You’ve done the hard part. You’ve got value defined in the eyes of the customer. You’ve created a product that creates more value than alternatives in the market. It’s time to generate demand and prepare to secure orders at value-based pricing. It’s time to market your value proposition.
The four things you need to know about marketing your product’s value proposition are:
- Value-based strategy guides value-based marketing.
- It is a commercial conversation.
- It is not selling.
- It requires substantiating your value throughout the sales cycle.
1. The Value-Based Strategy Definition Provides the Framework for Marketing Value
Value-based strategy for capital equipment is a business strategy that deliberately creates more economic value for the target customer than alternative offerings. And then extracts fair, profitable compensation for that value.
Four critical elements of this definition guide value-based marketing:
- …deliberately
- …economic value
- …more value…than alternatives
- …fair, profitable compensation
Your marketing is going to be deliberate. You’re not going to make it up on the fly. You’re not going to rely on lofty, hollow platitudes. You’re not going to leave the sales force to fend for themselves. Instead, you’re going to equip the sales force to substantiate your value proposition during the sales cycle and win orders at the prices you deserve.
The economic value that your product creates for your target customer will headline your marketing messages. It’s the cornerstone of your entire marketing strategy. Every sales tool, press release, product demonstration, advertisement, and promotion will be designed to support your economic value proposition.
You won’t be vague on value. You’ll express it in financial terms, and you’ll be clear about the competitive advantages that enable your unique value.
You’ll take on the competition. Your product creates more value for the customer than alternatives. Therefore, you will have to talk about those alternatives. You’ll make direct comparisons between your product’s and the competitions’ ability to create customer value.
You’ll deal with price. The price you seek is fair, profitable compensation for the value that your product creates for the customer. That price needs to be defined, communicated, and defended.
2. It’s a Commercial Conversation
If your customers only buy from you to make a profit, it follows then that marketing value must take the form of a commercial conversation. You have to link the problem that your product solves for your target customer to the financial benefit that they can expect. That conversation follows this flow:
- We understand your problem
- We have a unique solution
- It will produce a superior financial result for you (the customer)
The above is very different from a product features and benefits discussion. Your customer’s business and problems are center stage. Their financials and your product’s price will have starring roles. It happens at all levels of your market messaging. It doesn’t matter if it’s a:
- Press release
- Introductory presentation
- Product demonstration
- Web page
- Conference paper
- Or detailed response to a prospect’s inquiry
Everything is a commercial conversation.
3. It’s Not Selling
Value-based marketing and value-based selling are not the same things. Marketing is preparing to win orders. Selling is winning orders.
Marketing:
- Defines the target customer and product.
- Creates value propositions for target market segments.
- Generates market awareness of your product’s value proposition and competitive advantage.
- Develops capability to substantiate your value proposition, competitive advantage, and price during a sales cycle.
Selling:
- Qualifies individual prospects.
- Tailors your value proposition and competitive advantage to individual prospect’s needs and circumstances.
- Executes the sales cycle to win orders at target prices.
Both processes are required to succeed in a value-based strategy. However, you must make the distinction between the two.
Parachuting marketing guys in to make a sales presentation to a prospect is not marketing value. It’s just marketing guys selling. If your marketing guys constantly find themselves in the selling role, it’s a pretty good indicator that the marketing work hasn’t been done.
4. It’s Substantiating Value Throughout the Sales Cycle
If you want prices that reflect your value, you will have to ensure that customers can confirm your value before purchasing. You need to draw prospects into your sales funnel based on your concept of value. Then you need to substantiate that value through every step of the sales cycle.
The marketing team needs to:
- Develop and communicate the value proposition and rationale for buying
- Equip the salesforce with tools that support your value and can be customized to individual customer circumstances.
- Ensure that if a customer requires you to demonstrate your product’s value before purchasing that you never fail.
- Develop product positioning skills in the sales team so that they can sell value with confidence and secure value-based pricing.