Communicating Your Value in a Tough Economy
Value Hypothesis
When you're on the outside hoping to gain an audience and make your first sale into an account, you can use your research to conclude if they can possibly derive some benefit from what you sell. You don't really know for sure. And without a discussion where the client validates your assumptions and provides real data, all you have is a value hypothesis, a guess and a hope of things that might be. Like a coloring book for children, you can see an outline, but it initially holds neither tone nor definition. Value hypotheses are what marketing departments are typically known to distribute —a glimpse of a desired future state.
Value Proposition
When you're talking to a qualified prospect and she's explaining the how much, how often, who to aspects of the problems they face (or the opportunities she wants to leverage), the closer you are to knowing what your value proposition is going to be. It's impossible to write a value proposition unless you know what to propose, and to get at this information you must convince the prospect to disclose something about how her business operates, where the dysfunction and costs reside, and what her vision is for an alternative. You then map your capabilities onto her requirements, and return to the prospect with a specific plan that proposes a way for her to solve her problem or achieve her vision by using your capabilities.
When developing your value proposition, keep in mind three areas that you need to address:
- What's important to the client? Simply stated, a value proposition addresses the client's issues and focuses on the return on investment that can be achieved by implementing your solution.
- How does your solution create value for the client? Here you need to describe how you, your company and your solution create value in a qualitative and quantitative way.
- How can you demonstrate your capability? Where have you solved a similar problem or addressed a similar issue in the past?
You can only construct a meaningful value proposition if you have a keen understanding of the customer's business initiative and how your solution impacts that initiative. You'll also have to be able to analyze some key measurements before and after your solution has been implemented, so that you can develop an expected return on investment.
A quick and easy way to experiment with this concept is to talk to a client you recently sold to, and ask him to help you fill in the blanks. Here's a step-by-step guide for doing this:
- Review the roles that are affected by your solution upstream and downstream from the department that bought it.
- Agree how long it takes him to perform key tasks today, the quality or volume of that production, or whatever other metrics apply to the problems he is trying to remedy.
- Establish the improvements anticipated from your solution. Try to attach a dollar figure to improved production, quality or time saved.
- Then review the quality of information you've gathered and compare it to how you write value propositions today.
Try this approach for some of your new key opportunities. You will then be giving executives the information about value in the format they want it in, and you'll be able to close more deals in the process.
Formal Value Reviews
After you've installed a major solution in the client organization, make certain you take the time to meet with the executive and conduct a Formal Value Review to communicate the value you have delivered. In order to do that, you'll have to determine the precise metrics you'll measure in advance of the installation so that you can effectively establish some benchmarks and then track and confirm the results. You also want to take time in your meeting with the executive to review the steps you took to address issues and resolve problems during the implementation process.
After this initial meeting, you should seek ways to re-connect with the executive on a scheduled basis, annually at a minimum, to conduct these Formal Value Reviews to confirm the value you're continuing to deliver to them and to their company.
You can use this meeting to expand the depth and breadth of your relationship with the executive. Look for other ways for you to provide value to them at the beginning of their next buying cycle, for example. Look to become viewed as a business resource to them in this regard.
