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Your Value Proposition Is No Longer Sufficient

by David Brock on May 24th, 2011

Too many sales and marketing people struggle with value propositions.  For some–the value proposition is still internally focused, basically an advanced form of Features – Advantages – Benefits.  Others think of the value proposition – the elevator pitch that, when stated in a compelling manner, the customer will melt and immediately issue a purchase order.

Others recognize that value is in the eyes of the beholder, they work to understand what customers value, then present their solutions in the context of what each customer values.  They recognize, they need to do this for each person involved in the decision.  They understand that value is dynamic–that what customers value may change over time and these sales professionals respond to those changes.

Even in its best execution, the problem with value propositions is they are rooted in what we sell.  We base value propositions on our products and our solutions.  It’s increasingly difficult to differentiate our products and solutions—more importantly, that’s not what’s important to the customer.

Please don’t misunderstand me, Value Propositions are critical.  We still have to understand what customers value, define, communicate and deliver differentiated value, but customer needs are moving far beyond this.  We need to focus on Value Creation.

Value Creation is different from your value proposition.   Value creation includes a number of elements:

  • The customer experience—whether it’s the customer buying experience, their experience in using your products/services, the experience of working with your company, or how they engage you in the social world.
  • It’s about how we engage our customers through the life of our relationship with them–each touch, each interaction, creates value—not solving world hunger, but in every interchange having them think it has been a good investment of their time.
  • It’s about how we help them think about their businesses differently.  How we help them identify new opportunities to grow, how we help them expand into new markets, how we help them better understand and respond to their customers, how we help them operate more efficiently and effectively (this is where value creation comes close to value propositions).
  • It’s about how we help facilitate our customer’s buying processes.
  • It’s about helping the customer understand and manage change.  Sales is all about change, we create value in helping our customers embrace and manage it.
  • It’s about collaboration and innovation–working jointly with our customers, building capability and capacity within both our organizations.
  • Value creation is about higher levels of relationships and trust–running both ways.

Value Creation is less about products and solutions, and more about customer centricity, customer experience, people, and relationships.

Value Creation is not about a specific business case — our value propositions may focus on a specific decision and business case for our solutions.  Value Creation is about how we sustain value over the life-cycle of our relationship with the customer.

Value Creation is not about a transaction—but about 100’s and 1000’s of interactions that create meaning for our customers—as enterprises and individuals.

Value Creation can never be reduced to price—but it’s about the importance–or value–we bring in a long term relationship.  It becomes inconceivable to all parties not to have this relationship—the costs are too high.

We need to master Value Propositions, it’s the starting point for Value Creation.  But in the new world of buying, our most sustainable form of differentiation is becoming how we create and maintain value with our customers, suppliers, stakeholders, partners and employees.

  1. David – Suggest a value proposition is how we express our connection to the value we (hopefully) understand that customers hold. Suggest the value proposition or more specifically, the differentiation claim, needs to be matched by performances, multiple engagements and customer touches over the long term matching the perceptions we desire the customer to hold. These naturally change over time and may even differ even by geographic locale or the varying competitive landscape. I agree with you completely that these are certainly not internally-focused.
    Howerver, value propositions are not based simply on a product. Quoting marketing gurus Al Ries and Jack Trout, “Marketing is not a battle of products, its a battle of perceptions.”
    I expand on these ideas and much more in my upcoming book, “Connecting the Mind and Voice of Business.”

    • Ford, thanks for the comment. I don’t disagree with anything that you’ve said–they form the base of a value proposition. Since value is in the eye of the beholder, it is the customers’ perceptions of the value that counts. However, I still think that value propositions are becoming table stakes. There is so much more value to be created in the process–the manner in which we engage the customer, the manner in which we get them to think about their businesses differently, the new insights they get, the new opportunities they can pursue, the value we can bring in facilitating their buying process–and sustain in the way we deliver value through their life cycle with us.

      Value propositions are the base line, but increasingly it’s the value we create that will be the differentiator.

  2. Tom Pallen permalink

    Let me boil this down. As a 30 year veteran of the Rep business I’m reminded every day that this is a “people” business. The key to any relationship (read success) is trust. The trust that the engineer shows when he passes you the “confidential” document. The trust that the buyer shows when he shares competitors pricing. The trust that’s built over years of service and dedication. Trust is the Value Proposition.

    • Tom, thanks for joining the discussion with a provocative comment. Clearly, trust is a core element–though I have some ethics/judgement issues with the examples you cite. Customers don’t share information or time (confidential or otherwise), without trust–that trust is not developed without the sales person creating great value in the relationship. Trust and value creation are absolutely intertwined–they strengthen and reinforce each other. The converse also applies–particularly in the trust element–if you don’t continue to create value in the relationship, trust starts to diminish. The absence of trust makes it impossible to create and deliver value.

      It’s interesting to see how relationship selling has changed over the years, it’s moved from being purely relationship based (eg the lunch, golf games, etc to more value creation based).

      Let’s look at it from a different perspective. A customer might have strong and trusted relationships with two competitors. The competitor that creates the greatest value will win the business.

      Tom, thanks for the provocative view. Trust and Value are tightly intertwined, but they are different. Regards, Dave

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