How to run a successful PoV — Proof of Value
The age-old adage of ‘try before you buy’ has never been more important in today’s world. The marketplace is flooded with software providers promising the right solution. But how can you tell which one is right for you? Making a mistake can be extremely costly so this is where the benefit of conducting a proof of value comes in.
Firstly, it’s important to differentiate between a proof of concept (PoC) and a proof of value (PoV).
A proof of concept typically results in a prospective customer being given demo access and data for the software solution.
On the other hand, a proof of value takes a more comprehensive look into what that solution means, placing a stronger emphasis on highlighting the overall value it will have for your organization, and helping you to effectively measure success.
In effect, a proof of value (PoV) is a test conducted to demonstrate whether a product idea is feasible for your business.
It’s used to:
- Validate a product idea
- See your data in a new way
- Prove its ROI to business stakeholders
- Collect user feedback from team members
The appearance of a PoV depends on the scope of the project, but it can involve the end-to-end journey, featuring extraction, enrichment, classification, data mining, and visualization.
If a sample set of data has been defined, it may involve just the later part of the process whereby the data is loaded and mapped. This is when prospects get access to the data within the platform. Getting hands-on with their own data for a limited time. At the end of the PoV, the final report provides the business with the necessary data and information to influence decision-making.
This can include:
- User feedback
- Business analysis
- Forecasted financials
- Future strategies
Ultimately, the PoV is used to demonstrate the value of a product to the business and prove there’s sufficient ROI to justify the need.
Generally, the processing time takes between a few weeks to a few months, although this may vary depending on the PoV. If extraction is required, it can take a little longer as there will be security processes to work through.
Why should businesses run a PoV?
Too often, during a competitive sales cycle, some organizations overreach to win business by offering beyond their solutions capacity. The beauty of running a PoV is in the name: you get the opportunity to prove its value.
When implementing a new product, several stakeholders need to be appeased. This is where the PoV comes in by acting as the literal proof that verifies the product will reap benefits for your business. Essentially, it acts as the deciding factor before you decide whether to utilize a new product.
Let’s have a look at some of those benefits:
1. Validation
Use your PoV timeframe as ample time to address stakeholder queries across the board.
These can include:
- Is it a worthwhile investment?
- What are its tangible benefits?
- What ROI can be expected?
- How can it enable positive change within the business?
- How does it improve upon existing processes?
- What can it do that we cannot?
It’s also a great time to validate the working relationship with the technology provider. Getting insight into how they work and whether it’s a good fit. If they make the process easy during the POV stage, are supportive and communicate well, it’s a good sign that the full project will be managed efficiently and effectively.
2. Identify and Rectify Issues
The PoV will act as the trial run for any new implementations. You can identify any issues that arise during this time from feedback across the business and nip them in the bud. Once you know these issues you can analyze them and rectify them correctly.
3. Cost Saver
Resolving issues in the PoV stage will save potential long-term costs down the line, because by addressing any early mishaps or issues, you can solve them before you make your full purchase. The cost of this is tiny compared with the cost of purchase.
Additionally, it’s a lot cheaper to discover any problems early on and rectify them than by blindly purchasing without conducting adequate research. Keep your costs low and your stakeholders happy.
4. Opportunity to Learn
They say the best way to learn something is through practical experience, which is what the PoV offers.
Having firsthand use of the product will allow you to understand the ins and outs of your possible future investment assisting with:
- Getting users familiarized with it
- Gathering feedback
- Brainstorming ideas on how to maximize productivity with your business
Knowledge is power and by arming yourself with practical knowledge you can efficiently utilize your new product and reap the rewards that come with it.
How to measure value from a PoV?
It’s important to define some critical success factors at the start of the process and then measure against those. For example, if testing the extraction capabilities, ensuring the values and volumes are extracted correctly is paramount.
Another could be having data visible in a certain way that gives you the ability to classify data down to a certain level.
It could even be based on the identification of avenues for potential savings. Even from a sample data set, you may find that things like low-value invoices or early payment analysis could lead to significant potential savings.
