During my formative years, there was a public service announcement that would come on TV typically during the nightly news and ominously ask you: “It’s 10pm, do you know where your children are?” (Source: https://en.wikipedia.org/wiki/Do_you_know_where_your_children_are%3F) So I’m rephrasing that question for all B2B technology solutions companies and asking you: “It’s 10pm, do you know where your value proposition is?” The obvious insinuation stemming from the fact that it’s getting late and you had better know where your children are at 10pm or 1pm…or else bad things would happen to them. Thus if you are trying to sell your software solution to the enterprise, then you had better know where and what your value prop is before it’s too late!
It never ceases to amaze me is how many B2B technology sales organizations struggle with articulating their value prop. Either they really haven’t figured out what it is or they don’t know how to tell it simply and clearly. Being based in Silicon Valley for the past 20 years, I know first hand how much we love to take the simple and clear and make it complex and confusing. It’s almost as if we feel that the more syllables and complicated words we use to describe our value proposition, the more valuable it will become or be perceived. Unfortunately, that verbose and complex variation of a value prop backfires all too often.
What is a value proposition? There are many definitions out there. Some of the definitions are simpler than other. Not surprisingly, I prefer the simpler versions of the definition. I would define a value proposition as “The promise of value that you can deliver to your customer that is easily measured and received by your customer as a result of working with you.” A perfect example of this is FedEx. In the late 1970’s and early 1980’s, FedEx used an advertisement campaign that famously declared in their tag line: ““When it absolutely positively has to be there overnight.” They changed the game against their much larger competitor at the time Emery Worldwide and ended up establishing themselves as the de facto overnight shipping company (source: http://www.tronviggroup.com/value-not-price/).
Why was the FedEx value prop so effective? It was simple to understand. It was clear and credible. It was memorable. And they focused on delivering this value proposition with a money back guarantee if they didn’t deliver your package overnight successfully. So if you had to have something delivered overnight, why would you even bother considering anyone other than FedEx? It’s a pretty compelling example of the power and effectiveness of a great value prop applied in the business world. We can and should learn from the FedEx lesson and do the same in the B2B enterprise software sales world.
Here are some tips and advice for building an effective value proposition:
- If it’s more than two sentences long, it’s too long. But don’t create one long run on sentence, because it will still be too long!
- If it takes you more than 20-30 seconds to tell it, it’s too long
- An 8th grade student should be able to effectively tell your value prop, or it’s too complicated
- Every customer should easily understand and believe your value prop
- Every customer should easily be able to quantify and objectively measure the value that you are delivering to them
- You should have real world examples to substantiate the assertions and math behind your value proposition
- Avoid fuzzy or gray area aspects in your value prop because if there is even an shadow of doubt about the validity of one element of your value prop, then the whole thing won’t be believed by your customers
- Ask yourself: Is it credible? How do I prove it? Is it clearly differentiated from my competitors value prop?
- Use simple words and business terms that will resonate with your customer
A litmus test question that I like to ask my customers about their value prop is: “What is the single most important area of value that you deliver to your customer?” Most sales people are guilty of talking too much. They tend to think that if they tell a value prop that has lots of different elements to it, then it will be more valuable to the customer. I submit that is exactly the wrong approach to take because you then dilute and undermine the credibility of your value prop by bringing up things that the customer doesn’t care about. Another great barometer of identifying what your value prop is to ask existing customers that have been using your products or services what value they have derived and in their experience what is the single most important area of value that they have received. How did they quantify or measure the value that your product or service has delivered to them?
I’ll share a real world anecdote around the struggles companies experience in knowing their real value proposition. We develop custom sales playbooks for our customers. Every engagement kicks off with a deep dive discovery process. We conduct discovery calls with their top sales performers, execs, product managers, marketing, engineering and a select few of their most successful customers. In this real world anecdote, this was a successful software company that was growing fast and had been it business for over ten years. They had an excellent, very experienced sales team (i.e., sales reps, sales engineers and first line sales managers) that all had worked together for many years and had built a strong chemistry internally and externally. Their customers absolutely loved their software product. Many of their customers started out using their software product in one line of business (LoB) and then due to the success of the software product, expanded it’s use across multiple LoBs and even enterprise wide in several of the largest enterprises in the world. That’s a VP of Sales fantasy dream as it was a classic “Land and Expand” sales play tailor made for the enterprise and F1000 companies.
Here’s what is so interesting about this story. Their execs and sales team did a phenomenal job on all of our discovery calls. Their depth of knowledge about their customers, their products, the competition, etc. was unparalleled based on our ten years of experience doing this with software and technology companies. They were struggling to get a few of their best customers to agree to do the discovery call with us due to common reasons: need them for reference calls, they just spoke at our user conference, we’re in the midst of a sensitive licensing negotiation with them and can’t risk jeopardizing it, etc. So we started writing the draft sales playbook and I went back to the VP of Sales one last time and reiterated the importance of capturing their customers’ perspective in the playbook. They ended up getting a CIO from one of the largest Financial Services firms in the world to agree to do the call. It was incredibly insightful as he shared some really important things with me that had not come up during the initial discovery calls with their sales team. He told me that they had learned what was most valuable about the software wasn’t something that was included as part of my client’s value proposition that was articulated to them during the sales process and his buying journey. In fact, it was something that they as a customer learned over time as they expanded the use of the software across multiple LoBs within their huge organization and gained more experience with the product.
I went back to the execs and sales leaders and shared the new value proposition with them. What really resonated about what the CIO told me is how he replied when I asked what they saw as the most important aspect of the value prop: “It’s ironic that you asked that question because my team recently had a meeting about company X and their software product and we were all laughing and saying that if we had known about the core value proposition that we’ve discovered during the sales process and negotiating process, then we wouldn’t have needed the detailed proof of concept (PoC) or waited so long to expand use of their software. The value prop that they shared with us during the sales process sounded very similar to their competitor’s value proposition so we didn’t know whom to believe. And what we discovered as their unique value proposition to us through using the product, was truly unique to their product and no other competitor offers that in the way that they do.”
Needless to say we added that customer’s version of the value proposition to the sales playbook and focused the sales training exercises and proficiency role playing exams on this key point. They’ve now discovered a better way to sell by learning their real value proposition from a customer.
My wise grandmother always used to tell me starting in High School that “No good things happen after midnight.” And if you think about it, she was absolutely right. When do you hear about “good” news stories or happenings after Midnight? So use this metaphor and real world sales lesson to go find your true value prop before it’s too late!