| Understanding and Developing Compelling Value Propositions |
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| In: Asian Channels March 2006 | |
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What is a value proposition? It might seem like a very straightforward question, but you’ll be surprised how hard it is for people to answer this question, even experienced sales executives stumble when trying to find a suitable answer. A main reason for this difficulty stems from the product-centric materials sales people are constantly bombarded with. In the simplest terms a value proposition is a pitch or an offer. It is a proposal for an exchange, a promise to provide goods or services. More precisely, it is a specific offer for a particular action within a set time for a given price. The "value" part is a little harder. Value is what customers pay extra for. If a customer is not willing to pay for it, either it is not valuable or the value is not understood.
Value propositions are not about the product.
It is not so different in the business world. Successful sales professionals tie their pitch not to the fleeting product superiority or features, but to impact on business performance. It is the link to the customer's business model that creates value. The product is merely a tangible manifestation or case study that makes the business discussion specific, relevant and believable. A powerful proposition is one that creates a discussion of business objectives and requirements, and one that can set up a great executive conversation. The need to address business issues is even more obvious in channels. Since the channel customer is not going to use the product, you would think that it would be easier to avoid the product feature trap. Yet the majority of channel account managers tend to make product propositions not value propositions. Only a minority of account managers consistently address channel business issues.
It is crucial to remember that a channel’s main concerns very often tend to revolve around reputation, customer satisfaction and referrals. After all, losing a customer is something all channel partners worry about almost obsessively.
Something else to never forget – there are no short cuts. The only way to create value propositions is to really get thoroughly into the customers perspective and find a link. Remember, unless the pitch connects to something the customer intimately cares about, it is not a value proposition, it's just an interruption. |
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