As sales and marketing people, the concept of “Value Proposition” has become fundamental in our positioning in our markets and with our customers. The concept of the value proposition can be traced back, apparently, to a McKinsey paper written in 1988, and to Norton and Kaplan’s work in the early 90’s (I was surprised by this, I thought the concept predated this by some years.)
But value propositions have become almost another feature we talk about in pitching our products and company. Take a moment, search your website and those of your competition. Inevitably you will find the “value proposition” touted with all the other features and benefits of your offerings. It will be proudly displayed on your product pages, it will be trumpeted on your corporate pages, and it’s probably a headline on the home page.
A few years ago, I was asked to do a keynote on Value Propositions. My first slide was the value proposition from the client’s web site. They all applauded and cheered their positioning. The next several slides were the value propositions of their top 5 competitors. They were all the same–everyone solved the customer problems, everyone drove growth and differentiation for their customers, everyone reduced cost and improved profitability, everyone was far better and different from the competition——–and every one was the same………..
Hmmm, I thought value propositions were supposed to be differentiating…..
The other thing was they were all about the company, their products, services and how great they were. They were only indirectly related to the customer.
That hasn’t changed….
Over time, we started to expand our concepts around value. We began to realize that “value is in the eye of the beholder.” We began to talk about value positioning, that is: “You can expect to get these results and outcomes……” Value positioning is a combination of the quantitative and qualitative results the customer could expect in implementing a solution. It became the business case to justify a solution.
In value positioning we took our standard “dear occupant or current resident” value proposition and started customizing it to our customers’ specific situations. We conduct discovery to understand where we could help, what the specific impact might be and presented it to the customer.
In some cases, we’ve also started to tie our value positioning to value realization. That’s an after the fact assessment, “did you actually get the results we committed?” Sadly, we don’t do that very often, and usually only when driven by the customer or as we are trying to upsell or renew.
Value positioning and value realization are very powerful and very important in our engagement and account development strategies.
But we have to think. Are they really differentiating? Do they they really set us apart from the alternatives? Do they help the customer make a choice and have confidence in their decision?
The reality is, our value positioning is probably becoming table stakes. It is important to the customer, but as they look at their short list, the alternatives are probably not very different. They all solve the customer’s problems. They each help the customer achieve their goals. There are some differences, probably more nuances. One approach may be stronger in some areas, another in other areas.
Don’t get me wrong, value positioning is critical in our work with customers. And value realization is critical in building on that, should we win. But our positioning is probably not what causes us to win.
So what causes us to win?
We have to expand our concept of value to focus more on value creation!
Value creation is the work we do with the customer as they move through their opportunity/problem solving and buying journeys. It’s the things we and the customer learn–together about what face and what they might achieve. It’s what we learn about each other. It’s how, collaboratively, begin to think differently, to consider new things, to re-frame how we might look at the future.
Value creation is not something we can trumpet at our websites. We can’t create headlines about “Our products create unique value……”
This is because value creation is created in the moment. It is the interaction we have with the customer. Each interaction is different, each is fleeting. We can’t standardize it to playbooks and battlecards.
Value creation is deeply personal, each of us, customers and sales people have a shared experience of each others. We are learning something new, we are debating new ideas, we are questioning our premises, biases. We are planning together imagining a new future and figuring out how to get there, how to manage the risks.
We can’t follow a script around value creation, but we can equip ourselves to become value creators. Mindset is key–an open/growth oriented mindset. Curiosity is important, it helps us look at things differently. Deep listening, critical thinking and collaborative problem solving are all fundamental to helping the customer move forward. And caring is the foundation to value creation.
Value creation is not about the features/functions/benefits/feeds/speeds/capabilities of our products. It is all about our customers, the people, not the companies, and us, and how we work together in looking at and managing changes.
Value creation is the ultimate differentiator. It’s not limited to the customer’s buying journey, but it’s our shared experiences over the life of our relationships. It’s their experience of our company and our experience of theirs before we even meet. It’s the value we create in those first fleeting discussions—even though we/they may not even be looking. It’s the experience in every interaction as they determine they should change (perhaps because we have incited it), it continues through their buying journey and after they buy and look to implement/realize value.
Value positioning and value realization are still critical. And, generally, we have lots of room for improvement–too many sales people are limited to parroting standard value propositions. We have to get better at this, but it’s table stakes.
Value creation is what differentiates us from everyone else, it’s the experience we create with the customer and build for a lifetime. Ultimately, it’s why customers choose us over an alternative.
What about the future?
Our concepts of value have evolved from 1988’s introduction of the value proposition.
I suspect, we will see a few things emerging in the coming years.
- We will recognize the value that need be created is not a one size fits all approach, so we must be adaptive. Some decisions are not complex, not high risk, may be transactional. Our value creation for those is very different than for complicated and complex scenarios.
- Value creation will increasingly shift to inciting organizations to change.
- Sensemaking and decision confidence are already important to value creation and will be increasingly important as people struggle with complexity.
- We will see the need for agile networks of value creation–collaborative efforts between multiple organizations and people. We already see this in massive social change, but as organizations look to grow and create more value, we will see we need new and different kinds of relationships. So it will no longer be how we engage customers, but how we engage the people critical to achieving our shared goals.
- We will recognize that diversity–in all senses of the word–is critical to value creation. We can’t think the same, we have to think differently. So we will look for increasingly diverse groups, that may be swarmed for an instance, to help in this journey. So agility, nimbleness, and flexibility become critical.
- We will, also, learn these principles are critical for driving change within our own organizations and they will become fundamental to how we lead, how we develop, how we empower, engage, and align our people. The “Great Resignation” is the red flag telling us we need to change the experience we create within our organizations (which further enables us to be more impactful in creating value with our customers and others).
What are your thoughts?