B2B

1. 4 Steps to Make Your B2B Value PropositionMore Compelling
Another area in which B2B marketers can learn from B2C
practices is researching and improving their "Value
Proposition". This concept has always been a predominant
strategic tool for marketing in B2C categories, and is now
becoming more ubiquitous in B2B industries. What has
driven the importance of this principle recently is the
recession and how customers today view and judge "good
value". Their biggest concern for the future lies
overwhelmingly in the economy. This macroeconomic reality
is impacting the behavior of all decision makers, in two
critical ways: (1) a reduction in consumption in many
categories (e.g. entertainment), delay of major purchases (e.g.
home improvements) and/or resorting to cheaper products,
and (2) for more essential goods and services, people will
trade down to stretch their money, demonstrating higher price
sensitivity and decreased usage.
Everyone is simply more sensitive to what they will be
getting for their money or the price they pay. The underlying
concept of "value" in this context for a value proposition is
based on a basic formula: "Value = Benefit/Price". The term
"proposition" implies a promise of value, or what can be
offered and delivered to the customer to enhance the
product/company brand equity (e.g. essentially the perceived
value of the brand) and customer loyalty. While there are
many definitions of "value proposition", the one I prefer is
more customer-driven and very appropriate for B2B
companies:
"It is a clear statement about the tangible business results
customers can get from using your product, service or
solution. Busy decision-makers don't care about what

2. you're selling. They only care about what it does for
them." [1]
In other words, a value proposition defines the primary reason
why a customer or prospect should buy from you and not the
competition. A company must find a relevant and credible
way to differentiate its offer from competitors, and ideally
identify at least one key element of value where they need to
excel.
Importance of Being Customer Focused
A good value proposition must be customer-driven, not based
solely on a product's attributes. In his book "Building Strong
Brands", David Aacker refers to the "Product-Attribute
Fixation Trap", where the strategic and tactical management
of a brand is focused on product attributes, with the
assumption that these are the only relevant bases for customer
decisions and competitive dynamics.
This is a common challenge for technology companies in
particular, who are obsessed with the intricacies of the
product functional performance. The key is to focus more on
the reasons why your customer could use your offering, or
what they really care about when making decisions.
Understanding the formulaic definition of value will help. A
concerted effort to diligently research customers will help
identify new insights and ways to enhance the perceived
benefit/solution. This will enable B2B marketers to then
establish an optimal price point that will accurately reflect the
relevance and importance of the perceived quality of this
benefit.
What to Ask Yourself (and Customers) To Identify
Opportunities for Improvement
When developing the value proposition to maximize the
perceived value of your offering, here are some useful
questions that we ask B2B clients internally and/or customers
in research.

3.  Why do people buy from our company in the first
place? What value do they seek? Expect? Hope for?
 What are we doing to meet their expectations? What
are we not doing?
 What are the customer's true "pain points" or
problems?
 What is our "niche/specialization" or area of
excellence? Do customers recognize this?
 How do customers actually think and talk about our
business? What must they be convinced of to start
buying from my company.
 What can I add to my value proposition to cause my
customers to say, "I would have to be crazy to do
business with someone else"?
How to Overcome Common Issues to Enhance Your
Value Proposition
Solutions must begin with smart research that validates
typical customer problems or complaints that can adversely
impact this balance between the perceived benefit and the
price. For example:
1. "The superior benefit is not worth the price premium"
a. Add or enhance an emotional element to the end benefit
b. Leverage the price as a signal of quality
c. Create new copy to elevate the perceived worth
2. "I already have the same benefit with my cheaper choice"
a. Question the cheaper option to shake the customer's
complacency
b. Focus on your superiority, perhaps with a credible
endorsement
c. Offer an extra reason to support the benefit and to buy
it
3. "I can't afford it, - it is way too expensive for me"
a. Reframe the absolute price - e.g. change the unit of
measure or perceived price point
b. Emphasize any side savings
c. Highlight the risks of not buying it
4. "Sure it's cheap, but I doubt the quality"
a. Reassure the customer on the quality - e.g. leverage

4. product strengths, brand history or special
ingredients/components
b. Use others to sell the quality - e.g. spokesperson who
epitomizes value, or how everyone else thinks it's high
quality
Creating a relevant and credible value proposition will be
meaningful only if it is consistently used to guide all
marketing and sales initiatives, from phone calls, emails,
voice mails to advertising and actual presentations to
customers. The concept of optimizing value is too important
for your success to treat lightly when defining the ideal value
proposition. We suggest you address 3 fundamental questions
which will help you determine whether your current value
proposition needs improvement:
1. Have the market conditions, including competition,
changed enough during the past 3 years so that your value
proposition warrants a new review?
a. Yes, so should consider whether/how to strengthen it
b. Not sure, but it makes sense to re-assess these market
dynamics to validate it
c. No, am positive my value proposition is still solid and
relevant (if this is your answer, there may be a risk in this
assumption?)
2. Do your primary customers recognize, appreciate and are
still motivated by the promise in your value proposition?
a. Yes, because we get feedback from them all the time
that confirms its viability
b. Not sure, because we don't spend enough time or
resources getting objective, comprehensive feedback
c. No, doubt it, because we have been getting mixed
signals and more pressure on our pricing from them
3. Do your marketing and sales teams consistently and
convincingly communicate the same message, based on your
current value proposition?
a. Yes, at least that is what my senior managers convey
to me
b. Not sure, as we don't always monitor their messages
carefully
c. No, don't think so because the coordination and
communications between our marketing and sales
personnel can be improved

5. If any of your answers introduce a hint that improvements are
needed, we would be happy to talk with you. Please refer to
our Marketing Effectiveness programs. Thank you.
[1]
Konrath, Jill. Sellingto BigCompanies. Chicago: DearbornTrade Pub., 2005. Print.
For further information on applying B2C marketing principles and disciplines in your
B2B organization, feel free to contact us. You can learn more about our company and
capabilities as a business growth partner for your business on our website.
Jay Gronlund
Principal
Global Partners, Inc
www.globalpartnersinc.com