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Value Proposition

Baskar Sundaram
Baskar Sundaram

Value Proposition is a statement that specifically addresses how aspects of an offer positively affect a customer’s business. It should provide customer-specific statements that are quantifiable and describe tangible and intangible value. It offers clients something they want and gives them a good reason to choose you over your competitors.

A good value proposition is a great paid to proposals since it helps clients grasp the value of what you are selling compared to other options. It explains the benefits of using your product or service and what problems it solves to your ideal customer. It describes to your target buyer the pain point that you can solve. It outlines what makes your company or solution unique and superior to alternatives. A value prop may determine if a potential customer responds to a sales pitch or not.

People make decisions based on recognition of your brand hence a good value proposition takes the client’s needs into account and is also sensitive to the role of the evaluator. It demonstrates your understanding and frames your solution in a way that matters to the buyer. Selling on value helps to organize your proposal strategy. Value grabs your client’s attention and differentiates your proposal.

Your value proposition is unique for every sales opportunity and relates to your theme and strategy statements. They introduce key win themes in a way that makes an impact on your client and demonstrates that you are the best choice. Try to Involve your customers in developing and testing your value proposition and support your claims with facts and third-party evidence.

In building a Value Proposition try to use effective price-to-win methods. Value rather than the lowest price quotation is the way the customer perceives price, and the winning proposal offers a client more value than any alternative options. Use price-to-win methods to arrive at a winning price. A good way to demonstrate the value of your solution is by quantifying the return that the client will get by investing in it. ROI may include one of the following typical measures:

  1. Time / Breakeven Period
  2. Rate / Internal Rate of Return (IRR)
  3. Value/ Net Present Value (NPV) / Economic Value Added (EVA)

Also, use Proof Points (Pieces of information proposal developers use to support the soundness of a solution) to further convince the customer.

Using pictures to explain your value proposition helps clients understand your value faster and remember it longer, and also adds emotion to persuade. Structure your value proposition in a logical, orderly way.

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Go through a checklist of questions to ensure the perfection of the work. The checklist must include questions like Who is the target customer, Why should the customer buy your product or service, What does the product or service do, etc.

Some tips you should keep in mind while building an effective Value Proposition include keeping it short and simple, knowing your audience, being aware of hype, jargon, and superlatives and focusing on benefits over features.

Failure to sell on value will result in the client choosing on price or doing nothing. Overcome obstacles to using the value proposition to increase your chances of winning. A value proposition offers clients something they want and gives them a good reason to choose your organization rather than your competitors. The value proposition forms the foundation of the executive summary. You don’t have to offer the lowest price to win a deal; you must show more value than your peers. Quantify the payback using a measure of time, rate, or value. Make the payback visual and add emotion by including a graphic, even when the value is intangible. There are many ways to structure a value proposition; choose the method that works for your organization and the proposal you are working on. Focus on the right kind of impact, which may not necessarily be financial.

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