| Is there an easy way to make the competition | | | | customer needs to start a deeper level of |
| irrelevant? In an age with so much access to | | | | analytical comparison. If you have too many |
| information, bombarded by advertisements and | | | | options then the customer will need to spend |
| commercials, is it possible to keep the | | | | more time to consider the alternatives, and |
| attention of your potential customers? What | | | | while they are weighing your multiple options |
| is the secret to help customers make an easy | | | | they may start to consider the competition as |
| decision to buy? There is a secret formula | | | | well. Limit your presentation to three |
| that works for e-commerce, retail, bids and | | | | options. If the customer makes a specific |
| proposals. It is a simple formula that has | | | | request for an alternative, then provide the |
| worked since the days of bartering beads, | | | | alternative that the customer has requested, |
| beans and burrows. | | | | but avoid introducing too many new variables |
| | | | unless asked. The more factors in a decision, |
| Create Differentiation | | | | the longer the process and the more likely to |
| | | | turn your "Moment of Truth" into a Lapse into |
| Create differentiation within your own | | | | Confusion. |
| products or services. If you have an | | | | |
| assortment of products or services to offer, | | | | The Value Proposition |
| you may have identified your differentiation | | | | |
| already. Common examples of differentiation | | | | For each option that you present to the |
| for products may be based on size, speed, | | | | potential customer, provide a value |
| color, components, combinations or | | | | proposition. Your value proposition should be |
| accessories. Common examples of | | | | something that can be conveyed in three to |
| differentiation for services include speed, | | | | five bullet points, three to five sentences, |
| performance, quality, responsiveness, | | | | or spoken in thirty seconds or less. You |
| availability, ease or integration. If you are | | | | should be precise and succinct. Present the |
| in the unique position of having only one | | | | value proposition from the customer point of |
| product or service to offer potential | | | | view. For example, rather than say "we ship |
| customers then you should consider | | | | in three to five days", you could say "the |
| accessories, partners or other options to | | | | product will typically arrive at your door in |
| create a variety of levels from the | | | | three to five days". Rather than say "we have |
| perspective of your future customers. If all | | | | the fastest process", you could say "our |
| else fails, you can offer different levels of | | | | process is fast, so you get results faster". |
| shipping speed or delivery. | | | | |
| | | | A value proposition typically contains the |
| Focus on the Moment of Truth | | | | essential elements of Feature, Advantage, |
| | | | Benefit, Image and Offer. This is a reference |
| Focus on the moment of truth, the place or | | | | to a specific important feature of your |
| position that your products or services will | | | | offer, the advantage as compared to the |
| be offered to the customer. In a retail | | | | competition, and the benefit to the customer. |
| environment this may be the end-cap, a wall | | | | The Image refers to a photograph or diagram. |
| display, shelf space or a counter display. On | | | | The Image is an important element of your |
| the Internet this may be an on-line store, | | | | value proposition, as people will generally |
| e-bay or your personal web site. It may be in | | | | remember an image more readily than words. |
| a catalog or a brochure. It could even be | | | | Images convey feeling, and typically depict a |
| part of an email communication. Occasionally | | | | lifestyle example of the customer enjoying |
| the moment of truth may be in the form of a | | | | the benefits of the feature's advantage. The |
| bid or proposal after several months of | | | | Offer is a call to action. Give your customer |
| discussions with a potential client. The | | | | an offer to buy, and let them know |
| moment of truth is the moment that the | | | | specifically how to conduct the purchase. |
| customer has a an option to make a purchase | | | | Examples of the order call to action are "buy |
| decision, to buy your products, invest in | | | | now", "limited time discount" or a number to |
| your services or hire you. This is the moment | | | | call to place the order by phone. |
| that you need to put your good, better and | | | | |
| best foot forward. | | | | An example of the value proposition with the |
| | | | essential elements is "Call now to order the |
| Good, Better and Best | | | | self-cleaning home brew coffee maker and |
| | | | start enjoying fresh, hot coffee with the |
| Give your customer three options. Show them | | | | extra convenience of no fuss, no muss and no |
