Customer Centered Value Propositions

The Development of Customer Centered Value Propositions

Most people are not very interested in carburetors. They don’t capture the imagination, they are not particularly attractive, and for most of us not fascinated by automobile engines, the rank very low on the list of things to think about. We would have difficulty evaluating one carburetor over another in terms of rated performance, and many of us are somewhat uncertain as to what it actually does.

And yet, if you told me that my car would not run, and that I wouldn’t be able to get to work without one, or that a malfunctioning carburetor would cost me hundreds in extra gas and car repair bills, I would suddenly be a lot more interested. I could now perceive carburetor performance in terms of something that was important to me: the ability to get places in my car. I would have a context for valuing an otherwise uninteresting piece of equipment.

Companies are a lot like cars in that many products and services contribute to their functioning well. They are also like cars in that most people who operate them don’t understand all the mechanical details of how they work. There are any number of products and services that could contribute to companies being more efficient, more profitable, or better able to fulfill their goals. But most company decision-makers aren’t going to have the time the interest, or the technical breadth and depth to understand the implications of all of these products and services. Why choose one “carburetor” over another? And what happens when a new product comes along that doesn’t replace any current function, exactly, but enhances the performance of the whole?

Strangely, many sellers do very little to make the evaluations easier for their buyers. They market and sell their “carburetors” in a product-centered way, extolling performance attributes as if they were ends in themselves. They assume customers will be perceptive enough to understand both the differentiating advantages and the business implications of these attributes. But how many really are?
What can be assumed in all cases is that decision-makers want their companies, their departments, their processes to run better. They want to solve their critical problems, fulfill their goals, and meet the objectives on which their compensation is based. And ultimately, the only consistently reliable way to market and sell products is one that forges a link between these customer values and the product’s capabilities.

Decreasing the sales cycle time required

“3 call close” program

The most significant improvement companies can make toward increasing revenue is getting Marketing resources directly focused on improving the sales cycle and selling effectiveness. While Marketing campaigns certainly require focus and management, it appears obvious that an equal level of focus on the improvement of the sales cycle is warranted.
What are the “pain points” in the current sales cycle that requires the most time and effort, and where do the greatest number of lost opportunities occur? What are the primary differences in the sales cycle of the best verses average salespeople? What resources can marketing provide to addresses these pain points and differences?

Do most marketing programs get designed by starting with an analysis of the current sales cycle, or start with the product information that we think the prospects should know?

The “3 call close” program is designed to establish the foundation for designing Marketing programs that focus on improving the sales cycle cost effectiveness. For the current sales cycle the following could be identified:
- Most significant steps in the sales cycle and the effectiveness of the resources used
- The gaps in performance based on sales skill and experience
- Try different resources that could be a more cost effective substitute for a sales persons time
- The sales cycle elements that currently require the most skill, knowledge, and experience

This information is gathered by analysis of the firms CRM information where that is available and reliable, augmented with both interviews and electronic surveys of the different sales channels. Perhaps there would be direct participation in sales calls that are expected to be “tough”.

Some of the approaches and questions that are used in the interviews and surveys include:
What are the 5 things the customer needs to believe before they will buy?

When sales people describe the differences between good prospects ready to buy and prospects that need a lot of “help”, the differences can frequently be identified as the differences in what the prospect “believes”. These include beliefs about the value of addressing the opportunity, beliefs about the risk and cost certainty, beliefs about our company’s support and product capabilities, etc. Many of these beliefs are not related to our company, but more related to the prospect and the industry. Identifying these key required customer beliefs is one of the steps in broadening the marketing focus beyond just the product issues required to make the sale.

Are there measures for the claimed advantage and differentiated customer value?
Identify the current Value Proposition claims and elements including:
· The value to the customer of taking action
· The advantage being offered
· The value to the customer of the advantage
· Evidence for each of these three claims
Each of these claims should be both compelling and believable, with metrics for each

Are prospects qualified to be ready to buy the product category or the company’s product?
If only the usually prospect qualification questions [are you the decision maker, do you have sufficient budget, when do you plan on buying] are used, then the prospect is only being qualified for any provider of the capability. It is not until the advantages of the product are included in the qualification questions that the prospect start being qualified for your sales channels.

What is the level of Product/Market maturity?
The level of product/market maturity determines the extent of selling required.
For mature products/markets the prospect usually knows the features they value, and may even have some experience in the area. So the selling is limited in scope to advocating our features/capabilities and their comparative customer value.
The other extreme is that the product/market is so new the customer may not be certain that they want to address the opportunity, and certainly do not know the approach and required “bill of material”. In this case the selling effort has to include selling the right customer problem description and the solution elements required for success.

