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Value Proposition: The right strategy beats a bigger budget

March 7th, 2019
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Marketers say they have money problems.

According to research from Conductor, lack of budget is the biggest internal challenge that could negatively impact online performance. Securing budget/investment is the most extreme challenge for marketing teams, according to KoMarketing research. And here at MarketingSherpa, you’ve told us the size of your marketing budget is a barrier to growth time, after time, after time.

Hey, I hear you, marketers. I want a bigger budget as well.

But if you can’t simply throw more money at the problem or outspend the competition, you can still beat them — with a better approach. In other words, a more effective value proposition.

I recently came across the perfect example when I talked to a marketer who likely has far fewer resources than you do.

This article was originally published in the MarketingSherpa email newsletter.

A value proposition based on customer-first marketing

Dean Porter is the development director at Hunger Fight, a small local nonprofit organization here in Jacksonville that helps feed Title 1 elementary school students as well as seniors.

Dean and his wife founded their charity in the teeth of the Great Recession. And they quickly learned that organizations were not so keen on simply stroking a check to a charity, even when it was doing noble work like feeding the hungry.

They didn’t have a big marketing budget they could fall back on. They couldn’t just spend their way into more leads.

So they had to come up with a better idea – a value proposition aimed at giving to their ideal customers, not just taking from them.

They created a model with a value proposition that coupled corporate employee engagement with community involvement by holding meal packing events, which they describe as “two ½ hours of organized chaos to feed children and families.”

 

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MarketingSherpa Podcast Episode #4: What do you lead with?

February 12th, 2019
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What is an impactful way to increase conversion?

Or …

How do you grab your customer’s attention?

See, I could have led with either statement. Both statements describe our conversation in the latest MarketingSherpa podcast. But my hypothesis was that the first statement would grab your attention more.

Customer attention is a scarce resource. There is only space for one headline in the print ad, only a set amount of characters in a paid search ad, only six seconds that will be the opening six seconds of your TV commercial. And yet, your product likely has many value attributes.

So what do you lead with? To elucidate (and other fancy words) yourself on this subject, you can listen to this episode below in whichever way is most convenient for you — or click the orange “Subscribe” button to get every episode.

 

 

More About Episode #4 — Value sequencing

The initial question of the podcast leads to a bigger topic — value sequencing.

What do customers need to know? And when do they need to know it during the buyer’s journey? In addition, which customers need to know which things about your product?

This is true for their entire macro-journey with your brand but equally important at the micro-level within each customer interaction. For a landing page or an email, what do they need to know in the beginning, middle and end?

These are topics Austin and I dove into. Here are the show notes from this episode:

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Value Proposition: Before you express the value, you have to deeply understand the value (MarketingSherpa Podcast Episode #3)

January 29th, 2019
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You think your product is great. Your service is top-notch. And personally, I have no reason to doubt you.

Your ideal customer, on the other hand … let’s face it, they don’t live in the four walls of your office. They aren’t thinking about your product every moment of every day like you are. They — and I hope this doesn’t sound harsh — really don’t care.

This disconnect is normal, of course. But here’s where you’ll get in trouble.

The next time you hire an advertising agency to create a campaign, when you redesign your website, when you launch a product — if you use that same insider thinking, you will undercut your marketing investments. Because those advertising and marketing creatives need to be armed with an essential reason why the ideal customer should buy your product.

Without that core reason — that marketing creativity isn’t being put to its most effective use. Just like a painting without a viewpoint isn’t really art, it’s just nice colors on a canvas.

Without that core reason, all you get is “we’re the bestest, greatest, amazingest [product type] you’ve ever seen.” You can buy all the media you want and blast that message out into the world but really … c’mon … how many customers will truly believe it?

Your product needs a value proposition. In our latest podcast, Austin McCraw and I have a robust yet light-hearted conversation about pitfalls marketers can get into when crafting their value prop. You can listen to this episode below in whichever way is most convenient for you or click the orange “Subscribe” button to get every episode.

 

 

More about episode #3 — consider the competition

A value proposition created in a vacuum is no value proposition at all.

And this is what makes crafting a value prop so difficult. You’ve got to take a good, hard look at what other options your customers have. Even when it isn’t direct competition. For example, customers taking a short trip aren’t only considering which airline is best, they are considering if they should drive instead. Or take a train. Or perhaps not go at all.

That competitive element can go against our human nature because by playing up a competitor’s offerings, we can feel disloyal to the team we’re on.

But it is essential for marketers to be the voice of the customer in the organization, reminding the whole company what other offerings are out there. By doing so, you not only sell your company’s products and services but can positively shape their value to create something even better for customers. And by having an influential stake in value creation, you are at the heart of what is important to business leaders and the very essence of the business itself.

