The term Value Proposition may be the most over used and misunderstood business phrase since Partner. Organizations often use Value to describe generic, unproven statements about their product or service that could also describe any of their competitors. If you are curious about how your organization views and is aligned on your Value Proposition, do a quick survey. Ask people from all functions to describe in one or two sentences how your organization creates unique and differentiated value for your clients. Chances are pretty high, based on having run this exercise with many companies, that your staffs responses (from the top down) will make them look like they work for different shops. Don’t feel bad, you are not alone and view it as an opportunity area with high payback.
Your Value Proposition is also a critical component in “how you sell” or your Sales Process. Sales organizations are constantly looking for ways to differentiate themselves in the crowded markets in which they compete. That usually starts with their products and services. A huge area of opportunity is also to differentiate in how they sell. The data on this front is compelling as to why this is important (see other blogs). I would argue that if an organization has great clarity about how they create unique value for clients, then it enables the organization to innovate in how they sell as well. I use the example of a company that has invested to create a tremendous customer service experience. Client satisfaction is close to 100%, as is client retention. How would you use these strengths to create clarity in your Value Proposition and leverage in how you sell? Would you have reference checks at the end of your Sales Process or try and make it table stakes or hurdles for the beginning of the game?
Your Value Proposition will impact many parts of your business. If you view this as an opportunity area and want to learn more, then try this exercise with your team.
1. Determine the Decision Making or Buying Criteria for your Industry. If this is how you are going to be judged in most pursuits, then be able to both understand the criteria and how you create unique value in each of the areas is useful information. Rank the criteria High to Low based on what you typically see as being most important in the clients eyes.
2. Model how you create Value against the Criteria. Determine how you truly differentiate in each of these areas. Whether it is Price, Functionality, Risk or Reputation, do you make it easy for prospective clients to choose you? If you want to take it up a notch, then create a grid and add your known competitors to the grid based on where you believe they create Value. If you want to raise the bar again, show the grid to your clients and see what they have to say about how you deliver Value.
3. Develop Proof Points and Impact. The fact that you believe you do something is interesting, being able to prove it is another thing. Let’s assume prospective clients are slightly cynical and may be looking for some proof. What you are trying to understand is the Impact that your solutions have an KPI’s or financial results of your clients organizations. Your Clients will be a great resource for you to get this information if you treat them with respect, listen closely and value their time.
4. Create a Value Statement. Take the new information and turn it into one to two sentences maximum that describe how you create unique and impactful Value for your clients today. It should describe the common problem you resolve and how your solution creates impact.
5. Refine, Adjust, Refine. We have changed our Value Statement every month or two based on new information from clients, prospects and adjustments that we continue to make. Assume messaging is never perfect and will continue to get more concise and refined on an ongoing basis. We would encourage you drive that as an ongoing exercise.
Creating a Value Proposition is hard work, but we believe has high payback across your Marketing, Sales and Product groups.Share