Getting Rid Of The “Value Proposition”

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I found myself talking about a “Value Proposition.” It caused me to pause, thinking about the concept of a “Value Proposition” and whether it has meaning any more.

Too often, the Value Proposition, is a sentence or two that we are trained to deliver at some point a conversation. To make sure our customers don’t miss it, we tend to say, “Our value proposition is…….”

When we remember the “script” and articulate our Value Proposition, it is often so distant and depersonalized to the customer, to have had little value. It’s further diminished, when they are hearing the same thing in slightly different words from everyone else.

  • “We help you eliminate these problems……”
  • “We help you achieve these goals…..”
  • “We help [Insert the right phrase: Increase revenue, decrease cost, improve profits, improve quality, improve customer experience….].”

When we are at our best in talking about a Value Proposition, we make it specific to the customer:

  • “We help you reduce costs by $X over Y years…”
  • “We help you improve productivity by X% resulting in $Z savings….”
  • “We help you reduce scrap by $Z…”
  • “You should see Y% improvement in retention…”

This personalizes the Value Proposition, making it more specific to the customer. Sadly, too few sales people do this.

While this is very powerful, somehow the concept of a Value Proposition seems to be dated and, perhaps, not very valuable.

Part of the problem is the concept of a “proposition.” A dictionary definition says: Prop-o-si-tion (noun)1. A statement or assertion that expresses an opinion or judgement. 2. A suggested scheme or plan of action, usually in a business context.

This is part of the problem with the concept of the Value Proposition. It’s an opinion or judgement, it’s a suggested plan about something in the future. More specifically, it’s OUR opinion and not necessarily the customer’s–unless we go through a conversation or process of validating that position with the customer.

But too often, we don’t, we express our “opinion,” just as we express other opinions about what we sell to the customer.

And the customer doesn’t care about our opinion. Particularly, when we recognize, it’s the customer that defines what they value.

But then, there’s the challenge, can the customer really define what they value? Particularly, if they are mired in the status quo—they may not know how to think about value or how to think about it differently.

So somehow, the concept of Value Proposition somehow seems to be a little “off” to me.

That’s why the concept of value creation, more importantly value co-creation is so important.

In reality, value is a learning journey we take with our customers—Yeah, I know that sounds really flaky. It sounds like on of those new age mantras, so let’s dive into it in a little more concrete way, what does it mean to “co-create value with our customers?”

Some things to think about:

In complex B2B sales, we actually have far more expertise and experience about the issues/problems than our customers do. They probably haven’t addressed the issues we help them address very often. We address them every day with each customer we engaged.

We help them recognize issues, problems, opportunities, they may have never considered in the past. We share our experience as well as the experiences of others who have faced similar issues or challenges.

But they know their businesses, their culture, what works and what doesn’t work for them better than we will ever know. So the customer teaches us. We jointly discover what works best for them.

We create far greater value with our customers than we do separately. It’s those diverse perspectives and experience bases that enable us, our customers and us, to see things differently, to learn collaboratively.

We know (and research confirms this) that our diverse experiences help us reach a better solution, more quickly, than if we worked separately.

These perspectives of value co-creation and jointly discovering value are very different than either our view and our customers’ views of value.

Discovering what we and our customers value, how we collaboratively create and deliver value is tough work. It requires an open mind, curiosity, a willingness to be confused, and a commitment to help the customer learn and to learn from the customer.

2 COMMENTS

  1. Yes, determining value is very important. But price justification (aka value proposition) built on value understanding and creation is very important. In our value measurements, we have found that price justification or value proposition is often more important than price itself.

  2. Agree, Dave that ‘value proposition’ is all too often something that is arbitrary and, even worse neither substantiated nor something that distinguishes the vendor – especially in the consulting business. This is a main reason for us to answer customer requests not with a proposal for implementing this enterprise software or another but with a considerably smaller project that first targets at determining what is important and the key drivers plus the KPIs that define value.

    Of course we are going out with this also actively.

    Doesn’t always work, though, because not only we need to be open minded but the customer needs to be, too.

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