Independent consultants or focus groups made up of representatives from functional areas of a company also can be good sources. Establishing monetary estimates for some value elements, such as peace of mind, is not always easy. Many suppliers put such intangible elements aside and discuss them with the customer in a qualitative way after presenting quantitative results. After building the initial value model, the supplier should validate it by conducting additional assessments. Then the supplier can determine which descriptors have the most impact on the value customers receive from the offering, and the supplier can pursue customers for which its offering will provide superior value.
Suppliers can use value models to create persuasive sales tools.
Sonoco Products Co.'s protective packaging division tracks the savings its customers gain from implementing what it calls total packaging solutions. Rather than selling customers common corrugated-cardboard packaging, Sonoco offers packaging systems that, it says, are stronger, lighter and smaller. The major elements in Sonoco's value model are savings from reduced product damage, packaging costs and storage costs. Our previous research has shown that suppliers can increase profitability by providing flexible market offerings. Doing so requires constructing what we call naked solutions with options.