Image Credit: Idreamlikecrazy on Flickr
Throughout the years of working with clients to develop their value proposition or enhance their branding and messaging, I often get an interesting request. Namely, to create a value proposition for their company.
They hope to establish a single value proposition for their entire company– a “meta” value proposition that will encompass and communicate the essence of everything they do. The fact is, for any company with more than one major product offering or service line, that is never going to work. Let me give you an example…
Imagine a company that provides office building maintenance. They might offer (1) office cleaning services, (2) landscaping and building maintenance, and maybe even developed some capabilities in (3) event setup for meetings or fundraisers, for example. They might be able to sell all of these services to the same company. It might even be the same team of staff who clean the offices, set up tables and chairs for events, and shovel the walkways.
But here’s the kicker: even if they sell all three services to the same company, there are THREE different buying centers making the buying decision for each service.
The facilities manager wants to make sure that there are clean offices to keep their staff happy. There might be an Operations Manager who wants to ensure that the grounds are maintained due to insurance or building leasing concerns. The sales leader may want to throw an elegant dinner to introduce a new product to potential clients.
You can’t have “One Ring to rule them all”, because the buyer of snow shoveling services doesn’t care about tables and chairs being set up properly, and the event manager doesn’t care about a thoroughly maintained and safe sidewalk – at least from a purchasing perspective.
Focus on Your Distinct Buying Centers
The reality is buyers make buying decisions based on the value they expect to receive in exchange for their money for a given purchase, for the specific reason that they are making that purchase.
I like the easy interface of Apple for my iPhone and my tablets, but I’m still a Windows guy for laptops and computing (although Windows 8 might yet change that!) Having a good corporate identity is great, you should absolutely strive to have one, but it doesn’t replace thinking through each service or product line, and being able to answer the only question that matters, “Why should my target buyer care?”
So, if you offer office cleaning services as well as event planning, for example, there may in fact be two distinct buyers or buying centers making decisions for completely different reasons from one another. As such, you need to have distinct and sharply defined value propositions – compelling reasons why they should buy your version of that product or service.
What’s in a Name?
But, you may say, what about a company like Apple? Don’t they sell their products based almost solely on their Apple-ness?
Doesn’t the Apple Watch prove, with a million units sold in its first weekend, that it really is the Apple value proposition that sells? And while there is certainly some truth to that in the rare exception, in Apple and a handful of other companies whose branding is so strong, that it is in fact a distinct meta value proposition. (Nike is another one that comes to mind, Starbucks would be a third.) But most companies don’t enjoy that kind of brand equity. Those are rare, world-class – in fact, unique-in-a-generation-type branding.
Apple does indeed trade on the prestige and capital of their brand, but they are a terrible example for everyone else. This is because they have advantages that have been well-earned over the last 30 years – advantages that other companies just don’t have.
If they offered something as ridiculous as Apple Spaghetti, people would be interested to see what they were able to do with the new iSpaghetti, and would give them a huge benefit of the doubt for that category.
But that’s only because of the public trust that they built up as innovators with their previous successes. They did mp3 players so well that it was its own value proposition for why you would want a smart mp3 player. Before that, it was a shrinking company.
What about the iPhone? When it launched, everyone cared that it was from Apple. But – and here’s the thing – that caring generated interest – but the value prop for the iPhone had to prove compelling over the long haul. Otherwise, it would be a fad. All heat and no light (Newton, Apple TV.) In short, iPhone’s value prop was far more than that it was an Apple product – it changed the game of what a phone could be.
Most companies don’t have that kind of brand and innovation capital – but even Apple hasn’t grown “beyond” the need for specific value propositions for each of their offerings. If the iPhone wasn’t a good phone, it would have failed. You still have to prove the point, in your category, of why your customer should buy your product from you.
The Corporate Foundation
Before Apple launched the iPhone, the clear winners in the phone category were companies like Nokia and Motorola. And yet, Apple was able to displace them. The iPhone represented a distinct and new improvement in the fundamental value proposition in what a phone or mobile device could be. So… where DOES Apple’s name come in? That is what we call the Corporate Foundation.
What distinguishes your company’s ability to offer any specific value proposition? Your value prop may very well be enticing to your customer in and of itself. They may say, I like the idea of a smart watch, but who’s offering it to me? There were other smart watches before Apple launched theirs, just like there were other mp3 players before there was an iPod. The corporate foundation is what demonstrates that we’re uniquely poised to fulfill the promise of this or that value proposition.
The corporate foundation is essentially a snapshot of the company making the offering in such a way that the buyer – whether it be a consumer or in an industrial purchasing situation – can feel comfortable that the offering party is actually situated and able to fulfill on those promises.
Prior Wins Don’t Always Indicate Future Success
The corporate foundation is a snapshot that looks at the past, present, and future of a company in relation to their offering. In the past we have referred to it as credibility. Where have they done it before?
Apple has huge credibility for being able to create innovative and disruptive personal technology. That’s not arguable. So, their customers will give them a huge benefit of the doubt. If the same exact watch was launched by some company called Acme Watches, they would have a much harder time to break into that market. Frankly, even if Rolex had launched the same watch, they would be challenged. This is because their customers aren’t going to take into account their credibility as manufacturers of high-end timepieces. They’re going to ask “when has Rolex ever done any of this kind of wearable, smart technology?”
The Present Corporate Snapshot
The customer doesn’t only consider a company’s track record, either. They want to know how cost effective a given purchase will be, relative to my other current options? It doesn’t have to be the lowest price, it just has to feel like it’s not an insane purchase decision.
Tesla, for example, had to prove their credibility by trading largely on Elon Musk’s personal credibility as an innovator genius. But he also had to demonstrate, through funding something as innovative as Tesla cars, that customers were actually getting a lot of car for their money. In fact, they’ve successfully done that in their initial niche marketing campaign over the first few years of their launch.
Past Success, Present Options, and Future Capability
The third and final consideration for an offerings value proposition in relation to their company is future capability. Customers want to know, “Are you going to be able to back this up over the long haul?”
When I look at an Apple watch, I have a reasonable expectation of there being an Apple watch 2.0. I need to know that Apple will continue investing in this technology, that they will not abandon the product, and that they can in fact produce a product of this quality at this price point in volume. Past, present and future are all taken into consideration for your corporate foundation, which is designed to support (and not replace) your individual offering’s value proposition.
Questions for you to consider:
- Are you leaning on your company’s story when you should be sharpening your specific offering’s story?
- Does your company story support your product or service lines, and have you created those links in easy to follow ways for your prospects and customers?
- Does your company’s past successes, current market context, and perceived future capabilities support the story that you want to sell with your offering?
What other companies trade on their name while creating distinct value propositions among their service lines? Connect with me at @jpalomino or tell me in the comments.