How?

Value Engineering

Quantifying the offer.

Ian H Smith

At Being Guided we help organisations who engage in a high-value, high-touch sell to increase sales effectiveness by combining four things: Design Thinking8, Value Engineering9, Vibe Coding1 and AI Sales Coaching21.

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Value Engineering, calculated.

Design Thinking is strengthened by Value Engineering: mapping out a solid use case, financial justification and technology preferences for high-value products and services.

Value Engineering was originally conceived by Lawrence D. Miles9, a General Electric engineer. Miles' techniques have saved design engineers, manufacturing engineers, purchasing agents and service providers millions of dollars.

To quote Miles, it was necessary to show "why so much unnecessary costs exist in everything we do and how to identify, clarify, and separate costs which bear no relationship to customers' needs or desires."

Value Engineering eliminates waste and determines value over price. This is calculating the cost of purchasing (or crucially, not purchasing) any high-value product or service in a timely manner. It is quantifying time-based value versus the cost of delay or doing nothing.

As Value Engineers, we set the scene mapping your ideal customer's needs with your offering. This is where we apply Design Thinking to enable you to build receptivity, rapport, trust and truth with buyers - early and often.

From a financial perspective, we start with a simple question for the buyer:

What is the cost of NOT buying the product or service?

Firstly, let's look at the Return On Investment (ROI) Model - a general formula:

ROI = (Cost of Investment / Net Profit​)×100%

To adapt this formula for an As-Is vs. To-Be comparison, consider:

Net Profit: This will be the difference in profits between the Future State (To-Be) and the Current State (As-Is).

Cost of Investment: This is the cost incurred to move from the Current State (As-Is) to the Future State (To-Be).

Given the above considerations, the formula becomes:

ROI = (ProfitTo−Be​ − ProfitAs−Is​​ / Cost of Transition) × 100%

Where:

Profit To-Be = Profit or (benefit) in Future StateProfit As-Is = Profit (or benefit) in Current StateCost of Transition = Cost to move from As-Is to To-Be

Note: If you're measuring benefits other than strict monetary profits, such as time saved or other intangible benefits, ensure you can convert these benefits into a monetary value for this to be valid.

To calculate the Return On Investment (ROI) with the specified inputs, we can formulate several equations. Let's define the variables first:

BVAs-Is = Current State (As-Is) Business Value generated per annum without Solution.BVTo-Be = Future State (To-Be) Business Value generated per annum after investing in Solution.

COS = Cost of Solution.ROI = Return on Investment as a ratio relative to the Cost of Solution.

CoD = Cost of Delay per day when not investing in Solution.CoDN = Cost of Doing Nothing per day when not investing in Solution.

CoDday = Cost of Delay per day when not investing in Solution.

CoDNday = Cost of Doing Nothing per day when not investing in Solution.

Calculating ROI from Solution: Net_Gain - BVTo-Be - BVAs-Is

Calculating ROI: ROI - Net_Gain - CDI / CDIThe ROI is expressed as a ratio. Multiply by 100 to get a percentage.

Cost of Delay (CoD): This represents the loss per day by delaying the Solution purchase. Assume the delay starts from the beginning of the year and goes on for d days:CoD = BVTo-Be - BV As-Is (d x CoDday) - CDI / CDI

Cost of Doing Nothing (CoDN): This is the loss per day for not implementing the Solution. Similarly, for d days:CoDN = BVAs-Is - (d x CoDNday) - CDI / CDI

AI Sales Coaching is here.

At Being Guided our work is built on four things: Design Thinking, Value Engineering, Vibe Coding and AI Sales Coaching. Our work is focused on organisations who are engaged in a high-value, high-touch sell. In these sales motions, many sales and non-sales people are usually engaged.

Everyone sells and everyone needs an AI sales coach. You could be the CEO, you could be the CRO, you could be an Account Executive, you could be a subject matter expert. Or you could be a tech founder of a startup seeking to engage and monetise early adopter customers.

Whatever your role, AI Sales Coaching matters.

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Creating our Value Engineering course on Second Nature.

The high-value, high-touch sell is still people buying people. It's still all about creating receptivity and rapport between buyer and seller. In turn, rapport generates trust - and of course, that leads to truth. So, where does AI Sales Coaching fit?

Sales coaching is about sharing stories, modeling resilience, and helping sales people develop the emotional intelligence needed to build lasting relationships. Think of AI Sales Coaching as a set of Avatars providing meaningful Role Plays at each stage of the buying and selling cycle.

At Being Guided we have formed a partnership with Second Nature to deliver AI sales Coaching. This builds on the successes this AI startup has had in just a couple of years with global tech firms such as Adobe, Microsoft, Oracle and SAP21.

Breaking the Hermetic Seal.

At Being Guided we see the high-value, high-touch sell as a challenge of breaking the hermetic seal that surrounds executive buyers. This requires the seller to offer something substantial on day one of any outbound communications and engagement.

As illustrated above this the Being Guided sales method which is embedded in Second Nature: Demand Creation Selling. This is built on a foundation of Design Thinking and Value Engineering.

Design Thinking maximises stakeholder engagement by fostering empathy and collaboration across the buying and selling cycle, whilst Value Engineering builds robust business cases using ROI models to defend value and quantify costs. Together, these approaches make up our sales method: Demand Creation Selling.

Demand Creation Selling is the opposite of Demand Fulfulment Selling: proactive, not reactive; and, ideal for innovators, where buyers cannot know all and specify requirements in an arm's length Request For Proposal (RFP). Our approach is all about Mutual Value Discovery.

Mutual Value Discovery sessions to determine the cost of buying (versus NOT buying) your Value Proposition. This includes generating a ROI Model from Value Engineering that determines the Time-Based Win-Win Value you create for the buyer and you.

Summary. Value Engineering

At Being Guided we bring four things together in pursuit of improving the high-value, high-touch sell: Design Thinking8, Value Engineering9, Vibe Coding1 and AI Sales Coaching21. The common thread in all of this is design.

Value Engineering ensures that the business case for a Value proposition is fully quantified and justified by the buyside.

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