Customer Value Proposition in Value Markets
Customer Value Proposition in Value Markets
Business houses that are our customers are under constant pressure to cut down their cost. With this concern at the back of their mind, out of the sales pitch, they mainly concentrate on the price quoted to them. In such cases, the supplier needs to demonstrate the core value offerings/ benefits with extra vigor to persuade the customer to make the purchase.
Marketing managers tend to neglect the real contribution of value propositions to superior business performance.
Understand what your offerings are really worth to the customers.
Once companies become disciplined about understanding customers, they can make smarter choices about where to allocate scarce company resources in developing new offerings.
Ways that suppliers use the term “value proposition” into three types:
1. All benefits: simply list all the benefits they believe that their offering might deliver to target customers. Requires the least knowledge about customers and competitors.
• Potential drawback: o Benefit assertion: Managers may claim advantages for features that actually provide no benefit to target customers o Focus on POP than POD: Any distinctions that do exist have been overshadowed by the firms’ greater sameness. Many of the benefits may be points of parity with those of the next best alternative, diluting the effect of the few genuine points of difference.
2. Favorable points of difference: “Why should our firm purchase your offering instead of your competitor’s?” This requires detailed knowledge of the alternatives.
• Potential drawback: o Value presumption: assuming that favorable points of difference must be valuable for the customer.
3. Resonating focus: Suppliers can provide such a customer value proposition by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a
Business houses that are our customers are under constant pressure to cut down their cost. With this concern at the back of their mind, out of the sales pitch, they mainly concentrate on the price quoted to them. In such cases, the supplier needs to demonstrate the core value offerings/ benefits with extra vigor to persuade the customer to make the purchase.
Marketing managers tend to neglect the real contribution of value propositions to superior business performance.
Understand what your offerings are really worth to the customers.
Once companies become disciplined about understanding customers, they can make smarter choices about where to allocate scarce company resources in developing new offerings.
Ways that suppliers use the term “value proposition” into three types:
1. All benefits: simply list all the benefits they believe that their offering might deliver to target customers. Requires the least knowledge about customers and competitors.
• Potential drawback: o Benefit assertion: Managers may claim advantages for features that actually provide no benefit to target customers o Focus on POP than POD: Any distinctions that do exist have been overshadowed by the firms’ greater sameness. Many of the benefits may be points of parity with those of the next best alternative, diluting the effect of the few genuine points of difference.
2. Favorable points of difference: “Why should our firm purchase your offering instead of your competitor’s?” This requires detailed knowledge of the alternatives.
• Potential drawback: o Value presumption: assuming that favorable points of difference must be valuable for the customer.
3. Resonating focus: Suppliers can provide such a customer value proposition by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a