The Value of the Value Proposition – part 1
In the last post, I described 7 factors for success in sales management. One of those is creating the right sales pitch. And of course, the right pitch starts with a compelling Value Proposition.
A great way to create a Value Proposition is the use of the steps which Gartner used in the past. Let me explain the different elements of the Value Proposition.
1. For (Target Group)
Many Sales pitches have no clear target group in mind. In a #b2b context this is critical. Ideally, these are not just groups of people, but rather personas. A persona is a sharply detailed description of the user of your product or service.
2. Dissatisfied with the current alternative
Buying a new product or service from a startup or scale-up with an unknown brand name, is a risk for any company – especially for enterprises with a strict governance policy. Therefore, new products or services can only be successful if they crash the current alternative. In technology, we believe that the substitution of the new product/service must lead to a 5 – 10 times better result in order to be successful. Additionally, the target group must be (really) dissatisfied with their current solution. Only then there would be sufficient leverage for change and the purchase of a new product from an unknown company.
3. The product/service is
Explaining the product/service in a few words or sentences is probably more challenging than you might think, but key for the customer’s understanding. Try to keep it simple: less is more.
4. That provides
Even more important than the product/service description, is explaining the customer benefits or the problem-solving capability of the new product/service. What does it solve? How does it make my situation much better?
5. Unlike
Finally, add a description of the differentiator of the product/service compared to the current alternatives. Or even better, define the uniqueness of your offering. Some companies go beyond the product or service level and explain why their company stands out from the rest.
Making a great Value Proposition is one of the basics in selling your product or service. You have to spend enough time to get the right result. And even then, you should adjust the Value Proposition over time as markets and customers tend to change.