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Developing Effective Value Propositions
By Showing the Decision Maker
What’s In It For Her
CONSULTATIVE SELLING, VALUE-ADDED SELLING,
SOLUTION SELLING.
THE METHODS HAVE BEEN AROUND A VERY LONG TIME,
BUT WE STILL, ALL TOO FREQUENTLY, SEE SELLERS
EXPLAINING THE VALUE OF THEIR SOLUTION TO THE
CUSTOMER IN TERMS OF PRODUCT FEATURES AND
FUNCTIONS.
WINNING CONSISTENTLY MEANS UNDERSTANDING YOUR
CUSTOMER’S PAIN AND THEN LINKING THE VALUE OF YOUR
SOLUTION TO THAT PAIN.
THIS REQUIRES TRAINING, A WILLINGNESS TO INVEST TIME
IN CUSTOMER RESEARCH AND DISCOVERY, AND THE
AVAILABILITY OF QUALITY DATA AND INSIGHTS.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 2
Introduction
When Product or Brand Managers Miscalculate Customer Value
You’ve just taken a new job at a consumer products manufacturer, selling animal health
products to the mass market. You’re an experienced seller in consumer-packaged goods
and look forward to the challenge of learning a new product line and introducing yourself to
the pet category buyers at the national chain retailers in your territory.
Your new company has historically sold only through the veterinary channel and has just
recently begun manufacturing non-prescription products for the mass market. It is still hiring
brand managers and marketing resources with mass-market experience.
After digesting product knowledge on the flagship flea and tick line, you’re nearly ready to
head into the field to sell. Your first buyer meeting is in one week.
You ask the existing product team to describe the value proposition for the flea and tick
products. “Our active ingredient kills 30% more fleas than the leading competitor,” is the
only reply you receive.
Oh dear. That won’t do.
What Is a Value Proposition?
As it turns out, customer value propositions are extremely simple. You want a customer to buy
your product, service, or solution. In B2B sales, it doesn’t matter whether you’re trying to sell grass
seed to a big box retailer, engineering services to build a seaport, or enterprise-wide supply chain
software. You must tell the buyer what’s in it for him. And you must explain why your product,
service, or solution will help:
1. Make more money,
2. Save money, and/or
3. Make the buyer a hero, or conversely, keep him from suffering organizational
embarrassment.
You’ll also describe how your solution* will do these things better, faster and/or cheaper than your
competitors. These items, and these alone, constitute value for a decision maker. The specific pains
linked to these three items vary by industry, customer, and finally, by the individual decision maker
himself, but the three main components of an effective value proposition never, ever change.
* We’ll use the term “solution” to mean product, service, or solution from now on.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 3
Why Crafting a Good Value Proposition
is Difficult
If there are only three components to any effective value proposition, why is it so hard to build a
good one? The reasons boil down to these:
Training and coordination among sales, marketing, and product management
Willingness to spend the time
Availability of customer and competitor data
Training and Coordination
In most large organizations, sellers work with a variety of supporting resources to craft a value
proposition. These might include marketing resources, product managers, or brand managers.
Often sellers expect the value proposition for the solution they’re selling to be packaged for them
in advance in a “sales kit” or “play book.”
Sellers prefer to maximize their time in the field and minimize time spent in the office on this labor-
intensive task, so their fervent hope is that someone else will be responsible for the value
proposition.
_______________________________________________________________________________
Poorly crafted value propositions typically result because
sellers, marketers, and product managers are untrained. The
expertise of all three groups is required. _________________________________________________________________________________
There are two problems with this:
First, marketing and product management resources sometimes do not understand how to craft an
effective value proposition that focuses on the customer rather than on the solution attributes
(that is, features and functions). And even if they do, the expert seller knows she must still spend
time customizing the value proposition to resonate with a unique customer experiencing a unique
set of pains.
Second, sales people are often themselves untrained in the art of value proposition development.
In this case, there is the danger they’ll end up using marketing or product management as a crutch,
taking whatever generic messaging is handed to them (appropriate or not) and using it
indiscriminately with every customer.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 4
What’s missing? An explicit link between the value proposition and the unique set of pains the
customer is experiencing. The common denominator here is lack of training.
