THE KEY TO YOUR SUCCESS – YOUR VALUE PROPOSITION
PRICE, QUALITY, DELIVERY - WHICH DO YOU CHOOSE?
“Keys to Your Success” is presented to improve your business, build your profit and grow your
sales. This article focuses on the three basic value propositions and why you r company should
select one value statement as the basis of your branding.
Customers expect one of four value promises from your company. The first one is consistency.
When your offerings are inconsistent (i.e., some items billed as low cost, some items presented
as high quality, and other items delivered with a guaranteed timeframe), then you risk confusing
your buyers with your company’s value offering. Once confused, they may switch and buy from
your competitors. A aspect of your Brand Integrity is to keep your value proposition consistent.
However, if you focus on one of the three value options, you can build your reputation, your
brand, and your customer service on a consistent promise that can create loyal customers.
Building a recurring sales cycle is a part of the keys to your success. So, let’s look at the three
value options:
If we think about these three value propositions as the points of a triangle with the customer
inside the triangle, you can visualize that customers are attracted equally to either of the value
propositions (i.e., low price, high quality, or exceptional delivery). Conversely, as you move
closer to one of the value propositions, then you move further away from the other two, and this
represents how customers are attracted to businesses with a clear value proposition. Specifically,
a company that offers a low price will attract a certain level of loyal customers (i.e., discount
electronics store), while a company that offers high quality will attract a specific segment of the
market (i.e., Mercedes Benz®). The third option, exceptional delivery, is an equally valid
business model that can differentiate you throughout the country (i.e., FedEx®).
Low Price For Competitive Markets
Companies that face strong competition may offer a low price to attract new customers. This
approach can work if you are a high-volume reseller (think WalMart®). This is not the preferred
approach for a new business because the company may not be able to sell large quantities in the
early years. This means that if you want to start or expand in an area that is served by a large,
low-priced competitor, then you should choose a business model that focuses on one of the other
value propositions.
High Quality Makes You Unique
If you choose to offer high quality items, you can become unique in the marketplace for two
reasons. First, you attract an exclusive customer base willing and able to pay a high price for
your items. Second, a competitive marketplace is filled with many products, but only a few of
the items are in the “High Quality” category. This means that your product line will be focused
and your customers will associate you with a narrow range of products. For example, many
retailers sell jewelry. However, when you’re ready to buy a diamond necklace, how many
retailers can you name? More importantly, how many stores will you visit before you purchase?
(Probably only a few select stores.)
Once you establish your company as offering only high quality items, then you will attract a
loyal customer base that is less price sensitive. This means that you have less risk of declining
sales in a slow economy. (Birthdays occur in good times and bad, and customers with disposable
income buy in any economy.)
Exceptional Delivery – The Untapped Market
Within the overall marketplace, few companies focus on exceptional delivery. This is probably
because most customers place a lower priority on fast or accurate delivery until the need arises.
The most notable success stories are in the floral market where holiday deliveries are a vital part
of the florist’s profits. Flowers delivered on Valentine’s Day, Mother’s Day, and Easter are
highly profitable, but only when the delivery is on time. If the flowers are delivered early or late,
the customer is likely to stop buying from that florist.
Amazon books is building a reputation for fast (overnight) delivery of it physical products
(books, printer toner, electronic devices, et. Al.) and immediate delivery of its digital content (ebooks, music, television programming, etc.). This ability to provide exceptional delivery is
creating an unprecedented market demand while Amazon has created a new revenue source
(Amazon Prime).
If you are in business and want to grow your profits, consider how your customers view your
value proposition. When you fail to define your value proposition, customers may not see a level
of consistency in either area (price, quality, delivery). If your customers do not have a consistent
reason to select your company as the preferred vendor, they may shop at your competitors. So,
pick your value proposition, market that concept, and build it into your business model. This is
one of the keys to your success and can keep you in business when the economy slows or when
competitors attempt to enter your market.
818 Words
Richard Melancon CPA, author of Integrity-based Leadership, has helped companies to grow
and improve profit in any economy for over 25 years,. Own a business? Want to own a
business? Ready to make meaningful contributions to your current organization? Richard works
directly with your company or he can address your next conference with impactful insight and
vision. Phone: (504) 780-909, E-mail: richard@ramcpa.com Website: www.ramcpa.com.