Value Propositions - What to Consider!
How to Craft a Value Proposition that Sells
Second in a series pertaining to executive value propositions. In this second piece, we will cover aspects of value propositions to consider.
Part II: Clear Thinking for Superior Results
By Ed Broyles, Pursuit Writer and Tracy De Cicco, Principal and Founder, Konposit
In the last blog we talked about the kinds of traditional thinking you should avoid in developing great value propositions. In this blog, we’ll talk about what you should consider – the kinds of forward-looking, right thinking and actions that will help you craft a value proposition that really sells.
So, what SHOULD you focus on?
1. Your client’s vision
2. Your client’s outcomes
3. Your client’s story
4. How your hands can guide your client
Your client’s vision
Value propositions are about one thing and that is your client. Everything about your value message needs to be about and pertain to them. Respectfully, no one cares about your company history; no one cares about your product. Clients have problems that need to be solved and what they care about is how you are going to solve them – your value to your client.
So how do we get there?
You must start with a deep understanding of your client’s VISION. Ask these questions:
· Where are they now?
· Where do they wish to go?
· Who do they compete with?
· How are they positioned against the competition?
· What are their financial challenges and opportunities?
Sometimes a company’s vision is relatively near-term and urgent.
For example, Tracy worked with a retailer in the specialty retail / golf space. They were drowning in the competition from Dick’s and other big box retailers. They needed to focus on survival. Sure, they had some longer-range goals – creation of a next generation retail platform – but primarily needed to craft a plan to survive. What did they need to do to just survive and not fall prey to the competition? In their case, the urgency, of course, had a lot to do with their financials. They were bleeding cash and needed to stop the bleeding immediately. Tracy was with a firm that outsourced business processes and her team was working with this retailer to create a financial model to take over some of their processes. It was simple – the vision was around survival, and specifically, to cut costs through outsourcing.
But oftentimes, a company’s visions are longer-term and grander (in comparison to the prior, extreme example). For example, “Grow Customer Intimacy.” That would be Neiman Marcus, who is always looking at ways to know their customer better and create a wedge between themselves and the likes of Nordstrom and Saks. They provide sales associates with better tools to engage with their customers and give their customers more unique and easier ways to shop. In today’s hyper-competitive retail world, retailers must know their customers well and intimately. They need to foresee what their customers want. Neiman Marcus aims to do this well.
Ed worked on a proposal to a health care organization with the simple, but large, vision of “Make People Healthier”, using information technology and the power of data analytics. It was not easy, however, to get to that vision and to tie it to a genuine value proposition. The simple vision became a complex set of specific goals and solutions, but it was always out in front of both Ed’s and the client’s teams.
Possibly, your greatest opportunities are with companies that don’t have a cohesive vision. In this case, you can help them to develop one. This gives you the opportunity to be a thought leader. Tracy worked at IBM when omnichannel (bringing multiple retail shopping channels together for a cohesive shopping experience) was still nascent. IBM was newly developing a business vision and platform around omnichannel commerce. Because this was such a new area, Tracy and the team were evangelizing the ‘vision’ around this new paradigm, namely, helping companies understand what it could mean to their clients and their bottom line should they execute this new business model. They were helping companies understand, develop and realize this new business vision.
Your Client’s Outcomes
As best you can, focus on tangible, measurable, and easily understood outcomes, specifically, your client’s outcomes! In addition to the cost-cutting “vision” expressed above, that customer had a specific outcome to offload some of their back-office processes to better focus on future strategic business processes. They also wanted their people affected by the outsourcing to be taken care of – they wanted as many of their good people retained in the outsourcing arrangement. Once you know what their outcomes should be, you can very clearly articulate how your capabilities enhance and impact these outcomes. For example, when Tracy learned that this client wanted to offload ‘old’ processes to focus on the new, she shared with them how her company’s processes and capabilities could do just that – including managing the business processes on the old paradigm and platform, processes like accounting. This freed the client to develop a set of new, innovative business processes – a next generation retail and customer platform.
The outcomes in this case came from the vision – cut costs, to survive:
· Outcome 1: Specific cost cutting objectives and the means to achieve them
· Outcome 2: Specific retention numbers and how to ensure they are met
· Outcome 3: Specific time and resources made available to them to develop new processes
Tracy shared a presentation with her customer that articulated what her team knew about the client’s needs and goals. This material included a detailed pro forma of the financials related to outsourcing their ‘old generation’ business processes so they could focus on the new, future processes (outcomes).
