Value proposition is a very common term within the business ecosystem.

This concept is not just linked to the way the companies communicate its products and services to the market. It must be applied internally, being part of the company's processes and communication, in a clear and objective way.

Before getting into more technical terms, let's give some more practical examples of how the value proposition works:

Companies like Amazon focus on communicating to the market about the wide variety of products on their marketplaces and how they can deliver faster than any competition.

Zappos is known for providing fantastic customer service.

In short, this is the value proposition of these companies. It is a specific benefit promise to be delivered, communicated and recognized.

In a market full of competitors, having a clear value proposition is undoubtedly what makes them stand out and sell more and better.

So, how to work this concept in your business? Let´s see.

The best way to structure your value proposition

The truth is that even without a formalized value proposition, your business probably already has one. That's why it's important to have control over how you want to communicate your company to the public, or the public will define this for you.

Even the small business in your neighborhood have one. If you like to have a coffee at the bakery near your house and the employees knows your basic order and your way of communicating (more formal or informal) already offering your favorite dish even before you ask for it, this business is probably already working on a value proposition focused on building relationships with its customers.

When you go to the center of any big city and find a cheap restaurant, very typical of large centers, with delicious and always abundant food, you know that their value proposition, even if is not formalized, is to offer food at the lowest possible price to win scale.

In the first scenario, we have a value proposition based on the relationship, in the second is based on price.

You don't have to make billions to have a value proposition. Intuitively, all companies already have one, whether it is good or not.

However, if you want to formalize it to enhance your marketing and sales results, there are several ways.

First we have to map 3 important points:

What value does your product/service deliver?

First, always think about the result you offer to your customers and partners. When we talk about B2B sales, we can think of the value proposition based on a very simple triad:

• Cost reduction;
• Revenue increase;
• Risk reduction.

If your solution doesn't solve any of these points, your sale is probably anchored in relationship.

Let's use the example of Insight Sales itself. Our solution can automate the monitoring of sales KPIs, integrating with any CRM in less than 1 minute, without the need of developers.

Taking into account that this is a job that normally takes several months to be done and cost a lot of money, we can say that our product delivers a very significant reduction in cost and working time.

Now we know what we deliver to our customers in terms of solution and we can move on to the second point.

How to deliver your solution?

We are now on a very important topic. Talking to an entrepreneur and business consultant with over 10 years of experience in top management, we discussed a lot about the value proposition.

An interesting point he raised is that many businesses managers, entrepreneurs and salespeople end up forgetting that innovation is not always necessarily linked to the product.

A great product helps sell, of course. But your innovation may be in your business model and the way you deliver your solution to the customer.

Hubspost is an interesting case. They have a channel program where the partner indicates their software. Therefore, they are one of the most interested parties in making the tool work in the best way, because the can integrate with their tools and improve customer's results.

At the end of this process, there are partners that leverage the system's results within their customers, increasing customer retention and, consequently, reducing churn.

It is interesting to see how, in addition to the product, we can add to the business model and service a way of generating value for partners and customers.

The value perceived by your customer

Communication is everything in life. It is very common for you to communicate "A" to a person and they understand "B", and in business terms this can bring a lot of problems (and few results).

Imagine the following scenario: Company "A" sells business automation software. The practical result of the application of this tool is the reduction of costs, because with automated work it is possible to have the same desired result with fewer people working. That's the obvious conclusion, right? Wrong.

Now imagine that there is another company (we'll call it "B") that is interested in buying company A's solution to automate commercial emails. She has faced difficulties in monitoring and training her salespeople as she works with many salespeople and few managers. Since her product is relatively inexpensive and she needs multiple people in the commercial to sell at scale, reducing staff is not an option. The consequence of this is that many emails are sent with poor communication, outside the expectations of the company. Over time, these mistakes start to get in the way of branding.

Therefore, she is looking in the market for an automation tool to automate the sending of emails. When finding company A's solution, the feature that most caught the attention of company B's managers was the possibility for all salespeople to be able to use the same email template.

With this tool, company "B" will finally be able to standardize its speech, reducing the risk of misalignments when prospecting.

So, she bought the solution to reduce her risk and not her employee costs.

It is very important to talk to your partners and customers whenever possible (it can be through online surveys, social networks, or customer service, for example) to understand how they are seeing your service, service and business model.

The answer is likely to surprise you.

Implementing your value proposition in the sales routine

At the beginning of the artcile, we talked about the importance of studying your value proposition well. It is essential to have this information very well aligned with your marketing and sales team to communicate it effectively with the market.

Let's go back to the Insight Sales scenario. Our solution reduces the cost and time of implementation and we strive to provide an extremely personalized and humanized service to our customers.

How do we communicate this to the market? First, we've made it very clear that we do months' work in under 60 seconds.

The savings generated are quite noticeable. Every contact we make, whether through Outbound or Inbound communication, we leave this information in evidence.

We positioned our tool as a salespeople solution made for salespeople. When we say this, we make it very clear to our target audience that we understand their pain and we will communicate in the same language.

Therefore, all our communication - whether made to prospect emails, marketing emails, presentations, proposals, institutional website and blogs - need to make this very clear.

After communicating, we need to execute on a daily basis with our customers what we want to have as a value proposition.

We keep the tone of contact informal, and we always try to respond in less than 1 hour, even if the problem is not urgent.

We help with business process and management tips, even if they are outside the scope of our tool. In this way, we put our value proposition into practice so that our customer's perception is similar to what we communicate and want to offer.

Not to say we're just talking about us, let's give an example of the value proposition of a company that you may already know very well.

Case Study Netflix - value proposition for studios and customers

Anyone born before the mid-1980s lived through the movie rental era. You had to go to a store, choose the VHS (who hasn't rewind a tape?) or DVDs you'd like to watch and rent it.

It had to be returned before the deadline set by the rental company. If you missed the date, you had to pay a late fee.These type of service have generated absurd revenue for rental companies, with the most famous of them being Blockbuster.

Today, it is even difficult to imagine this scenario, but it was the great reality of movie lovers in the past.

However, in the late 1990s, Netflix emerged. Instead of charging high rental and delay fees, Reed Hestings' company designed a value proposition based on not charging multiple fees, giving customers the right to rent unlimited movies.

This idea at the time was a big disruption!

In the late 2000s, streaming technologies emerged. With them, Netflix was able to further revolutionize its value proposition, generating benefits for both the movie industry and its customers.

On the one hand, film production companies did not become so dependent on the high distribution costs of the traditional market, making it possible to produce more films, reach a larger audience and also more quickly. On the other hand, customers had access to a much larger catalog at a lower cost compared to the cost of renting just a VHS in the past.

It needed a lot of investment in technology to deliver its value proposition more broadly, generating benefits for most of those involved in the process, thus being an interesting case of a company that structured and evolved a value proposition that conquered the world.

Netflix is ​​a giant that has had access to a lot of investment, but you don't have to look so far to see the benefit of a clear value proposition: after all, without one, you probably wouldn't have a favorite restaurant or bar to go.

How to have an efficient value proposition, after all?

It is critical to understand that the value proposition must be read by the public promptly.

You must speak the same language as your customer, and use all resources to make them want to communicate with your company.

So, the best way to do this is to have clear guidelines for the entire company, and reinforce day-to-day communication, but not forgetting that the delivery of the product/service/business model itself is the most important thing to reinforce the proposal in the consumer's mind.

That's why you have to invest in improving deliveries whenever possible aiming for a better perception of your brand by your customer constantly. There's no better way to demonstrate your value than with satisfied customers.

And you, what is your value proposition?