What's Your Value?

Written by Kerry O'Malley Sunday, 01 November 2009 20:59

Create a value proposition that makes it crystal clear how your company differs from the competition.

Does your company have a "value proposition" that all of your employees know, understand, communicate, and attempt to provide every customer or potential customer?  It doesn't have to be rocket science, although I've read plenty of articles that tell you "how to do it," authored  by marketing gurus or MBA's that make it seem much more complicated than it is.  It's not easy, but it really is one of those things that you can apply the KISS principal to.  It can have powerful results if driven from the top, down through the company ranks.

Your value proposition should identify what it is your company offers that is unique to the marketplace and that meets a real need your customers have.  It is something like a mission statement, although it relates specifically to the reason your company exists and the tangible results it provides.  It is intended to draw interest from customers and motivate employees.  It should be evident in all of your marketing communications (brochures, ads, trade show displays, website, etc.) and should be reinforced throughout your corporate culture. Keep in mind this rule when developing your customer value proposition:  It has to be unique, measurable, defendable, and sustainable.

The value proposition should be at the top of your marketing strategy - positioning and messaging flow from the value proposition.  Many companies develop a value proposition that is really just a list of benefits their company or product provides - and often they are the same benefits your competitors offer.  So how do you develop a value proposition that makes your customers either willing to pay more or prefer your products and services over your competitors?

Job One is to uncover the core value that your company offers and that your customers and prospects will want to buy.  As hard as it is, try to stay away from benefits because your competitors will have the same list.  Isn't every product advertised as innovative, easier, faster, more cost effective?  So how do you differentiate in a way that encourages more customers to buy from you.

1. Start with core competencies. What capabilities does your company use when developing products or services?  Your core competency could be an internally developed technology you use to deliver your product or service.  Don't list anything that your company doesn't "own" (something you outsource, for example.)  Answer these questions: A: What you brought to market first? B: What do you offer as the only provider in the market? C: What makes your offering clearly superior to alternatives?
2. Study your customers. What problem do you solve for customers?  What problem do they want solved that no other company has fixed yet?  Is there a new trend in any of your customer segments?  If you don't know what your customers are thinking, you have to do this research!
3. Turn core competencies into values. This is the hard part! Use the language of your customers and redefine your core competencies as values.
4. Study the competition. Choose only the top three or four competitors in your industry and look at the language they use to market their company and products. Determine what their value proposition is and whether you believe they can defend it (with proprietary technology, patents, market share, etc.). On a chart, map out their core competencies versus yours so that differentiation or sameness becomes apparent
5. Define the company vision. Where will the company be in 3 years, 5 years, 10 years? The value proposition must align with the long-term strategy.
6. Identify one main core value. Prioritize your core values. Determine which one of the top values differentiates you from the competition. What is the one thing about you the customer should remember when he is ready to buy? List the points that allow you to defend this position. Decide whether you're willing to put the lion share of marketing dollars behind it to build your reputation in the market for that value. Remember, you can't be all things to all companies.
7. State the value proposition. Write a value proposition statement that everyone in marketing will use as the starting point for positioning or messaging for marketing communications. If you can, back up your statement by documenting what the customer saves or earns by choosing you.  The final statement must also be translated throughout the organization so that every employee understands it and can articulate it...
8. Test the value. Test the final value proposition with customers to see whether it resonates.

As you go through this process, continually ask yourself these questions:

• Are you and your team being honest, or are you using wishful thinking when you list your core values?
• Can you defend the value?
• Can you quantify the value to your customers?

If you think you'll have quicker results in one market segment over another, don't be afraid to target that group first.  It's typical for companies to want to go after the whole pie.  If your value is strong, it will likely apply to a broader market over time.

Last but not least, be pro-active. Continue to monitor your competitors and listen to your customers. If you can no longer defend your value proposition, it's time to adapt or start over in order to stay on top.