Virtual Sales 3.0 Conference March 20th - 21st 

 

Focuses on aligning people, process & technology through  sales transformation!

 

Do You Understand Your Value Proposition?

By Heather Baldwin

For all the talk these days about understanding your value proposition, there’s been very little said about the equally important flip side: understanding what your value proposition isn’t. It’s not just an academic exercise. Gaining a solid grasp of the areas in which you are weak or in which you don’t offer a material edge over your competition not only helps you clarify and better articulate your real advantage, it can also illuminate new areas of opportunity.

“Organizations that are able to view their negative space – the areas where they can’t compete or lack the skills and knowledge to be successful – can often work backward to find their edge based on their shortcomings,” says Anne-Marie Fink, an eleven-year veteran of JPMorgan Asset Management and author of The Money Makers: How Extraordinary Managers Win in a World Turned Upside Down. Take Advanced Micro Devices (AMD), says Fink. A small manufacturer of CPUs, AMD recognized it would not be able to compete with Intel in improving clock speed. So it found a different bottleneck that slowed computer response time and in 2002 rolled out an innovative new chip that returned results more quickly without increasing clock speed. For the first time in years, the company had a true value edge that enabled it to sell on features rather than price.

AMD succeeded because it “zigged when the competition zagged,” says Fink. Rather than trying to beat Intel at its own game, AMD acknowledged its weakness and, in avoiding that area, found a strength. To do the same in your company, Fink recommends managers take the following steps:

  1. Make a list of the things your competitors do almost as well as or even better than you do. Eliminate them as the source of your value edge. Don’t try to go head-to-head with them in these areas; you’ll only set yourself up for price wars, which will erode margins.
  2. Look at the space outside your competitors’ areas of advantage. Are some customer segments underserved or some parts of the business ignored? For instance, are your competitors aggressively pursuing large enterprises, leaving the SMB market wide open? Why? Is this an area of opportunity for you? “Pursue unconventional reformulations and tweak your offerings to meet a need that has yet to emerge,” says Fink.
  3. Be different. This may sound trite on the surface, but it’s a good reminder to quit trying to strengthen areas of competitive weakness in an effort to win more business. Concede to your competitor’s superiority in areas where they are ahead of you and look for uncharted paths to gain an edge. “Have faith that room exists in big markets for unconventional approaches, especially in volatile times,” says Fink.

For more ideas, visit www.moneymakersbook.com.