Buyers for original equipment manufacturers (OEM) or contract manufacturers are demanding high quality, low prices and timely delivery. New business can be garnered from a competitor because they couldn’t deliver on one or more of these important pillars. But these companies can also lose business for the same reason.
“It’s no wonder so many manufacturers choose to focus on these three vital elements in their value proposition,” says Chris Peer owner and CEO of SyncShow. “It’s true you can earn new business by offering a stronger value proposition than another supplier in one or more of these areas, but what do you do after you win the business? How do you protect yourself from being the one on the chopping block the next time you miss a deadline, have a quality issue or the cost of your goods increases?”
Smart Business spoke with Peer about defining a company’s value proposition as a way to stand out among competitors.
Why might companies not realize the growth they were planning for?
Business leaders and owners are used to fixing problems. So when their goal for growth isn’t achieved, the first thing they do is look to fix their sales or marketing teams — and sometimes both. This can lead to salespeople being replaced, marketing agency contracts being terminated and the addition of new processes and technologies. Sometimes this works, but often the only thing that’s fixed is the symptom, not the problem. Fast forward nine to 18 months, and it’s common for the same problems to persist; corporate growth was never achieved and a lot of time and money were wasted.
If the problem isn’t really with a company’s marketing and sales teams, what is often the root of the issue?
Too often the problem lies with the company’s value proposition. Today, buyers are more educated than ever before. Most buyers will have a multitude of choices when choosing a vendor, supplier or OEM that all clearly meet their time, quality and price expectations. It’s time for companies to re-evaluate their value proposition and create a more compelling reason why a buyer should select one company from all the others in the pool of competitors.
How can companies adjust their value proposition to stand out among competitors?
Identifying your value throughout the buyer’s journey is critical. Buyers typically go through a six-step process when making a buying decision. Those steps include:
- Research: How are you attracting buyers in the research step? Is your marketing bringing in leads? Is your value proposition attracting buyers?
- Engagement: If the leads are coming in, are they qualified? Is your value proposition strong enough to convert a researcher and engage them in a conversation?
- Consideration: At this step, it’s likely the buyer’s quality, time and price needs are going to be met. What does your value proposition say to get you on the short list of companies they’re considering?
- Evaluation: Now that you’re on the short list of qualified suppliers, is your value proposition strong enough to win you the job?
- Confirmation and commitment: Congratulations, you won the job. Is your value proposition strong enough to keep the buyer over the long term?
Determining how to provide value at each step in this journey is the path to marketing and sales success.
Where should companies start?
A company’s value proposition is perhaps the No. 1 asset in its growth equation, yet so many companies fail to define it. Don’t waste years fixing the symptoms of failed success. A company should look deep into its ethos and create a compelling message that clearly defines why it is different and why buyers should choose it for their next job.
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