      One challenge for many vendors is that they do not have the expertise to find and collect the additional data. You may need to hire help from consultants, clinicians, statisticians, process experts or finance experts. Or you may need to make a long-term commitment to internal education and training on the benefits of data collection. This might involve designating internal staff to attend classes, and reading up on data collection and analysis methods.

      Depending on what gaps you identify in Step 1, you may need to do different sorts of work to find data on the types and amounts of benefit your product delivers.

      Examples include:

      • Detailed literature searches of general or focused on-line databases. This means going beyond the first page of your Google or PubMed search. Try using multiple different search terms, finding other specialized databases to search, visiting a physical library especially a library dedicated to your industry (e.g., a medical library or engineering library).
      • Finding and speaking with academic researchers or other experts on your type of product or industry. The help of a top expert in your product area can save you time locating benefits data.
      • Customer or prospect focus groups, facilitated by professionals, to identify the types of benefits your customers are achieving or hoping for.
      • Telephone or on-site interviews with customers. Ask them about the benefits they have achieved. Request any data they have to quantify those benefits. You can also get data on model assumptions, e.g. the cost of a day in the hospital, how many staff are needed per patient, and what process or outcome metrics are used by your customers and what typical performance levels are reported.
      • New studies of product benefits that you sponsor. You may conduct these studies yourself or have experts do the work. This involves identifying an actual or potential customer and getting their agreement to collect data over an extended period of time. Or you may offer to collect the data at their location.
      • Harvesting data from your product installations. In some cases electronic products have data trails, logs, etc. that can be examined to show how often the product is used, or whether individuals changed their behaviour after using the product.

      It is important that this data collection work is done properly and with confidence. If you feel that you do not have the internal expertise to conduct new product benefit studies or to analyze data from customer interviews, hire expert help. A botched benefit study or poorly completed data analysis can have a negative impact on customer confidence and your customer relationships.

      In Stage 4, Step 4, you will see Worksheet 4: List the ways you can gather the data to fill your benefit model gaps in Worksheet 4, Section B.

      It may take weeks or months to gather the data you need to fill the gaps in your benefit models. Make sure that your organisation's senior management understands how important it is to get these data, and the amount of effort and cost that is involved. Doing a credible job of benefits data collection takes commitment, patience and persistence.

    4. Step 3: Overcoming data collection and analysis challenges

      Step 3: Overcoming data collection and analysis challenges

      Some data collection and analysis challenges are common to all industries. Others are specific to particular industries.

      Some of the common challenges include:

      • Selecting a proper sample for analysis. The number of observations, data collection sites, surveys, etc. is important. Too few and your results are suspect. Too many and you are doing more work than is required. In some cases, samples need to be randomized so they are not biased.
      • Data availability. Measuring some benefits may require new data that is not currently collected. The temptation is to dismiss metrics that are not currently collected. But each metric should be evaluated on its contribution to the business case. It may be worth the additional effort to collect new data.
      • Resource constraints. Measuring the right things in the right way costs money but most vendors budget little for benefits data collection. You need to make the case to your senior management that it is worth doing the job right to gain the credibility and customer impact you want and need.

      Using the healthcare industry as an example, some industry-specific challenges include:

      • Risk adjustment. Patient outcomes and costs are affected by the types of patients you are studying Sicker patients cost more. So to compare results across customers or within customers health care categories, you may need to adjust the results based on patient severity.
      • Difficulty in attribution. There may be many different factors that affect the results a healthcare provider achieves. For example, their hospital lengths of stay may be affected by the types of patients they admit, the season of the year, the day of the week, the process improvement efforts of nurses and management engineers, regulatory requirements AND by your product. Metrics and measurement methods should be selected to isolate your product as the cause of the benefit, if possible. For example, if the performance trend is flat up until the time your product was used, you may have greater confidence in claiming a product benefit.

      In Stage 4, we cannot cover in detail everything to address these different challenges. That would take a book! But it is important that you have the knowledge and expertise to handle each of the challenges appropriately. If you are not sure, hire an expert, or educate yourself.

    5. Step 4: Revising benefit models and worksheet 4 - refining the benefits model

      Step 4: Revising benefit models and worksheet 4 - refining the benefits model

      Once you have gathered the additional data you need to fill the gaps in your benefit models, revise the calculations, assumptions, documentation, format, etc. of your initial benefit models, and repeat the review process described in Step 1.

      Keep a good record of the changes you make to the models and copies of previous versions in case questions arise about what changes were made, or why they were made. 

      Action Items

      • Complete Worksheet 4
      • List benefit model gaps
      • List ways of gathering data to fill those gaps
      • Consider your benefit measurement challenges and ensure that you have the expertise to comfortably address them
      • Revise your benefit model and repeat the review process

      Worksheet 4: Refining the Benefits Model.

