How to create effective value propositions
This isn’t new. The problem is, with complex sales and multiple stakeholders, the people involved in making the decision will all have different needs and your value proposition won’t be the same for each of them, or even any of them.
Let’s take our business as an example. If Huthwaite International is selling a global implementation for SPIN® or negotiation skills it’s not unusual for us to be working with sales, HR, L&D and finance directors during the sale. Now, as a company, we’ve got a clear view on what the value proposition is for SPIN® and negotiation skills – they are research-based, we can demonstrate ROI, we can train it in 35 languages across 6 continents and we can train coaches.
That’s useful to know, and it’s all true, but it doesn’t help us to create value for our solution if, for example, one of the key needs of the L&D director is to have easy to access reports on the progress of people through the e-learning modules, or if it’s really important to the sales director that the training can be delivered virtually for people in remote places.
Our challenge, when building value for what we do, is to make sure that we ask the right questions to uncover those specific needs rather than pushing what we see as our market-level differentiators on our customers.
At its core, that’s what the SPIN® model is – a questioning and listening model for B2B sales that shows people how to move away from a push style of persuasion to a pull style.
A two-stage framework for creating a value proposition
Being persuasive through pulling means doing the legwork up front. We call this process Persuasive Case Analysis and we cover it extensively on our programme but if you haven’t been on a SPIN®programme here are a few simple tips from Huthwaite to challenge your thinking before your next client meeting.
- Pick a specific product or service that you offer – e.g. Print On Demand services
- Identify a customer type in your prospect organisation E.g. IT Manager
- Identify one key feature of your service – something that you feel differentiates your product for that customer type e.g. Quick delivery guarantee.
Done? Now. Answer these questions:
- What problems would my client need to have for this key feature to be useful? E.g. Suffering from tight deadlines or last minute client changes to documents. In other words, you are saying “if they don’t have this problem, then there will be no value for this feature.”
- What are the consequences for the customer of not addressing the problem? E.g. Expensive overtime payments, missed deadlines, decrease in customer satisfaction scores.
- What are the potential needs that the customer you are meeting might have in relation to the problem of, in this case, tight deadlines? Try not to make these just the opposite of the problems. Think broader. E.g. Meeting deadlines may be a need, but perhaps the greater need is increasing confidence in being able to provide customer satisfaction.
- What is the value or pay-off for the customer in meeting the need? What’s in it for the business and what’s in it for them personally? E.g. If they had increased confidence in customer satisfaction then they might have smoother implementations, improved revenue streams, less hassle from the CEO etc.
What you have now is a useful framework to guide your questions to try to uncover needs you can solve. Your first job is to find out if the problems you have identified exist, and if so, to get to a stage where the customer is expressing the need to you so that you can state how you can meet it.
Bear in mind that one service (e.g. Print on Demand) can have several ‘features’, so you will really need to roll your sleeves up and go through this process for each of them. It really is that granular and to do it properly takes time. It’s because of the effort it takes to do this properly (you should see the erasing, striking through and grunting that goes on during a PCA session) that we always encourage clients to share their completed PCAs as sales resources, updating them over time as the sales team give feedback on customer needs that they are coming across. This can really strengthen sales teams and build a common approach to sales across the business.
Three take away tips
- When you are thinking about your value propositions and how you differentiate yourself from competitors, you should work with marketing and operations teams to drill down into how they apply at a specific customer level.
- Take a strategic approach and set aside the time to really understand how key features can help address potential customer needs. You may find that a key feature is not as valuable as you think.
- Generate and share the ideas amongst the sales, marketing and operations teams- it creates debate, and provides a great resource for future opportunities. Feedback from the sales team can help not just understand the value of current offerings, but can also guide future product and service development.