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3 Rules for Building a Strong Value Proposition

blog author
Written by Mike Schultz
President, RAIN Group

Ask 100 sellers at 100 companies why their customers buy from them, and you're likely to hear 100 answers with the same underlying theme: the value we provide.

Sellers describe their value to us in a number of ways: we get results. Our relationships are very close. They get from us what they've always wanted (but never gotten) from other companies. We bring innovative solutions to the table. And so on.

Pretty obvious, right? To win sales you have to maximize value.

In practice there's no denying that sales winners are much better at getting buyers to perceive maximum value than the rest. In fact, in our research, only one factor—"overall value was superior"—was of top importance to buyers in all of the categories we studied (e.g. how winners win the initial sale, what drives repeat business, what drives referrals, etc.).

Before you can learn how to communicate value, however, you need to understand some key concepts about value.

What is a Value Proposition?

  • Value: The monetary worth of something; that is, whether and how much someone will pay for something.

  • Value Proposition: The collection of reasons why a buyer buys; in essence, factors that affect whether they purchase, and from whom.

  • Value Proposition Positioning Statement: A compelling, tangible statement of how a company or individual will benefit from buying something specific or buying from you in general.

Most people, however, only think of the third bullet. For example:

From Investopedia:

What Does Value Proposition Mean?

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

Investopedia Explains Value Proposition

Companies use this statement to target customers who will benefit most from using the company’s products, and this helps maintain an economic moat. The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers. Companies pay a high price when customers lose sight of the company’s value proposition.

You'll note that in the Investopedia definition and explanation they reference a value proposition only as statement with the common elements of what people refer to as an elevator pitch.

Not many purchases are made in elevators, and people don’t buy because of two key points in a brief statement. They buy for their own reasons, often different from one buyer to the next.

Don’t get me wrong. It’s helpful to be able to pick key points that often resonate with buyers, and have them at the ready for discussions when you meet people for the first time. We call this a value proposition positioning statement. If you only do this, you’ll limit your possibilities for building the maximum case for your value with clients during the selling process.

Value Proposition Definition 

Value Proposition Definition: The collection of reasons why a buyer buys; in essence, factors that affect whether they purchase, and from whom.

The If you think of a value proposition not as a statement, but as a concept about why people buy something, then you’ve got a lot more to work with. It’s from that concept—the collection of reasons why people would want to buy from you—that you can put your selling efforts to work much more effectively, communicating different components of that value in different ways for different situations.

The collection of reasons why people buy typically fall into three major buckets that, in sum, form the three rules of winning value propositions:


1. Buyers have to want and need what you’re selling. You have to resonate.

2. Buyers have to see why you stand out from the other available options. You have to differentiate.

3. Buyers have to believe that you can deliver on your promises. You have to substantiate.


The 3 Legs of the Value Proposition Stool

What happens if you don't follow all three of the value proposition rules?

What happens when a leg of the value proposition stool is missing?

As you can see from the ”Three Legs of the Value Proposition Stool” graphic above, take any one of these away and it makes it much more difficult to sell.

  • Remove resonance and people just won’t buy what you’re selling or won't buy it from you, because what you bring to the table isn't important enough.
  • Remove differentiation and they’ll pressure your price or attempt to get it someplace else.
  • Remove your ability to substantiate your claims and while buyers may want what you sell (you resonate), and may perceive you to be the only people on the planet that do what you do (you differentiate), if they don’t believe you, they won’t risk working with you.

Again, statements that encapsulate the mission and value of a firm are helpful early in discussions. RAIN Group helps companies to unleash their sales performance. If you want your salespeople, professionals, and leaders to sell at their maximum potential, we can help. This is the umbrella under which we at RAIN Group operate.

The purpose is to help our buyers wrap their heads around the general area where we help, and to know when they should work with us. However, there is always a set of underlying factors and specifics that sway any particular buyer to choose us versus doing something themselves, finding someone else to help them, or deciding to do nothing at all.

If you want to resonate, differentiate, and substantiate you need to do much more than write a short sentence...or a long sentence, or a paragraph, or a page. While you can sum it up, the summary itself isn't enough to drive the buying decision. It just does a little positioning for you. Your actual value proposition—the collection of reasons people buy from you—will be different from one buyer to the next. You’ll discover what it should be for each buyer through your conversations as you learn what they want and need, and who the competition is.

Then and only then will you be able to craft the most compelling solution and messaging for them.

If you do, the buyer’s perception of your value will be as strong as possible when it counts: when it’s time to buy.


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Topics: Value Proposition