How to: develop a value proposition
Part of what makes your company’s offer unique is how it solves the problems in your prospect’s business. Your value proposition is the compelling reason that makes current customers buy from your company. This section discusses what goes into developing this, and how it helps your export strategy.
UNDERSTANDING YOUR CUSTOMER
Your early research into a new market should focus heavily on identifying your most valuable potential customers, with the aim of analysing their businesses. This way, you can gain a better insight into those customers because you will understand how they interpret value. Clearly understand the needs, requirements and pain points of potential customers. Decision makers want to hear how your company can solve a problem, save money, or deliver greater efficiencies rather than hearing about the technical merits of your product or service. The more you can show how your product or service enhances their business, the more effective and convincing your sales pitch will be.
As a statement, your value proposition is at the very heart of your sales campaigns and should be at the forefront of your company’s blueprint for growth. It needs to be well-defined, concise and it should be continuously refined through ongoing research and regular contact with customers. Where appropriate, it should also be translated into the language of your target market.
COMMUNICATING YOUR VALUE PROPOSITION
Once you have defined what you offer your customers, it should inform all of your marketing efforts. You may have to alter your marketing materials to reflect this; for example, after initial contact with customers or partners at a trade fair, they are likely to look at your company’s website. Does the messaging accurately reflect what your company provides and how it differs from competitors’ offerings?
EXPORT CHECKLIST: TIPS FOR EXPORT SUCCESS
- Know your market
- Understand what makes customers buy from you – this is important for helping to articulate your value proposition, especially in a new market
- Closely research your target prospects in your intended export market: your findings will also inform your value proposition to those customers
- SMEs in particular should focus on their ability to be flexible and provide niche products and services
- Translate your value proposition into an easily presentable set of activities or services that we can deliver that can be traced through to the customer’s bottom line.
Case study: KPMG
Kieran O’Brien is a Senior Director in KPMG Ireland’s Management Consulting Practice (www.kpmg.ie) and also leads the Financial Management (Finance Operations Improvement) service line. A trained Chartered Accountant, he has extensive experience in providing advisory services globally, such as in the area of aircraft leasing, and he also has a background in delivering performance improvement for organisations. Here, he talks about how companies can establish their value proposition with customers in new markets.
Firstly, what are the advantages from a business perspective of exporting?
The benefit of looking globally is that you lessen your concentration or risk in one market. Then there’s the growth aspect. With any market, it’s like trying to do it at home, only harder. Your aim should be for structured and sustainable growth and that is generated by starting small and building up, in the same way as you would in your domestic market. You need to take your time. You are working in a market where you have a geographical disadvantage and where you need to be there or have someone there for you and consequently, it’s more challenging because of the unknowns, but it also gives opportunity.
When going into a new market, how should a small or medium-sized company look to position itself?
It’s key to understand your target and your potential customer, to understand what’s important for their business and to understand what, ultimately, they’re looking to get. Then take the value proposition that you have and tailor it; it’s ultimately about applying that to deliver those benefits. It is about demonstrating flexibility: the ability to move quickly and be adaptable. It’s also around being quite niche. The advantage of looking at things globally is that you don’t need to go with everything; you can focus on what you’re strongest at because the [overall] market is bigger. In the services industry, that is a big deal. Ultimately, having a niche or being a genuine leader at something is what will be successful. If the product you’re selling isn’t successful here, you won’t be successful elsewhere. If your product or service is solid, then your chances of success in export are a lot higher.
Based on your experience, what advice would you give to potential exporters about developing a value proposition and communicating it to target customers?
From a services proposition, it’s about the time spent in understanding what does that service proposition look like, what is the unique selling point, and what is the genuine value or positive impact or change you can make for a customer. For example, that could be addressing a new regulatory requirement they need to work with. A company ultimately needs to translate its value proposition into an easily presentable set of activities or services that can be delivered on, and that can be traced through to the bottom line.
“It’s key to understand your target and your potential customer, to understand what’s important for their business and to understand what, ultimately, they’re looking to get”
What are the main things to get right in this process?
Listening to your customer is foremost. Getting initial engagement is good, but you need to listen. It’s about taking that on board and honing it down. It’s about translating the value proposition into the benefit to that customer, and the things that are important for them – the ‘what’s in it for me’ factor.
You have to be willing to get knocked back because sometimes – particularly for services where people normally go to a local provider to get them – it’s not a simple sell. In that case, it’s a longer sales cycle that might take a couple of goes at it. You need to be able to roll with that, keep going, and keep listening. You need to be resilient and flexible. You need to be more intelligent with using the internet and online tools and demonstrate how you can deliver, utilising those tools when needed. When you’re exporting, you need to be able to demonstrate flexibility and innovate in how you interact with your customer.
At the end of the day, the world is a lot smaller than it was. There’s technology around smart meetings and online project management, and it’s about being smart about how you deal with the mundane issues so you can focus on the value proposition.
Show that you do that well, so the customer doesn’t have worry about it. If you get rid of all the barriers, then it becomes all about your product or service.
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