Your Single Customer Value Proposition

To figure out what it is that your customer values in relation to your proposal, is one of the most essential business questions. However, this may not be an easy question to answer.

Peter F. Drucker wrote, "The question 'What do customers value?' -- what satisfies their needs, wants, and aspiration -- is so complicated that it can only be answered by customers themselves."

When you begin by investigating the underlying reasons why customers choose you, you can then define key points to use in your conversations. However to do so, you have to truly understand what creates, or better what constitutes value from the customer’s perspective, speak to specific needs, stand out from all available options, and deliver proof that you can deliver exactly what is promised.

Best of all, you should avoid delivering generic messages that sound like everyone else’s – and avoid the mistake that I made. “Dealing with customers in a better way.” Which business manager or company owner wouldn’t be interested in hiring me to help his sales staff “dealing with customers in a better way”?
I now know I was expecting too much from one simple statement. I learned it the hard way: Viewing your value proposition as a comprehensive statement is a mistake. Once I realised that, I also noticed it is a rather common mistake.
And thinking about that, most likely it originated from the traditional cohort-thinking, from gathering customers in target groups. And shouldn't we think in terms of individual customer value?

So, probably it is better to define value proposition as the collection of reasons why a specific customer buys from you. This also implies that we don’t reference a generic statement. The fact is you can’t possibly capture what needs to be captured in a few sentences or even a generic paragraph or two.

To develop a working value proposition, first think about why customers buy. These reasons typically have three purposes. First, customers need to understand your value proposal. Secondly they have to differentiate your value proposal and finally your value proposal has to be sound, so substantiated.

  1. Understand. Obviously a customer should understand why he should deal with you. Your communication shall create reaction or at least resonance. Resonance is all about elevating above the ongoing chatter in the marketplace. Instead it is all about speaking to customer needs and wants. A buyer must quickly understand how to fit you into the “how can they help me” category or they move on. You have but one chance to capture someone’s attention, so better avoid describing what you do or the tasks you perform. To resonate, make it all about them, and speak to the needs of the customers you desire. Be straightforward, clear, and specific. It’s not time to get fancy with clever language if you want to be quickly understood.
  2. Differentiate. Buyers want to see you or someone else as the best suitable option. Your area of distinction may be many things: your products and services - which is rather rare by the way - , customer experiences, operations, point of view, or even the way you are structured. As you work to distinguish yourself, be sure to position yourself as the most suitable resource for solving the prospect’s need. This may lead to different areas of distinction for different prospects, so don’t think in terms of just one differentiator. Think of the customer first and how what you do and how you do it benefits them. Don't try to answer this question yourself? Ask. Ask your customers, the ones who you already serve, why. Ask them what they really will miss when you would no longer be present.
  3. Proof: Intentions aren't that convincing, it is what you really do, your performance. So you made the claim; now it’s time to perform and prove you’re not bluffing Customers are fundamentally sceptical, with good reasons. So it is not about your communicated intentions, it is all about your conduct being in line with claim. Talk them through a case study, show them research you’ve published, schedule a demonstration, or discuss likely results based on work you’ve done with similar customers. Substantiation mitigates risk, a major obstacles in any sale and by the way also a major reason for price pressure.

When you think of a value proposition as a collection of reasons why customers buy from you, you begin to get a sense of what it really is required in order enable customers to understand, differentiate, and proof. If you structure your sales conversations, your value proposal, your reason-why, you don’t need to rely on a fixed short value statement.
In fact, as you learn more about your customers or potential customers, you can use the information gained from each conversation to individualise and to strengthen your specific single customer value proposition.

Klaas Meekma.

 

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