Buyers have a variety of reasons they buy from one seller rather than another, and the reasons vary from buyer to buyer. Sellers’ success lies in how much they can influence these reasons, which is why having a value proposition is vital. Definitions tend to say that a value proposition is a statement or two that explain why a buyer should purchase a product or service, i.e., what value they can expect to get in return for buying.
A slightly different definition of value proposition
But Mike Schultz, president of RAIN Group, prefers a definition that differs slightly from the traditional. He believes the following is a better explanation:
“The collection of reasons why a buyer buys; in essence, factors that affect whether they purchase, and from whom.”
Schultz explains that a value proposition shouldn’t be limited to only one or two key reasons why a prospect should buy. He thinks that sellers are actually selling themselves short by only highlighting a couple of key examples of the value they offer. Instead, he suggests sellers present their value proposition as a concept about why buyers choose to make a purchase. “It’s from that concept—the collection of reasons why people would want to buy from you—that you can put your selling efforts to work much more effectively, communicating different components of that value in different ways for different situations,” he explains.
Three components of effective value propositions
He goes on to explain that these propositions are most successful when they address the three common factors driving a buyer’s purchase decision.
- Buyers must want and need what you’re selling. “The seller must resonate.”
- They need to believe you and your solution stand apart from other choices. “The seller must differentiate.”
- And they have to feel you will deliver what you promised. “The seller must substantiate.”
Four questions propositions must answer
To build an effective value proposition that meets the three purchase drivers, Schultz advises sellers to ask four questions. “The most successful sellers make the value case to themselves as powerfully as possible—before getting buyers to believe in it just as strongly,” he writes. To do this, ask yourself the following:
- Why act?
- Why now?
- Why us?
- Why trust?
The first two questions will address resonance. By answering these, you’re uncovering the buyer’s want and need for your solution. The third question highlights how you’re different from other vendors. And finally, the last question, as Schultz notes, “covers substantiation. It's where you make the case for why the buyer should believe in you, your offering, your company, and your ability to achieve the desired and promised results.”
Other points to consider
When putting together your proposition, it’s important that it is clear and concise. You don’t want to overload the prospect. Avoid using too much jargon or technical terminology. Also, professionals advise sellers to come up with and test more than one value proposition. SOCO Sales Training reminds sellers that “that there isn’t one perfect value proposition for your business, and you must constantly reimagine and rework them to maintain the highest rate of return.” Consider role-playing with teammates or mentors to help decide on the best choice.
And it goes without saying that the basis of an effective value proposition is your knowledge of your solution, your target customer, the prospect, and their business. It’s vital to have a thorough understanding of each in order to demonstrate your unique value.
Photo by Jopwell