How can you tell if that value proposition you carefully crafted is effectively differentiating you?
A good start to ask your employees what the company’s value proposition is. If you don’t get the same answer from everyone on your own team, it’s a good bet your value proposition, and how you communicate and live it, could use some work.
A good value proposition defines the benefits of your company's products and services—and makes clear how your company is different from the competition. A good value proposition can drive very real bottom-line results.
But an effective value proposition isn’t merely saying you have an expansive product selection, competitive prices or speedy delivery. A lot of companies—your competition included—can make those claims. To get the bottom-line results you want, a good value proposition should be specific and reflect what your customers value most. For example, if you provide customized solutions, that should form the basis of your value proposition. And when you are communicating and living that value proposition, your sales team won’t even pursue customers who care only about price.
So, how do you know when your value proposition isn’t as effective as it should be – when it’s just another “me-too”? Here are three symptoms of a weak value proposition:
- Price is your sales team’s go-to selling strategy. If offering customized products or having service reps available 24 hours a day is what sets you apart, there is no reason your sales team should be starting their pitches by discussing price.
- Customers aren’t getting a consistent message. Ask customers to describe your company. If some customers respond by talking about price while others mention product variety and still others say you deliver outstanding service, that’s a sign your message isn’t strong enough.
- You treat everyone in your customer’s organization the same. To create an effective value proposition, start by talking to your customers and hearing firsthand what they value most about your company, and why. But merely asking the purchasing agent or the CEO why they do business with you won’t cut it. To get a clear picture of what customers value, you’ll need a variety of perspectives, because while a purchasing agent may love your easy re-ordering capabilities, an engineer in the same company may value your technical support. When you understand what each member of your customer’s team values, you can craft the right message to the right person, and talk to your customers about what they truly care about.
Honest answers to those questions should give you a sense of whether your value proposition is working.
To be effective, a value proposition must clearly differentiate you and set you apart from the competition. It’s more than just pretty words on a website. A clear value proposition should drive every aspect of how you operate your business, from internal communications to your product offering and which customers you target. And that, in turn, will drive increased sales and profitability.
Jonathan Bein, PhD, is the managing partner of Real Results Marketing, which helps distributors make marketing a profit center. He has developed and applied analytic approaches for customer segmentation, customer lifecycle management, positioning and messaging, pricing, and channel strategy for distributors. Reach him at firstname.lastname@example.org or visit realresultsmarketing.com.