Harnessing your Customer Truth - From Value Propositions to Sales Propositions - Part 2
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Here we focus on the difference between the Total Value Proposition and Sales Propositions. The difference between companies that are thriving and those struggling to survive is how well they harness and align their value to customers. There is a widening gap between what companies offer and sell and what customers actually value and are willing to pay for. You can start to close this gap by truly understanding what your customers value, looking at your products or services and how you interact with customers – this determines your single ‘customer truth’.
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Harnessing your Customer Truth - From Value Propositions to Sales Propositions - Part 2
- 1. From Value Propositions to Sales Propositions the second of four extracts from a white paper of the same name Harnessing Your Customer Truth Part 2
- 2. www.futurecurve.com The total value proposition is the sum of the offerings and experiences delivered to your customers, during all their interactions with your organisation Definition of a total value proposition To recap from Part 1
- 3. www.futurecurve.com The total value proposition is the sum of the offerings and experiences delivered to your customers, during all their interactions with your organisation All products, services and solutions and their functionality How your customers experience your products, services and your company Your customer’s experience through all touch points with your company such as marketing, sales, delivery, customer service, after sales service, invoicing, legal/contracting Definition of a total value proposition
- 4. www.futurecurve.com Are your sales people creating sales propositions in a vacuum? The issue for many companies is they don't have a total value proposition. Why is this a problem? Because whether you know it or not, your salespeople will be using a pitch, a series of insights and benefits and return-on- investment models all woven together into a story when they meet prospects. They’ll be delivering a sales proposition.
- 5. www.futurecurve.com Are your sales people creating sales propositions in a vacuum? Without this sales proposition being joined up to and driven from the company-wide, total value proposition, it will be off-target and lose its power and impact
- 6. www.futurecurve.com This will cost you money in many ways, including: Ineffective marketing campaigns Chasing the wrong sales opportunities Attracting bad opportunities Wasting time through reinventing everything each time Lack of focus = Waste of money What can you do? Losing you money
- 7. www.futurecurve.com Create your company value proposition first and refine to create tailored sales propositions from it Value proposition to sales propositions
- 8. www.futurecurve.com It’s not a one-way street. Feedback from sales teams on customers and markets is vital to keep the total value proposition relevant and well positioned. Feedback is vital Value Proposition Sales Proposition
- 9. www.futurecurve.com Value = Benefits: all the good points that customers perceive – the positive functionality of the product, its attributes, the behaviours of your people interacting with customers and the values and greater purpose that your organisation stands for and the contribution it makes Minus Costs: all the bad points that customers perceive – the negatives of the product functionality, attributes, behaviours and weak or non-existent values and greater purpose, as well as the cost and risk to your customer Value = Benefits – Costs2 Let’s look at how people understand value
- 10. www.futurecurve.com . Why the power of 2 against Cost? Because humans are hardwired to avoid loss, meaning that the negative factors in the Cost ‘bucket’ weigh far more heavily with us than the positive factors in the Benefits ‘bucket’. This means you need to create benefits that outweigh the costs by at least twice. You wake in the night from fear and not from a happy memory. Our equation may understate the importance of loss aversion. For some customers, subtracting Costs⁵ may be more appropriate. Value = Benefits – Costs2
- 11. www.futurecurve.com Many companies create their value proposition in their own image but your value proposition isn’t all about you. You must bring your customer into the creation of your value proposition. Value is not all about you
- 12. www.futurecurve.com If you don’t bring your customers into value proposition creation, you’re just making a guess about what your customers truly value. This is about much more than just asking them what they want. Don’t make it up http://www.linuxkungfu.org/images/fun/geek/project.jpg Good research is essential to uncover what customers really value when they’ve experienced working with you, not just listening to what they said in the sales meeting. We cover this in part 3.
- 13. Contact us Please say hello @futurecurve And visit our website: www.futurecurve.com e. cindybarnes@futurecurve.com t. +44 (0)1628 487 708 This is Part Two of an extract from the Futurecurve White Paper, ‘Harnessing Your Customer Truth: From Value Propositions to Sales Propositions’ Click this link to download the whole white paper
Editor's Notes
- Harnessing Your Customer Truth From Value Propositions to Sales Propositions By Futurecurve Leading experts in uncovering what customers, and all key stakeholders, really value and from this designing product, service and company-wide innovation and communication to drive better business for all. In Part 2 we focus on the difference between the total Value Proposition and Sales Propositions
- Definition of a total value proposition The total value proposition is the sum of the offerings and experiences delivered to your customers, during all their interactions with your organisation
- Definition of a total value proposition The total value proposition is the sum of the offerings and experiences delivered to your customers, during all their interactions with your organisation Offerings = All products, services and solutions and their functionality Experiences = How your customers experience your products, services and your company Interactions = Your customer’s experience through all touch points with your company such as marketing, sales, delivery, customer service, after sales service, invoicing, legal/contracting
- Are your sales people creating sales propositions in a vacuum? The issue for many companies is they don't have a total value proposition. Why is this a problem? Because whether you know it or not, your salespeople will be using a pitch, a series of insights and benefits and return-on- investment models all woven together into a story when they meet prospects. They’ll be delivering a sales proposition.
- Are your sales people creating sales propositions in a vacuum? Without this sales proposition being joined up to and driven from the company-wide, total value proposition, it will be off-target and lose its power and impact
- Losing you money This will cost you money in many ways, including: Ineffective marketing campaigns Chasing the wrong sales opportunities Attracting bad opportunities Wasting time through reinventing everything each time Lack of focus = Waste of money What can you do?
- Value proposition to sales propositions Create your company value proposition first and refine to create tailored sales propositions from it
- Feedback is vital It ’s not a one-way street. Feedback from sales teams on customers and markets is vital to keep the total value proposition relevant and well positioned.
- How people understand value Value = Benefits – Costs2 Value = Benefits : all the good points that customers perceive – the positive functionality of the product, its attributes, the behaviours of your people interacting with customers and the values and greater purpose that your organisation stands for and the contribution it makes Minus Costs : all the bad points that customers perceive – the negatives of the product functionality, attributes, behaviours and weak or non-existent values and greater purpose, as well as the cost and risk to your customer
- Value = Benefits – Costs 2 Why the power of 2 against Cost? Because humans are hardwired to avoid loss, meaning that the negative factors in the Cost ‘bucket’ weigh far more heavily with us than the positive factors in the Benefits ‘bucket’. This means you need to create benefits that outweigh the costs by at least twice. You wake in the night from fear and not from a happy memory. Our equation may understate the importance of loss aversion. For some customers, subtracting Costs⁵ may be more appropriate.
- Value is not all about you Many companies create their value proposition in their own image but your value proposition isn’t all about you. You must bring your customer into the creation of your value proposition.
- Don’t make it up If you don’t bring your customers into value proposition creation, you’re just making a guess and hoping it’s right about what your customers truly value. Good research is essential to uncover what customers really value. We cover this in part 3.
- Contact us: Please say hello @futurecurve And visit our website: www.futurecurve.com e. [email_address] t. +44 (0)1628 487 708 This is Part Two of an extract from the Futurecurve White Paper, ‘Harnessing Your Customer Truth: From Value Propositions to Sales Propositions’