This article by Jill Konrath first appeared in her Selling to Big Companies e-newsletter. We liked it so much that we wanted to share it with you.
A few weeks ago I sent out a newsletter announcing my new web site, Selling to Big Companies. The next day I received an email from a subscriber that said:
"You did a good piece of selling in the email. I read all the way to the bottom, and I had NO intention of doing so when I glanced at it. You must know your stuff!"
While I enjoyed the compliment, what really surprised me was that it was signed by a professor from the pharmacy department of Midwestern college.
Why in the world was a PhD reading my newsletter? It wasn't logical. So being the curious (or nosy) person that I am, I emailed back and asked him why. Turns out that he and a colleague were starting a consulting practice.
When they told me about it, I was floored. They had one of the best "value propositions" I'd 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 business results a customer gets from using your products or services.
Most people and companies have lousy value propositions. They're weak - and I mean really weak. Often they're just regurgitated descriptions of their features, processes or capabilities. Or, they're filled with self-aggrandizing puffery.
Here are a few examples of weak value propositions:
- We have the most robust system on the market.
- I help companies improve employee communications and morale.
- We offer training classes in a wide variety of areas.
- Our 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 them 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 the 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 (these are the companies behind your prescription drug card), they found that some firms offer the same amount of services for a lot less money than others.
One of their clients switched to a plan they recommended and saved $800,000 in the first 6 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 $1/2 billion division of a major corporation. She said that if a salesperson said he could reduce corporate waste by just 1%, she meet with him as quickly as possible.
Now a 1% 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 went right to the bottom line as more profits.
Strong value propositions deliver tangible results like:
- Increased revenues.
- Faster time to market.
- Decreased costs.
- Improved operational efficiency.
- Increased market share.
- Decreased employee turnover.
- Higher customer retention levels.
Documented success stories are great for attracting prospective buyers too. That's why the professors have such a compelling value proposition.
Here's one last example: I help people and companies boost their sales. I could easily describe it as "sales consulting."
But it's far more effective to tell about the regional engineering firm I helped land a huge contract (it grew to over $1 million in just six months) even though they were the underdogs. This story significantly enhances my credibility and demonstrates I deliver results.
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 have a much stronger one than 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
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?
- So what if communication improves?
By asking this question over and over again, you get much closer to the real value you bring to customers.
2. Talk to Your Customers
Your existing customers are the best resource to find out what value you bring. Tell your customer you need help understanding the real value of your offering and you'd like a chance to learn their perspective.
When you ask for feedback, you open yourself up to hearing the not-so-good things too. Make sure you don't get defensive; if you do, your customer shuts down fast.
Most people are scared to ask their customers about this. I know it took me awhile before I dared, but what I learned from the exercise was invaluable.
Don't let another day go by with a weak value proposition.
A strong one literally opens the right doors for you, while a weak one keeps you on the outside. During tight economic times, this is especially important. Work on your value proposition today!
About the author: Jill Konrath, author of Selling to Big Companies, helps sellers crack into corporate accounts, shorten sales cycles and win big contracts. She is a frequent speaker at annual sales meetings and association events.
For more articles like this, visit http://www.SellingtoBigCompanies.com. Get a free Sales Call Planning Guide ($19.95 value) when you sign up for the Selling to Big Companies e-newsletter.