I recently did some work with a professional firm on value propositions. And whilst I cannot share the detail of that work I thought it was worth highlighting a few key points about the importance of the poorly understood (or applied) concept of value propositions.
There are numerous definitions in marketing texts, but no overall agreement as to which is best. That is probably because you can consider value propositions from the lofty heights of a corporate brand, through particular markets and segments, for particular products, services or thought leadership campaigns and then also for a specific opportunity with a particular client.
Client’s perception of value
The first few definitions I found concentrated on the perception of value from the buyer’s perspective when considered against the alternatives (including doing nothing). This harks back to the fundamental need to see things from the client’s point of view (and thus the need for keen empathy skills) and the translation of features and advantages into benefits. Whilst this sounds easy it does require an in-depth and far reaching understanding of the real needs of the clients – and often beyond the scope of the fee-earning professional’s usual day job. And, to get to this real understanding requires informed and probing questioning in the context of a strong relationship of trust.
This was elaborated on by some marketing experts to explore the various quality-price combinations that might be relevant in a particular segment. For example, Professor Kumar suggests the use of value curves to compare competitor offers for each segment.
The importance of the experience
Barnes, Blake and Pinder have a definition that focuses on the experience that a client receives and the need to calculate a measurable value (benefits-costsx2). They have a Value Proposition Builder™ that takes you through an analysis of the bad, neutral, good and Wow! value experiences. This suggests that the use of service mapping and blueprinting might provide a mechanism to get to the heart of service value propositions.
Alternative value propositions for different members of the DMU
I thought it was interesting that in a recent videocast by the CEO of Huthwaite International (home to Neil Rackman’s SPIN™ selling questions methodology) he argued for the need to develop a separate value proposition addressing the economic and financial needs of the procurement and financial stakeholders.
Importance of relationship
Adrian Payne’s definition sees the value residing in the reassurance that the firm will continue to provide a stream of tailored products/services – thus continually providing superior client value in an extended relationship. This, I believe, has particular resonance within the professions where retention of major clients and price pressure are acute issues in the more competitive markets.
The need for better professional selling skills
Regardless of how you think about value propositions – and whether at the corporate, sector, service line or individual client/transaction level – what IS universal is the need for marketers to work closely with business developers and salesfolk so that value propositions are clearly stated in brand communications and campaigns and carried through into sales discussions and for the fee-earners to be sufficiently well trained in professional consultative selling skills so that they are able to have strategic dialogues with clients and get right under their skin so that the real commercial and financial needs can be identified and embedded in differentiated value propositions.