It is natural for customers to probe the “what’s in it for me” interest deeply before making a buying decision. When customers buy a product or a service they ask numerous questions and weigh various pros and cons of buying the product. They are likely to make a cost and benefit analysis. Such analysis should tilt heavily in favor of benefits to lead to a purchase. Obviously, the more benefits you offer, greater is the probability of buying. In fact, nowadays customers’ expectations are almost exploding. In this age of instant gratification, speed, quality of service, and everything else about the product is quantified and weighed before buying.
Businesses and sales persons should convince the customer how much they are going to benefit if they buy their product. A value proposition is a statement specifying the tangible product/service and financial benefits that would accrue to the customer if they buy the product or service. The more elaborate and specific the value proposition, the stronger it becomes. A strong value proposition invariably results in a sale.
The Value Proposition should be about the Customer
A value proposition could be in any form – quality product, better customer service, speedy delivery, progressive discount, saving on energy, etc. Your value propositions should talk about the benefits accruing to the customer and they should be converted in to dollars.
Keep Weak Value Propositions Away
Phrases like “you will benefit immensely”, “you stand to gain”, “you are assured of great service” do not convince discerning buyers. Sales persons cannot succeed by using standard sales lines such as:
- Our product saves you precious dollars
- You will get countless benefits
- Our technical superiority will save you money
- We are the best when it comes to saving money
These types of statements are vague and too generic. Using such lines and responses in the value proposition will not impress or persuade the prospect to buy.
Use Strong Value Proposition Statements
There should be punch in the value proposition statements. The statements should be strong, convincing, and verifiable.
- This new policy saves you $10,000 per year and provides you with more coverage
- Our clients have increased their business by 20-25 percent using our business solutions services
- Your savings on waste management will be nearly one percent or $1300.00 per year
- You will be saving $10.00 per year per computer in terms of energy savings
These are some examples of strong value proposition statements. The best way to submit value propositions is to quantify them in terms of dollar value. Customers can see the immediate benefit and compare it with the competition. If the competition doesn’t have quantified benefits in their value proposition document then your product or service is more likely to be the desired solution. A strong value proposition, with numerical data, has the potential to differentiate your product or service from the competition.
Don’t Ignore the Small Numbers
Ignoring small numbers in your value proposition is not advisable. There are a number of senior executives that would schedule a meeting with you if you send them a value proposition stating that your product or service can reduce their waste management expenses by 1 percent. This may appear to be a small figure, but companies doing millions of dollar worth of business will really pay attention in this recession as each cent saved on waste management is applied to their bottom line. The small numbers doesn’t apply to waste management alone. Even a tiny feature like saving energy when printers are switched off can decide their salability.
Keep It Short and Uncluttered
Keep the value proposition statements short and uncluttered. You should mention the final figures without taking the customer through complex calculations. The dollar figures you furnish should be accurate. Most importantly you should allow the customer to verify your figures by citing authentic sources.
Unique Value Proposition (UVP)
Develop a unique value proposition to stay ahead of the competition and get noticed. Convert the UVP into dollars so that the customer would know exactly how much they are going to benefit by doing business with you. IBM for instance, offers services as its unique value proposition instead of cutting their price. Over the past few years its business has grown largely based on that. Since we have laid emphasis on quantifiable terms, it is necessary to mention here that IBM’s revenues increased by nearly five percent in the third quarter of 2008 compared to that of the same period in 2007. Of the $23.5 billion that it earned, $14.8 billion came from services provided.
The fact that a well written value proposition garnished with hard dollars lends itself to be easily understood and compared should be borne in the minds of the business owners and managers. The customer will be motivated to buy when the benefits become tangible in terms of dollars, there are no two ways about it.
About the Author:
Doug Dvorak helps companies and professionals achieve results through customized, creative and non-traditional sales training systems that are “one size fits one” and developed to the unique business needs and “sales pain points” of each client. He is available to speak on these topics.
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Copyright 2008 The Sales Coaching Institute, Inc.
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Doug Dvorak, CEO of DMG International, is the Author of the forthcoming book “Build Your Own Brand” (Pelican, 2009)