With many companies claiming to deliver value to their prospective buyers, rarely do these claims distinguish one company from another. How can a company uniquely stand out from its competitors?
In this eTip, we interviewed Steve Patti, a CMO, ex-agency CEO and consultant to B2B brands on the subject of value propositions.
BMC: What is your experience with developing value proposition messaging for brands?
Patti: The majority of the time, when a company tells me they are not meeting their sales goals or are not converting their marketing leads it signals that the messages they are delivering are not resonating with their target audiences. I typically challenge the company to answer three questions: what problem(s) do you solve, for whom do you solve them, and what are the proof points? The responses I receive vary and that signals an immediate disconnect.
Over the past three years, I’ve worked with a dozen companies to help them develop message maps that align buyer roles, pain points, solutions and proof points. Prior to that, I’ve taken multiple companies through the same process as a staff CMO.
BMC: We hear a lot about unique selling propositions (USPs), value propositions, and elevator pitches. What’s the difference?
Patti: An elevator speech is designed for a social setting when you are networking with people and it is supposed to catch someone’s attention so that prospects say, “oh, that’s interesting – tell me more” to stimulate a conversation. It’s a short descriptor of what you do but it’s not designed to get you into large companies because it doesn’t tie into any critical business issues facing a prospective buyer. What’s more, it doesn’t jolt a decision maker outside of their comfort zone to listen and this is a critical element necessary to engage a prospective buyer, according to sales expert Jill Konrath.
A unique selling proposition (USP) is a component of brand strategy. It’s the one thing that your company does better than your competitors to create a perception of differentiation in the mind of buyers. However, the truth is that in our current age of digital disruption, true differentiation is difficult to sustain because as soon as one company comes to market with something unique fast followers are right behind them. When you take a closer look at companies in just about any market they offer fairly similar services and solutions and there isn’t a lot of meaningful differentiation. The reality is that busy corporate decision makers don’t care how your brand compares to its competitors (vendor comparison comes much later in the buying cycle). Instead, they want to know how you can help them solve a business problem – and this is where value propositions come into play. A classic definition of a value proposition is a clear statement of the tangible results a customer receives from using your product or service.
Effective value propositions have 4 elements: (i) the business result is attractive to the decision maker, (ii) it’s aligned with the prospect’s business climate/environment, (iii) challenges the buyer’s status quo to nudge them to action, and (iv) the outcome/benefit is tangible. A value proposition is about impacting the prospect’s business and not about your brand.
BMC: Why is an effective value proposition more important than ever before?
Patti: Companies are under more pressure than ever from financial markets and so they are constantly re-organizing, down-sizing, and re-shuffling their staff. This stresses out employees at all levels as many are doing the work of 2-3 people. Because prospective buyers are so busy, they don’t have much time for any distractions and if/when they need to know anything about a product or service they can easily access the Internet and receive all the information. Further, they can’t justify allocating time to talk to a sales person to sit and listen to a pitch about what their company does.
In most instances, the prospects you are calling on are not seeking to make a change from their current vendor(s) unless you can give them a compelling reason to do it. The status quo is “good enough” because they are just trying to survive the current workload. A value proposition answers the question: “Why should I change what I’m doing today to do business with you?”
BMC: What are three mistakes you’ve seen brands make when it comes to developing effective value propositions?
Patti: The first mistake that triggers all of the other mistakes is not understanding what their customers define as value. Too many marketers sit inside their corporate offices claiming to “know their customers” and then spend inordinate amounts of time and money creating messaging that their customers (and buyers) simply don’t read. SiriusDecisions estimates that 60% of B2B content budgets are wasted on content that nobody reads and eConsultancy estimates this as a $5B worldwide problem.
The second mistake is failing to focus the value proposition on a tangible financial business result that your brand can deliver for the prospective buyer. When I hear claims like “best in class”, “lowest cost provider”, “one stop shop” I cringe because these types of sales claims don’t make an impact on a buyer’s business.
The third mistake is the lack of any customer proof points to backup the value proposition claim. Getting these three areas right can produce big results in terms of generating sales leads and closing deals.
BMC: What words of wisdom would you offer regarding value proposition development?
Patti: Get serious about asking yourself how much you really know about your prospects and customers (by segment) and their business challenges and then map it. Next, audit your sales and marketing messages and identify the business outcome(s) your company delivers for each type of prospect/customer. If you cannot identify the business outcomes your brand delivers, then flag this as a gap that needs to be addressed. Review the copy language you are using in your collateral — if you find terms like “partnership”, “solutions”, or “one stop shop” then throw them away as it signals you are trying to sell something. Create value propositions that contain business outcomes and customer results data that aligns to the business needs of your prospects/customers by market segment.
Steve Patti is a CMO and agency strategist (www.stevepatticmo.com). As an entrepreneur, Steve built a $20MM global marketing firm to serve the Fortune 500. As a CMO, Steve has built Challenger Brands to compete with the Fortune 500. Steve’s industry experience includes technology, healthcare, financial services and consumer products across North America and Europe. Steve holds a BBA, MBA and has been recognized through dozens of marketing and community service awards.