Where in the sales cycle is the largest gap in performance between the average sales person and the best sales person?
IBM describes one of the goals of Marketing as “providing the tools that will allow the average salesperson to be as productive as the best salesperson.” To develop impactful tools marketing has to know the points in the sales cycle that cause the average salesperson the most difficulty, especially relative to the best salesperson. Without this information and analysis the marketing programs lack targets and goals.

The actions identified above are some of the activities that are part of the “Concurrent Marketing” program that enable Marketing to design marketing that meets the needs of the sales channels.

Value Propositions useful for average salespeople

One of the first perspectives initially identified in this blog was: The quality of the Value Proposition, based on the level of “compelling and believable”, determines the skill and effort required in the selling process.
For salespeople with average sales skill levels in enterprise “considered purchase" markets , effective Value Propositions need to answer these four customer questions:

1. Why should I take action now to address this problem/opportunity?
2. In addressing this problem/opportunity, what differentiating capabilities do you bring to the solution? [i.e. What do you do better than the competitive alternatives?]
3. What is the value to me of your differentiating capabilities compared to the value I would receive from the competitive alternatives?
4. Why should I believe each of these claims?

While we frequently think of foundations as being physical, information can also serve as a foundation. Just as firms can think of their balance sheet as being a foundation for the firms financials, the Value Proposition for a product, service, or solution serves as the foundation for the marketing programs.

There are more than one type of Value Propositions, each with a different structure designed to support different objectives.

• For markets driven by technical sophisticated buyers, the Value Proposition that is commonly used is "Feature-Benefit".
• For consumer markets, best described as impulse purchase, the Value Proposition structure is “For (target customers), (our products) provides (key benefits) and (key points of difference to competition)".

Many of the Marketing failures that occur in enterprise considered purchase markets occurs because either the "Technical" or the "Consumer" Value Proposition structure is used erroneously, therefore not providing the sales channels the information required for effective selling.

"B to B" marketing is not aligned with Sales

One of the central reasons that B to B marketing is not aligned with sales is the traditional domination of Marketing by Consumer marketing. The consumer large advertising budget and its centralized decision making make Consumer marketing the focal point for consultants and agencies. Additionally the availability of LOTS of data make it much more attractive for University professors for getting papers published. [Until recently neither Harvard nor Stanford offered B to B marketing courses.]
But in many companies the Marketing responsibility is to provide leverage to the sales channels for revenue generation, which extends significantly beyond the “awareness” focus of consumer marketing.
Unfortunately in many companies the processes and criteria for B to B marketing is too influenced by consumer marketing and does not extend to the requirements of supporting the sales cycle through the close. Frequently B to B markets are referred to as “considered purchase” markets, which is different than the “impulse” markets for Consumer marketing. Using that differentiating attribute we can understand some of the requirements of B to B Marketing:
The decision whether or not to initiate a project is done by a group of managers who compare the value to the customer of one project over another. The expected values are specific and tangible. If we expect our sales channels to encourage our customer to initiate a project that could require our product we will also need to provide information on the expected value to the customer that would result from project initiation. And some indication of the project completion requirements. This program description is much more “actionable” than the usually “directional” customer values associated with impulse purchase.
The same is true regarding product/vendor selection. There will be a vendor/product comparison by the buying team! They will use real metrics to compare vendors and their advantages, And then the value to the customer of those advantages will be evaluated and compared. If we do not provide the information the customer will develop it for themselves as time permits, or perhaps your competitor will provide it. “Directional” metrics that are not comparable are not very useful in this stage of the sales cycle. And each claim will probably be assessed for accuracy, so evidence for each claim is a required…or else a lots of time and trust needs to be provided by the sales channel.
These elements which are needed for B to B sales efforts are not usually provided by B to B Marketing, only the traditional consumer "impulse purchase" elements, which really only impact awareness.

Using Marketing to increase sales effectiveness

Companies in "B to B" markets that want to increase revenue will find the most cost effective approaches come from transforming their Marketing to be more aligned with Sales. There are at least five perspectives that should be adopted by Marketing:



- The quality of the Value Proposition, the level of “compelling and believable”, determines the skill and effort required in the selling process

- Marketing Program design can be focused on addressing the sales channels “pain points” in the current sales cycle, not just the product attribute we want to advocate to the market

- Gaining scale in sales channels requires the rapid capture and transfer of experience to the channels with less skill and time available

- Sales channels consist of innovators and followers just like customers, so managing the adoption through the stages is critical for gaining scale.

- Just as both Sales and Marketing have “product advocacy” aspects, Marketing needs to add “Consultative Marketing” to parallel Sales “Consultative Selling”.

The results of the implementation of these perspectives is the significant increase in selling effectiveness of the “middle 60%” of the sales channels [not the top 20% or the bottom 20%], which is more than Sales can achieve trying to do it by themselves.



Over the next several blog entries I will expand on each of these points and indentify the impediments for implementation.



Bud Hyler

BudH@logmkt.com