Clarifying Your Value Proposition
So how does your value proposition look? Can you describe what you do in terms of tangible business results? Do you have documented success stories? Or do you need to do some work to enhance your value proposition? If it’s not strong enough yet, don’t despair. Like I said earlier, most people and companies have a much stronger one than they use. They just get caught up describing “what” they make or “how” they do things.
Both hard values and soft values need to be considered as you work on strengthening your value proposition. You’ll want to explore how you impact customers in each of these areas.
This is the most easily identifiable because it’s directly related to your offering and is highly measurable. Tangible value is typically expressed in numbers or percentages.
Examples might be:
- Reduce cycle time from 3 days to one.
- Cut labor costs by 25%.
- Save R100,000 in energy costs.
- Increase market share 5%.
- Improving productivity 17%.
Typically tangible value gains also have related intangible value gains that aren’t as obvious, but help strengthen an already strong value proposition. For example, improving productivity means fewer workers. With a smaller workforce, the company saves a significant amount in the benefits area. Less money is spent in recruiting and hiring. These savings can also be quantified as part of your value proposition.
A well-designed web site may cut the need for customer service staff. A more efficient JIT ordering process decreases the amount of warehouse space and its associated costs. A digital asset management system’s ability to repurpose data reduces advertising expenditures. Always try to quantify the indirect values as well as the direct ones.
Sometimes the value of your offering is not quite so measurable – such as lowered risk, increased teamwork, improved marketplace image, or better morale. Intangible value doesn’t sell well in today’s economy. Most decision makers consider it a nice added benefit, but won’t spend money for a solution that only provides soft value.
To increase your sales success, take these intangibles and make them tangible. Find ways to quantify their value to customers.
Opportunity Costs can also strengthen your value proposition. An opportunity cost is something your customer can’t do now because of their current methods of operation. For example, it’s what they could be doing with the R500,000 savings they’d get from using your product. Or it’s the business strategy and associated profits they can’t aggressively pursue because of the internal conflicts that delay decisions.
To strengthen your value proposition, follow the multiple suggestions discussed in the ensuing installments.
Remember to check in next week for another great installment on this awesome series!