A few weeks ago I sent out a newsletter announcing my new web site. The next day I received this email from a subscriber:
“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 from a professor in the Pharmacy Sciences Department of a midwestern university.
What in the world was a PhD doing reading a newsletter on selling? Turns out that he and a colleague were starting a consulting practice.
Then he described his core business. I realized it was 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 the 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 – often, really weak. Often they're simply a description of the offering's 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.
- 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. 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 now. And, by including specific numbers or percentages, you get the decision maker's attention even faster.
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 6 months, without reducing services to their employees.
That's a really strong value proposition.
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 1 percent, she'd meet with him immediately.
Now a 1 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 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
- Improved customer retention levels
Documented success stories make you believable to prospective buyers. 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 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 try 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.
2. Talk to Your Customers.
Your existing customers are your best resource to uncover your true value. Tell your customer you need help understanding the real value of your offering, and you'd like a chance to learn their perspective.
Most people are scared to ask their customers about this. It took me awhile before I was willing to risk this, 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 for you, while a weak one keeps you on the outside.