Clients and Customers

A value model has two different end user organizations, in two different roles. We use two different words for these end user organizations, in order to distinguish them: “client” and “customer”.

The “client” is the end user organization that has an offering that they are attempting to sell. The client employs sales professionals to sell this offering. The sales professionals work with the value model, both to better understand their prospective customers, and to estimate the value that the offering provides to those customers.

The “customer” is the end user organization that may or may not buy the offering. The value model is concerned with the value created or destroyed by the offering in the customer organization, so the value model is a model of the customer, not the client. The customer employs executives who are responsible for creating value—or preventing value from being destroyed—and who may (or may not) find the value creation opportunities provided by the offering to be compelling.

For example, consider software that analyzes oil and gas pipelines for potential leaks. The client is a software company, the company that makes and sells the analytics software. The customer is a company in the oil and gas industry, a company managing oil pipelines or gas pipelines (or both), and interested in preventing leaks. The value model is a model of the customer, and a model of the value at risk to the customer in the absence of this software. 

A particular value model is unique to a client, to reflect the unique offering provided by the client. In this example, the value model is unique to the business of preventing leaks in oil and gas pipelines, entirely different from other value models for other offerings in other industries.

A particular value model is configured  for each customer, with configuration variables that are changed customer-by-customer to reflect the differences between customer organizations.  Some customers manage thousands of miles of pipelines; others have smaller assets to manage. Some customers have pipelines located in wet climates where pipes corrode rapidly; others have pipelines in dry climates, where the corrosion is slower. And so on.

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