It takes the combined effort of seller, marketer, and/or product manager to craft an effective value
proposition. Why? Because the proposition must address the customer, competitors, market
conditions, and the solution itself, and it’s rare to find all of this knowledge in one person.
Therefore, if any one of these parties doesn’t understand what a good value proposition looks like,
the end result will be poor.
Willingness to Spend the Time
Time is the ardent enemy of the sales cycle. The more time a customer takes to make a buying
decision, the higher the probability that something will go wrong:
A competitor will outsell you
The decision maker will be replaced mid-sales cycle, and you’ll have no relationship with the
incoming executive
Customer priorities and budgets will change
In addition, time is money. Longer sales cycles are not only more expensive, but they also lengthen
time-to-commission-check. Urgency, therefore, is the seller’s watchword. For these reasons, most
sellers are usually in a hurry to get the deal done.
Exceptional salespeople, however, take the time to properly prepare for their sales cycle by doing
the necessary research and strategy formulation required to win. But, as we’ve noted, they are
exceptional. Average sellers prefer to be in the field interacting with customers which, to them,
means the sale is moving forward (whether it actually is or not).
_______________________________________________________________________________
The more time a customer takes to make a buying decision, the
higher the probability that something will go wrong. So, sellers
skimp on spending time building an effective value proposition. _________________________________________________________________________________
Conducting customer, competitor, and market research and using it to build a winning sales
strategy is time-consuming and arduous. Most sellers loathe it. Yet, an effective value proposition
absolutely cannot be developed unless this work is done, and done well.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 5
Value propositions that win address all of these items:
Unique set of pains the customer is experiencing
Understanding of the customer DNA:
o Business strategy (with their threats and opportunities)
o Financial health
o Organizational culture
o Personalities of decision makers and influencers (and the manner in which they like to be sold)
o Buyer’s compensation KPIs
o Public and consumer perception
o Risk tolerance, etc.
Insight into both the customer’s competitors and your competitors
Overall market conditions, as well as any unique industry conditions affecting the customer
(such as pricing or availability of raw materials)
Government regulations, if any
Conducting enough research and discovery to become literate on these topics takes time, often a
lot of time, regardless of how much assistance is available from marketing and product
management resources.
Most sellers lack the patience to do a thorough job, so they take shortcuts or omit some areas,
telling themselves that since they already know the answer to these questions, there’s no need to
dig. (And occasionally they get lucky.)
Exceptional sellers know, however, that this extensive effort substantially increases win probability
(one notable reason why is because the competitive seller isn’t likely to be this diligent), and in the
long run, may even shorten the sales cycle.
Availability of Customer and Competitor Data
Sometimes sellers have trouble building value propositions, not because they lack training or are
unwilling to put in the time on research, but because their research doesn’t unearth enough
valuable data to build one.
______________________________________________________________________________
Sometimes research doesn’t unearth enough valuable data to
build an effective value proposition. _________________________________________________________________________________
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 6
To illustrate, let’s look at the consumer packaged goods industry.
The value proposition that persuades a retail buyer to take a competitive product off the shelf,
incur the switching costs, and replace it with your product might include this kind of data:
Unit cost to retailer
Price point
Margin
Trends in consumer buying preference within the product category
Size of the market and whether it’s growing
Market share of the proposed brand vs. competitors
Revenue lift from advertising
Brand awareness measured via consumer attitude and usage study
Retail financial performance of the proposed brand by channel, geography, consumer
demographic, seasonality, etc.
Freight charges
Shopper behavior/consumer preference
Promotional spending
Exclusivity
Innovative product features
Shelf or aisle placement
Optimal assortment mix for profitability
Average ring for a basket containing your brand
Product quality
Social media awareness
Fill rate reliability
Inventory management assistance
In-store education and support
Buy-back policy
Payment terms
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 7
It’s quite a list. (Note that to make it into the value proposition, each data point must contribute to
helping the buyer make more money, save money, appear to be an organizational hero, or avert
political embarrassment.)
Sometimes you can get this data, sometimes you can’t. It’s always going to be difficult to estimate a
competitor’s sell-in cost and proposed margin to the retailer, for example.
And even when data is available, especially for items your own company controls (you’ll always
know your sell-in cost, freight charges, promotion budget, etc.), you still can’t always know
whether the value you’re offering is better than your competitor’s – and that’s what matters.
