For decades, companies have invested significant time and money in efforts to develop compelling value propositions that focus marketing plans and hone future business direction. However, the results of these efforts often overpromise benefits that the broader organizations can't, or even worse, never intended to deliver.
Consumers quickly recognize the gap between what a brand promises and what it actually delivers. The widening of this gap in recent years has led to widespread consumer frustration in the financial services, telecommunications and automotive industries.
Many major banking institutions, for example, have spent substantial media dollars advertising how much they value "customer relationships," while simultaneously nickel-and-diming their existing customers with hidden, and oftentimes predatory, fees. In a recent study, it was found that 78% of consumers believe banks care solely about their own interests and not the interests of their customers. Can you blame them?
Accordingly, consumers have become more reliant on the advice of their peers to find the "real stories" behind the brands they are evaluating. It is now customary to seek guidance, and even approval, from outside sources before making a brand decision.
How can you develop a value proposition that puts your organization in a position to deliver on its promises?
1. Get All Hands on Deck. All parts of the organization responsible for delivering the value proposition should be part of its development process; this includes: operations, finance, information technology, human resources, sales, marketing and any other divisions that play a role in contributing to the benefits that customers receive when they choose your product.
2. Dig Deep. Customer data and perceptions are central to any value-proposition exercise, but so too are a lot of other inputs, including business performance, development plans, pricing strategy, customer-service levels, technology roadmaps and much more. An initiative to create an effective value proposition will take a holistic view of the customer and the organization to determine where benefits reside for the business, its current and prospective customers, as well as its employees.
3. Take the Long-Term View. Developing an effective value proposition is not a light switch that a company can turn on and off. Similarly, taking a long-term view of the benefits that an organization can provide often necessitates an examination of what goods and services a company offers, and how, over time, those goods may need to adapt to consumer trends or evolving market conditions.
4. Be Honest. Sometimes reality is hard to face, but the more you know your company's weaknesses, the easier it is to build a successful value proposition. Mostly this process involves identifying why a customer would have a valid reason to abstain from your company's offering. In today's politically charged corporate environments, this can be a significant challenge that is all too often overlooked.
5. Never Stop. It is critical to continuously re-evaluate your value proposition based on what consumers want, on what new brands are offering and on what new things your existing competitors are introducing. Looking at ways your organization can continue to improve is critical to making sure your company thrives.
When effectively combined, these five steps can lead to a compelling value proposition that avoids the pitfalls of the isolated overpromise/underdeliver approach that many companies deploy today. This integrated concept also helps the marketing function bring the customer back to the center of the strategic-planning process.