Define Your Value Proposition
Ways to Deliver “Purposeful Value”
In every relationship there are opportunities to help others and build trust. Famous authors such as Stephen R. Covey, Charles G. Koch, and Womack and Jones have written many books that are excellent reference tools and resources for classifying value and how it can be created. For many, putting activities into categories provides a new view into their value mix.
As part of our Executive Development Program Communication 3’s, we often use a quick reference approach (Practical – Functional – Emotional) to review scheduled client and prospect relationship development activities to better understand how they strengthen relationships and deliver value.
(Save TIME – Make $$$)
Practical value activities focus on helping others in two areas: Save them time and/or make them money. It is hard to shy away from a relationship anchored by planned activities helpful in either category.
Delivery of “referred qualified leads” is an example of a basic practical value creating activity. For most, it meets both the time and money criteria. If you can regularly deliver referred qualified leads for others in your relationship network, you will create many long and lasting relationships.
Why? Referrals often improve “conversion rates” and reduce “conversion costs.” You must ask, “How much might a ‘referred qualified lead relationship’ be worth?”
- Average customer value = $20,000
- Average qualified leads per quarter = 10
Conversion Rates (with and without) a Referral
- Qualified lead-to-customer conversion ratio =
1 out of 10 or 10 percent. However, referred qualified lead-to-customer conversion ratio = 3 out of 10 or 30 percent. Referred qualified leads are three times more likely to convert into customers.
- Cost to convert – qualified lead to customer = $2,000
- Cost to convert – referred qualified lead to customer = $500
- Referred qualified Leads require only 25 percent of the resources (time/money) as leads without a referral.
So, if in our example, a relationship with you can increase their conversion rate from 10 to 30 percent and reduce their costs to convert (time and money) by 75 percent, you likely have strong relationship development compatibility.
In our opinion, having a qualified lead referral network is one of the most important, misunderstood and under-cultivated ways to grow your business.
Functional Value (Easier or Better Way)
Functional value activities can also be helpful ways to strengthen relationships. The “As Seen on TV” sections at Walmart and Walgreens are full of ways entrepreneurs are bringing functional value-based products into the market.
In the service sector, innovative software like Constant Contact and Tableau can greatly simplify (for your boss) what have historically been cumbersome tasks. Becoming functionally valuable is highly recommended in larger organizational settings.
Emotional Value (Make Others Feel Better)
Emotional value activities are a third way to build lasting relationships. In fact, including a “human factor” into most business relationships is often what makes them unique. Being aware of just a few personal pieces of information can allow you to both celebrate and be supportive of people you know.
“Happy Birthday,” “Congratulations on Your Promotion,” “Sincere Condolences” and “How Might I Help?” are all phrases that strengthen emotional ties and build friendships. As you consider the relationships in your life, we believe taking purposeful actions that create value for others is a key for your success.
“Power Play” Value = Combined or Sequential Activities
Power play value relationship development plans include combinations or sequential practical, functional or emotional components. These take a bit more thought but, as you might expect, can have even greater influence.
It is noteworthy these more complex relationships and activities can be more easily scheduled and managed using relationship management tools such as LinkedIn and Saleforce.com.
Practical and Emotional Combination
As you identify what relationships are most important, it is often worthwhile to create an emotional connection by including specific activities. Remembering their birthday or anniversary, celebrating their promotion or other “bond solidifying” activities are almost always worthwhile.
A simple text, tweet, snap, call or voicemail often suffice today. But taking time to schedule a quick face-to-face visit or special delivery gift can take your relationship building to a higher level.
Why not begin implementing your purposeful value relationship development program featuring practical, functional and emotional activities today?
Brian Klink is the president of Strategic Business Solutions, Inc. and has over 30 years experience at Fortune 500 Companies and as an independent consultant.