Beyond Price: Building B2B Value Propositions that Climb the Pyramid

Price is often looked upon as the most decisive factor in the world of B2B marketing and hence most marketing strategies revolve around optimizing pricing. While we cannot discount the importance of competitive offering, cognizant sales teams are aware that there is a spectrum of emotional and rational considerations that every B2B purchase decision is based on. The B2B buying process is rather a combination of objective(pricing, specifications, scalability, compliance) and subjective(buyer reputation, social responsibility, design, aesthetics). But what has all of this got to do with B2B Value Propositions? Well, let’s read on to find out.

Bain & Company, an American management consulting company, has identified 40 different kinds of values that a buyer considers when making a purchase and has arranged them in the form of a pyramid called which is named ”the B2B Elements of Value Pyramid". This framework deconstructs customer value into five distinct levels, ascending from basic "table stakes" like meeting specifications to the pinnacle of inspirational elements like vision and social responsibility. Let us decode this comprehensive pyramid and see how it relates to the B2B value proposition .

Consider a couple of examples to better understand the B2B value proposition

1. SLACK

Slack's compelling B2B value proposition has made it a favourite among businesses of all sizes, as it directly addresses common workplace challenges and offers tangible benefits for productivity, communication, and collaboration. It demonstrates the power of a clear and well-articulated value proposition in driving B2B success.

1. BITLY

Bitly's value proposition is another great example of how to effectively communicate B2B value. It highlights the specific benefits that businesses can gain from using the product, while also aligning with their key priorities. The concise and impactful language used makes it easy for potential customers to understand the value proposition and see how Bitly can help them achieve their goals.

What are the B2B Elements of Value Pyramid?

The B2B Elements of Value Pyramid identifies and organizes the 40 distinct types of value that B2B offerings provide to customers. These elements are grouped into five levels, with the most objective and basic forms of value at the bottom and the most subjective and aspirational forms at the top. Let us start from the lowest Level-1 and then climb our way to the top at Level-5.

Level 1: Table Stakes - The Foundation You Can't Ignore

While scaling the pyramid is crucial, neglecting the base can bring the whole structure crashing down. Level 1, the "Table Stakes", represents the fundamental elements that every B2B offering must meet simply to be considered viable. These non-negotiables form the bedrock of customer trust and acceptance.

Think of it like building a house. You wouldn't start with the roof or interior design; you'd lay the foundation first. Similarly, in B2B, ensuring basic compliance, meeting agreed-upon specifications, and adhering to ethical standards are mandatory prerequisites before climbing higher.

Level 2: Functional Elements - Friend or Foe?

While meeting functional requirements is essential, it's a double-edged sword. Fixating on cost reduction or performance improvement can commoditize your offering, leading to endless price wars. Instead, leverage these elements to demonstrate expertise and differentiation. Showcase how your solution uniquely solves industry-specific challenges or enables innovative practices. Position yourself not just as a vendor, but as a trusted partner in achieving their functional goals.

Level 3: Ease of Doing Business - Frictionless Flow

Customers crave seamless experiences. Integrate seamlessly with their existing systems, simplify onboarding and usage, and provide stellar customer support that anticipates their needs. This smooth flow reduces friction, boosts productivity, and fosters trust, propelling you up the pyramid.

Level 4: Individual Elements - Touching Hearts and Minds

Personalization is power. Acknowledge individual decision-makers within the organization, tailoring your communication to their specific roles and aspirations. Highlight features that enhance their status, recognize their contributions, and offer opportunities for career advancement. This resonates on a personal level, creating emotional connections and loyalty.

Level 5: Inspirational Elements - Building a Brighter Future

Connect your offering to a higher purpose. Align your values with their vision, showcase your commitment to social responsibility or sustainability, and demonstrate how your solution contributes to a better future. This resonates with their long-term vision and sense of purpose, solidifying your position as a partner in progress.

Crafting the Winning Proposition

Once you've scaled the pyramid and identified your value sweet spots, weave them into a compelling narrative. Don't just list features; tell a story. Show how your solution empowers their journey, eases their burdens, and inspires their vision. Make the emotional connection, speak to their individual and collective aspirations, and demonstrate your commitment to a shared future.

Why is the B2B Elements of Value Pyramid useful?

This framework can be a valuable tool for B2B companies in several ways, It can help you…

• Understand the full range of B2B value propositions that your offerings can provide to customers.
• Prioritize your product development efforts by focusing on the elements that are most important to your target customers.
• Develop more effective marketing and sales messages by highlighting the specific benefits that your offerings provide.
• Build stronger relationships with your customers by demonstrating that you understand their needs and aspirations.
• Ensure that your B2B offerings are not only meeting your customers' basic needs but also exceeding their expectations and creating lasting value.

Key points to remember:

• Data is your compass: Conduct thorough customer research to understand their specific needs and aspirations. Back up your claims with quantifiable data and testimonials to add credibility.
• Collaboration is key: Align sales and marketing teams around the pyramid framework. Ensure consistent messaging across touchpoints, delivering a unified value proposition that resonates from day one.
• Continuous ascent: The pyramid is not a static destination. Keep innovating, expanding your value offerings, and climbing higher to stay ahead of the curve.

By building B2B value propositions that ascend the pyramid, you move beyond the price wars and tap into the true drivers of customer loyalty and long-term success. Embrace the power of purpose, personalization, and inspiration, and watch your sales soar to new heights.