Be it the leading brands of the world or small businesses in your locality, they will have one common attribute – They will know what their product is and how to sell it. But herein lies the dilemma. If you know only part value of your product, and if you know only some areas where your product can be used, or if you do not know what the competition is up to, than you can lose your customers.
This is the reason why formulation of a customer value proposition is very important.
Let us understand customer value proposition from our day to day experience. If you meet any sales person, he will try to show you a catlog or a presentation of the product he is trying to sell. The catlog will highlight all the key features of his product, it will show the price as well as products in different price range and ideally, the sales person will communicate verbally with you of WHY his product is better than the competition and what are his products USP’s.
The salesman is just trying to put across a Customer value proposition. He wants to make you understand the value of his product, and why you should buy his product. If you are in top management, If you are a CEO of a small business organization, or even if you are in the junior most position in sales, you need to know what is your products value proposition.
Typically a customer value proposition consists of the following criteria’s.
Product – What is your product and what are the features of your product. A customer can be impressed if you have a lot of USP’s and if you highlight these USP’s. If you don’t show all the features of your product, than the customer is most likely to lose interest.
Segment – Are you approaching the right segment for your product? If you target a wrong segment, the customer value proposition will probably be lost on your customer. He will not at all be interested in the proposition because he is not the target audience.
Price – Deals are made and broken on the basis of price. Is your price too high or too low as per your target segment? Is your competitor giving a better price? A complete value proposition will understand the dynamics of pricing and the proposition will be made accordingly.
Value – You may not be interested in a local toothpaste brand, but you will definitely be interested in Colgate. You may not show interest in a local made Cola, but you will like it when offered a Coke or a Pepsi. The brand carries value. The best practice is to highlight your brand and its heritage while preparing a customer value proposition.
Competition – Whether you want to listen to this or not, but the truth is your customers are equally interested in your competition. They will choose you only if you have the right customer value proposition which meets the customer’s requirements.
Overall, Many marketing activities are covered while building a proper customer value proposition. The complete organization, its heritage, people involved, products which the organization makes, the value proposition of these products, their price as well as their features, all help in making the right customer value proposition and hence the decision for the customer.
Successful companies understand that value proposition is the most important part of business. And to stay ahead of competition, you need to build value as per what the customer wants, and not as per what the company can provide.