Value Engineering Pt. 1: What is the Role?

Unlocking Sales for a B2B SAAS Company

High Level Overview of the role:

Value engineering, sometimes referred to as Value Consulting, is a methodology in which Enterprise SaaS companies demonstrate, through the use of quantitative models, the anticipated benefits a prospective or current customer can expect to recognize from using the company’s product.

Value Engineers typically report into the Chief Revenue Officer (CRO).

What do Value Engineers Do (Day to Day):

• Value engineers calculate the projected increase in revenue, cost-savings, work-quality, and overall performance a client can expect by working together. In practice, this usually takes the form of complicated financial modeling calculations made by the Value Engineering team, sometimes referred to as a "Business Case", or a "Business Value Assessment". The team’s calculations are usually dynamic, adapting to each of the individual specifications of a company’s unique clients. 

• The core deliverable of the value engineering mirrors that of a high-profile consulting engagement, where the team presents wraps its findings into a set of slides that are presented to economic buyers (senior VPs, CxOs etc.) to convince them to buy the SaaS company’s product.

• An example storyline of a Value Engineering presentation would be:

  • Client has a problem with low revenue growth and high costs​

  • Our software can solve for that by enhancing client's marketing program in various areas to 

    • A) Attract new customers​ to enhance revenue

    • B) Convince active customers to upsell / cross-sell to higher value products to grow customer LTV

    • C) Absolve client's marketing team members of spending unnecessary time on low-value activities to reduce costs / expenses

  • The value to client of expected revenue growth + costs saved = "x", which more than justifies the contract price being proposed.

• Value Engineering teams are usually lean, so they typically spend their time working on high-value deals that require custom calculations. 

• Value Engineering teams work collaboratively with highly visible areas of a SaaS company's commercial organization, including sales executives, customer success, sales engineers, and product marketing.

• To summarize, Value Engineering is essentially a free pre / post sales business consulting engagement. A value engineering engagement serves as a deeper and comprehensive discovery process than what a typical Sales member would have the time and training to accomplish in a typical sales process.

How to Be Successful

A mix of both "hard" and "soft" skills is needed to be a successful Value Engineer. Experience with MS Excel and PowerPoint will come into play on a near daily basis, as well as a strong background in analyzing financial data (NPV, ROI, LTV). One should also be highly comfortable presenting in front of high-level audience groups. 

Because Value Engineering is a highly collaborative role, working well with internal teams is crucial for success. Working hand-in-hand with Sales, Sales Engineers, and Customer Success to gather critical information to be used in building Business Value Assessments and to know when to jump into a deal to help bring it across the finish line will play a pivotal part in the success of a Value Engineer.

Work Experience & Academic Background

While there is no standard background , typically Value Engineers come from traditional consulting or investment banking roles due to the high reliance they place on some of the "hard" skills required to succeed. It is also common for Sales Engineers to transfer over into Value Engineering roles.

Salary

Salary for Value Engineers, as with most roles, varies based on years of experience (YOE):

• 3 - 5 YOE: $130K to $160K Base, 15% to 20% Bonus, + equity. TC (not including equity) = ~ $150K to $190K 

• 5 - 9 YOE: $160K to $190K Base, 15% to 30% Bonus, + equity. TC (not including equity) = ~ $185K to $245K

• 9+ YOE: $190K to $250K Base, 15% to 50% Bonus, + equity. TC (not including equity) = ~ $215K to $375K