I imagine most of us of have heard the term “value proposition”. But what do we mean by value? I like to think of value as an organisational and/or personal benefit that can be measured or expressed in financial, operational or emotional terms. So, what do people typically mean by the term “value proposition”?
McKinsey defined it as “a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits”.
But are standard value propositions enough to convince prospective customers in complex B2B buying environments? A well-crafted generic value proposition might open the door to dialogue but probably will not be enough to close the sale.
Four key questions
That’s why we need to craft compelling, customer-specific value propositions and that means our customer will get convincing answers to their four key questions:
▪ Why do they need to act (rather than continuing on their current path)?
▪ Why do they need to act now (rather than later)?
▪ Why should they choose us (rather than any other option)?
▪ Why should they trust us (to ensure they achieve their intended outcomes)?
This sequence is rarely linear; many prospects will find themselves revisiting the answers as their buying decision journey evolves. Let’s breakdown each of these questions.
Why act?
Our discovery process should start by exploring our prospective customer’s current or anticipated circumstances and the issues these cause. We can then help them to recognise the most significant consequences and implications of those issues.
We then need to highlight the better outcomes they should aspire to achieve and focus on the tangible benefits that will come from achieving these outcomes.
While considering the need to act, prospective customers will compare the painful consequences of their current issues with the positive benefits of their intended outcomes. The greater the contrast, the more likely they are to act, and our roles to help amplify the difference.
Why now?
Most organisations require a significant buying decision to be supported by a strong internal business case that justifies the level and timing of expenditure. Projects that clearly align to the organisation’s corporate priorities and initiatives are far more likely to be supported and prioritised.
Even if they are convinced of the need for change, they may still be inclined to wait unless they see the potential costs of delay as being painful and significant. We need to convince them of the need for urgent action.
Why us?
If we’re going to differentiate ourselves, we need to understand what our customer regards as other credible solutions. Be aware this might not be restricted to our obvious competitors.
We will stand a better chance of winning if we can engage early and influence their needs, rather than wait to respond to a formal RFP. Every salesperson tends to claim that their solution is better but it is far more persuasive to explain how and why our approach is different. Having established what sets our approach apart, we then need to show how this translates into better outcomes for the customer.
We have a key role to play in helping our prospective customer recognise and appreciate our unique differentiation and how this will benefit them.
Why trust?
In order to win their final approval, we need to prove they can trust us to help them achieve their anticipated outcomes. We need to ensure that the primary sponsor and other key stakeholders believe that their reputation will be enhanced through their association with the project, and we need to ensure that the key decision-makers and approvers believe that going ahead is their lowest-risk option.
As the authors of The Jolt Effect point out, buyers hold back from commitment because of their ‘fear of messing up’. If this is the first time we have tried to do business, the trust factor often proves to be a hugely important consideration.
The Executive Summary
The executive summary is a critical element of every sales proposal. It is likely to be read by key decision-makers and final approvers, who may not previously have been involved and could be unfamiliar with the details of the project. Some may question whether the project needs to go ahead now, rather than later, or even at all.
Unfortunately, many sales proposals and their executive summaries tend to focus on the vendor offer and the “why us” part of the story. As a consequence they can be less persuasive because they underplay the need to address the “why change”, why now” and “why trust” questions.
When we incorporate all four elements of the customer’s value story – why act, why now, why us and why trust – into our executive summaries, we dramatically improve our proposal’s chances of getting timely approval.
Bob Apollo, Chief Outcomes Officer, Inflexion-Point Strategy Partners
Bob Apollo is the Founder and Chief Outcomes Officer of Inflexion-Point Strategy Partners, a leading B2B complex sales consultancy. He is a Founding Fellow of the Institute of Sales Professionals, and a regular contributor to the International Journal of Sales Transformation, Top Sales World, LinkedIn and other leading sources of the latest B2B sales insights.