_______________________________________________________________________________
When good data is available, you still can’t always know
whether the value you’re offering the customer is better than
your competitor’s – and that’s what matters. ________________________________________________________________________________
In instances where accurate data is scarce, particularly competitive data, value proposition know-
how and adequate time spent on research and discovery become even more important. The seller
must build a winning value proposition with the ingredients she’s got, not the ingredients she
wishes she had, which takes art and nuance and negotiation and, silly as it might seem, force of
personality.
All in all, she’d rather be working with a lower sell-in cost to the retailer.
The Most Common Mistake
The most common mistake that sellers, marketers, and product managers make, of course, is in
believing that a good value proposition consists solely of solution features and functions.
The feature/function mistake shape-shifts among industries, but it’s always recognizable. It is the
common cold of the sales world, highly prevalent with a variety of symptoms (though fortunately,
in this case, it’s treatable).
Different Industries, Same Mistake
In the consumer packaged goods industry, brand managers and marketers working with sales fall
into the trap of detailing the value proposition to the consumer. But CPG sellers don’t sell to
consumers, they sell to corporate retail buyers whose pains are vastly, vastly different from those
of the consumer.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 8
This is a classic case of the seller walking into an orange grower’s office with a pocketful of apple
seeds. One can hardly persuade a retail buyer under severe pressure to increase category margins
and lower inventory held, by offering a tutorial on the flea lifecycle.
Is the flea lifecycle important in helping the buyer judge the quality and efficacy of the product? Of
course, but it’s rarely the first or only item on the decision criteria list. In fact, depending on the
buyer, it might be the last (hard as it is for marketers to hear this).
_______________________________________________________________________________
Detailing product features that are a priority to the consumer,
but not to the buyer, is a classic case of the seller walking into
an orange grower’s office with a pocketful of apple seeds. _________________________________________________________________________________
In enterprise technology sales, product managers working with sellers fall into the trap of being
consumed by the merits of system functionality, rather than the strategic business goals that the
technology will enable. It is the product manager, after all, who runs the team that builds the
solution, making her a proud parent. The temptation for her to focus on solution features is, in fact,
overwhelming.
Is invoice-matching a key piece of the value proposition for
an ERP procurement module?
To the super user, yes, it’s enormously important. And
certainly, the super user is going to be an influencer in the
buying decision, focusing on operational pains (solved by
product functionality).
But the Chief Procurement Officer, who is actually going to
make the buying decision, doesn’t care about invoice
matching – other than to ensure he isn’t buying a solution
that his end users will refuse to adopt.
What he cares about is eradicating inefficiency in the
company’s procurement process so that the true cost of
buying a box of pencils doesn’t end up exceeding the price of
a ticket to Madison Square Garden to see the Knicks play.
His mission is to save money; indeed he’s compensated on it.
He’s going to choose the procurement solution that does that
best.
What the Chief
Procurement Officer
Cares About…
Is eradicating inefficiency in the
company’s procurement process,
so that the true cost of buying a
box of pencils doesn’t end up
exceeding the price of a ticket to
Madison Square Garden to see the
Knicks play.
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Developing Effective Value Propositions
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On the other hand, his co-decision maker, the CIO, will have these concerns (or pains):
Cost to implement the solution
Whether he has the expertise in-house to maintain it
Whether it fits his best-of-breed IT strategy and governance policies, or
Whether it will be cheaper to outsource the whole thing to someone else
Neither will give invoice matching more than a passing thought, if that. Again, functionality seems
to fall to the bottom of the decision criteria list.
Are we suggesting that solution features and functions are utterly unimportant to the sales cycle?
Of course not. Fail in your ability to thoroughly articulate how your solution works and risk looking
foolish in front of your customer. A deal killer if ever there was one.
No, we’re suggesting instead that sellers and their compatriots quite often fail to link the value of
their solution to the very specific business pains troubling their customers, choosing instead to
focus on features and functions that are important to an end-user or consumer.
Why? Because it’s easier to list what a solution does rather than figure out how it will improve your
customer’s business by making them more money, saving money, or making the decision maker
look like a hero (or conversely, saving him from political embarrassment). The former doesn’t
require you to know what makes your customer and competitor tick. The latter does.
