While I enjoyed the compliment, what really surprised me was that it was from a professor in the Pharmacy Sciences Department of Midwestern University. Why was a Ph.D. reading a newsletter on selling? It wasn't logical.
So being the curious (or nosy) person that I am, I e-mailed and asked him. Turns out that he and a colleague were starting a consulting practice. When they told me about it, I was floored because they have one of the best "value propositions" I've heard in a long time! But before I tell you what it is, let me define what that term means.
A value proposition is a clear statement of the tangible results a customer gets from using your products or services. The more specific your value proposition is, the better. Most people and companies have lousy value propositions. They're weak – and I mean really weak. Often they're simply a description of features or capabilities. Or they're filled with self-aggrandizing puffery.
Here are a few examples of weak value propositions:
· It's the most technologically advanced and robust system on the market.
· We improve communication and morale.
· We offer training classes in a wide variety of areas. My product was rated the best in class by leading authorities.
You're probably saying, "So what?" That's exactly what most customers think when you share a weak value proposition. They've heard lines like that a zillion times before and don't believe you one little bit. Besides, you haven't shared what's in it for them-and that's all customers care about.
With today's tight economy and overburdened decision makers, you need to have a strong value proposition to break through the clutter and get their attention. That means you need a financially oriented value proposition that speaks to critical issues they're facing. And, by including specific numbers or percentages, you get the decision maker's attention even faster.
Now back to the two professors. In researching various pharmacy benefit managers (the companies behind your prescription drug card), they found that some firms offer much better deals than others.
One of their clients switched to a plan they recommended and saved $800,000 in the first six months, without reducing services to their employees.
Now that's a REALLY STRONG value proposition. I can't imagine any Chief Financial Officer turning down an appointment with the two professors after hearing those figures.
Let me give you another example: A while back I was having lunch with the president of a half-billion dollar division of a major corporation. She told me that if someone called her and said he could reduce her waste by just one percent, she'd meet with him immediately.
Now a one percent savings seemed miniscule to me, so I asked her why. She told me that she knew exactly how much her company spent on waste – and it was a big chunk of change. Every penny she saved would go right to her bottom line as additional profit. Strong value propositions deliver tangible results like...
· Increased revenues
· Faster time to market
· Decreased costs
· Improved operational efficiency
· Increased market share
· Decreased employee turnover
· Improved customer retention levels
Documented success stories make prospective buyers believe in you. That's why the two professors have such a compelling value proposition.
So how does your value proposition look? Can you describe what you do in terms of tangible business results? Do you have documented success stories? Or do you need to do some work to enhance your value proposition?
If it's not strong enough yet, don't despair. Most people, and companies, too, have a much stronger value proposition than the one they use. They just get caught up describing "what" they make or "how" they do things.
Here are several things you can do right now to enhance your value proposition:
1. Brainstorm with your colleagues:
2. Review your marketing material and what you say to customers to get their attention. If you're not talking tangible results, keep asking each other "So what?"
So what if it's an efficient system? So what if we have a replicable process? So what if it's high quality? By asking this question over and over again, you'll get much closer to the real value you bring to customers. If you're a sole proprietor, do this exercise with a group of small business owners.
3. Talk to your customers: To find out what value you bring, your existing customers are your best resource. Tell your customers you need help understanding the real value of your offering, and you'd like their feedback.
Most people are afraid to ask their customers for feedback. It took me awhile to take this step, but what I learned was a real eye-opener. Not only did it change my value proposition, but it also changed my offerings and self-perception.
Don't let another day go by with a weak value proposition. A strong one literally opens the doors of major corporations, while a weak one keeps you on the outside.
Jill Konrath, President of Selling to Big Companies and Leapfrog-Strategies Inc., helps sellers create value, differentiation, and demand in competitive markets. For info on speaking, training or consulting services, please call: 651-429-1922 or email: mailto:firstname.lastname@example.org
Published in Networking Today, June 2007