Value Proposition

Differentiation Defines Value

Sales people are fond of talking about the Value Proposition.  We all know that it's essential to an effective sale.  But I'll bet if you ask a dozen reps what a value proposition is, you'll get a dozen different answers.  So here's my unique swipe at definition number thirteen.

The value proposition is a statement of the value a solution will provide to a customer.  The more financially-driven and quantified this statement is, the better.  It highlights current costs and revenues subtracted from future costs and revenues.  It explains in clear, concise terms the payback a customer will realize from the solution.

The initial value proposition statement is usually high level.  Over the lifetime of the sales cycle, we drill down into more and more detail.  For example, suppose the initial value proposition for an ERP solution is:  "This system will cut costs by streamlining business practices and will give you competitive advantage by providing a unified view of operational performance."  Over time, the value of current and future costs are shown by examining changes in system hardware and software, consulting services, labor, office leases, insurance, etc. etc.  Value is established through differentiation, otherwise you're just another commodity.  Eventually, the customer will visualize a very clear picture of the payback they will achieve from your solution.

Remember, it isn't until we explicitly establish value, that value can be seen in the eye of the beholder.

This has been Phil Janus of salesengineering.com "Going For The Close".

Good Selling everyone.