Challenge #5: Communicating your Value.

Wouldn’t it be a shame to spend time understanding the things your customer really values, speaking to the right people and creating a real differentiation, only to then fail to communicate your value effectively?  Being different in ways your customer truly values isn’t enough if the customer doesn’t know about it. This is where a really powerful and persuasive Value Proposition is so important.

What is a Value Proposition? (V.P.)

Let’s start with what it isn’t. It’s not an advertising strap line...

An advertising strap line is not a VP. “Saving our customers money”; “Delivering value everyday”

Neither is it a bland statement like “Our solution will save you money”. This is little more than a vague expression of hope that most customers are likely to view with some scepticism – especially since many of their other suppliers are likely to be saying the same things! Most of what passes for VP’s are high on proposition and low on value. 

Your VP should be powerful and persuasive, clearly answering a key question for the customer:

“Why should I choose you rather than one of your competitors?”

They will then want to understand what it is you are going to do that will help them - The Supporting Propositions. Finally, what evidence do you have that will make them feel comfortable that you can do the things you say you can do?

Put simply, your Value Proposition must:

• Resonate - they need to see how it addresses the challenges and issues they are facing
• Differentiate - what is it about your product/service/solution that makes you different from the competition in ways the customer values (see Challenge #4)
• Substantiate - prove you can do the things you say that you can do

So what is a Value Proposition?

“A Value Proposition is a clear statement of the results a customer gets from using your product or service which clearly differentiates your offer from those of competitors”.

Where does it come from? 

There are four main sources:

1.   Your prospective customer – this is your customer as a business. What are the key issues this customer faces, and what are the impacts on their business of these issues? (Challenge #1 – Solve the Value Mystery)

2.   Your prospective customer – as individuals. Businesses don’t make decisions, people do. What are the individual interests and motivations of each of the people who will be involved in making the decision? (Challenge #3 – Identify people who care about your value)

3.   Your company – Given your understanding of your customer, as a business and as individuals, the issues they face and the opportunities they have available, what can your company do to help? Particularly, what can your company do better than anyone else to add real value to the customer? (Challenge #4 - Differentiate)

4.   The competition – whether we like it or not, it is unusual for there to be no competition. Sometimes the competition is the “do nothing option”, or perhaps for the prospective customer to decide to do things internally. Don’t forget the question – why should the customer choose you rather than doing nothing, or doing things internally? How would they be better off choosing you?

Once you have those four pieces in place, you can think about how to build your Value Proposition. The quality of your final VP will be driven by the level of your understanding of the prospective customer as an organisation, as individuals and the competition and their capabilities.

Powerful VP’s are clear and to the point and clearly identify that you have understood the key issues and can deliver a demonstrable value.

“Our solution will save you money” – everyone tells me that!

“Our solution will save you $250k in the first year of operation by managing inventory and shelf life more effectively, and $200k a year in subsequent years”

When can you start?

Thanks for reading Challenge #5. Book a date in my diary and let’s discuss some of the challenges you might be facing creating powerful and effective Value Propositions.  https://bit.ly/mikesdiary

If you can’t wait for the next instalment of The Seven Challenges of Value, I have a very special offer for you. Click on the link below and get an audio version of the book and a FREE .pdf for just $5.25

Look forward to seeing you for Challenge# 6.

Understanding, Creating and Delivering Outstanding Customer Value – and getting paid for it!