3 Steps to Your Value Proposition

Published: January 5, 2017


A few weeks ago, I was working with a client on a multi-million dollar opportunity that was “stuck” and apparently going nowhere. There was mounting pressure to get it closed before the quarter end. Keep in mind that this account team had been working on this deal for over 8 months.

As I always do when brought in to discuss any opportunity, I asked the account team a series of five questions. One of which was, “What is your value proposition to the customer?”

Unsurprisingly (at least to me), the account team could not give me a concise and compelling answer to the question. Actually, their version of the value proposition sounded a lot like some of their marketing material which could be found on the corporate website. They were number one worldwide, with the leading technology, etc., etc. I’m sure you get the point. In the end, they did not have a value proposition that would be compelling to this customer — or any customer, for that matter. And that is one big reason why this deal was going nowhere.

Three Characteristics of a Value Proposition

A value proposition has three characteristics that will make it compelling to a customer. And by compelling, I mean the customer will sit up, take notice and want to do a deal as soon as possible. First, a value proposition should highlight the incremental value between your offer and that of the next best alternative. Don’t talk about all of the things that are the same or similar to the customer’s alternative because there is no value in that. This attribute tells the customer why they should be paying attention to you. The following image is a resource called an Interactive Business Case (IBC) that highlights the total cost of ownership between two alternatives. The analysis shows that it would be more cost effective to choose Company ABC over the next best alternative:

ibc1Second, your value proposition must be directly linked to addressing a top priority of the key decision maker(s). Why? Because this is what they will spend money on and what they care about. This attribute tells them why they should care about what you have to say. Below is an example of a resource, called an Interactive Business Case. For example, if a key priority for a decision maker is to increase worker productivity, the Interactive Business Case screenshot below shows how this can be achieved by having a more efficient backup infrastructure:


Finally, a compelling value proposition will be defined by the customer’s success metrics because this is how they will measure value. By putting value in the customer’s language, it is easy for them to see and understand what you are proposing. This attribute tells the customer what you are promising to deliver. After all, they are not buying your product or service (that’s what they are paying you for), they are buying the outcomes or results they desire and that your product or service will provide. The screenshot of the Interactive Business Case below shows the outcomes that a product or service will provide, and how long it will take for their investment to bring in more value than the dollars initially invested.

ibc3The next time you are approaching an opportunity, know that at some point in the sale the moment of truth will be when the customer wants to know, “What is your value proposition for us?” When it’s compelling, odds are you will win the deal and win it quickly!

About the Author

Steve Thompson

Steve Thompson

Steve is the founder of Value Lifecycle, a strategy consulting firm, with clientele representing over 100 diverse industries. He has over 33 years of experience in operations, sales, sales management, purchasing, and executive management. After working extensively on both the selling and buying side of the equation, Steve brings a unique perspective to the challenges facing his clients as they define and execute their business strategies. Steve have consulted, trained, and implemented both strategic and tactical buying and selling programs in all major North American market centers, as well as Europe, Asia, Latin America, Middle East, and Africa.