If when you see the phrase “value proposition” you think: “Yes, we have one already. We provide great customer service. We’ve been in business for 75 years, and we have the best product,” then you may want to rethink where you stand.
In a Real Results Marketing survey, more than 88 percent of the distributors placed a large emphasis in their messaging on just a handful of features: product selection, availability, speed of delivery, pre-sales technical support and professional sales representatives. In other words, many distributors are saying the same thing. For most, it does not differentiate them from the competition. What’s more, the logistic functions of product selection, availability and speed of delivery are typically what your largest competitors do well. Do you really want to be positioning yourself against competitors like Amazon, Ferguson and Grainger on product selection?
What’s more, if you see yourself as all things to all people, and align your organization around that, you’re bleeding profitability. This isn’t just about coming up with a cool mission statement for your website. This is about how you target and communicate with customers and align your products and services to what they value. Having a value proposition that you can live and breathe for your customers is critical to your survival.
You need something much stronger to set yourself apart from the Amazons and other market leaders of this world. How do you know if you have a strong value proposition? Start with these three questions:
Do your employees know your value proposition?
Ask them. If each employee gives you a different answer, then it’s likely that your company does not have a strong value proposition.
What is your sales team’s pitch?
Do your salespeople go directly to price? Or does their message align with the rest of the organization’s? If it’s the former, it’s likely your value proposition needs work. Even if your team isn’t starting with price, you still need to make sure their message is one that your company can deliver on. In one distribution company we worked with, a sales team filled the vacuum themselves. They came up with their own value proposition and even went as far as to add it to their own collateral – emails, mailers, tear sheets and more. While the effort was commendable, there was one problem: Not only did that message not match the rest of the company’s communications, but it had nothing to do with the distributor’s strengths. Without a good value proposition, your organization doesn’t have a rudder. Everyone will go their own direction. This was a great example of that.
How would customers describe you?
Why do they do business with you? Ask them. You may also already have data in your system that can drive some insight. For example, if you offer emergency delivery services, how often do your customers use it? And, most importantly, are the customers who are using those services loyal to your company? How often does that customer reorder or order additional items from you? Are you their first choice or do they only use you when they need emergency products? The answers to questions like these should provide insight into how much a customer values the products and services you offer.
If you’re doing it right, your entire business should be organized around what customers value; you’ll acquire more customers, better serve and keep them, and, as a result, will grow market and wallet share. A strong value proposition can have a very real bottom-line impact for your business.
Contact us to learn about how Distribution Strategy Group can help you identify and communicate the right value proposition.