Commentary & Analysis
Do You Really Have A Value Proposition?
By Barbara Pellow February 1,
By WhatTheyThink Staff
Published: February 1, 2006
By Barbara Pellow February 1, 2005 -- Over the past few weeks, my columns have discussed four components to successful marketing and the development of sales opportunities. All four of these key components must be given careful consideration--for each can affect whether you fail or succeed in your marketing efforts. 1. Identification of the right target market 2. Development and delivery of product and service offerings that meet customer needs 3. The message…a clear articulation of the value proposition 4. Effective selection of media to reach the target audience This week's column focuses on The Value Proposition. The Value Proposition The December edition of Printing Impressions published printing's Top 400. As I analyzed several of the firms that were experiencing double digit revenue growth, I saw a common characteristic. The market leaders all had strong value propositions. When investigating your company, anyone in business, politics, public service, or an applicant looking for a job should be able to answer the question. "What's your value proposition?" The printing firms experiencing double digit revenue growth all had a strong value proposition. Definition of Terms The definition of "value" in the American Heritage Dictionary is "Worth in usefulness or importance to the possessor; utility or merit." A definition of proposition is "the act of offering" or "that which is proposed or offered." In the world of marketing, a value proposition is the basic reasoning you provide for why people should consider your product or service. To get customers to change from the status quo, you have to give them a good reason. They need to know the tangible business results they will get from using your product or service. The more specific your value proposition is, the more likely you will be to encourage potential customers to do business with you. As I examined a number of Internet home pages (these are often the initial introduction to your company) from a variety of different print service providers, I realized that they were--in a word--lousy. They offered a description of the types of jobs or general services the printer could provide and an equipment list of the technology used in the print shop. And they displayed lots of pictures of buildings! While the printers will remain nameless, here are a few examples of the weak value propositions I discovered. * XXXXXX operates from strategic plant locations and regional sales offices throughout the United States to conveniently address all of our customers' needs. * XXXXXXX operates printing plants all over the world, geographically dispersed to provide capacity primarily in Europe and the United States. We have a strategic advantage over our competitors because our operations are structured to be more flexible and scalable. We use the right press for the right job. * You receive the highest grade printing that only comes from years of being one of the leading commercial printers in the Midwest. As you examine these value propositions, you might be saying, "Who cares?" Well, you should care. If customers think you have a weak value proposition, you won't have a chance to continue the dialogue. You haven't shared what's in it for them-- and that's what customers care about. The last thing you want, when customers visit your web site, is for them to say "Who cares?" In the examples above, they are likely saying just that. You need a benefit-oriented value proposition that speaks to the critical issues your target audience is facing Today's challenging economy requires a strong value proposition that breaks through the clutter and gets the customer's attention. That means that you need a benefit-oriented value proposition that speaks to the critical issues your target audience is facing day in and day out. It needs to be as specific as possible to get the decision maker's attention even faster. The truly strong value propositions talk about tangible results like: * Increased revenues * Faster time to market * Decreased process cost * Improved inventory management * Increased market share * Improved customer retention Value Propositions that Work There are a number of graphic communications service providers that have re-engineered their value propositions to reflect the values that are important to the respective target markets they are trying to reach. Here are some examples. Lavigne Inc. President and CEO Chris Wells had a good perspective on where the market was going and realized that he needed to adjust both his value proposition and business model to maintain his current customer base and attract new business. LaVigne has been in business for over 100 years and is one of the largest independent commercial offset printing firms in the Northeast and one of the 50 largest digital printing facilities in the U.S. LaVigne has developed advanced, accurate, without-a-hitch mailing programs that are dealerized, personalized and localized -- for any number of users, anywhere they may be. These customized Web-based print applications feature easy to use templates for uploading data, text and images via the Web, putting users in control of the message and timing of the delivery to their customers. LaVigne manages a mix of digital assets and data for the corporate location to protect brand integrity. LaVigne has completed the value chain by adding back-end services such as mailing, fulfillment and distribution operations for customized materials. When you visit the Lavigne Inc. web site, the value proposition is clear. It states, " We are not just about great looking printing. Our mission is to help you deliver the right message to the right people at the right time and the right cost. We call this Return on Communications Investment (ROCI), and nowadays this mission goes far beyond the pressroom. Maybe that's why so many progressive clients trust us. We know that there are lots of great quality printers to choose from, but our clients work with us because we help them increase their ROCI. And we look forward to the opportunity of helping you increase your ROCI too." Targeting High-Profit Customers Salt Lake City-based Rastar Digital Marketing has targeted auto dealership marketing programs with great success to deliver customer acquisition and retention programs. Through the science of data mining, Rastar helps dealerships identify "high-profit" customers and prospects residing in their primary market area and builds a communications program that reaches them one by one, producing three personalized full-color pieces over an eight-week period to drive traffic into the dealership. These communications introduce the dealership to the prospect and offer them current service specials along with a special incentive to those currently in the market for a new vehicle. As soon as a prospect responds or comes to the dealership, he or she is immediately enrolled in a one-to-one marketing program. The mailings are Internet template driven, so the dealership can add its own unique information including text, photos and special offers. Once the prospect is converted to a customer, Rastar works with the dealership on customer retention. Rastar's key value is business results for the client: "Rastar Digital Marketing drives a staggering ROI of $59 in revenue to every dollar a Lexus' dealership spends on the 1:1 program." We are changing the way that the dealerships do business by getting them to focus on customer retention According to CEO Kevin Despain, "We are changing the way that the dealerships do business by getting them to focus on customer retention -- which is right in line with Lexus' initiative for improved customer experience. We are in a great place at the right time to deliver very unique and compelling marketing solutions because we have the preparation, the HP Indigo press infrastructure, and the experience in personalized communication strategies." Targeting Customers Who Get It Strategic Content Imaging (SCI) has grown 50 percent per year for the past three years and will be moving to a 90,000 square foot facility in Carlstadt, New Jersey during 2006. According to Senior Vice President Steven Amiel, "I attribute our success to our ability to identify customers and markets that place a high value on our work. We clearly focused on a specific bull's eye--the $ 50 million to $2 billion company or division with multiple products sold through multiple distribution channels." SCI's knew that this customer base had a need and appreciation for integrated cross-media campaign management and the blend of services offered by SCI. Its value proposition is simple and clearly aligned with benefit to the end customer. " Strategic Content Imaging (SCI) specializes in the management, production and delivery of electronic and print communications. Our mission is to help clients reduce the costs, streamline operations and increase profitability." The Bottom Line As you look at how your business is positioned in the market, forget that your products, services, or print equipment even exist. Talk about the impact you can have on your customers. Tell a "before and after" story that talks about the difficulties that your customers experienced before they worked with your company -- and what you helped them achieve. Visitors to your Web site will no longer be saying, "Who cares?"