As qualitative researchers we are often working to uncover the valua proposition or the USP for a particular product or service. As with many things, I’m always looking for ways to structure my thinking or brainstorming. Having some type of structure, or knowing the questions to ask, is simply much easier than staring at a blank piece of paper or a room full of participants while trying to understand the product. This article is a two-fer. It briefly explores the 3-D method for establishing/evaluating value propositions and reprints an article from the Financial Times outlining a 5-P method.
One of the most important and yet one of the most badly carried out tasks by business to business marketers is the development of a good customer value proposition.
The term customer value proposition or CVP is one of those dreadful inventions of the last decade. In the past we had products and services with unique selling propositions or USPs but that didn’t seem to be simple enough for our developing profession.
The problem with customer value propositions is that most people can’t help themselves when they create them. They feel honour bound to list each and every feature and benefit of the offer and, as a result, they weaken the appeal to the person they are aimed at. Instead of the proposition being clear, it becomes fuzzy and listless. Too many features and benefits are too much for recipients to cope with.
What has happened to the big hairy idea — the single proposition that makes an offer different, desirable and defensible? In the following article by Mike Southon, and published in the Financial Times over the weekend, he describes how to create an elevator pitch (a CVP by any other name) and instead of using the three Ds (distinctive, desirable and defensible) , he suggests the 5 Ps (pain, premise, people, proof and purpose). Arguably it is a more complicated version of the “3 D formula” but there are some good points for us to ponder on.
Floored by an elevator pitch
By Mike Southon
Financial Times: March 7 2009
One of the most enjoyable parts of my job is appearing at events involving an “elevator pitch” competition, where hopeful entrepreneurs extol the virtues of their business idea in the time it would take to travel a few floors in a lift with someone.
The first thing I explain is that the elevator does not get stuck for several hours – you have to keep your pitch short and simple.
The worst culprits for bad pitching are inventors, engineers and technologists who feel that they have to cram as many features as possible into their three minutes.
In sales, there is the concept of “golden nuggets”, where as many as 50 amazing features of your product are crammed into literature by your marketing team. The problem is that most customers have very short attention spans and can only remember three things about your product. As soon as you mention the fourth golden nugget, the first, and probably most important one, drops out of their memory.
By the time you get to nugget number 50, all the most compelling ones have long since gone, and the prospective customer has also lost the will to live.
The objective in delivering an elevator pitch is not to secure an order there and then. The best you can hope for is to stimulate enough interest to receive another 15 minutes and a business card.
So the methodology for a good elevator pitch is simple, and centres around five ‘P’s: pain, premise, people, proof and purpose.
The most important question for a would-be entrepreneur is: Where is the pain? You should also ask: What is the pain or problem that you plan to solve?
The larger the pain, the more likely people are to give you money to take it away. Pain can come in many forms, but if your product or service saves time and money, that is a good start.
Next, you have to explain in simple terms the premise of your business. Exactly what is it you do? For this, you need to be literal and not descend into sloganeering. “We transform people’s lives” is laudable but vague. “We are an excellent training company, specialising in communication skills” is much more to the point.
If you feel this is too obvious, I suggest you visit a trade show and work out what each company does, just from the text on the display stands. The worst are deliberately vague in the hope your curiosity will be aroused, encouraging you to approach the stand to find out what they do. Unfortunately, most people will not bother.
The other Ps of pitching are very straightforward.
You need to talk about your people because entrepreneurship is a team game. Every investor says they look for a credible team rather than a good idea, and every customer says they buy from people not companies.
Proof is the hardest element to provide. Why should anyone buy from you and not your competitors? The best proof is examples of your happy customers, in the form of relevant case studies.
Finally, you must provide your purpose, and the most important purpose of any business is to make money.
Potential investors will be looking for a return on their investment, and prospective customers will only want to know that you run a sensible and profitable business, to ensure reliable and consistent delivery of your products and services.
This should provide the basics for delivering a good elevator pitch. For more details, Chris O’Leary has written an excellent book, Elevator Pitch Essentials.