Thursday, March 16, 2006

Customer Value Propositions and Persuasion Effectiveness

By Ernie A. Cevallos

What is wrong with value propositions?

In today’s competitive environment creating and delivering winning value propositions is a fundamental expectation in the race to win more business and out perform rivals. It is evident that properly constructed and communicated value propositions make a powerful argument, and align the solution fit with the needs and buying criteria of customers. The goal is to persuade the customer by irrefutable proof that the value proposition represents a win-win business transaction.


A common problem that challenges the effectiveness of value propositions is that there are different interpretations of how to create and deliver value propositions. It’s common to see value propositions constructed by listing benefits that communicate canned information about products and services. Smart sales folks sometimes default to this method since it requires the least amount of research time, and it feels safe to recite all the apparent benefits of the offering(s). However, the time saving feature is also a major weakness due to the haphazard communication of features and benefits that are “me too claims”, or don’t mean much to the customer.

Another wrong step to avoid is to make claims that are difficult to measure, exaggerated, or not specific to how the customer measures value. Buyers are sophisticated and credibility can be lost by exaggeration, or inaccuracy of presented information. Moreover, false confidence on apparent early good customer bonds lead talented players to say (and believe), “I play golf with my customers and I will get their business.” All said and done, relationships and personal charm are part of the equation in persuading customers to buy from a company, but a relationship by itself is an incomplete, and weak at best, value proposition. Customers have budgets to meet, committees to uphold decisions, incentives to be earned by saving money, and stakeholders that expect the bottom line to grow. The buyer who likes a seller enough to jeopardize the bottom line is rare.

It’s all about the ethos, the pathos, and the logos

Generic value propositions that can produce “money savings”, provide better “lifecycle costs”, or improve “operational costs” are in play by all competitors. When everybody is making the same “me too claims”, what is a customer to think? As often as not, claims are made that cannot be backed up with facts, or not enough work is done to determine tangible benefits. In view of this, high performance sales organizations should go to great lengths to insure that the value is distinctive, measurable, and addresses the identified needs. Customers in most organizations are sophisticated and can read through Bullsh-t and platitudes indeed.

Harry Frankfurt, professor emeritus in the philosophy department at Princeton University, wasn't bullsh-tting when he wrote an essay titled "On Bullsh-t." The work, which was recently published in book form under the same title, defines bullsh-t and addresses its prevalence in American society. Frankfurt, a moral philosopher, foregoes unnecessary material in the introduction and bluntly writes "One of the most salient features of our culture is that there is so much bullsh-t”.1 "Bullsh-t shows the indifference to distinction between true and false," Frankfurt said. "A liar deliberately says what is false, but someone who bullsh-ts does so to suit his purpose." For example, a marketer is less concerned with the truth about their product and more concerned about selling it, he explained. "Bullsh-t becomes an instrument for pursuing personal goals”.2

Keeping professor’s Frankfurt writing in mind, Aristotle proposed a long time ago that persuasion is clearly a sort of demonstration, since we are fully persuaded when we consider a thing to have been demonstrated. Considering the modes of persuasion furnished by the spoken word there are three kinds: The first kind depends on the personal character of the individual [ethos]; the second on putting the audience into a certain frame of mind [pathos]; the third on the proof, or apparent proof, provided by the words of the speech itself or message [logos].3 Now the punch line, there is great risk to personal credibility or ethos when bullsh-tting or making inaccurate claims. Once credibility or ethos is lost there is no chance to construct effective pathos or logos, and development of a successful persuasive message becomes an impossible task.

Potential customers must see tangible evidence of the value they will get as compared to the next best alternative. This makes decision making a predictable process that is a win-win scenario for both parties. Everything being equal, a good relationship can help break the stalemate because people do buy from those they like. It’s the job of smart performer(s) to set up the stage with enough advantages in order to craft a winning value proposition. No short cuts can be taken in the race to win the business and favor of customers.

Notes:

1 Young, Ellen. “Philosophy prof pens book on bull” Online posting. 16 February 2005. The Daily Princetonian. 8 March 2006. http://www.dailyprincetonian.com/archives/2005/02/16/news/12033.shtml

2 Young, Online Posting

3 Americanrhetoric.com. Selected moments from Aristotle’s rhetoric. 16 March 2006. http://www.americanrhetoric.com/aristotleonrhetoric.htm

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