Making your company “valu(e)”able…..to customers, employees and other stakeholders
Loading ...Going by the fact that the session “Defining Value Proposition” during NASSCOM’s recent EMERGEOUT Conclave was one of the best attended ones, one thing is clear – creating a compelling value proposition continues to remain a challenge for technology companies.
In response to the many questions that cropped up during that discussion, this article attempts to piece together a framework for building a compelling value proposition, one that has been synthesized from our various interactions and consulting engagements.
Creating a compelling value proposition continues to remain a challenge for technology companies. This article is an attempt to piece together a framework for building a compelling value proposition, one that has been synthesized from Prayag’s various interactions and consulting engagements.
Focus on what you are really good at
The one thing companies should avoid is creating a laundry list of capabilities or perceived differentiators. Most companies have this false notion that the longer the list of attributes going to define their value proposition, the more compelling it is. In reality, it is the reverse. When you are approaching a customer, he is going to assess you vis-a-vis a similar player as well as see how your strengths stack up against his key requirements. Thus, it is important to highlight what makes you stand out as well as what you are really good at.
Service parameters can be strong differentiators
Most companies we meet believe that since they are in the services business, they do not have anything unique to offer. Nothing can be further away from the reality. In today’s world companies across industries are striving to improve service and demonstrate that they value customers. One reason, perhaps, for this line of thinking, is because we do not understand how to demonstrate differentiation along soft dimensions. Service dimensions such a reliability, predictability and quality are of utmost importance to a customer- the moot point is, whether you are willing to put a stake in the ground and make a commitment on these parameters which will make the customer sit up and take notice. For example, a company that offers guarantees or commitments on service levels is more valuable to the customer than one that merely talks about better service but is reluctant to commit.
Quantifying benefits
During the session at EMERGEOUT, co-panelist Sanjeev Agarwal elucidated, from his Daksh experience, the importance of presenting the gains well – he contrasted the way Daksh had presented the gains (by guaranteeing service level adherence) to that of a competitor from Philippines, who had translated the same into monetary gains- and won the deal. Thus, sometimes, spending that effort to see what will make the most impact on the customer may go a long way in sharpening your value proposition.
Know your customer
Please ask yourself the question “How well do I know my customer?” and give an honest answer. I am certain that most often we would find that we don’t know enough. And then what happens is that we are making generic assumptions on how we can make a difference, or, worse still, highlighting the wrong thing. For example, offering to drop price (which is the most common tactic adopted by service providers) may be of little relevance to a prospect who values quality and reliability of a strategic project. On the other hand, domain understanding and program management capability may be of great importance. So, for example, even if you did not have such skills in-house, if you offered to bring in those skills / people (by teaming up with a complementary provider) and demonstrated that you understood the customer’s needs, that may work better.
Credibility is important
It goes without saying that one must be able to back the stated value proposition with a track record, or evidence of capability or references, or a combination of these. Further, the credibility of the individual or team that is delivering the value proposition also makes a difference. Thus, a presentation delivered by the management team, or CEO, carries a lot more weight than one delivered by a sales person. This is especially true of emerging companies which are yet to become established brands.
And so is measurement
It is imperative to have your pulse on how well the value proposition is working for you. As an emerging company, you can do dip sticks, solicit feedback after a meeting and try other cost effective ways to keep informed.
It is not just about the customer
As a company, not only do you need to offer compelling value to a customer, but also to every other stakeholder. The employee, for example, is a key stakeholder, and you need to be able to articulate why the employee should choose to work with you, rather than the neighborhood company. One other aspect is to tailor the value proposition for different experience profiles- for example what may be important for an entry level hire may not be relevant for a lateral hire and vice versa.
Framework for defining your Value Proposition
- Focus on what you are really good at
- Leverage service parameters
- Quantify benefits
- Know your customer
- Credibility is important
- Measure! Measure! Always
Last, the entire organization needs to believe in the value proposition and back it through articulation and action – invaluable for translating the value proposition into wealth (and value!) for your company!
Post contributed by Sudha Kumar, Prayag Conuslting for the EMERGE newsletter.
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