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Value Propositions

Baskar Sundaram

A good value proposition helps clients grasp the value of what you are selling compared to other options. It should provide customer-specific statements that are quantifiable and describe tangible and intangible value and offer clients something they want and gives them a good reason to choose you over your competitors.

Sell the value based on client benefits.

People make decisions based on recognition of your brand. 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. Creating a good value proposition helps you win.

Link benefits to your unique selling points.

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

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.

Quantify the payback.

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:

○ Time / Breakeven Period

○ Rate / Internal Rate of Return (IRR)

○ Value/ Net Present Value (NPV) / Economic Value Added (EVA)

Use proof points to further convince the customer.

Make it visual

Using pictures to explain your value proposition helps clients understand your value faster and remember it longer, and also adds emotion to persuade.

Focus on the right kind of impact.

According to Tom Sant, clients may seek the following kinds of impact:

○ Strategic/Financial

○ Tactical/Technical (operational)

○ Political/Social

Examples of measurable impacts to look for are:

  1. Strategic. Improve working capital by 30 percent with no increase in revenue.
  2. Tactical. Automate a manually intensive aspect of the mission so that it requires 10 fewer steps to complete, thereby reducing errors and saving hours of effort.
  3. Political. Improve morale by combining long-distance telephony and network offerings, thereby increasing retention by five full-time equivalent positions per year.

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.

The article briefly details key examinable syllabus area from the APMP Foundation certification.

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