Are You Selling Value Proposition or Cost Benefit?

Sally recently learned the difference between value proposition and cost benefit when one of her dance students did not return this fall. Jenny had been studying at her school for two years and was ready for a more advanced level. Sally told Jenny’s mother the exciting news and penciled her in the schedule after their conversation. But Jenny dropped out.

Value Proposition Outweighed by Cost BenefitAdvancing a level includes means more classes and geometric growth of time and money for the student. Sally assumed that progression through the levels was natural. The family opted out because the cost benefit was too low and advancement was not presented as optional.

Jenny’s cost benefit outweighed Sally’s value proposition.

After the announcement arrived in an email we had a meeting and developed a solution. By the way, Sally is my wife and client. Sally called and apologized for making the assumption. Jenny’s mom was happy to know they were welcome to return at a recreational level, but not this year because Jenny had already committed to another activity.

Sally’s dance career with the Joffrey Ballet led her to create a value proposition from a narrower lens than the wide angle lens of her market.  90% of the students at Sally’s school do not have professional aspirations; they come for a myriad of reasons. Parents put their kids in dance for recreation, social activity, performing opportunities, role models, professional dance aspirations, and more.

Sally no longer sells her business through the eyes of a professional dancer. Her value proposition has evolved to leverage this wide array of customer cost benefits. She recognizes that each student and parent has a unique set of desires and needs. She and the instructors learn what each student  and family expects from the program – their cost benefit.

In the future, when a student gains the ability to move up, the improvement will be expressed as a compliment for achievement with an open invitation to advance without expectation.

The school has not changed their product. The program was already meeting these diverse needs in a fun, nurturing, environment that does not sacrifice quality.

Our products and services often provide a broader set of benefits and meet a litany of needs and wants unknown to us.

So forget your value proposition.

The marketing collateral your customer responds to is only an indication of interest. Even if you have done tons of research, your value  proposition is generalized. Your value proposition gets you in the door, but at the end of the day, your customer buys their unique cost benefit.

Never assume to know your customer’s cost benefit.

Your customers expect unique outcomes, some of which are hidden in a back room few salespeople ever enter. Your goal is to earn a seat at their cost benefit analysis table in that backroom. When they ask you, “What do you think?” you’ve moved inside their circle of trust.

To sit on the customer’s side of the table you must convince them that their needs and desires are your priority. Crafting questions and listening with your eyes, ears, neurons, hormones, and instincts is the key to the well-guarded door to the private decision making room.

What are the pros and cons to the entire organization, departments, and team?

What are the hidden expenses?

What changes do they face and how can they manage them?

What are the negative impacts and how do they weigh against the positive results you’re promising?

What is the personal effect of your offering to each member of the buying team?

Are you selling to your customer’s cost benefit?

Need help identifying your customer’s true cost benefits and how your products and services meet them? Give me a call @ 434.906.5045