How to prepare for a PoV?
Preparation is key to ensuring you extract maximum value from the PoV experience.
Here are a set of simple steps to follow:
1. Brainstorm your objectives with decision-makers across the business
- Outline current challenges
- Accept queries from across departments
- Map what you want to achieve and learn from the PoV
2. Define these into critical success factors
These will be what you gauge success against.
- Set expectations
- Make them clear, concise, and transparent
- Ensure everyone works towards this common goal
3. Ready your resources
- Determine what you need to provide
- Have all the appropriate resources available
- Have them ready to go so work can commence as soon as possible
4. Timeline
- Agree on a timeline to work towards
- Achieve your objectives within the time frame
Getting the most out of your PoV
After preparing, now it’s time to get the most out of your PoV.
You can do this by:
1. Setting Clear Goals
Make them S.M.A.R.T (specific, measurable, achievable, relevant, and time-bound.)
2. Training Properly
Give all users the necessary time and training to maximize the potential of the PoV.
3. Communication and Feedback
Leverage interactive sessions to ensure users’ questions are answered while using the software. Encourage an open atmosphere for queries, suggestions, and feedback. Conduct a thorough evaluation of the PoV, gather all feedback, and consider everyone’s opinion. Relay all this back to relevant departmental decision-makers before liaising with the provider.
Defining Success
Coming to the end of your PoV, your task is now to evaluate whether it was a success and if you’ll be taking the next steps.
First, review the critical success factors you decided on during the preparation stage. Ticking them off one by one means you have achieved what you’ve set out to do and that the PoV worked. If you’re not ticking off that list, then you run the risk of a project that never makes it out of PoV.
PoC, PoV, MVP — what is the difference?
What is the difference between the PoC (Proof of Concept), PoV (Proof of Value), and MVP (Minimum Viable Product)?
I will explain those terms using real-file examples and events from my personal life.
I will use non-IT examples — hopefully, they are easier to understand for everyone. Once you understand the purpose of those concepts, you will know when to use the proper approach.
PoC (Proof of Concept)
The PoC (Proof of Concept) is exactly what it is called — you want to verify the feasibility of some concept. What is extremely important is the PoC is (often) not designed to provide the business value.
For me, that was to check if I have the required driving skills to navigate a car and (big) trailer.
Why that was a PoC? Verification of my driving skills did not provide any business outcome by itself. PoC’s goal was to check if I can handle a trailer, but that was not the actual business need (I am not a professional driver).
PoV (Proof of Value)
The PoV (Proof of Value) is similar to the PoC in the way that we do not build a production-grade solution.
The core difference is that the PoV validates if some idea provides a business value or not. PoC might prove the feasibility of an idea, but that idea does not have to provide any business value. That is a huge shortcoming of PoC — we might successfully create something no one would be interested in. Multiple IoT initiatives failed because they used the PoC approach. The project successfully connected some devices to the Internet, but it was not enough to generate any business outcome.
My personal PoV was acquiring a caravan. I wanted to verify if traveling with a caravan generates any business outcome (satisfaction) for me or not.
PoV is not a solution designed for production usage, in my example that meant buying some old caravan (to control potential losses in case of a negative outcome). At the same time, that caravan should have functionalities “simulating” the production deployment. Real-file implementation — 20 years old, (almost) fully functional caravan.
Update based on the received feedback:
The PoV (Proof of Value) should be as close to the production setup as needed to validate the business outcome with a decent certainty.
Renting a caravan does not provide the “complete taste” of owning and traveling this way. When you rent something (i.e. a caravan) you do not have to worry about servicing it, replacing used equipment, or making small repairs. All of those aspects are an integral part of “owning” a caravan but are non-existing when you rent one. As a result, the PoV would be executed in slightly different conditions and would not provide a representative outcome.
That is the reason I bought a caravan instead of renting one.
When you execute the PoV you should do it in conditions as close to the production deployment as possible. The better the “simulation environment” the more precise outcome you will get.
