Customer-Attracting Value Propositions
With today’s tight economy, a strong value proposition breaks through the clutter and gets the attention of overburdened decision makers. If you haven’t found a way to state your value in business terms, you’re in for a never-ending struggle to get business.
Strong value propositions open doors and create opportunities for you to sell your products or services. They’re financially oriented and speak to the critical issues your target market is facing.
I recently read an article in a magazine about a company whose software calculated exactly how much retailers should charge to squeeze the maximum profit from every product and at any time.
During an 8-week test with one retailer, revenues jumped 10%, unit volume increased 6% and net profit grew 2% due to their price-optimization capabilities. Payback was expected within 12 months. That’s their value proposition!
What retailer wouldn’t want to learn more about what this company does! As I was reading the article, I could almost see the retailer’s senior management team salivating over the information in it.
That’s the power of a strong value proposition.
A while back I had lunch with the president of a R500million business unit of a major corporation. She told me that if someone contacted her and said he could reduce waste by just 1%, she would meet with him immediately.
Why? Because she knew exactly how much her company spent on waste – and it was a lot of money. Every penny she saved would go right to the bottom line.
Again, powerful value propositions open doors – quickly! Taking time to really clarify yours is well worth the time invested in the process.
Strong value propositions are always stated in business terms. Corporate buyers are particularly attracted to phrases such as:
- Increased revenues
- Faster time to market
- Decreased costs
- Improved operational efficiency
- Increased market share
- Decreased employee turnover
- Improved customer retention levels
- Increased competitive differentiation
- Faster response time
- Decreased operational expenses
- Increased sales per customer
- Reduced cost of sales
- Improved asset utilization
- Faster collections
- Reduced cost of goods sold
- Minimized risk
- Additional revenue streams
- Increased market share
- Improved time-to-profitability
- Increased billable hours
- Reduced cycle time
- Increased inventory turns
- Faster sales cycles
- Reduced direct labor costs
Can your business do any of these things? How about something similar? Perhaps you’ve never really thought about your products or services in these terms. But this is what corporate decision makers want to hear so it’s time to revisit your value proposition.
Think about translating what you do into the language of decision makers. Remember, they don’t care about your product’s speed or efficiency. They don’t care about the wonderful methodology you use. They only care about the results it delivers.
When you find the right words to describe your offering, you’ll immediately notice a change in how you’re treated. Corporate buyers will want to learn more about what you do.
Tangible, Measurable Results
The very best value propositions deliver tangible, measurable results that are highly desirable to prospective buyers. Yet many companies fail to extend their “benefits” into actual numbers. If it’s possible for you to do this, it is highly recommended.
Specificity sells. The more specific your value proposition, the more attractive it is. Stories are another way of providing specificity, enabling you to get your message across but without having to make unsubstantiated, across-the-board claims.
Sellers as the Real Value Proposition
In today’s market, with less and less differentiation between products and services, sometimes the seller is the real value proposition. Customers buy the knowledge, expertise and ideas he or she brings to the relationship.
For many salespeople this is a totally new and unfamiliar paradigm – and they’re unprepared to sell their own personal worth. But many sellers do bring extraordinary value to their customers – sometimes in easily quantifiable ways, sometimes not. A woman I know is a sock salesperson who does business with major retailers. Socks are commodities and pricing is often the primary criteria in decision-making.
But not for this salesperson. She helps her customers increase sales to their clientele by:
- Regularly shopping the competition and advising her customers about market trends.
- Designing packaging alternatives to encourage customers to buy more socks at one time.
- Developing creative displays that entice customers to buy socks more often.
- Creating unique designs for trendy sock styles for special occasions and seasons.
These things are NOT part of her job description. She’s chartered to sell socks. But instead she’s bringing her knowledge of design, color and style to the customer relationship. Her customers reap huge benefits. Inventory is turning faster than ever before, sales are up and so is profitability.
Her value proposition is highly personal, but it’s what differentiates her from everyone else in the marketplace. When she’s in a competitive situation, she needs to share what she herself does for customers – and let them know they’re getting a business consultant in addition to a sock supplier.
This is the new and emerging reality in value propositions. In a world where products rapidly spiral into commodities and service offerings can be copied overnight, the only real difference between suppliers is the people involved. You, the seller, become the value proposition – and a huge factor in the decision that’s made.
Remember to check in next week for the fourth installment on this 9 part series!