April 19, 2010

Overcoming the Fear of Value

Why is that so many proposals contain no value proposition at all? What are those proposal writers afraid of?

That is our topic this time.

Tom Sant

Overcoming the Fear of Value

Are you afraid of value? There's plenty of evidence that suggests most proposal writers are. For one thing, very few proposals even contain a value proposition. And for another, when I bring up the importance of putting a value proposition in your proposals, the audience pushes back—hard!

I call this reaction "value paranoia." The result is weak value propositions that do little or nothing to move a deal forward. Here's an example of a so-called value proposition born of value paranoia:

"We offer a full range of enterprise-strength, integrated technology solutions."

Pretty exciting, huh? Makes you want to grab your checkbook, right? Or how about this one:

"We are a true one-stop shop for all your financial services needs."

I'll bet that makes you want to shout YES!, doesn't it? And here's another one—one that was actually used as the value proposition for an opportunity worth over $500 million:

"We are committed to the success of the enterprise."

Good grief! These are horrible. There's just no other word to describe them. For one thing, every one of them starts with "We," even though common sense would suggest that an effective value proposition should be focused on the buyer and what they care about. And for another, they contain no promise of positive results that can be tracked or quantified. Finally, none of them are backed up by even a shred of proof. These three supposed value propositions—all of which appeared in real proposals, by the way—are little more than marketing fluff.

When I press clients to create a more compelling value propositions—"ABC Company can reduce total energy costs by 75 to 80 percent by implementing our solar energy panels"—they sometimes squirm in their seats.

"What if the client actually follows up and holds us to our promises?" they ask. "Where will we find the baseline data against which to measure our impact? How will we ever get this past our in-house lawyers?"

These are all good questions. But they are questions that can be answered by modifying your sales and implementation processes and presenting your value proposition in clear, careful language. They are not reasons to refrain from offering a meaningful value proposition.

1. What if the client actually measures our results?
It'd be great if they did, assuming your products and services are as good as you claim. Why not make that part of your implementation strategy? Tell them that you'll work with them to set up the processes necessary to track results. Getting that data should make it a lot easier for you to win the rebid or the next phase of work.

2. Where will we find the baseline data against which to measure our impact?
Ideally, you will get it from the client, but we all know that many of our clients aren't measuring current performance so they have no way to know what kind of impact our products and services have had on their operations. If the client can't provide the baseline data, how about industry associations? They often publish data that represents industry averages. Or how about getting your own baseline data by going in to a new client immediately after you have won a deal and measuring the key parameters at the outset and then measuring them again after six months? If you do this half a dozen times, you'll have your own baseline data that you can use as a starting point with customers. You'll know the average cost of processing a check in the Accounts Payable systems from half a dozen organizations that are similar to your new client. You'll know how long it takes to process a data record in a legacy system compared to what it takes once your system is in place. And so on.

3. How will we ever get this past our lawyers?
Lawyers believe that their job is to keep the company out of trouble. And they know that the primary sources of trouble are (1) clients and (2) employees. If they can just eliminate both sources, they will have done their job perfectly. Unfortunately, in the real world there must be a balance between the "excess of caution" that lawyers love to live by and the slight risk of doing business that is required to actually close a deal. By using weasel words appropriately—"this may result in…," "you could see an increase of up to 20 percent…", "based on current assumptions, we project savings of…"—you can protect the company from making promises that could come back to haunt you and yet you can still offer a meaningful value proposition.

Value propositions are the means by which we motivate the decision maker to move forward. A strong, specific value proposition that offers quantifiable improvements in a core area of performance is the key to shortening your sales cycle and winning more business. Don't let value paranoia cripple yours.

We can calculate a compelling value proposition from automating your proposal operations. Give us a call and we'll put some pretty impressive numbers in front of you—and no marketing fluff!

1 comment:

Richard Sakanashi said...

It takes confidence to be accountable. I like your suggestion to propose to work with the customer to quantify the value.

I can't agree more with you on the subject of value. I was taught to crunch the numbers as a matter of habit, and it has always received the attention of the customer.

Richard Sakanashi