BUILDING AN AWESOME CUSTOMER VALUE PROPOSITION

You know it when you see it. It’s a value proposition that says, “I’d have to be crazy to pass up this opportunity. Look what I’d be getting for acting on it. Look what I’d be losing out on if I let it go!” You feel a sense of urgency as to not let the chance slip away or get swooped up by someone else who will realize the feeling of exclusivity that awaits upon purchase.

Powerful value propositions are grounded in logic and emotion and they drive persons to engage. Logic sets the evaluation process in motion, which includes determining the product or service criteria (specifications), required time frame and budget. Logic is used in the decision-making process to help narrow down the selection. Your emotion is the “X” factor that separates the product or service from the pack because it connects to who you are or reflects what you aspire to be. This is true in the personal sphere and in Industry. A solid value proposition provides a business value, technological value and personal value. Let’s look at the process of buying a vehicle. It may be a sports car to zip around town, or a minivan for long family road trips or a pickup truck used to haul your boat or go on fishing trips. The steps are usually the same. You determine what functionality you need. It could be gas mileage, horsepower and the many ‘bells and whistles.’ You may follow up with Consumer Report reviews on maintenance, safety rating and resell value. The next step would probably be to gather opinions from family, friends, neighbors and even strangers driving it. The information you obtain either supports your choice or forces you to change direction. The result is a well-developed vehicle short list.

Then comes the fun part, the test drive! Most persons see themselves in the vehicle before they even step into it. Envisioning yourself using the product or service is where the emotional connection starts to solidify. Does the ride make you feel powerful, young, practical, distinguished or that you’ve ‘arrived’? Chances are for the one that is your final choice, the answer is a resounding YES. Here’s the often-unanticipated part, if the connection is strong enough it can significantly impact or even override the ‘logic’ part of the original purchasing decision. Think back to a time when you had a budget in mind and blew right through it. Maybe it was the hot car, dream vacation or the house that reminded you of your childhood. Think to a time when you delayed a necessary purchase to wait for the new, upgraded version of the product, like that next generation iPhone. You deemed the value of the enhancement to be greater than the cost of delayed gratification and immediately realized productivity gains.

A comprehensive value proposition explains what benefit you provide for who and how you do it uniquely well. It describes the problem you solve, and why you’re markedly better than all available alternatives. In conjunction, the customer determines value as the difference between their perceptions of costs versus the anticipated benefits for a given opportunity. They then match your proposition against their value determination. To ensure you come out on top, your value proposition must:

• Tie your product, service or organizational capability to the customer’s market and operational challenges, in a way that leaves them more enlightened and better off than before they engaged with you.
• Demonstrate a tangible, quantitative gain for the customer (i.e. greater revenue, cost-savings, increased operational efficiency or less maintenance). Making all tangible results tied to financial gains or savings (i.e. less maintenance means less labor required and reduced downtime for greater product throughput). Remember, numbers are the great competitive equalizer.
• Concurrently, it must delineate positive intangibles associated with your customer proposition. Make sure to include a personal value (i.e. the ability to make them look like a hero by determining additional cost-savings for the company and with that, increasing chances of promotion).
• Provide additional market or operational insights that have the potential to further impact their bottom-line.
• Gain the approval of superiors and peers as to the wisdom of the selection, again leading to promotion and status increase as an organizational expert
• Have a severe downside if the customer does not act on the value proposition (i.e. risk to worker safety or loss of revenue or foregone cost-savings). This is a critical aspect to getting customers to act with a sense of urgency.

The ultimate question to determining the strength of your value proposition: Is the value proposition presented to the customer clearly superior and well differentiated, resulting in a sustainable and enhanced customer partnership?

So how do you build a value proposition that meets your customers’ specifications and connects with them emotionally? After all, industrial products are not nearly as alluring as a red sports car or a fancy new electronic gadget. Fortunately, there are industrial offerings that can dramatically increase customer loyalty and spur continued good feelings with the supplier. These offerings show:

• Product ease of use. The products are intuitive and simple to train personnel on, allowing a more flexible workforce.
• Attractive packaging and equipment modularity (handling) that is pleasing to the eye and functional. Yes, many don’t care about visuals until they see them. Think to the Apple box that indicates something special is inside.
• Products that address market trends and anticipate future standards or regulations, saving the user the headache of readjusting plant architecture or other adding equipment with every market change.
• Products that provide assistance in resolving their business, process and production challenges, and show ways to meet even the unknown ones, broadening their challenge scope to further impact their bottom line.
• Products which help them better meet the needs of their customers (i.e. their customers want faster deliveries and your product boost operational efficiency and throughput).
• Solutions offered that demonstrate you are ‘listening’ to their needs, challenges, market dynamics, company vision and mission, employee requirements and personal goals of their leadership and employees.
• Solutions that reflect their operational day-to-day experiences and help to run these smoother.
• Technical support with a robust warranty program to mitigate operational risk and secure market reputation.
• Products that offer in-depth two-way communications, moving further into the Internet of Things (IoT) and other technological innovations that give a window into their process.

Below is a Saw Mill Drives Customer Value Proposition example. It incorporates many of the concepts outlined.

Ask yourself the following questions when formulating a value proposition, to build the needed insights to closely connect with your customers.

• Why are my customers buying from me today?
• What are customers seeking when they use competitive products? What are their value propositions to them?
• What are the emotional triggers that get my customers to act? How do I create stronger ones?
• Is there an identifiable customer profile that seeks my products and services (by industry, size, region, channel)? What drives these customers and how do they determine success?
• Do I understand their industry enough to truly make this determination?
• Where is the market going and how do my products and services fit into new markets dynamics, giving the ability to continue playing a vital role in their success?
• What are my customers’ must-haves to gain ground with their customers? How can I make them stand out?

You will probably have more than one value proposition, even with the same product or service and the same customer. This is because different groups are seeking varied product features and benefits and have distinct business goals and challenges to resolve. Let’s review the chart below and the attributes highlighted (value measurement) for the various groups regarding a pump system

Keep in mind, value proposition can change over time based on market dynamics and/or the customer’s experiences. For example, a company just starting out may value low-price solutions. As they mature in their perspective markets and gain market share, solutions able to help them maintain market position and grow further become more valuable. For this reason, your value proposition to customers should be regularly reviewed (at least once or twice a year), to ensure the proposition meets current and anticipated operational requirements and they are preserving vital emotional connections.

Lastly, know that customer value propositions can be communicated in numerous forms, be it advertising, in person, using your website, among other platforms. Whatever the case may be, make sure your value proposition is tailored to the customer, drives action, builds loyalty, shows the price of inaction and distinguishes you in the marketplace. Easy, right. I thought so. Happy Hunting!

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