Luckily for me, the PoV was successful and provided the business value (I really enjoyed traveling this way).
MVP (Minimum Viable Product)
MVP (Minimum Viable Product) differs from PoC and PoV as it can be deployed into production. It lacks some functionalities and might be not polished, but it does provide business value to end users.
Typically, the MVP is a natural consequence of a successful PoV. We proved that some idea provides value for end users, so we developed a minimal product delivering that value in production.
The MVP was to buy a (minimum == old) sailboat. Why that was an MVP instead of PoV? I already knew that I love sailing and there was no need to verify if there is any business value for me.
I would prefer to buy a new, high-end sailboat; because of multiple reasons, I decided to buy the minimal (cheap) version.
I do love sailing 🙂
Summary
In this post, I described PoC, PoV, and MVP. I hope that real-life examples showed the main differences between those concepts and were easy to understand.
If you have any questions, please subscribe to my mailing list and replay to the welcome message — I am happy to answer any concerns.
Proof of Concept (POC) vs Proof of Value (POV)
POC (Proof of Concept) or Proof of Value (POV) is often a last step in the pre sales process. It is the last step for sales engineering. Once POC/POV is successfully completed, the sales deal goes to procurement or contract.
If the POC/POV fails, the deal goes down with it.
Proof of Concept (POC) is also known as pre sales technical evaluation process. A micro or scaled down version of the environment is usually created to mimic the actually scenario and usecases. The goal of POC is to satisfy the success criteria that are mutually agreed upon before starting the POC. The purpose of Proof of Concept is show how product works. The focus is on showing that product solves customer’s usecases and pain points. This activity usually precedes with detailed report of meeting success criteria and product accomplishments.
POV (Proof of Value) is used to identify the value of the product based on customer’s usecases. It’s usually lighter touch than POC. The value is proven by demonstrating customer’s usecases in a standard environment. It usually does not require creating a micro environment or recreating customer’s production environment for satisfying the success criteria. The purpose of Proof of Value is to show that product will solve customer’s usecase (or problem).
Should I use POC or POV?
Whether you should engage in Proof of Concept (POC) or Proof of Value(POV) – It mainly depends on the product, and to some extent customers too. During the presales process, the goal is to close the sales successfully by demonstrating product capabilities to customer to their satisfaction (success criteria). Prospective customer is buying the product not just solves the immediate problems but it also fits into their short term and long term goals.
A well planned Proof of Concept with clear success criteria does wonder to sales cycle. They are much shorter and have better chances of being successful. POC is a great tool for closing the sales quickly. Most of the POCs fail not because of the product, but because of the people mismanagement.
Proof of Values (POVs) is lighter and executed in more controlled environment. They do not require extensive settings of environment like POC, so they move much faster in the process. However, the downside is that customer may not be satisfied enough to make a purchase. POVs usually work great for SaaS products which are easily demonstrable and where a sandbox can be easily created for a lighter version of POC.
It is common to call a lighter version of POC as POV. Many sales engineering teams prefer to use the term POV, because in POV, the focus is on showing the value rather than showing the concept (functionality). But most of the modern POCs do not just focus on proving the concept. Even though they may be called POCs, their focus is still on solving customer’s usecases and proving value.
Both POC and POV are tools for satisfying customer’s requirements during the presales process. If managed properly, they can do wonders. If not managed properly, they can consume extensive resources and derail the sales process. Remember, there is no coming back once POCs or POVs are failed.
How Success Helps
Success focuses on 5 key components required for successful POC and POV:
1- Planning and Execution
2- Customer Collaboration and Experience
3- Repeatable execution of successful POCs/POVs
4- Insights and Learnings
5- Playbooks and automation
Success brings the much needed structure Proof of Concepts and Proof of Value needed for long time. It saves time and resources for both the parties. It’s a win-win.
