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:

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:

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.

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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