For my entire career, as a sales person, sales manager and sales consultant I've been frustrated with the notion of "creating value" ...."business value"....."value proposition" etc.As a sales person I was told to sell value and even went thru training classes to learn how to do so. As a VP of Sales my marketing department gave me static company "value statements". As a consultant I suggest our clients negotiate the value of their solutions not the price of their products and solutions. It is as a consultant that I was forced to take the gauzy, hazey, smokey concept of value and turn it into something we can use on a day to day basis to win deals at a price premium. Here it is (took 20+ years to figure this out) Your true value proposition is:

the 2-3 things that satisfy the customers needs better than their alternative on this deal

In the words of Eric Fellman (The Power Behind Positive Thinking) "life is simple, it's just not easy". The same can be said for this concept of business value. It is, as my consultant and customization expert Leo says "real time marketing" that determines from one deal to the next, what the 2-3 things are the we have that solve the customers business problems better than their alternative to us and provide real value.

While not easy., it is however, necessary. It is the soul of doing business deals. In the absence of clear data on the 2-3 things that make us better, the customer will see us as the same (best case) or as a sub par choice (worst case) to their alternative. We all know what happens then...we win or lose on price. Conversely, when we have gotten a price premium it's either the customer has made a mistake (doubt that) or you have proved your business value (likely) or they have figured that out on their own  (most likely)and agreed to a premium. This work is doable, just tricky. There are several data points we need to deeply understand:

• The customers business needs by different buying influences

• What their most likely alternative to us is
• The hard and soft, costs and benefits, for the short and long term, of choosing that alternative
• Net out to 2-3 things we have that solve their needs better

Once we have the data, it is our job to get to the various buying influences and most likely, adjust their concept of what their alternative is to the fact based version you have taken the time to create. We did this work for a company who sold web based technology to enable learning. They were being told "your competitor is exactly the same and their price is lower". In other words, the customer said you have no true value proposition and you are a commodity. The likelihood of multiple buying influences in the customer organizationf doing true side by side analysis of the two firms is extremely unlikely. Customers continue to use this tactic because it works and drives their prices down! Since the customer didn't do this type work we did.

We started with asking, what are the big "buckets" a customer should be considering when comparing two firms side by side, some of the categories were:      -          technology      -         depth and breadth of content-         corporate health-          etc. We then took each category one at a time and thought thru the hard/measurable aspects that a customer should be using as criteria, for example, under "technology" we looked at: 

1. the ability to integrate with their existing systems
2. how fast they can be up and running
3. how often the system fails
4. technology support
5. etc.

 Here is the good news, once the headings of the big categories are done and the measurable sub categories are also brainstormed, this list tends to stay about 80% accurate unless competitors change, your products and services change or something else strategic shifts. It is this analysis that enables you and your sales team to net out the 2-3 things that make a difference on each deal. When we completed this brainstorming with our client we came up with 43 criteria that their customers would need to use to determine, on this deal, given different needs of different buying influences, whether or not the two suppliers are really "the same". It is the diligence of doing this work on a deal by deal basis that allows us to systematically identify our value "real time". If this article intrigues you, I would suggest you forward it to marketing and ask them to help develop this list and keep it accurate and updated...I promise this will benefit you more than fixed "value statements" that typically come from marketing. 

by Brian Dietmeyer