Delivering Value, Getting Nothing: The Value Void

It's a frustrating reality for many B2B companies: You've invested countless hours and resources into developing a unique product or service. You've meticulously crafted a solution that addresses your clients' pain points, improves their efficiency, and drives bottom-line results. But when it comes to pricing, you're met with resistance. Despite delivering undeniable value, your clients simply aren't willing to pay more. Welcome to the "Value Void".

Why is this happening? The answer lies in a common misconception: assuming that value is inherently recognized and appreciated. In reality, value is a subjective perception that must be actively quantified, communicated, and demonstrated.

The Key to a Successful Value Proposition

The cornerstone of a compelling B2B value proposition lies in addressing two critical elements:

1. Profit: How does your product or service directly impact your client's bottom line?

2. Risk: How does it help your client mitigate risks and uncertainties?

To craft a persuasive value proposition, ask yourself these questions:

• Do we understand the client's value chain and where we fit in?

  • This requires a deep dive into your client's business operations. Where does your product or service intersect with their core processes? How does it contribute to their overall goals?

• Have we quantified the dollar impact of our product?

  • Be specific. Can you quantify the cost savings your product will generate? Will it increase revenue? Provide concrete examples and data to support your claims.

• Have we quantified the impact of our product on reducing risk?

  • Does your product reduce the risk of operational disruptions, financial losses, or regulatory non-compliance? Quantify the potential financial impact of these risks and demonstrate how your product can mitigate them. Eliminating a 5% risk of a $1 billion loss is a $50 million savings!

• Have we clearly communicated this to our clients in their language?

  • This is no time to be subtle. Get the pencils and calculators out to calculate how much real value your product delivers to the client. Put it in terms they understand - like hard dollars of additional revenue or cost savings.

A Case in Point

Your company sells a cloud-based engineering software that automates a time-consuming manual process. Instead of simply highlighting the features and benefits of your software, focus on the following:

• Profit: Quantify the amount of time and money your clients can save by automating the process. The obvious cost savings are in manpower, but don't forget about third-party costs and the impact of speedier delivery to your client.

• Risk: Highlight how your software can reduce the risk of human error, data loss, and regulatory fines.

By framing your value proposition in terms of profit and risk, you're speaking directly to your clients' concerns and demonstrating the tangible benefits of your product. This will make it easier to justify a higher price point and build stronger relationships with your customers.

Remember, your clients aren't just buying a product; they're investing in a solution that will help them achieve their business objectives. By focusing on the value your product delivers, you'll be well on your way to overcoming the Value Void.