I was just informed by one of my colleagues that the television program Fringe (similar to the X-Files, only with less Scully and more Dawson's Creek), I am PVR-ing at home has started ten minutes late. Therefore it will end ten minutes late, and I will have only recorded the first 50 minutes of the episode. All because American Idol ran late. I am very cross.
At the heart of my frustration lies an unfulfilled and now foggy value proposition. When I signed up for the service, the brand promise was very clear: in return for some of my post-tax income, I could record shows when I was away and watch them whenever I wanted, plus the service would manage the network juggling of timeslots for me. Wicked. Now? I'm not sure what I should expect.
There's a great lesson here for SMBs. Having a simple, compelling and very clear value proposition is critical in landing net-new business. And then delivering consistently on the promised benefits will help keep customers happy.
I want to focus on the first half of the equation here, since refining and communicating an unambiguous value proposition is tougher than delivering on it for most SMBs. Expressing in plain English the value associated with whatever you are selling is more important today, in this economy, than it has been in north of 50 years. With lower demand overall, combined with higher competition in almost every industry, and pretty good marketing techniques in use by most firms, the battle for market share is at an all time high. And customers are looking around for options like mad. If a customer doesn't understand what your organization does, in about eight seconds, you are dead.
So then the questions are:
First, how to develop a straightforward and persuasive value proposition, and then
How to articulate that brand promise effectively.
Refining the Value Proposition
Here's an example of a well refined value proposition (from Winners): “The latest brand names for up to 60 per cent off.” Everyone understands it. And it's powerful.
Value propositions boil down to answering three core questions: who are you, what do you do, and what makes you special? That's what the Winners model does. There are a lot of approaches and techniques that work in getting to a clear and compelling value proposition. Most organizations use a three step process: 1. Internal. 2. External. 3. Internal. They look internally at competencies, then they look externally to get market input, and then they finish looking internally at what it all means. In the end, the process is a combination of (sometimes painful) soul searching and research on key questions.
Note: working through the following process steps as a group typically works better than conducting an internal survey or voting on potential options. So plan to get your team together in a room for a day, offsite is preferable as it gives distance and perspective to issues you may have been dealing with for some time. Bring a flip chart and markers to record everything your team says, so that everyone can see the progress you are making.
Step 1 - Internal: Who Are You?
Answering this question should be done by the group responsible for founding and/or running the company – the Partners, the Executive Team, the Owners, etc. And it is usually through a series of guiding questions that THE answer is arrived at. Here are some examples of good guiding questions to ask (some sound insane, but trust in the process):
- Why did we get into this business in the first place?
- Why not shut down the company right now?
- How would Larry King introduce us to his TV audience?
- What are we really good at?
If we are thinking about a book publisher as an example, the answer from step 1 might be: “We got into this business because we are great storytellers. So who are we? We are great storytellers?” The founders of Nantucket Nectars love to say “we are juice guys”.
Step 2a - External: What do you do?
At this point, customer feedback is important, especially if you haven't talked to a lot of customers in a long time. Why? If what you do doesn't match up with that the market is looking for, you're going to be in a tough spot in this economy. Finding customers in their own environment, and asking them questions about what they like/dislike/want/don't want is a pretty effective way to temperature-check your offering.
Beyond customer input, more guiding questions will get your group to the answer to ‘What do you do?':
- If we had to explain our business to a 5-year old, what would we say?
- How do we help address a customer pain point, or fulfill a customer desire?
- What is the outcome for customers of buying/using our product or service?
Staying with the same book publisher example, the answer from this step could be: “We write great children's fiction which tackles diversity issues.” Disney is fantastic when it comes to understanding and talking about what they do – they say over-and-over “we make people happy”.