Nobody Buys a Value Proposition
Chapter 2 of Exceptional Selling: How the Best Connect and Win in High Stakes Sales
Today, and for the foreseeable future, the driving force of conversational substance and customer relevancy in the business world is value. It is at the top of the list of what really matters to customers in today's business-to-business sales environment. Customers want to know how your offering is going to add value to their business and help their careers. How will it reduce their company's costs or generate additional revenues? Translation: "What's my incentive to change?" They also want to be assured that your solution will deliver as promised. They just don't want value-added, they want value assurance. Translation: "Show me how this dream will become reality and give me the confidence to invest."
There is a big challenge attached to the value imperative. Value propositions and value added were first introduced in the mid-eighties and in those days, the idea of selling customer value was news and it set you apart. Today, the critical importance of selling value is blindingly obvious to everyone in the world of complex sales. Sales professionals fully realize the customer demand for value and thus, their presentations and proposals are focused on value. The ubiquity of the concept and the creation of value, in this environment in which every customer is demanding it and every seller is promising to deliver it, has created a major communication challenge. In the quest to differentiate our companies in the customer's eyes and to win complex sales, the more we focus on value, the more we all sound the same. It's a substantive communication challenge that most sales professionals are failing to meet.
The roots of this problem are anchored in the widespread misunderstanding and misuse of value propositions. Companies create these propositions to articulate the value they plan to offer customers. These statements become the basis and guiding force of the collateral materials that marketers develop for the sales organization -- sales messaging, brochures, PowerPoint decks, etc. The sales force dutifully takes all of this collateral and presents it to the prospect. They are selling value, right?
Not exactly. The sales force is presenting the value proposition itself, a generic statement of value that requires the customer to translate that value into terms relevant to their businesses and their job responsibilities. For example, "Our adhesive agent bonds at a lower temperature. It does cost three cents per pound more, but the resulting energy savings make this the most cost-effective, environmentally friendly product on the market." That certainly sounds like value, at least in terms of the overall marketplace. However, we have no idea if our value has relevance with this customer. Often, the customer doesn't either.
This problem is magnified when value propositions are poorly conceived. The fact is, the concept of the value proposition has been distorted and stretched well beyond its originally intended role. Given the emphasis that companies place on value propositions, you would think that they have been around since the dawn of business. Actually, a former McKinsey & Company consultant named Michael Lanning coined the term in a 1984 white paper. Lanning said that a business was a "value delivery system" and that system could be articulated in a "value proposition." Fourteen years later, in his book Delivering Profitable Value, he defined a value proposition as:
The combination of resulting experiences, including price, which an organization delivers to a group of intended customers in some time frame, in return for those customers buying/using and otherwise doing what the organization wants rather than taking some competing alternative.
This was solid thinking, very coherent and comprehensive. But as usually happens, Lanning's concept misused and diluted in its' real world use…
The first thing that happened was that sellers ignored the "resulting experiences" phrase in Lanning's definition. Instead of basing their value propositions on the results that customers derived from using their products and services, sellers started using value propositions to describe themselves and the attributes of their offerings. The value proposition was well on its way to becoming just a new version of the worn out feature-and-benefit statement.
Value propositions… evolved into value clichés. Instead of being specific about the customer problems they could resolve and the "experiences" they could deliver, sellers began articulating value in generic, ultimately meaningless terms, such as "high quality," "fast," and "world-class." How frequently are you using words like this? As a self-check, compare your value proposition and sales collateral to those of your top three competitors. Shuffle them up and reassign them. Can you tell the difference? I'll bet you can't. (And if you can't, what are the odds that your customer can?)
In highly competitive industries, which are now virtually all of industries, the value propositions and sales collateral of various companies are indistinguishable from one another; and, too often, undistinguished to boot. When you communicate value with words like "rapid response," and "limited breakdowns," you are using the same words that all of your competitors are using.
Now, let's go back to Lanning for a minute. By 1998, when he wrote the book on value propositions, the concept had become so misused that he felt the need to add a clause to its definition. He added that value propositions were "not the trivialized and garbled notions that have been wrongly ascribed to this term."
The consequences of the trivialization of the value proposition have flowed directly down the strategic chain to you and your customers. A value proposition might or might not be relevant and credible to a specific customer. For that matter, it might or might not have any basis in reality. Nevertheless, the vast majority of marketing communications and sales professionals are relentlessly presenting value propositions.Excerpted with permission of the publisher John Wiley & Sons, Inc., from Exceptional Selling: How the Best Connect and Win in High Stakes Sales. Copyright © 2006 by Jeff Thull. This book is available at all bookstores, online booksellers and from the Wiley Web site at www.wiley.com.