Does your value proposition articulate how your offering solves a customer’s business challenges or is it a jumble of features/benefits? The sophistication of a value proposition ranges from being stuck on feature selling to one that’s fully developed and helps win business. To find out if you’re at square one or doing pretty well, think about your value proposition in terms of the continuum below.
The further to the right you are on this continuum, the better off you are. However, even if you’re far to the left right now, that’s okay — think of these reference points as building blocks toward a better state. Here’s more information on each reference point and how you can start making improvements.
List Features
This stage is the starting point for thinking about how your offering’s features translate into benefits. But it’s not enough to tell buyers that they can “save time” or “save money.” You need to push further.
Identify Value
At this point, you can describe your offering’s business impact to buyers. By that, I mean you’ve identified the specific cost saving/revenue producing/intangible benefits that buyers would receive from your solution. Indicators that you have at least achieved this degree of movement to the right are case studies, whitepapers, e-books, presentations, etc. These all serve to create buyer awareness and interest.
Predict Value
This is where I see the biggest gap between the haves and have nots. At this level, you are equipped to help decision makers build a business case for your offering. Using value calculators, TCO tools and ROI tools, you can help prospects estimate how much your solution will help their bottom line. The end result for you is a shorter selling cycle and more deals closed.
Deliver Value
This step in the evolution requires you to measure the value a customer receives, identify shortfalls, and take corrective action. Often value-pricing strategies appear at this stage. (Here’s what we recently said is the key mistake when using value pricing.) The opportunity for you is to build customer satisfaction and create follow-on sales opportunities.
Share Value
This stage is not for everyone. When entering into gainsharing arrangements, you need to be confident in the value you deliver. That confidence though can be rewarded with a larger share of the customer value created. With proper risk mitigation, these can be your most profitable customers.
Where is your Value Proposition?
I suspect most companies are on the left hand side of the value proposition continuum. But I’d bet that the more successful companies have evolved further to the right.
Where do you find yourself on the continuum? What steps can you take to improve your position?
[Image via Flickr / Be-Younger.com]