How meaningful value propositions really come about

Too many value propositions are cobbled together from business clichés, unprovable claims of superiority, and assertions that many buyers find lacking in credibility. At a recent Product Strategy Network Member Roundtable, participants shared their own journeys along the route to crafting compelling value propositions for their own products.

The introduction of professional marketing to the world of B2B commerce has brought real benefits to both sides of the sales equation. But it has also brought along a lexicon of mind-numbing, confusing, hollow, and misleading jargon. Sadly, much of it has colored our sales claims and marketing messages, which take on the same dismal doublespeak that has now become the standard idiom of business life.

Bogus bargains

In all fairness, the use of twisted, exaggerated, oversimplified, bombastic and distorted claims in business are nothing new; in fact it's just the opposite. It's only surprising that after all these years, they remain so common . Perhaps the most frequent claim in value propositions is that the product or service will ‘save' money for the customer. Of course, everyone would like to reduce their own expenses. But the savings claim, which is made so often and with so little substantiation, has largely become meaningless. Customers remain skeptical, unconvinced, and bored. Indeed, as the term is most commonly used in marketing messages, ‘save' translates into ‘spend.' When someone says ‘act today and save ,' what they're really saying is ‘ spend today.'

What is particularly vexing about most of these savings claims is that, under the right set of conditions, they can all be true. But when two or more companies are each pitching their products to the same buyer, and all are making defensible claims that they can save the customer money, the question boils down to specifics: How much? Under what circumstances? Compared to what?

Nor is the savings claim alone in that respect. Other commonly-used, but hard-to-prove assertions are also in widespread use. Among them: "We can make you money;" "We can make you more productive," “We can make you more competitive,” and so on. Here too, the need to pose detailed questions in verifying those claims would apply.

At a recent PSN Member Roundtable, our members were keenly interested in learning how other participants managed to rise above generic value propositions for their own products. They were particularly interested in the applications of value propositions beyond their use in messaging; after all, strong value propositions can also drive product teams to focus on what really matters most to the market. A finely-tuned proposition enables managers to make better choices about how to allocate scarce company resources to its product creation and its commercialization activities.

The proposition

Despite their frequent abuse, and occasional neglect, value propositions remain a fundamental tool to managing product strategy and leading the product team. Companies that think of them primarily as a “messaging” activity tend to work on their value propositions as the product nears release or when they need to sell something. That contributes to the perception many of their managers and colleagues hold: that value propositions are merely the fluff spun out by marketers for sales purposes. But there are also practitioners at the opposite extreme who see the importance of determining the value proposition even before they decide to build the product.

Therein lies a paradox: By their very nature, innovative products have an uncertain market value. But how can you create a value proposition to lead product development when you're still trying to figure out its differentiating qualities and persuasive powers? What is its true value, and to whom? Where is the greatest value? What value proposition will resonate best with whom? How it is better than the alternatives?

It's a Journey

It's not easy to resolve. Our members found that determining a compelling value proposition is a journey – one that involves time, thought, inspiration, testing and revision. In the case of innovative products, they concluded, that journey should start early. And since it's fundamental to creating profitable products, the development of a value proposition shouldn't be left solely to the marketing department; Product Management and/or Executive Management need to drive the process. Key stakeholders such as Product Development, Sales, and Business Development need to be part of it too.

What our members conveyed is that you need to know early on what sorts of information you'll need to have later so you can listen and look for it along your way. You mine your sales force, you pick the brains of your channel partners, you interview industry analysts and talk with other influentials. Why? Because only a deep understanding of your market will help to discover a proposition that resonates strongly with customers and guides your product development effort. And you don't just sit down at a desk and “write” a great value proposition. Instead, you listen to your buyers and observe your product's users and discover in their experience your own central proposition.

There are a number of frameworks available on the Internet and in many books for constructing a value proposition. The frameworks used by two PSN Members were presented at our roundtable; click here to see them. But having a good framework is only the start. You'll also need to validate your claims with specifics and to do so in the customer's language – something which could require collecting data from the customer's own operations as well as purchasing syndicated research studies.

You'll need to demonstrate your claims, too. Case studies and value calculators are commonly used to do this. You'll want to work with your customers to document results and define what data to capture, so you can refine the value proposition later. Armed with that sort of information, you might even be able to guarantee your next customer the performance they can expect!

In future issues of Inside Product Strategy, we'll provide Quick Tips from our members and research to help you address these challenges:

•  How to make your value propositions rise above generic value propositions

•  Securing management buy-in to your value proposition

•  Secure organization-wide adoption

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