How
well is your value proposition working for you?
The elevator ride challenge
I have been listening to a lot of
business pitches recently. Between
working with clients, a startup accelerator and recent networking meetings, I
have heard a lot of people introduce themselves and their business. And…it is
boring.
Too often we communicate our
businesses in terms of our functional capabilities or industry verticals. We do not introduce our businesses in a way
that is engaging, compelling and meaningful to our current and prospective
customers. I talked with a gentleman
this past week and asked him to tell me about his business. He introduced his business as “we do
IT”. It took two minutes of asking
pointed questions for me to uncover their unique point of difference in the IT
world. He had not been taught how to sell his business in a way that clearly
defines the value they offer.
I have been listening to a lot of
entrepreneurial business pitches this year.
One of the biggest challenges for an entrepreneur is to simplify his/her
business pitch to a single sentence or at least a compelling 30-second elevator
pitch. After three to five minutes, many
entrepreneurs still struggle to explain their business concept clearly. If the value proposition is not clear, the
opportunity for to secure investment in a new business is highly diminished.
I recently took one person for a ride
in an actual elevator to pitch her concept, and she did fairly well to simply
tell what they do while traveling just four floors. Could you do this? Can you describe your business in an engaging
and compelling way to explain the key benefit to your customers in a 20 to 30
second elevator ride? Can all the
members of your leadership team do this?
Identifying your value proposition
Many companies do a nice job of
defining a clear value proposition and compelling reasons to believe it. Having clear reasons to believe (or RTBs) is
also important. The combination of the
value proposition and RTBs help a target customer decide if you provide
interesting value to them – the What’s In It For Me factor or (WIIFM).
It does take work to identify and
clearly define your value proposition.
Many companies struggle with this. It takes practice and training to do
this well. Here are a couple thoughts to
assist you in thinking through how to better define your value proposition. You and your team may be great at this, but
it is surprising how many companies still need work in this area.
Let’s start with what you are
not. If you can identify the products
and services you do not provide, you will avoid the temptation of defining your
scope and value proposition too broadly.
You may be in IT, but you do not work on hardware. By defining yourself as not a hardware
company, it makes it quicker to define your strengths in the realm of software
and/or application development.
What is the one product or service
benefit you provide that your customers value from you over your competitors?
Articulate what you uniquely offer. Do you make fishing lures or fishing lures
that are highly effective because of they way they light up underwater? Do you run an Italian restaurant or do you
run the Italian restaurant with unique family recipes from Northern Italy where
all the servers make you feel like family?
Do you sell coffee or do you sell coffee from organic coffee growers
whom you work with to help develop sustainable practices in their community and
farms? Do you create websites or do you
create websites that effectively engage and sell target customers through an
ecommerce platform that is highly customizable?
Make sure your value proposition is
relevant and meaningful to your target customers. Is your value proposition both valuable and
differentiated from your competition?
How many restaurants do you know that sell chicken sandwiches? How many of them have a clearly differentiated
chicken sandwich? What makes it
different?
If you are willing to drive farther
to buy something, there is a clearly differentiated value proposition that has
engaged you.
Does your communication clearly
communicate your value proposition such that a customer would drive further or
pay more to get your product or service vs. your competition? If your answer is no, you have work to do.
If you can afford research, conduct
research with your current and target customers to help you understand what they
value. This will help you define and
communicate a compelling value proposition.
Why should we believe you?
Once you have a value proposition,
you need to support it. What are your
RTBs?
I was recently in the Florida
Keys. Almost every restaurant we saw has
an “award winning” key lime pie. That’s
a lot of awards. Many companies claim to
be the best at what they do. What the
winning companies do is define how they uniquely provide a specialized product
and service. They provide clear reasons
to believe why they are a better choice for this solution than others. The restaurant that displays the awards and
offers a money-back guarantee if you do not love their pie will stand above
those who just claim to be award winning.
Is your company environmentally
friendly because you say so (and then buy carbon offsets in exchange for how
you conduct day-to-day business)? Or, do you work in a LEED certified building
with a net zero use of energy and recycle over 90% of all waste? Which of these
two sound more environmentally friendly to you?
Providing clear, powerful and
relevant reasons to believe will support your value proposition and make your
story authentic and differentiating.
Write your story
You need to write your own
story. Combine your value proposition
and reasons to believe into a 20-30 second story. Create your own authentic differentiating
story as to why customers should do business with you – not why you are great,
but why you offer a unique, valuable benefit to them. Then explain why they should believe that
benefit.
When you have this right, it should
become the foundation for your communication brief for your brand
communication. Your leadership team
should all be able to tell your story.
And, your sales team should also be trained in how to sell with this
story.
This short story about your value
proposition is the core of what will differentiate you in the market. It should not change year to year. If you consider changing your go-to-market
strategy in a way that will change your value proposition, do your homework
first. Make sure your proposed change
offers a potential reward that is worth risking and/or disrupting your customer
loyalty and business.
For now, make sure your current story
is the strongest story you can tell to differentiate and build your
business. Don’t be boring!
This blog was originally posted
by GrowthSpring Group on the MENG Blend website
GrowthSpring Group is a unique a strategic growth and marketing innovation firm that works with clients
to accelerate success by helping them identify and launch new opportunities to
profitably grow sales. www.GrowthSpringGroup.com
