Whether you are buying services or products, you have hundreds of choices with whom you can do business with—and all of them are a click away on Google.
As sellers struggle to pocket the dollars in their bank account, they will invest in gobs of money in sales and marketing, yet completely abstain from investing in the one thing that will drive more sales revenue than anything else: a defined and differentiated value proposition.
A couple of months ago, I met with “Bill,” the president of a manufacturing company that was brooding over on why his company’s sales were declining year-over-year. He had invested robustly in new salespeople, new sales strategies, a new CRM software, a new website and an inbound marketing program. After spending almost a half-million dollars on sales and marketing alignment, sales were still flat. I asked Bill to tell me about his company and his target customer.
Bill: We have been in business for over 30 years and have the best employees. We provide a niche service that helps our customers to attain better products. We help our customers to attain a service they cannot get from the larger manufacturers, and the larger manufacturers don’t want to provide the service we provide because they are not set up for it. It’s a win-win-win.
Chris: That sounds great, Bill, but I am curious. Why do you think customers are not purchasing from you?
Bill: I just don’t know. I can talk to a prospective customer for 45 minutes, and they just don’t get how great of a solution it is that we provide. I just don’t understand why they don’t see it.
Defining Your Value Proposition
After 17 years of working with businesses on their sales and marketing challenges, I can tell you that Bill’s predicament is fairly common. He has failed to define a differentiated and articulated value proposition that gets his customers excited. In Bill’s case, he developed a unique niche, but his customers don’t value it.
So why do so many companies fail to define a strong value proposition? I have asked myself this question many times, and my conclusion? Because it’s hard.
Admitting that your value proposition is weak is like calling your baby ugly. It surmounts to admitting you were wrong. It feels like you have to rethink your business model, but most of the time, it’s far more simple.
Articulating a value proposition can be simple, and often all it takes is to allow yourself to think differently about your business or business practices. To get started on defining your value proposition, ask yourself these three questions:
1. What business practices are you currently engaging in that make it hard to do business with you?
Billing policies? Delivery standards? Protocols? Are these practices industry standards? Can you do things differently that make doing business easier with your company and differentiate from your competitors?
We once had a client that charged a small fee for an annual program that their customers did not like, but the fee was required to do business with them. Why? No idea, it was just the way they had always done it. They removed the fee, and sales increased.
2. What unique attributes does your company possess that your competitors don’t have?
Access to a specific location or region? A unique process? Unique technology? Expertise? Industry experience? Oftentimes, it is a combination of attributes that make your company unique. Map out all of your attributes and see if there is something you can build upon. If you cannot find anything unique, define what would make your company unique and work towards it in the future.
3. Is your business model exciting to your customers?
This is a much harder thing to come to terms with. Bill would have saved a lot of money if he had come to realize that his vision was not valued by the customers he was selling to.
What customers would your business model be exciting to? Can you change a small piece of our model to drive more customer interest?
A well-articulated and differentiated value proposition is perhaps one of the smartest initiatives you can mount to drive increased sales revenue. If your sales are lagging, it's time to start thinking differently.