      • Section A: Gaps in the Benefit Model.

      • List any gaps that you have

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

      • Section B: Strategies/Methods to fill Benefit Model gaps.

      • List any strategies or methods you have to fill the benefit model gaps.

        • 1.

        • 2.

        • 3.

        • 4.

        • 5.

  5. Stage 5: Produce product value deliverables
    5

    Stage 5: Produce product value deliverables

    1. Introduction

      Introduction

      Once you have credible data about the type and amount of benefits your product provides to a group of customers there are many different uses to which you can put these data. 

      Some of the most common uses include white papers, brochures and other marketing materials. However, having the sort of rigorous data described in Stages 3 and 4 allows you to produce a number of other valuable “deliverables”. These include papers for external publication in peer reviewed or industry journals, and sales tools such as interactive benefit calculators and customized presentations.

      This Stage includes the following topics:

      1. Identifying different uses of product value data
      2. Selecting product value deliverables

    2. Step 1: Identifying different uses of product value data

      Step 1: Identifying different uses of product value data

      Ideally you will leverage your investment in product value analysis in several different ways. Why not get the most out of the work you’ve just completed? A good place to start is with a white paper or a technical white paper.

      White Paper:

      A self-published, relatively short (3-5 page) description of the value your product provides to a target customer group. It is written to an educated lay person, without an overly technical or clinical focus. It contains examples and illustrations. Think of this as the article you would love to see published in a popular magazine.

      Technical White Paper:

      A technical white paper has a similar format to the White Paper but with a more academic, technical or clinical tone to the writing. References are more extensive. It is written to a specific audience, e.g., chief information officer, chief operating officers of hospitals, chief financial officers, doctor leadership, nursing leadership, a particular specialty of doctors, etc.

      Other uses you may consider for your product value analysis information include:

      Brochures, Website, Social Media, and other Marketing Materials:

      Review your existing brochures, website, social media and other marketing materials. You may be able to add facts and figures from the product value analysis to improve these existing materials. You may also decide to create a new brochure or handout that highlights your product value story. This is in essence a shorter version of the white paper content with a more visual appeal. Also, you can publish articles on Linked-In under your own profile or in Linked-In interest groups that you are a member of.

      Peer-Reviewed or Industry Publications:

      If you have compelling new evidence of your product's value, especially related to substantial improvements in clinical processes or outcomes or customer financial results, you may be able to publish this evidence in a peer-reviewed journal (e.g., the British Medical Journal or the Healthcare Financial Management Journal), or in an industry journal or periodical (e.g., Modern Healthcare Journal).

      The more prestigious the peer-reviewed journal, the harder it is to get your article published. Also the peer-reviewed journals have a longer review and publication cycle. For most vendors it will be easier and faster to target industry journals that are not peer-reviewed. Many industry publications are now on-line. Some of these are eager for new content. The ideal journal is one that your target customers read. However, in many cases you can use copies of a published article as marketing material that you can send or take to individual customers directly.

      Your chances of publication may be better if you partner with a customer who is a healthcare provider. You can offer to do most of the research and writing to make this project appealing to the healthcare provider.

      Sales-Oriented Benefit Calculators:

      This is a version of the benefit model spreadsheet that is either used by your sales staff to input customer data and estimate an amount of benefit, or is given directly to the customer for them to input the data and estimate the benefits. Because the initial version of your benefit model spreadsheet may include errors, or assumptions or documentation that needs improving, you may want to begin by having your internal sales or marketing staff operate the spreadsheet. Once the model has been tested at several customers, and its content, look and feel refined you may be ready to hand it over to the customer for their direct use.

      Sales Presentations (packaged with benefit calculator):

      These are slide presentations that can be customized to show the results from the benefit calculators. Typically these slide presentations show general background information about the industry, the theory of benefit of your product, and then explain that based on customer data the expected amount of benefit is such and such. Paired with a benefit calculator these slide decks can be powerful sales tools to help customers see the value of your product.

    3. Step 2: Selecting product value deliverables

      Step 2: Selecting product value deliverables

      Think about which of the deliverables mentioned in Stage 5, Step 1 that would be most useful to your organisation. 

      Consult with Sales and Marketing staff, and then review your joint recommendations with your organisation's senior management. It is often a good idea to begin with a white paper, since you will probably do this at some point, regardless of the other deliverables you produce.

      A white paper can be rapidly produced using all of the documentation you have created in the Worksheets from Stages 1-4; this gives your internal staff and leaders a quick look at how compelling your value story is. You may want to first produce a white paper, and then send that around to key stakeholders with a list of other deliverables that could be created, and ask for their input on other deliverables.

      Action Items

      Select one or two evidence based value deliverables to produce.

      Produce the first deliverable – a white paper/a technical white paper, a brochure or an article for Linked-In!

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