What exactly is a value proposition?

George Brontén

Everybody knows you need a good value proposition in order to sell effectively. But does anyone know exactly what a value proposition is? If you ask 100 sales professionals, you’ll likely get 100 different definitions, some more useful than others.

In order to discuss value propositions effectively, we need a working definition that is useful to sales professionals and their leaders. I propose this one.

What is a value proposition?

The dictionary defines “value proposition” as “an innovation, service, or feature intended to make a company or product attractive to customers.”

Here’s a more useful definition for sales teams:

“A value proposition is a message that communicates clearly why a purchase will meaningfully benefit a specific customer, crafted for the purpose of influencing that customer to move forward in the buying process.”

The message may take any number of forms. It may be a straightforward sentence, an entire conversation, a visual representation, or a combination of them all.

It must clearly communicate the specific and meaningful benefit a customer can expect to gain from the purchase. This benefit may be monetary, professional, personal, or any other type of benefit, but it must be aligned with the customer’s genuine needs and desires in order to be effective.

A strong value proposition motivates a buyer to lean forward and progress towards buying your solution."
George Brontén

The specific customer may be defined broadly as all customers in an industry or market, or as a specific individual within a company that is considering a purchase. Notice that a sales team can and might need to define many different value propositions to be used based on the customer’s industry, role in the company, stage in the sales process, and individual motivators.

Finally, it’s important to understand that the value proposition has a purpose: To influence the customer to move forward. Many companies define big picture value propositions that are intended to encourage customers in a general sense to make a purchase. The most effective sales teams understand how to develop and use value propositions throughout the sales cycle that adapt to the individuals and their place in the sales process.

5 important qualities of A strong value proposition

A strong value proposition is used to engage the buyer early in the sales cycle, to open meaningful conversations, and make it easier to come to an agreement at the end. It evolves over time from a hypothesis to a refined business case. Here are five additional qualities of a strong value proposition:

  1. Relevant
    Clarifies how your solution improves a buyer’s performance.
  2. Quantifiable
    Quantified by a collection of benefits that resonate with the customer.
  3. Differentiating
    Differentiates solution value from competition (direct competitors and alternative uses of capital).
  4. Flexible
    Can be communicated in various ways (conversations, briefings, formal proposals, ROI models, etc.), and reflect quantifiable as well as qualitative benefits.
  5. Persona-focused
    Communicated in different ways to different buyer personas.

Expanding the value proposition

Highly effective salespeople bring value into the sales conversation early, and carry it through the entire sales cycle. This means they must be constantly adapting and updating the value proposition to respond to the customer’s needs, based on many factors.

Solutions like DecisionLink, which we’re proud to offer as an addition to our Membrain platform, can help drive value-based conversations by creating fast, easy, and highly customized visuals that quantify the value of the transaction in the customer’s terms. These can be used from the very first conversation throughout the sales process, giving the rep opportunities to co-create and quantify the value proposition with the customer as they go.

Quantifying the value proposition in this way is powerful. Even more powerful, is taking it to the next step and connecting the numbers to the human on the other side of the conversation. This requires the salesperson to understand what uniquely motivates the customer, and to frame the data in those terms.

For instance, a quantifiable value proposition might sound like this: “We can help you save $35 million within three years.”

A value proposition connected to a CEO’s motivation, where the customer is invested in helping underprivileged children in their community, might sound like this: “We can help you save you $35 million in three years that you can use to build schools.”

The latter value proposition is far more compelling because it frames the numbers in terms of something meaningful to the customer.

Obviously, crafting value propositions like this requires salespeople to do solid research, ask good questions, to listen deeply, and to probe for what matters to the customer. It also requires good tools like DecisionLink to analyze data and establish and visualize trustworthy quantifiable value. And tools like Membrain, which can be used to guide salespeople through the sales process and support them in identifying appropriate value propositions based on factors like industry, company role, and stage of the process.

Is your sales team using quantifiable value propositions aligned with your customers’ strategic initiatives throughout the sales cycle? If so, how has that impacted your business? What are your success stories? I’d love to hear from you.

For a demonstration of how Membrain and DecisionLink can help support your value conversations, just send me an email.

George Brontén
Published June 20, 2018, written by

George Brontén

George is the founder & CEO of Membrain, the Sales Enablement CRM that makes it easy to execute your sales strategy. A life-long entrepreneur with 20 years of experience in the software space and a passion for sales and marketing. With the life motto "Don't settle for mainstream", he is always looking for new ways to achieve improved business results using innovative software, skills and processes.

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