Why Your Value Prop Is Losing and What to Do About It
by Michael Cannon
Every company wants a great value proposition, the proverbial magic bullet that gets you in the door and gets you an order. The trouble is that most value propositions are more like blank or copper bullets. They don’t perform well. And because they don’t perform, they reduce the effectiveness of all your sales and marketing investments, sapping your company’s strength and competitiveness.
There is a lot of market research to support this assertion, such as this example from Miller Heiman’s Sales Best Practice Study:: “Over 65% of sales leaders feel they’re losing business because they don’t have a compelling value proposition.”
The Problem with Value Propositions
The underlying problem with value propositions is that they are often used for all sales and marketing efforts: to create interest in your company, to convince a prospect to meet with you, to convince a prospect to change from the status quo to a new solution, to convince a prospect to buy from you, etc.
Upon closer analysis, it’s easy to see why most value propositions are ineffective and hard to remember. Even a simple web search returns no clear consensus on the definition of a value proposition. For example,
“Identify and satisfy a need that your target market possesses”
“A clear statement of the tangible results a customer gets by using your products or services”
“A clear and succinct statement that outlines to potential clients and stakeholders your company’s unique value-creating features”
“A statement summarizing the customer segment, competitor targets and the core differentiation of one’s product from the offerings of the competition”
The definitions are all over the map and thus open to wide interpretation. So when you talk with your sales organization, a value proposition tends to be whatever needs to be said to advance the sales process. When you talk to the marketing organization, the value proposition tends to be a positioning statement for the company or for a product.
Value Proposition and Persuasive Messaging Defined
We advocate defining a value proposition as a one- or two-line description of the target customer, the value they would receive by doing business with your company, and what your company provides. Done well, a value prop answers the question: “Why should I consider doing business with your company?” For example:
“We partner with ultrasound healthcare providers to achieve the maximum equipment up time, the lowest total cost of ownership, plus the greatest sonographer satisfaction, by delivering the highest-quality support.”
Defining a value proposition in this way allows you to clearly differentiate it from a positioning statement, and from persuasive messaging–the silver bullet your marketing and sales teams need in order to create and win more business.
Unlike a value proposition, persuasive messaging provides a clear, relevant, differentiated, and provable answer to each of your buyers’ primary buying questions, for each customer messaging category. For example, the primary buying questions for your products and services category are some combination of:
- “Why should I consider your product?” for demand creation
- “Why should I meet with you?” for meeting creation
- “Why should I change from the status quo to a new solution?” for opportunity creation
- “Why should I buy this new solution from your company instead of your competitors?” for order creation
- “Why should I buy now?” for urgency creation
Persuasive messaging is the silver bullet your sales and marketing teams
need to win more business
Compare this to what most companies are doing today. They attempt to create one value proposition that answers all the possible buying questions related to each of their products and services. The approach does not work. For example, the answer to “why change?” is vastly different than the answer to “why buy from your firm?” The result is that, instead of providing the customer and sales team with a magic bullet, they end up providing a blank or copper bullet at best.
Differentiating your value proposition from your persuasive messaging enables both to work in concert. You can have a high-level value prop for the company that generates interest and multiple persuasive messages for each of the products and services you offer.
This change in how you communicate with prospective customers will help you generate more meetings, sales opportunities, and orders. Companies that successfully distinguish between their value proposition and their persuasive messaging experience an increase in sales of 10% to 15% or more.
A3 Solutions is one such company. A3 was in a classic David-vs-Goliath struggle: a smaller company with better technology confronting larger competitors with bigger balance sheets. Here’s how they explain the results of implementing great sales messaging:
“In three months, our sales pipeline has doubled in size, and our close rate is up by 150%,” according to Stuart Ratner, Chief Operating Officer. “We went from just another vendor communicating features and benefits to the preferred vendor communicating profound business value… and the shift occurred virtually overnight.” A3’s CEO Robert Lautt adds: “Our ‘Why Buys?’ are so strong that we effectively fence off the competition. Bottom line is we’re now a much more market-driven company.”
Implement persuasive messaging into your customer communications — content and sales conversation — and experience these results yourself.
Resources to Implement the Most Influential Customer Communications
Michael Cannon is an internationally renowned marketing and sales effectiveness expert, best-selling author, speaker and an authority on enabling B2B companies to engage customers with the most influential communications. For more information, visit www.silverbulletgroup.com.