Determining Your Value Proposition-What is an example of a good value proposition?

"Good Value Propositions"

What is a good value proposition? RightNow Technology’s value can be clearly demonstrated with hard numbers. There are other aspects to establishing good value.

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– From Chapter 4 – The Keys to the Gold Mine, "smartups (street-smart start-ups) Lessons from Rob Ryan’s Entrepreneur America boot Camp for Start-Ups", copyright 2001 Rob Ryan.

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I look for four elements:

1. A well-defined business opportunity.

2. A benefit or value that’s measurable in dollars

3. A favorable price/benefit ratio.

4. A short payback period.

Take a look at the following testimonial from Right Now© Technologies web site ( http://www.rightnow.com ):

"ScholarOne adds $2.4 million to the bottom line with RightNow eService Center™"

RightNow eService Center gets rid of so much of the manual effort and time wasted so your people can really focus on solving the technical problems. It buys them so much more time that they can actually go and build the FAQ database even more. We expected to have 15-20 support people by now, but we’ve been at four since we started and that’s all because of RightNow eService Center.

– Director of Customer Service

If anyone has any doubts about the power of Web-based eService, Diane Biesecker will gladly educate them. Biesecker, Director of Training and Support for publication management specialist ScholarOne, calculates that RightNow eService Center has saved her company more than $2.4 million – allowing the company to grow rapidly without having to proportionally scale up its customer service payroll.

ScholarOne supports scholarly publishers by allowing them to offload the complex processes of peer review and production onto an intelligently designed, Web-based platform, making it easy for contributors and editors to collaborate from around the world. This means inexperienced users use the system under hard deadline pressures – which could easily translate into some pretty serious support headaches.

To make matters worse, the nature of scholarly publishing often leads to major "crunch times" when many users have to complete a large amount of work at the last minute. "We have a weekend in April where 16,000 neuroscientists submit material for their annual conference," Biesecker explains. "They wait until the deadline and many of them have questions about how to use the system."

But, thanks to eService, Biesecker and ScholarOne handle the company’s growing and often "spiky" support loads with ease. The system allows Biesecker and her staff to rapidly create and fine-tune their site’s knowledge base to ensure users find answers to their questions fast. As a result, only a small percentage of site users place phone calls to ScholarOne’s support staff.

ScholarOne fully supports 150 publications with just four full-time service representatives – the same number the company had when it only managed a dozen journals. "It was originally projected that, at this point in the company’s growth, I would have to be managing a support organization of 75-150 people," says Biesecker. "But because the online content filters out such a tremendous percentage of support events, we can still do the job perfectly with four."
Biesecker calculates her $2.4 million savings by looking at the number of support incidents that customers resolve by themselves using the knowledge base created and managed using RightNow eService Center. She estimates that 80% of those incidents would have had to have been handled by email at a cost of about $10 each, and that 20% would have resulted in phone calls that cost her company about $33 each.

Know thy customer

She notes that the system’s ability to inform her of users’ top support issues is particularly valuable. One big support issue, for example, had to do with converting files into Adobe PDF format. Some journals require submission in PDF format, which is a problem for users who don’t have the necessary conversion software. Biesecker’s staff used to do the conversions for these users, consuming a lot of time and energy.

Then she found that Adobe offered a site license for conversion software that could be run over the Web for just $10 per month. Now, users with questions about PDF conversion are directed to the Adobe site with a hyperlink, where they can quickly convert their files themselves. "That single knowledge item has saved me 52,000 support events," says Biesecker.
Biesecker uses RightNow to pinpoint and document other support issues that ScholarOne’s development team can address. "We show management how much it’s costing us to address the issue, so they can figure out whether or not it’s worth having a programmer spend a couple of weeks fixing it," she explains. "That simultaneously eliminates entire categories of potential support cases and improves the quality of the user’s experience."

Working smarter

As a result of these support-driven software improvements, 86% of ScholarOne’s users never need to escalate support – either on the site or from a rep. That figure, which Biesecker culled from her RightNow reporting tools, is a major competitive advantage for the company. Of the remaining 14%, 10% find their own answers on the site, according to Biesecker’s figures. So her staff only has to work with 4% of the company’s entire user population.
"That’s a big selling point," says Biesecker. "We can show prospective customers that our system is very easy to use and generates a very low number of help-desk calls."

RightNow’s reports enable Biesecker to pinpoint specific projects or editors experiencing an unusually high percentage of issues, so she can proactively resolve the underlying cause.

The bottom line for ScholarOne is it continues to increase the number of journals it supports – thereby increasing its billings – without scaling up its support costs. "Web-based eService is a competitive differentiator and is playing a strategic role in optimizing ScholarOne’s profitability," concludes Biesecker. "We are very glad that we found and implemented RightNow when we did."

ScholarOne is the leading online resource for scholarly publishing, enabling publishers to outsource their complex peer review and production processes in order to reduce costs and ensure quality. http://www.scholarone.com/home_flash.html

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Moral of this story: A good hard value proposition is one that streamlines something that was previously very inefficient. Of course this always boils down to money, in one way or another. It saves customers either dollars or time – each can be measured, and each indirectly affects the bottom line.

If your product or service saves customers money, dig for the dollar details. How much money, precisely, does the customer save per month or year? How much does your product or service cost customers (measured against what they save)? What is the payback period (the amount of time before the customer earns back the initial investment in your product)?
If it saves time, quantify that also. How much time does the task take customers before they bought your product or service? How much time does it take them afterward? What is that time worth to them?

If you have a value proposition like ScholarOne and RightNow, then you get a 10. If you don’t, give yourself a zero. If you want to cheat, you can say 5 or 6, but bottomline customers and your revenues will show zero, so you might as well say zero. Zero means no company, find a better value proposition. End of the moral to the story.

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