Value Proposition: An effective way to communicate it

Sales Pitch: How to articulate your value proposition clearly?

In this part, we will cover how to communicate your value proposition effectively. We will cover the 5 parts of an effective value proposition. 1) The hook 2) the how 3) the details 4) the quantification 5) the proof

1) The Hook or Promise you are making

First, you need a hook! Why would customers be interested in listening to your pitch?

The hook needs to be a big promise that catches your client's attention. Be careful; it is important to listen to your clients first and try to understand their main challenges. Then, tailor the hook to their biggest challenge. For example, let's say your client repeatedly mentions how much time they are wasting, losing team members because they are overworked, etc. If your product can help them in that regard, your promise or hook can be something like, "Our product or partnership will help you save and regain a significant amount of time."

2) The How: How you deliver the promise i.e. what’s the solution(s) you sell (high level)

The next logical question for someone interested in the hook is to ask: How? The next level of how you should communicate your value proposition is to answer the question, "How do you deliver on this promise?" For example, "We save you time by providing a software, robotic or AI solution that automates the most tedious and dangerous tasks in your manufacturing process." At this point your customer understands that it is a software or technology-based solution for example. That is how you deliver the value.

3) The Details and advantages compared to other alternatives for your client

The next step is to explain the details, or the features included in the solution you provide. For example, "Our software will automatically conduct analysis on your data, will be accessible on all of your devices, includes a user self-onboarding process and workflow administrator panel that can be configured based on your business processes." In this section, simply detail the features or parts of your product. You can also mention implementation, configuration and after sale customer services. The idea is to list the most important and value-added features your customers need to hear to decide. Again, that is why you shouldn't communicate your value proposition too early. Like a doctor, don't write a prescription before making a diagnosis. Before communicating the value proposition make sure you invest the time in understanding their company and asking them a set of questions equipping you to turn your value proposition into one that is relevant to them.

4) The Quantification: Give some numbers and stats. How is it better than the current state or alternatives

This is the part where customers get excited if you can show or calculate good data for them. For example, provide them with average data on how much your other clients are saving with your solution. Better yet, when the time is right, make that calculation with your customer. Help them evaluate how much time and value they will gain from adopting your solution. Customers will go internally through various decision processes, and if you can equip them with data to do the selling internally and show that the investment is a no-brainer, then you will increase the likelihood of conversions and faster decisions. This is an important, not-to-be-skipped step and one to master. Additionally, the more you can showcase the value upfront, the easier the pricing discussion that comes later. The rule of thumb is to never provide pricing to an uneducated customer. It is very important that you resist the pressure or urge to communicate pricing too early in the process. First, truly help your customer understand the value.

The superstar secret: Always aim for a 10X ROI. I.e if the customer spends 50k, try to make your story and data show a 500k value return for them. Showing for example the multi-year benefits etc. In sales, it is ok to slightly exaggerate because people listen to you will always discount what you say. This is why it is important to aim high. Let’s say you’re saying you’re generating a 2 to 3x value return, and the customer discount it it is not as attractive. Think big, but always have sound data to backup your story.

 5) The Proof: Prove it with customer testimonials, it’s the best way!

Everyone is selling miracle recipes, and all humans have experienced someone selling us something that didn't do exactly what it was supposed to. People have been wary since the beginning of time. Humans will always have more ease deciding if they follow another human, like them (or better than them) who did. When I say someone is better than them, I mean that if you have one of the leading brands in their industry using you, it can be a factor for them to want to follow the trend or leader. You must be equipped with customer case studies, testimonials, and, even better, referrals. The best proof for a new customer is to talk to or hear from an existing customer of yours about their experience with you and answer key questions they will typically ask at that stage:

In this example:

• Did it fulfill the promise of saving time?

• Is the solution and features doing the job?

• Any complaints or things to be weary of?

• Was the implementation or adoption seamless?

• How is customer service?

• What’s the experience working with your team?

• How satisfied are they with your partnership?

• Did they see the calculated returns on investment?

• Do they have any recommendations etc.? 

Voila, we covered all 5 elements that constitute a great value proposition communication approach. 

Here is a final recap:

1) A great hook to excite your client, 2) The "How" to explain how you deliver on that promise, 3) The details, specifying the solution and service features that add value, 4) The data to substantiate the investment return projection, and 5) Proof: Satisfied customers and more data points from real customers.

Your client is now ready to discuss final pricing with you. Educated about what you do. Let’s go close some deals!