Almost all startups understand the importance of forging value propositions. Most startups do not understand the importance of proactively marketing, or projecting, complete value propositions out to customers. This happens because they get stuck in the product. Product value is always important in any environment but customers also seek vendor value during tough times. During bad economic times, as we are clearly in now, the notion of positioning comprehensive value to customers is going to be a critical endeavor.
Simply put, value is the sum of all things that a startup will promise to a customer in exchange for a sum of money. If you leave it up to the customer to figure out the value equation, you are almost certain to end up shortchanging yourself.
Value is not ROI or TCO. Value is not cheap price. Value is not some vague benefit. Value is tangible and powerful.
What customer pays for + what customer thinks they are not paying for but gets anyway = value.
Purchase needs are made on the first part – what they need or want and, therefore, will pay money to get. Purchase influences are the first part in addition to the second part. The decision of course is the end result of the two … value.
Most startups do a good job of marketing the first part. Very few even attempt to do the second part.
Customer marketing at a former company Raj and I worked at (NetScaler) focused entirely on a comprehensive value proposition. We went way beyond the product’s value (i.e., performance, savings) and marketed the so-called “backdrop” values. The company emphasized customer satisfaction through a host of marketing tools and survey research so that “great treatment after the purchase is made” becomes as important as anything. We aggressively marketed the fact that a great majority of Internet traffic flows through NetScaler products so that customers felt safe in joining this universal club – that is, they felt safe in making their choice. As well, we emphasized the application knowledge residing within our company so that networking customers felt that a trusted adviser for an ancillary domain would “come with the package” so to speak.
When times are tough and customers have less money to spend, remember to do them a favor and do your homework as it relates to sharpening your value proposition. This is something that doesn’t require a lot of money – just a lot of honest thinking.
- John
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