| something good, show them something better | | | | clean-up. Order on-line to receive your free |
| and show them your best. It is a simple | | | | sample of assorted coffees, available while |
| formula that takes a little care and | | | | supplies last." All we need to complete this |
| creativity in crafting your message. The | | | | enticing offer is an image of hands gently |
| three offers should be based on the | | | | caressing an aromatic steaming cup of coffee, |
| foundation of a consistent theme, the single | | | | cradled over a saucer. |
| most important underlying reason to invest in | | | | |
| your products or services. | | | | Plan, Do, Measure and Adjust |
| | | | |
| The 'good' product or service should be the | | | | Carefully plan your three offers and the |
| lowest cost option but still demonstrate your | | | | value proposition for each. Once you |
| inherent value and differentiation from the | | | | introduce your three offers, measure the |
| competition. You should be able to clearly | | | | success rate of each option by the |
| define your value, the features, advantages | | | | corresponding sales attach rate. Typically |
| and benefits of what you have to offer. This | | | | the "good" offer should be about 25% of your |
| is the customer minimum investment to buy, | | | | sales, and the "best" offer is normally only |
| and it should be a good one. | | | | 15% of your sales. Some customers will want |
| | | | the lowest cost option, and some will want to |
| Step up to better. Using the foundation | | | | be exclusive and purchase the best option |
| established with your 'good' offer, add | | | | regardless of price. The middle of the road |
| something more for a slightly higher price. | | | | "better" offer is customarily the lion share |
| The customer value should be easily | | | | at 60% of your total sales. Most customers |
| distinguished and highlighted as more | | | | are willing to pay a little more for quality, |
| significant than the slightly increased | | | | speed or convenience associated with the |
| price. Make a clear comparison to the "good" | | | | "better" offer if presented properly, even if |
| product or service. This should be a | | | | they do not want to pay the high price of the |
| preferred alternative for the potential | | | | "best" option. The "better" alternative gives |
| customer. The option should be slightly more | | | | customers a chance to do a little better than |
| expensive, but worth it. Some examples may | | | | "good", but still feel that they saved money |
| include, "with additional 1GB memory", | | | | as compared to the outrageously priced "best" |
| "includes six months of Satellite Radio", | | | | option. |
| "bundle package includes download of 50 | | | | |
| songs", "50% faster than the original", and | | | | If you do not experience the desired result |
| similar comparisons. | | | | in mix of sales then it may be necessary to |
| | | | adjust your plan or your value propositions. |
| Show them your best. The third option should | | | | In any case, as long as the customers |
| be the best that you have to offer, the cream | | | | continue to make a selection between your |
| of the crop. This is the most expensive | | | | options, the competition is irrelevant. Your |
| option and will only be selected by the most | | | | customers can get what they want, and they |
| exclusive of customers. It should also have | | | | will remain your customers. |
| something in common with the original "good" | | | | |
| option and the "better" option, but the third | | | | ____________________________________________ |
| and final option should be recognizable the | | | | _________ |
| best you have to offer. The price may be | | | | |
| significantly higher than the other two | | | | Words of Wisdom |
| options, and that is fine. Demonstrating a | | | | |
| significant leap to a higher price point for | | | | "No computer network with pretty graphics can |
| the top of the line option will help to | | | | ever replace the salespeople that make our |
| differentiate the cost value of the other two | | | | society work." |
| options. Do not expect large volume of sales | | | | |
| on the best offer. Rather, use this to | | | | - Clifford Stoll, Silicon Snake Oil, 1995 |
| demonstrate competitive advantage and | | | | |
| differentiation with the "wow" factor. | | | | "You can only cure retail but you can prevent |
| | | | wholesale." |
| Even if you have hundreds of customized | | | | |
| solutions or products, select and present | | | | - Brock Chisholm |
| three options, good, better and best. In the | | | | |
| decision process, human beings can easily | | | | "Give your customer three options that they |
| compare and contrast three options. The mind | | | | can compare without memorization. Make it |
| can juggle three prices and three sets of | | | | quick, make it easy, and add value. - Just |
| features for a quick and easy decision | | | | like that. |
| process. Once you add a fourth element, the | | | | |