On Value Prop: Part 1 of 3
I was having a coffee with the head of insurance operations at a large carrier. She was well aware of the work that I do at MassMutual and the type of support I provide for our early stage technology companies. So when I asked her about her biggest challenge, I assumed she was going to tell me about a $100M+ problem she was trying to solve, given the breadth and depth of her operation. She answered with a bit of frustration and a bigger sigh, “I have $10M of outstanding debt that needs to be collected.” This was a bit surprising, to see someone with such a wide scope, focus on such a seemingly small problem (but that is why she is great at her job). She concluded by saying that if a seller approached her and said they could reduce this problem even by 5% of the total debt, she’d meet with them in a heartbeat. Why? Because every dollar saved would go to the bottom line, enabling her to achieve her goals.
So why is this post on value prop?
Well, she aptly defined her business challenge and she also defined what she would need from a technology solution to make her buy, and more importantly, buy fast. This is what a powerful value proposition does. It opens doors quickly. Depending on your role, I believe that rather than making more calls or sending out more e-mails, a better strategy is to analyze what you can change about your process—starting with your value proposition.
What is a Value Proposition?
A value proposition is a simple and clear statement that summarizes what tangible results a customer can expect if they choose to use your product or service. It will speak to the targeted buyer’s challenges as well as the outcomes they’ll realize when it makes the case for your company as the problem-solver.
Your product or service is a tool in the buyer’s tool belt. Buyers only care about the results it can deliver, and a strong value proposition will convey that message. It lets them know that your solution can help them achieve their objectives.
A great value proposition should highlight what makes you different from competitors and are built around tangible, measurable business outcomes, but it should always focus on how customers define your value. Clearly articulated value props can be used to have conversations around brand strategy, launching e-mail campaigns, and catchy marketing material to highlight the buyers’ primary business challenges and how your product is an effective solution set.
It is important to stay flexible though. Your value proposition cannot and should not be a one size fits all mentality. You’ll have multiple ones depending on:
The Buyer: people in different job functions care about different things, even when they are evaluating the same service.
The Organization: different industries, different financial situations, macro tail or headwinds will shape priorities
The Product: if you have more than one product, they will have different value propositions.
I personally value and welcome a cold inbound e-mail where the sender has clearly done their research, and customized their value prop towards my specific need. Customization takes time and energy, and ultimately elevates the communication and subsequent conversation.
You will be a stronger seller if you are thoughtful about how to customize your company’s value prop. You’ll have conviction, you’ll work smarter to get into accounts, and you’ll be less discouraged by rejection (or perhaps have more patience with the sales cycle).
I’ll challenge you think about what your value prop is, how you communicate it, and if it could be better. I love Hubspot’s article here on how to craft an effective one.