Is Your Value Proposition Strong Enough?

By Jill Konrath

A few weeks ago, I sent out a newsletter announcing my new Web site "Selling to Big Companies." The next day I received an e-mail from a subscriber that said, "You did a good piece of selling in the e-mail. I read all the way to the bottom, and I had NO intention of doing so when I glanced at it. You must know your stuff!"

While I enjoyed the compliment, what really surprised me was that it was from a professor in the Pharmacy Sciences Department of Midwestern University. Why was a Ph.D. reading a newsletter on selling? It wasn't logical.

So being the curious (or nosy) person that I am, I e-mailed and asked him. Turns out that he and a colleague were starting a consulting practice. When they told me about it, I was floored because they have one of the best "value propositions" I've heard in a long time! But before I tell you what it is, let me define what that term means.

A value proposition is a clear statement of the tangible results a customer gets from using your products or services. The more specific your value proposition is, the better. Most people and companies have lousy value propositions. They're weak – and I mean really weak. Often they're simply a description of features or capabilities. Or they're filled with self-aggrandizing puffery.

Here are a few examples of weak value propositions:

· It's the most technologically advanced and robust system on the market.

· We improve communication and morale.

· We offer training classes in a wide variety of areas. My product was rated the best in class by leading authorities.

You're probably saying, "So what?" That's exactly what most customers think when you share a weak value proposition. They've heard lines like that a zillion times before and don't believe you one little bit. Besides, you haven't shared what's in it for them-and that's all customers care about.

With today's tight economy and overburdened decision makers, you need to have a strong value proposition to break through the clutter and get their attention. That means you need a financially oriented value proposition that speaks to critical issues they're facing. And, by including specific numbers or percentages, you get the decision maker's attention even faster.

Now back to the two professors. In researching various pharmacy benefit managers (the companies behind your prescription drug card), they found that some firms offer much better deals than others.

One of their clients switched to a plan they recommended and saved $800,000 in the first six months, without reducing services to their employees.

Now that's a REALLY STRONG value proposition. I can't imagine any Chief Financial Officer turning down an appointment with the two professors after hearing those figures.

Let me give you another example: A while back I was having lunch with the president of a half-billion dollar division of a major corporation. She told me that if someone called her and said he could reduce her waste by just one percent, she'd meet with him immediately.

Now a one percent savings seemed miniscule to me, so I asked her why. She told me that she knew exactly how much her company spent on waste – and it was a big chunk of change. Every penny she saved would go right to her bottom line as additional profit. Strong value propositions deliver tangible results like...

· Increased revenues

· Faster time to market

· Decreased costs

· Improved operational efficiency

· Increased market share

· Decreased employee turnover

· Improved customer retention levels

Documented success stories make prospective buyers believe in you. That's why the two professors have such a compelling value proposition.

So how does your value proposition look? Can you describe what you do in terms of tangible business results? Do you have documented success stories? Or do you need to do some work to enhance your value proposition?

If it's not strong enough yet, don't despair. Most people, and companies, too, have a much stronger value proposition than the one they use. They just get caught up describing "what" they make or "how" they do things.

Here are several things you can do right now to enhance your value proposition:

1. Brainstorm with your colleagues:

2. Review your marketing material and what you say to customers to get their attention. If you're not talking tangible results, keep asking each other "So what?"

So what if it's an efficient system? So what if we have a replicable process? So what if it's high quality? By asking this question over and over again, you'll get much closer to the real value you bring to customers. If you're a sole proprietor, do this exercise with a group of small business owners.

3. Talk to your customers: To find out what value you bring, your existing customers are your best resource. Tell your customers you need help understanding the real value of your offering, and you'd like their feedback.

Most people are afraid to ask their customers for feedback. It took me awhile to take this step, but what I learned was a real eye-opener. Not only did it change my value proposition, but it also changed my offerings and self-perception.

Don't let another day go by with a weak value proposition. A strong one literally opens the doors of major corporations, while a weak one keeps you on the outside.

