August 23, 2013

Value Proposition - Why You Need ONE!

We all belong to a sales organization
 Often when this statement is made, there is a chorus of "No we are a service organization", or "We are doctors, lawyers, architects, etc."  This is simply not the complete story.  Something has to be sold, whether you are a charitable organization, provide services,  or Apple, Inc., there is a buyer and a seller.  The fact is:  If you work for yourself or work for Google, you are part of a selling organization.

This leads to the question - How do customers/clients make a buying decision?  Many firms will talk about their people, or that they went to school with the client, or other such things.  I agree these may be factors, as well as price can be a determining factor.  However, customers want to receive 'value'.  Value is defined as the relative worth of goods or services.

How do you position or define the 'value' of your goods or services?  A value proposition is the method of conveying your company's value.  What is a value proposition?  In essence, it is about turning a customer from 'saying so what' to 'gladly willing to spend money'.  Also a strong value proposition reduces 'price' as being the only determining factor.  When all things are perceived as equal, price will become the final determining factor.
Let us start with what value propositions are not:
  • It is not featured based.  Our cellphone has a 4 mega-pixel lens.
  • It is not only about price, I contend, value propositions have little to do with price.  Our hamburger is 49 cents.
  • It is not about goals, philosophies, theories or concepts.  'We love our job' usually does not make a buyer decide.
In reality, it is all about faster, better, stronger.  This may seem obvious until you start listening to your company's marketing speech.  Does your company website, or company management, say:
  • We are local, we have been in the area for over 50 years.
  • We are known for our people.
  • The new software lets you do the following feature.
  • It is all about our philosophy.
  • We are agents of change.
This all may well be true, but leads buyers to say "so what?"

How do you put together a value proposition and how should it be stated?
  • Approach from the client's perspective - how can you make them faster, better, stronger.
    • We provide process improvement that will save you time. 
    • We provide multiple necessary steps of a process saving you the headache of coordination. 
    • We deliver pizza in 30 minutes, guaranteed to be hot.
  • State the information directly, don't be shy.  The client has a need and wants the answer.
    • Our help desk will answer your question in under an hour.
    • We can get your taxes done in 2 days, and we deal with the IRS with questions.
    • Our trash bags are 15% stronger than the competition.
  • Where should the value proposition be stated?
    • On the front page of your website.
    • Into the everyday 'speak' of your team.
    • In every discussion with the customer.
Why do you need it?
  • Your competition is talking about how they are better.  Your competition may even be using fear, uncertainty and doubt (FUD) to confuse the customer.
  • It creates a differentiator for your company.
  • MOST IMPORTANTLY -  The customer is trying  to solve problems and wants them solved FASTER, BETTER, and STRONGER.

David Haynes, NCARB, PMP, LEED AP
Ideate Director of Consulting

David is a Registered Architect, Project Management Certified Professional, who previously had his own architectural practice and was President of a commercial design-build construction company for 15 years. A graduate of University of Arizona, he has worked as an Architect, contractor, developer and as a national construction manager for a national retailer. David currently provides business process analysis, virtualization and change management solutions for AEC clients across the United States involved in the design and building industry. Follow David on Twitter: @dhaynestech

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