Home >  Blog >  Value proposition - true value

Value proposition - true value

Posted by Danielle MacInnis on 1 February 2017

Many companies face a fundamental problem: there is a sizeable and growing gap between what they offer and what their customers actually value. This value gap leads to lost sales, lower profits, commoditisation, failure to innovate and the wrong organisational structure potentially employing the wrong people. It can even threaten the company's very survival.

Why don't your customers value what you offer?

Companies face four key issues that stop them giving customers what they value:

1.They misunderstand what a value proposition is, so they cannot create one that meets their customers' needs

2.They only partially comprehend how customers perceive value and how to uncover their unmet needs

3.They often use an outdated value proposition that doesn't actually work for them today

4.Without the benefit of an effective company-wide value proposition, sales teams are forced to create sales propositions in a vacuum, ensuring they fail tocommunicate effectively the value the company delivers.

The default value proposition that many companies still use:

"We'll give you a little advice, help and service, in exchange for slightly better margins."

Ref: Adapted from Professor Neil RackhamTen years ago, this would have satisfied the majority of customers.

Only a minority wanted businesses to sell to them transactionally. Similarly, most customers were not looking for relational or consultative selling.

Transactional selling works when customers know what they want to buy, products and services are standardised, customers are price-driven and a business simply communicates value to the customer. Often you don't need expensive on-the-road sales people to do this.

Transactional selling can increasingly be managed through online channels for simple purchases or with excellent telephone-based internal sales or customer service staff, if a higher level of interaction is needed.

Consultative or relational selling is needed when customers don't know what they want to buy and need help to define the right solution. Products and services are customised to achieve the customer's desired outcome, allowing the business to co-create value with the customer. 

Adapted value proposition now looks like this:

"We'll use our expertise to bring you insights, solve your problems and co-create custom solutions with you, for which we'll charge you a premium."

The value propositions shown above are generalisations. To be effective, you need to create your own value propositions, which capture precisely what your customers want.

 

To learn more download Harnessing the Truth article from here.

 

Author: Danielle MacInnis
About: Dan is a customer centric marketer and the owner of MacInnis Marketing a company that creates sales and marketing systems to attract customers and employees to companies that they love.
Connect via: Twitter Google+ LinkedIn
Tags: Customer Centric Marketing Value Proposition

Post comment
 

 

Latest News

Why customer experience is so important for b2b

May 17 2018
Customer experience or UX is so important for b2b business because so many of us are getting i...

50 key features for great website

May 01 2018
This infographic by 99MediaLab provides a comprehensive list of 50 must-haves (and have-nots) ...

Subscribe to E-News

Join 10,000 of your peers and
make better marketing decisions with our e-news

What Our Clients Say

Danielle has been great at helping us focus our marketing efforts. Her ideas and energy really help us to make sure we get results from our marketing dollars. Since working with Dan we have been able to focus what we do, when we do it and how to get the best results. Something we never could have...

Jamie Burmeister, Adapt Solutions

Our Clients

 

 

Who we Are

 

What We Do

 

Why We Care

 

Who Work With


Knowledge Portal

 

 

<
Tell a FriendPrintBookmark SiteHome