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How To Create A Compelling Value Proposition For Your Technology

How To Create A Compelling Value Proposition For Your Technology

Vice President, Innovation & Growth @NVST.

Have you ever had a sales rep pitch you a product based on the specs and the price? It is a frustrating experience. If you are a commercial leader and you have this approach on your team, you are not effectively capturing the market.

While innovation is classically defined as a research and development profession, it is all for naught without the ability to arm a salesforce with an effective value proposition. Three key elements are involved in crafting a strong value proposition: segmentation, market positioning and effective claims.

1. Segmentation

Segmentation is an often-overlooked part of the research and development process. Of course, everyone wants to sell their product to as many people as possible. However, great new products are not made trying to boil the ocean.

Harvard Business School professor Clayton Christensen famously discussed how steel mills were disrupted by smaller micro mills, not by solving all pain points at once but by solving one customer’s unmet need. A helpful tact to get at defining who your product is for is first defining who your product is not for. Once you have decided who you will not focus on, you have the freedom to focus on the market segment you want to win first.

It also means fewer extra features get pulled in for developers, meaning quicker development cycles. If development cycles are quicker, it means that learning cycles are also quicker since you will speed up time to learning. From a P&L standpoint, this is also beneficial. As Paul Wietecha, CEO at Blacksmith Applications, said, “Segmentation helps companies allocate scarce resources where they will deliver the highest payoff.”

2. Market Positioning

Market positioning is also vital to understand in order to craft a meaningful value proposition. It would be out of place for Dunkin Donuts to offer $9 drinks on their menu and try to compete with Blue Bottle coffee. They serve different demographics.

An exercise I take many teams through at Envista is creating Harvey ball diagrams for their product line. The first question I ask is, “What areas do our customers care about?” These become the columns. I then ask, “Who are our main competitors?” These become the rows. Then we rate each competitor on each dimension.

Careful facilitation is required for such an exercise. It is easy to get caught in the trap of thinking about direct competition. This is an incomplete view. Zoom and Delta both compete for my dollars to show up at a business meeting. Maniacal focus on your customer’s unmet needs is required to perform such an exercise effectively. If done right, this exercise allows you to see go-to-market strategies of competition and should foster a healthy discussion about how to attract under-served segments and target personas.

3. Effective Claims

The final element of crafting effective value props is articulating your message in a compelling structure. Ultimately, as innovation professionals, we need to ask ourselves, “Why should my customer take the action I want them to take instead of their current path for meeting the need.” There is a cost in change, and to drive action, it is important to have a value proposition that is easily understood, differentiated, need-focused and credible.

Like with most things in life, getting your claim right the first time is hard. That is why rapid experimentation is key. Is the team stuck in the middle of a debate on which exact wording resonates better with the target persona? Test it.

Amazon founder Jeff Bezos once said, “Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day.” Most experiments fail, no matter how well-designed; however, the quicker they are run, the quicker the team will learn what message better resonates and delivers value.

Remember that most people do not buy ice cream on the beach because it is 30 degrees outside, it is made with the color 40 dye, it uses artificial vanilla flavor, and the price is $0.50 less than the other vendor. People want their needs met. If your sales team is not equipped to sell your innovative new product with tools beyond specifications and price, the job of research and development is not done. Value propositions are hard to nail down, but when done well, they can be truly differential in the market.

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