|Tough Economic Times Requires Real Customer Value.|
By Dr. Rick Johnson
Sunday, 15th March 2009
Market driven companies spend time and effort consciously influencing the way they are perceived by customers, prospects, and other stakeholders.
The quickest way to destroy this process is to remain excessively concerned with how much can be sold to the customer or how difficult the customer is or how much paperwork is involved. The focus must be on your Value Propositions that solve a customer's problem.
This is not a new concept. It has been around a long time. However, I believe it is the most confusing if not misunderstood concept in sales today. If you are not clear on what your value propositions are then you need to get together with your sales force and develop this concept.
Create a Brainstorming Session
Review your marketing and sales material and what you say to customers to try to get their attention. Emphasize the question --- “So What?” for every concept, feature, benefit or core competency that you discuss.
By asking this question over and over again, you'll get much closer to the real value you bring to customers.
- So what if it's an efficient system? What does that do for the customer?
- So what if you have a great reputation?
- So what if you believe you have world class service?
Don’t forget to Listen to Your Customers
Your existing customers are your best resource to find out what value you bring to the table. Tell your customer you need help understanding the real value of your offering and you'd like a chance to learn their perspective. Don’t rely solely on the feedback you get from your sales people. Create some customer focus group discussions.
Value propositions come in many shapes and sizes. They have many names. Some of you may recognize them by the term “unique selling points”. Others may call them your elevator speech and some marketers may say they are your positioning statements. None of that matters. What really matters is the perceived value of you as a company in the mind of your customers.
You see, “Perceived Value” drives customer expectations. Performance Value drives customer satisfaction. The higher you raise the perceived value of you as a supplier, the closer you come to creating competitive advantage. Caution…. Be careful not to raise this perceived value so high that you can’t perform up to expectations. That’s like shooting yourself in the foot.
Value Propositions --- You Have More Than One
I use the plural term, “value propositions” simply because there is more than one value proposition in every company and every transaction.
The value that your company provides. This is an opportunity for you to talk about your company in terms of what the company stands for, how it partners, how it has produced for others, and how the company serves others
The value your product or service provides. The best way to present product value is through the technique known as “similar situations.” This gives you the opportunity to talk about how your product or service has performed successfully in other environments. This is not just about features and benefits.
The value that (the salesperson) provides. If you understand that the first sale is about you, the salesperson (the first sale that’s made is you), then you can understand the impact that this piece of the value proposition can play. If you bring no value to the table, your price will dominate the discussion and the outcome.
It is essential that there must be some form of interest or perceived value on the part of your customer. The value proposition can’t be some mission – vision mumbo jumbo that sounds wonderful from a journalistic standpoint. It must validate the value that helps your customer produce more, benefit from, and/or profit from or satisfy a need.
That is the most critical component of your value propositions and yet it is often ignored by sales professionals; In spite of the fact that it creates the most effective engagements with the customer. And…. This is what the customer is the most interested in.
Your value propositions must include:
If value propositions are created and used properly, they can ELIMINATE or Reduce Competition. They create situational proponents that can make you the only choice.
- Continuing Value after the Sale.
- A Relationship not a Transaction
- A Partnership – Mutually Beneficial
- World Class Service & Support
The Concept is Simple
Successful Value Propositions are simply addressing the reasons why a customer should buy your products, from your company, represented by your sales people. It becomes a focus on your differentiation from your competition. More precisely, it answers the question of why a customer should choose your product, your services and your company.
Your value propositions must be clear statements of the tangible results a customer gets from using your products or services. The more specific your value proposition, the better. Most companies have lousy value propositions. They're weak, wordy and often mean very little in relationship to tangible value. Many go back to the old school concept of selling features and benefits.
Here are a few examples of weak value propositions:
Tough Economic Times Requires Real Customer Value
- We are the most technologically advanced supplier in the market.
- We offer transactional internet services
- We offer training classes on all our products.
- We provide world class service
- We partner with our customers
- Our products are best in class
We are facing tough economic times. Doing business today is just not as easy as it was when we were riding the high wave of the economic boom. You are actually going to have to know what you are doing to get through this economic crisis. That means you need to have strong value propositions to break through the chaos and media sensationalism and build the customers confidence. That means you need profit oriented value propositions that speak to the critical economic issues your customers are facing.
And, by including specific numbers or percentages you get the customers attention much faster than your competition. Use facts, testimonials and examples. A good value proposition makes a clear statement of the tangible results a customer gets from using your products or services.
The more specific your value propositions, the better. People come to conclusions by making comparisons. If you don't let customers and prospects know why it is in their best interests to do business with you or buy your product, they won't.
Strong value propositions deliver tangible results to your customers like:
Persistence is power in marketing and sales. Far too many firms fail in their efforts because they don't follow through long enough to produce proper results. Marketing & Sales momentum comes from a consistent effort. It takes time for customers to comprehend what you are doing and for prospects to get acquainted - and comfortable - with a business.
- Increased revenues
- Improved profitability
- Decreased costs (This doesn’t mean automatic price reductions)
- Improved operational efficiency
- Increased market share
- Decreased employee turnover
- Improved customer retention levels
- New products & services
- Competitive advantage
Do everything you can to share everything you know with your customers. This is the only way to become a valued resource to them. When people use your ideas, they will buy what you sell and come back for more and recommend you to others – satisfying needs builds trust.
Rick Johnson, expert speaker, wholesale distribution’s “Leadership Strategist”, founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail email@example.com