Making this link is what wins deals, and linking value to customer pain successfully requires
training, a willingness to invest time in research and discovery, and the availability of quality data
and insights.
_________________________________________________________________________________
Linking value to customer pain successfully requires training, a
willingness to invest time in research and discovery, and the
availability of quality data and insights. _________________________________________________________________________________
KICKING THE FEATURE/FUNCTION HABIT
How do you cure someone of the habit of building value propositions solely out of solution features
and functions?
A great way to do this is by continually asking the question, “Which Means?” until you arrive at the
value statement that addresses one of our three fundamental components:
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 10
“Which means the decision maker will a) make more money, b) save money, c) look like a hero or
avert political embarrassment.”
Let’s take an example:
Statement 1: Fully automated, three-way invoice matching flags discrepancies for immediate action, while enabling more effective and timely approval workflow.
Which means…
Statement 2: Less manual input and less time spent chasing down errors by the accounts payable clerk handling the invoice.
Which means…
Statement 3: They can process more invoices in a shorter period of time and get them approved much, much faster.
Which means…
Statement 4: The cost of processing an invoice drops dramatically.
Which means…
Statement 5: The company-wide cost of the procurement function decreases.
Which means….
Statement 6: Funding is freed-up for more strategic initiatives, like product innovation.
Who wouldn’t look like a hero if he could free-up funding
for strategic initiatives in product innovation, particularly
if he’s the Chief Procurement Officer?
A Novel Approach…
One of our colleagues employed a
novel approach in using the “which
means” method.
Faced with a sales team that
couldn’t seem to stop reverting to
feature/function statements, he
instructed them each to write the
words “which” and “means” on two
pieces of duct tape and stick one to
each knuckle: “which” on the left
hand and “means” on the right.
Should a seller slip and write a
feature/function statement during a
value proposition exercise, our
colleague would rip off the tape.
While drastic, this method has the
advantage of being highly effective
with an extremely low rate of
recidivism.
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 11
____________________________________________________________________________
Who wouldn’t look like a hero if he could free-up funding for
strategic initiatives in product innovation, particularly if he’s
the Chief Procurement Officer? _________________________________________________________________________________
Step-by-Step Value Proposition Construction
Rather than resorting to the duct tape method, we prefer using the Discovery to Create Value
Worksheet to help sellers do with their customers just as the name suggests – discover how to
create value and then mold the findings into a proper value proposition:
Developing Effective Value Propositions
symmetricsgroup.com | Accelerate Your Sales Performance page 12
This specific example was used with a hospitality client to help their sales force better understand
and cater to the needs of their corporate customers.
A somewhat fuller version gives direction and tools for conducting customer and competitive
research, but the point we want to illustrate here is the flow of discovery and analysis used to
design a value proposition.
Assuming we’ve done thorough customer research (or formal account planning, which we discuss
often in other literature), we work our way from left to right through the worksheet to capture our
discoveries and then analyze them in order to design a benefits statement that is part of a total
value proposition.
Discover... Analyze…
Customer’s specific issues, needs, pain points**
And then… Your solution to determine whether it fills a need or eases pain for the customer.
** This may be strategic initiatives, directives from a superior, behaviors a buyer is compensated for
performing, decision-making criteria in order of importance, etc.
Conduct as much discovery and analysis as required for your selling situation. (In other words, add
as many rows as you need to do a thorough job.) Add rows to conduct discovery about competitors
(yours and your customers). If you are selling to a buying committee, add rows that address the
pains of each member (the financial pains that concern a CFO decision maker vs. the operational
pains of an end-user influencer). Then, turn your analysis into benefit statements that, when pulled
together, constitute a holistic value proposition.
Conclusion
We have all heard the cliché “features tell, benefits sell.” It is a truism that sellers still willingly
ignore, because it’s simpler and more expedient to describe what a solution does rather than delve
deeply into a buyer’s organizational and occasionally, personal pains (as from a superior) to
determine, in detail, how their solution could ease this pain better than a competitor’s.
To win consistently, there is no shortcut. Exceptional sellers are always willing to put in the time
and effort to understand the business of their customers well enough to demonstrate why their
solution is best.