Developing Value Propositions

Why Do We Need Value Propositions?
Value Propositions are required to sell solutions to The Majority (those with big budgets).

TECHNOLOGY LIFE CYCLE

As Geoffrey Moore pointed out years ago in his book: “Crossing the Chasm”, Early Adopters and Innovators are enamored with features, but executives in the Majority make decisions according to their perception of your value in solving their critical problems.

Value Propositions are also required to sell to top executives, to transition from features-oriented selling to value-oriented selling, and to move up the Value Pyramid.

What is a Value Proposition?
A Value Proposition is a concise (quantified) statement of the Revenue Increase, Cost Reduction or Control Improvement that your solution provides your customer. Some technologists contend that you cannot determine value for their products. We contend that, if you can’t quantify the value you provide, you probably don’t have a viable business that will survive.

Value Propositions Answer these Questions:

• What can you do for me?
• Why is that important to me?
• Is that more than I'm getting now?
• Is that better than I'm getting now?
• Is that sooner than I'm getting now?
• Does it cost less than what I'm spending now?
• Is it less risky than what I'm doing now?

Developing Value Propositions
At Growth Process Group, we have a proven process for developing clear Value Propositions. Simplicity is key. We begin by describing the Problem Solved from the customer’s perspective. Then, we develop Before & After views of in simple graphical representations. We map Value to Pain by title type with a TCO perspective. Messages are crafted only after your Value Proposition development is complete.

An example of a Customer Problem Solved

• LOB Managers need fast implementation & fast payback (with new applications)
• IT is slow to implement new applications (due to lack of resources)
• We offer a SaaS solution that gets you up quickly without impacting your IT resources
• You save on infrastructure and support costs.
• Because we are the experts in our application, our cost to support you is much lower

Value Proposition Example (Notice the clarity and simplicity of this example)

• Reduce Storage Capital Expenditure
• 10TB of legacy storage cost = $500K
• We free up > 20% of legacy storage, Savings = $100K
• Enable sweeping 40% to 2ndary storage
• $.01/MB(2ndary) vs. $.05/MB(legacy)
• 4 TB savings = $160K
• Total Savings = $260K - our solution costs
• Payback is < 3 months

Transforming detailed descriptions of technical features to clear, simple statements, is a talent that is rarely found in those who are closely tied to the product or service development. Also, graphical representations are much better than text. How often do you visit a webs site to find a detailed text description that is confusing? We are advocates of simple graphical representation. Contact Chuck DeVita to learn about this approach.

We also recommend that you craft messages by title type based on the interests of that position. Examples of the concerns of various executives are shown below:

• CEO-Investor Relations & Share Price
• CFO-Profits & Cash
• COO-Productivity & Cost
• CMO-Strategy & Positioning
• CSO-Revenue Growth
• CIO-ROI & Efficiency
• Users-Functionality
• IT-Ease of Support

Growth Process Group’s Value-Pain Matrix methodology is used to determine which problems and messages are appropriate for each prospective title type. This often results in Aha! moments that reveal incorrect assumptions on who to sell to.

Growth Process Group offers a Sales Assessment service to identify the strengths and weaknesses in your Value Propositions. All major areas affecting sales are examined, including: value propositions, sales process, target market focus, sales organization structure, positioning, sales resource quality, marketing program effectiveness, new product introduction process, sales rep characteristics, team chemistry, customer support, infrastructure, etc.

For a discussion on improving your Value Propositions or the Sales Assessment, contact Chuck DeVita.

•     Return to Top     •