What's the value in your value proposition?
B2B sales and marketing people are constantly faced with pressure on prices. More and more products are exactly the same. The pressure is even greater for companies selling at the top end of their market. Clients always assume there is more 'room to move'.
Any businessperson worth their salt will tell you not to negotiate on price, but on value. How true that piece of advice is.
But, what is value? Technically, value means 'the amount of money or relative worth that is considered to be the fair equivalent for what is to be received in return'.
It should be easy an easy concept to communicate - but it's not that easy. Finding the value proposition to communicate is often one of the most difficult strategic questions a company will wrestle with in establishing its messaging framework. Without a value proposition, your marketers and salespeople have little left but price and their own creativity.
There are two reasons ...
Value is in the eye of the buyer, not the seller
What you think has value may not be value that is relevant to your client. It is the most common problem with defining a value proposition. A company believes they have a value proposition that matters to the buyer, but in the end it's not enough for the prospect to see the value to their situation.
What your customer values, and what they'll pay for it, are often at odds. Don't get caught in false thought pattern that what you are providing, at the cost you are providing it, will be considered 'value' by your prospect. This form of self-referencing is dangerous. Always set your reference point as the prospect or client. Survey them and define your value proposition based on what you find.
Value is just the price of entry
What they really want is for you to value-add. Look at the definition of value again and you will see that this is true. Buyers assume - and it's a correct assumption - that what they are going to pay for your goods or services will be a 'fair equivalent' for what they will be receiving. What they are really looking for is a good value. No matter the price point, buyers want to know that what they are buying is worth more than what they are paying. As you define your value proposition, look for things you offer that add exclusive, yet relevant value, but are included in your price. Make those value-add things a tangible part of your messaging.
So, as you begin to develop your value proposition remember these two very important things ... your value must be relevant to your buyer and it ideally should be an exclusive value-add.
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