What is value management? (And why you should care)

By: Steven Forth

Back in the autumn of 2012 a group of people came together to author “What is value management? (And why you should care).” There were twenty-one people involved in creating this document, many of whom have become (or remain) some of the leading lights in innovation, marketing and of course pricing.

You can access this document here, just as it was first published (over time some of the links have broken, but see below).

What is value management?

It is defined as, “The management discipline of providing value to customers while ensuring that providing value results in profit. Value management is a holistic approach that results in alignment between product management, marketing, pricing, sales and other business functions. The goal is sustainable and profitable revenue growth”

What is the value management cycle?

Below is an illustration of the connections within the value management cycle

Many of us have found this a powerful way to show how an understanding of value is central to every aspect of business. This connects to a lot of our current work at Ibbaka. We begin by understanding how market participants understand and respond to emotional and economic value and use this to build market segmentations and target customers. We follow this with customer journey maps to understand how value changes over the course of the relationship. Understanding of value remains central to innovation, to offer and service design, and to pricing.

The basic thoughts still resonate but a lot has changed as well.

Value-based pricing thought leader Stephan Liozu has been doing a lot of important work on the value of data and how to price it.

Assessment has changed a great deal with the introduction of causal models, greater use of probability and uncertainty (Monte Carlo models) and the application of machine learning.

The variety of pricing models possible has exploded and people have begun to apply design rules and combinatorial logics to their generation.

The role of emotional value drivers in B2B pricing is better understood.

Disciplines such as design thinking and service design are changing how we think about value management and pricing.

Given all these changes, now is a good time to renew this document. We plan to do this as a collaborative writing project. If you would like to contribute to the authoring or follow on as a viewer or commentator, please let us know. You can reach us at info@ibbaka.com.