How meaningful is your value proposition?
While the term “value proposition” gets thrown around a lot, there are many missed opportunities in how companies actually articulate their value — and with all of the noise in the market, it is crucial to get it right.Contrary to many messages in the marketplace, a value proposition is not a description of what a company does, what it provides, or a laundry list of product features. It is the unique, perceived worth of a contract between a business and its prospects. The value proposition resides at the heart of the market with the pain points and needs of users, buyers, and influencers — and the company and its products and services.The value proposition is a strategic asset that lays the foundation for business planning, market and marketing strategy, competitive and partner strategy, product roadmaps, operations, lead generation, pricing and customer service. It is also reinforced (or diminished) by each customer interaction with the business.Here are some concrete steps businesses can take to ensure that target markets should care about the products and services that a business offers:• Understand what keeps targets awake at night: When tasked with articulating the market pains in the way that customers would speak about them, many executives and marketers struggle. While they may be able to intellectually talk about the pain or the problems that customers and prospects have, it is clear that they cannot empathize in the language that the markets actually use. This empathy and common lexicon are essential to demonstrating that a business understands before it can show that it has a solution that fits.• Invest up-front in multiple value propositions: In any strategic sale, businesses have to reach out to users, influencers and the actual person holding the purse strings — and messaging falls flat when companies use a single “one size fits all” approach.As an example, a client was expanding into enterprise transformation initiatives. In voice-of-customer discussions it was clear that IT managers, the users, wanted to ensure that the company products would eliminate downtime for business users. The CFOs wanted to know that the costs would be contained and predictable — no budget surprises. Same initiatives, different vested interests, different messaging required — across all channels.• Embrace that prospects are buying holes, not drills: As tempting as it may be to talk about the latest feature or widget the product has, businesses need to focus on the problem the product solves. Too often, internal stakeholders get excited about what they believe will be the key “feature differentiators” that will set the product apart from the competition. Prospects want to know that a product solves their problem.A start-up team looking at a “better way to help users organize digital assets” was very excited about all the competitive features that the Web-based solution could offer. In fact, when prospects for the tool were surveyed about why their digital assets — photos and home videos — mattered, the consistent answer was “sharing memories.” The new tagline and executive summary in the business plan represented that. The features were still important, of course, but not essential to the value proposition.• Demonstrate impact: This is really the “so what?” principle. So many companies are focused on talking about what they do, they miss talking about why their targets should care. Businesses need to tell targets how their products and services can make a meaningful difference — save time, reduce costs, make money. How a company can demonstrate impact drives pricing and is the beginning of the conversation of how embedded it can be in the value chain.As businesses look at impact, they also understand that profile of the ideal customer. This profile will help with higher quality lead generation by targeting like customers who are not as price sensitive, who are loyal, and with whom a business can have a long-term relationship. The further the prospect is away from that impact, the more price sensitive the buyer will be.• Optimize the marketing mix: New channels have leveled the media playing field in ways that did not exist as recently as five years ago. As marketing and PR expert David Meerman Scott has remarked, “You can buy attention (advertising), you can beg for attention from the media (PR), you can bug people one at a time to get attention (sales), or you can earn attention by creating something interesting and valuable and then publishing it online for free.” In reality, businesses need to do all four activities to get attention.Having the right value propositions, maximizing finite resources and understanding the different channels to reach users, influencers and buyers are essential to being strategic and optimizing your marketing mix.• Reinforce at every stage: Every prospect and customer interaction is an opportunity to reinforce your value. This is the daily currency. If a business cannot consistently do this across all aspects of its operations, customers and prospects will find someone else who can.Getting the product-market fit right is an essential first step. Companies also must be able to clearly articulate the value. Given the noise in today’s marketplace, the many channels and stakeholders, and finite resources, the value proposition is a strategic asset that businesses must get right in today’s market to reach targets.Toral D. Cowieson, the founder of SISUTEK, a market due-diligence and product strategy firm based on the Seacoast, can be reached at 603-828-1633 or email@example.com.