---

Jill Konrath, President of Selling to Big Companies and Leapfrog-Strategies Inc., helps sellers create value, differentiation, and demand in competitive markets. For info on speaking, training or consulting services, please call: 651-429-1922 or email: mailto:jill@sellingtobigcompanies.com

Published in Networking Today, June 2007

Addressing the Elephant in the Room

By Jill Konrath

Admit it. There are some subjects related to your product, service or solution that you dread talking about. Perhaps your offering isn't the most "leading edge." Maybe your pricing is much higher than competitors. Or maybe you're a boutique firm without the full spectrum of services of the bigger companies.

Whatever it is, you hope like crazy that your prospects won't bring it up. Yet you know deep inside that the topic is unavoidable. No matter how hard you try to dance around the elephant in the room and pretend it's not there, it's just a matter of time before someone asks about it. Then you stumble through a lame response that makes you sound like a total patsy and your credibility plummets.

So what's a seller to do?

When I was in college, I worked at the Ground Round Restaurant as a waitress. On weekends, Leroy Larson played his banjo and sang the old favorites. After months of working there, I developed quite a liking for his rendition of songs by the Kingston Trio. (MTA & Tom Dooley)

Twenty years later, this group came to Minneapolis for a concert. I persuaded my husband to go with me – even though he wasn't enamored with their music. After the warm-up singers, a booming voice came over the microphone announcing the main act: "ladies and gentlemen (long pause)…The Kingston Trio."

There was a roar of applause as we waited for this much beloved group to appear. From the left side of the stage, three old, bald, slightly overweight guys hobbled slowly to the center. One was leaning so heavily on his cane we weren't sure if he'd make it.

The audience was in shock. We were in the midst of a geriatric unit. The once vibrant Kingston Trio looked like they belonged in the old folks' home.

The lead singer limped up to the microphone. When he got there he stopped. Slowly he scanned the audience, practically making eye contact with each person. As he looked at us, his head started shaking back and forth like he was in disbelief. Still, he was silent.

Finally he spoke. With a twinkle in his eye, he looked straight at us and said, "My goodness you've gotten old!"

The crowd erupted in laughter. The elephant in the room had been addressed; and once it was out on the table, it totally lost its impact.

How does this apply to selling?

When I sold for Xerox, my most feared competitor had a switch that automatically turned its copiers off after not being in use for 20 minutes. This was at a time when gas prices were high and people were big into conservation.

I lost more sales over this stupid feature than I care to admit. My competitor kept emphasizing its value. All my responses made me sound like I was on the defensive.

The truth was the annual cost savings were miniscule. Plus waiting for the system to warm up again drove people nuts. But it wasn't till I started bringing up the subject myself that I regained my competitive edge. Early on in the sales process, I would say:

"As you're evaluating systems you're likely to hear some vendors talk about how great it is to have an automatic off/on switch. For your information, when copiers are in the "wait mode" they're using about the same amount of electricity as a standard light bulb – which is minimal.

"What people don't realize when they get copiers with this switch is that you have to wait 30 seconds for it to warm up again each time. I don't know about your employees, but many find it unacceptable to wait for 30 seconds for their copy. They want it immediately."

I never lost to that competitor again. That's what can happen when you face into those dreaded subjects, think about them ahead of time and plan your response. You might even need to experiment with several variations until you find the right way to say things.

What other elephants could be in the room?

If pricing is the issue, address the fact that you're not the low cost provider head on and tell them why it's to their advantage. If you're a small company without the breadth of coverage of a corporate giant, point out the fact early on in your discussions. Then, follow up with several statements about why that's good for them.

Recently, I noticed a corporate giant using this strategy in their television advertising campaign. SAP, a firm that offers a comprehensive range of enterprise software applications, is perceived by many smaller firms to be too complicated, sophisticated, and pricey for their business operations. In their ads, executives/owners of these growing firms express surprise that they can get SAP's capabilities at such an affordable rate. It's very effective.

So, what elephants are you tiptoeing around? What areas do you dread talking about? Once you name them, start working on how to proactively bring them up when you meet with prospective customers. That's the only way for them to lose their impact!

---

Jill Konrath, sales strategist and author of Selling to Big Companies, helps sellers crack into corporate accounts and win big contracts. For more info and to get a free Sales Call Planning Guide, visit her website at http://www.SellingtoBigCompanies.com.

Published in Networking Today, April 2007