Proof of Value vs. Proof of Concept — The Key Elements
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During the final stages of the pre-sales process, proof of value (POV) and proof of concept (POC) are vital aspects, usually marking the last sales engineering step. After completing the proof of value and proof of concept, sales deals transition to procurement or contract, closing deals, and boosting close rates that match or better the industry standard.
Proof of Value identifies product value based on customer use cases, while proof of concept is a pre-sales technical evaluation process. If these elements are not fulfilled, then deals will fall through, and sales teams have to start from scratch, diminishing productivity and delaying key business objectives. What are the important facets of POV and POC? And where does conversational intelligence play a role in optimizing both?
Proof of Value
Proof of value identifies the value of products or services, depending on client use cases. It’s a lighter method and works best in controlled environments, with value proven through demonstrating use cases.
POV doesn’t require creating microenvironments or recreating client production environments to be successful. In its simplicity, POV shows that a product/service seamlessly solves client use cases. It focuses on use cases that cannot be achieved through any other technical means.
Proof of Concept
Proof of Concept, meanwhile, is the more layered of these pre-sales processes, a technical evaluation process that provides scalability to environments created to mimic real-life client scenarios and use cases. The main goal of proof of concept is to satisfy all success criteria that were laid out and mutually agreed upon before starting it. POC shows how well a product or service works while proving it applies to various client use cases and successfully addresses pain points. It is also known as the proof of principle.
POV and POC are Often Used Interchangeably
Proof of Value and Proof of Concept are terms often used interchangeably when broaching the pre-sales process. Both are regularly applied in technical use cases when sales prospects need a deeper, more intricate understanding of a product/service while understanding how the product/service meets business and operational needs.
Both methods are applied when proving technical value is more meticulous within the sales cycle, with reasonable timelines for both necessarily set to prove their effectiveness.
Proof of Concept Helps Boost Win Rates
Proof of Concept is a particularly good concept to help improve win/close rates, allowing pre-sales and account executives to properly understand all client needs and use cases.
For one, POC includes probing clients about their desired business outcomes to create a roadmap outlining how product/service features best meet objectives, with continuous learning and questioning needed to properly understand daily client needs.
Additionally, POC codifies the success criteria in a way that creates paths for discoveries throughout the sales process, holding buyers and sellers equally accountable. If sellers deliver regarding the success criteria, then buyers will agree to the technical win. Conversational AI ensures buyers and sellers are on the same page by extracting insights relevant to sales-related conversations and highlighting keywords, allowing sales professionals to be better informed regarding buyer expectations. This makes it easier for buyers to understand how products/services best address their needs.
POC accelerates the sales cycle and is a great tool for closing sales quickly. POC failure doesn’t derive from the concept, it is from mismanagement, with scope creep and a lack of clear deliverables and expectations hindering execution.
POV is the Lighter Version of POC
Proof of value is a more condensed version of proof of concept. It’s executed in a more controlled environment than POC. POV doesn’t require extensive environmental settings and takes a deeper dive into how valuable products/services are. POV also establishes whether they reduce costs and create more efficiencies, among other things. Proof of value validates adoption and tangibly measures success, providing justification for sales teams.
Proof of value works especially well for Software-as-a-Service (SaaS) products that can easily be demonstrated, with the groundwork set to create a lighter version of Proof of Concept.
While POV looks at value rather than functionality (which POC focuses on), they are interchangeable because many POC projects today don’t exclusively focus on proving a concept as they validate client use cases and prove how valuable products/services are while creating worthwhile purchasing experiences for buyers.
Conversational intelligence highlights value within conversations surrounding POV and POC, understanding buyer signals that indicate where the best value propositions can be made when negotiating with clients. Additionally, conversational intelligence helps sales teams identify product differentiators and unique capabilities that make POV and POC easier to validate throughout the pre-sales stage.
Conversational intelligence provides the sort of conversational and business value that allows businesses to facilitate better teamwork while easing the tensions and uncertainties surrounding remote work Versational provides a conversational assistant solution to ensure team leaders connect with their teams in the most effective ways possible and give employees the praise they deserve. Try our product for free today.