These are topics Austin and I dove into. Here are a few key moments from this episode:

  • 1:55 – Austin defines value prop.
  • 4:26 – You’re trying to set an expectation, not make a promise.
  • 5:35 – There is a fundamental value proposition for the entire company. Marketers can feel intimidated by that because they feel like they can’t really affect it. But every person in every company can likely at least affect one of these other levels of value proposition in their daily work.
  • 8:16 – Organizations also have a value proposition. Cultures have a value proposition.
  • 11:00 – A value proposition workshop is a way to get key business leaders together and discover the most powerful value proposition.
  • 12:19 – Consider the competition, even when you think the product is so breakthrough that there is no competition …
  • 15:49 – … because there is always competition. I’m a Jacksonville Jaguars fans, and at the beginning of the season, I could have felt like they have no competition. But now, staring back at a 5-11 record, reality clearly shows they weren’t up to the competition.
  • 17:42 – Of course what we’re talking about is looking past your direct competitors. We use the example of newspapers here. Even though many newspapers do not have direct competition, they still have plenty of indirect and replacement competitors.
  • 21:20 – Sometimes products or brands within your company aren’t differentiated enough. In that case, less is more, and they shouldn’t all exist.
  • 21:56 – Sometimes your products are competing with each other. In that case, make sure there is clear value differentiation between them. A bad example is my car insurance renewal. I get a thick packet in the mail that I don’t understand, and I don’t really grasp the different value of my product options.
  • 24:10 – A feature matrix is a great way to show the different levels of value offered by different products to minimize competition between products and help customers select the best offering.
  • 21:41 – Your product needs clear exclusivity from all competitors, both internal and external.
  • 27:25 – Even if you have a commoditized product, you can find ways to create and communicate value exclusivity. For example, com uses customer service and social media personalities to differentiate from other (frankly, fairly similar) fitness-oriented supplements and vitamins.
  • 28:03 – Even sushi can have exclusivity.
  • 28:55 – It takes the sushi chefs at this restaurant three years just to learn how to cook the rice.
  • 32:07 – A competitive analysis can help you identify elements of exclusivity.
  • 32:46 – If you really start to delve in, you might discover your product doesn’t really have a value prop. In that case, we discuss what to do.

Related resources

Powerful Value Propositions: How to optimize this critical marketing elements — and lift your results

Customer Value: The 4 essential levels of value propositions

Value Proposition Development on-demand certification course

How to Structure a Story in a Presentation

September 12th, 2018
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A MECLABS Institute Research Partner was putting together a major presentation and recently reached out for thoughts on how to structure it. As with conversion and many other areas of marketing, MECLABS (the parent research organization of MarketingSherpa) has a specific framework for crafting engaging presentations.

Using a trusted framework can help, because public speaking — whether on webinars, in-person at conferences, to prospects on a sales call, or in an internal meeting — does not come naturally to many people. In fact, public speaking is often ranked as a more common fear than death in national surveys, prompting Jerry Seinfeld to remark, “In other words, at a funeral, the average person would rather be in the casket than giving the eulogy.”

How morose. But it points out the need to support whoever in your company is speaking on behalf of your brand — sales reps, subject matter experts, C-level execs, even yourself — with a well-crafted presentation that helps them engage and convert the audience. You want to leverage the power of story and not rely on their speaking abilities alone.

The fundamental marketing challenge behind every presentation

Since presentations are communication and a representation of the brand, they are inherently a marketing challenge.

And like any marketing challenge, the goal is to make sure the value delivered outweighs the cost to the potential customer.

This is true for any call-to-action you have in the presentation, for example, moving to the next step in the sales process for a sales presentation or visiting a website for a presentation at a conference.

However, it’s even true for just getting your audience to pay attention to you. Let’s be real, it is very difficult to pay attention to anything for an extended time in 2018. If the value isn’t higher than the cost of avoiding email or putting down their phone or leaving the webinar or simply zoning out, you will lose them.

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Ask MarketingSherpa: How to get high-paying customers and clients

September 6th, 2018
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We frequently receive questions from our email subscribers asking marketing advice. Instead of hiding those answers in a one-to-one email communication, we occasionally publish edited excerpts of some of them here on the MarketingSherpa blog so they can help other readers as well. If you have any questions, let us know.

Dear MarketingSherpa: I am so happy I came across your site. Just flipping through and reading this email alone convinced me I’ll learn a lot from you. I am also grateful for the high-value report, I have downloaded it and will schedule time to really consume it.

My current challenge in my business is how to package my services for high-profile clients and charge them the premium fees for what I am worth. My business suffers from [in]consistent cashflow and high-paying clients.

I appreciate your help in transforming my businesses to target the affluent.

Dear Reader: So glad you found it helpful. Here are a few pieces of advice to help you overcome your challenges. This is a very frustrating challenge I’ve heard expressed by business leaders and companies ranging from ecommerce sites to consulting firms.

To charge premium fees you must have a powerful and unique value proposition.

What you offer must be appealing, however, in your situation where you are able to sell the service but must sell it at a low price, the likely culprit is lack of exclusivity in your value proposition.

To illustrate the point, I worked with James White, Senior Designer, MECLABS Institute (parent research organization of MarketingSherpa), on the below visual. Let’s walk through it.

The letters in the equation-looking grouping in the upper right are from the MECLABS Net Value Force Heuristic, a thought tool based on almost 20 years of research to help you understand which elements to adjust to increase the force of a value proposition. As you can see, exclusivity isn’t the only element of a forceful value proposition.

To the left are products and services with a low level of value differentiation. And to the right are products with a high-level of value differentiation.

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