Developing a customer-focused value proposition is key to winning business and selling more effectively. Value propositions establish the value basis for your business relationships with your customers. You can use value propositions to describe how your solution will improve your customer’s business and how the improvement will be measured. Every sales professional must be able to prove value in every sales situation.

What is a value proposition?

A value proposition describes the unique value that your solution will bring to a given sales opportunity. Value propositions are almost always opportunity-specific. Effective value propositions are created collaboratively with a customer over the course of the sales cycle. They focus on customer needs, not on solution features.

To be effective, value propositions need to go beyond typical benefits statements. Value propositions typically outline the following:

• Anticipated business improvements in quantifiable terms
• Timing of the benefits
• Timing of the customer’s costs and investment
• Payback period
• How the improvement or benefits will be measured

If there are multiple decision-makers in a sales situation, you may need to craft a unique value proposition for each decision-maker. For example, the value proposition for an executive might be slightly different from that of a technical buyer. Tailor your value propositions to each type of customer, buyer, or influencer. Know your customer, and adapt your value proposition to the situation.

Collaborate with your customer on value propositions

Your goal in developing a value proposition is to persuade your customer to award you the deal, preferably without you having to submit a formal proposal. You should try to convince the customer that the opportunity cost of delaying a buying decision exceeds the potential savings from moving ahead with the sale.

An effective value proposition, created collaboratively with the customer, offers these advantages:

• An understanding of the customer’s objectives and the potential benefits for the customer, for you, and for the buyer
• A reduction in risk because you and the customer better understand the actions required of each other
• An internal advocate in the form of your customer, who will help champion your actions
• A shorter sales cycle time

Simple, tactical product sales often require only a very straightforward value proposition. Sales that are more complex sales, such as the sale of outsourcing services, require a more detailed, complex value proposition.

Overcome challenges in collaborating on value propositions

The customer, as well as your own organization, can present challenges when creating collaborative value propositions. Value propositions are often misused or misunderstood in complex sales efforts. The following table lists both the ways that a value propositions can be misused and the solutions to overcoming these obstacles.

Organize your value proposition

Developing a value proposition is a critical part of the sales cycle. Your value proposition should provide a road map for your sales presentation or proposal and should be organized according to your customer’s priorities.
If you submit a sales proposal, your value proposition should be clear, and it should be stated up-front in your proposal — generally in the executive summary section. To organize your value proposition as part of a presentation or executive summary, follow these steps:

• Present a summary of your value proposition early in the proposal or presentation. Be sure to include a description of the collaborative approach that was used to develop the value proposition. You might say, for example, “After a comprehensive assessment of more than 500 employees and meetings with the executive team, we have determined …”
• Present two to five subvalue statements in a bulleted list. These statements must support the overall value proposition. You need to provide only an overview of each point.
• Present and validate each statement in the order presented. You should focus on quantifying the value, the timing of benefits, the timing of costs, the payback period, and how you will measure the results for each value statement.
• Summarize the total value and total cost. Present a summary of the total value and total cost based on what you previously stated in the proposal or presentation. End the proposition by previewing the next logical step in the sales process.

Shape value propositions that will get you the sale

A deep understanding of your customer’s business will help you shape a value proposition that positions you to win the deal. Too many sales professionals focus on solutions-driven value statements rather than customer-focused value propositions. Collaboration with customers is key — value is in their eyes, not yours. By working with your customers to craft value propositions that demonstrate the unique value that your solution offers, you can win more sales.