Your Client’s Story
Every client has a story they can tell their customers, employees, and shareholders. The story that gets told when you and a client are creating a new or expanded relationship derives directly from the vision and the specific outcomes. You are combining these into a narrative that you can easily articulate in a proposal or sales and marketing material and that your client can articulate to its stakeholders. When you and your client fully collaborate on and agree on what that story should be, then the true value of what you and the client can accomplish comes into focus.
Here’s what’s in that story:
1. Every story is a journey. You start from where you are, and you end up where you are going. You begin crafting the story by seeing the beginning and the end clearly, then, identifying the challenges, tasks, and goals you will have along the way.
2. Every story has challenges to be overcome. Clients will have cost, competitive, technological, and human resource challenges both now and along the journey. Resolving these conflicts is where your value can become apparent.
3. Every story has heroes. Maybe it’s your client’s story to be a hero to its customers. Maybe part of the story is that the new capabilities YOU can provide will make you a hero to your client.
We would suggest that the most important part of any story is that it is about humans. When you and your client start to craft the value proposition for your relationship, you should focus on what the vision, the outcomes, and the story will be for the humans who are the client’s customers, employees, and shareholders. Because business and visions and companies are, at their base, about people.
How will lives get better?
That may be the most important question you and your client can ask yourselves. And how YOU will make your client’s life better becomes your value proposition.
Ed worked on a proposal to help a company upgrade its customer contact center environment. Hot, messy, uncomfortable, with multiple computers on every desk and a tangle of wires underneath. The environment had made the client’s employees miserable and morale and productivity had been suffering. The story, though, was not about software or processes or air conditioning, although they all played a role. The story was about making life better for people so that they, in turn, could serve their customers better.
How You can help Guide Your Client
We can’t emphasize enough how focusing on the client is everything to creating value in any transaction or interaction. But sometimes the client does not have a clear vision and either explicitly or implicitly needs you to guide them. Sometimes clients need to:
1. More clearly identify and articulate the vision and goals around a project, transaction, or their relationship with you.
2. Cut through the fog of competition to see where their true differentiators are.
3. See beyond the immediate reason they are considering hiring you to a broader and more comprehensive vision of the future.
How do you do that?
An important first step is to talk to the right people. Specifically, those who have the business pain and business vision. Typically, these are senior executives such as C-Suite executives as well as line of business executives (note, we didn’t mention IT in this case!). Engaging with the right business constituencies at your client is the key to quickly focusing on and understanding what really matters to a company and to laying the foundation for a value-based collaborative relationship. To stick with the prior example and company used, when Tracy had worked with Neiman Marcus they were looking at ways to get in front of the business needs around omnichannel. This could have easily been something that someone – a vendor/partner as an example – may have felt that IT could help them with, from the standpoint of understanding the business pains. But Tracy understood that in many instances, at its core, these business priorities were related to just that, business pains and business opportunities, not technical ones or business pains as seen through the filter of IT. So, she set about engaging, through some very senior sponsorship in IT with senior business executives, such as EVPs and VPs of their Stores.
Next, really learn how to listen! Listening to another person and hearing their genuine concerns is a skill you can and should learn. Part of this skill is “active” listening. Engage with your customers in a way that allows you to get the answers you really need so you can help your client in the best manner possible. Ask questions; ask follow-up questions. Take notes if it makes sense to do so. Follow-up with written questions or emails along with a sincere thank you for allowing you to spend time with them.
Finally, and maybe most importantly, develop the skill to look beyond the words they are saying to you. You are looking for the real pains in the company – those compelling factors driving their strategic needs. Sometimes, no one you talk to has all the information or can adequately articulate those key factors until you have enough of a relationship with an individual to be able to push the discussion to that level.
None of this is necessarily hard, nor does it require a degree in psychology. It just takes patience and deep, honest human empathy. It also takes doing your homework in advance. When you walk into a CEO’s office, you want to avoid wasting any time on facts you can easily discern from reading their website or a 10K. It might be as simple as using the product first. Ed worked on a very large deal with a public transportation agency in which members of Ed’s team simply went out and rode the trains. Not only did they gather valuable insight first hand, but the client was very impressed that they did so.
In the next installment we’ll talk in more depth about how to develop the “big” story with your client, which opens the door to defining the differentiating value you will offer your client.
Tracy De Cicco and Ed Broyles have a combined 40 years of experience developing relationships with and selling to C-Suite executives. Tracy has led complex sales pursuits and Ed has developed thousands of written proposals to major commercial and government clients. Between Ed and Tracy, they have led and helped countless sales teams develop the value propositions and messaging that enabled access to top executives and won billions of dollars of business.
Tracy is the founder and principal of sales consulting firm, Konposit. She helps global companies establish and develop sales penetration and traction in the US. Her company website is www.konposit.com.