Key steps for business growth: how to develop a value proposition

Having seen in the article “Key steps for business growth“ that understand what are the key behaviors our customers perform throughout the buying process and segment the market in relation to these behaviors, provides a solid basis for developing and implementing growth strategies, we now look at how to develop a value proposition that is highly differentiating from the market and, consequently, how to activate the market in a way that generates new demand, the company’s growth.

Drivers and customer barriers

Prioritizing the segments that the company has decided to target to drive its growth, it is necessary to identify the motivations underlying the customer’s behavior, because only through a rationalization and understanding of the motivations and environment in which customers live and act certain behaviors can we promote and activate the desired key behaviors.

In other words, for each segment selected, you need to identify:

In which environment the customer buys and uses the product
What is the customer’s desired experience using the product/service
What are the emotional associations in relation to the product/service
What is the particular use and purchase behavior

This information, so rationalized, helps us to understand what are the factors on which the company wants to leverage to activate the key behaviors selected in the previous steps (the Drivers) and what are the factors that the company must necessarily change or circumvent to activate key behaviors (Barriers).

For each segment, therefore, it is necessary to develop a value proposition that manages to combine the requirements expressed by the customer and what the company has to offer. The skill consists in finding what is called “Sweet Spot”, the sweet space, where the offer of products/services of the company is perceived by the customer differentiated, and therefore not in contrast to that of the competition.

Finding Sweet Spot allows, depending on the different markets, to capture a higher price in the market or increase sales volumes and market shares. Each defined value proposition must necessarily indicate the change in behavior of that market segment, indicating which behavior the company wants to act more in place of that behavior should not be encouraged because it is not aligned with growth objectives. To be complete, the value proposition must consist of:

The target segment to which it refers – for example, the Purchasing Manager;
The key behavior desired – for example consultation with our sales office before publishing the tender notice;
Unwanted behavior that reduces the chances of purchasing the product/service – for example waiting for the RFP to contact our sales office;
The Value for the customer that activates the key behavior – for example having the quotes always correct and with a very short lead time;
How drivers will be used to stimulate key behavior – for example, develop a portal to directly interface with the customer’s purchasing office;
How the barriers to key behavior will be removed – for example, enabling training sessions for specific people in the customer’s purchasing office to use the portal and establishing a 24/7 hotline with the customer’s purchasing office.

Market activation

The last step involves, only for the segments previously prioritized and on which a differentiating value proposal has been drawn, the development of an action plan to accelerate awareness of the new offer by customers and the generation of new demand.

For each prioritized segment, it is necessary to develop a market activation plan of its own, including the key behavior activation strategy, the different activities that will implement this strategy, the time frame associated with each activity and the business function responsible for implementation.

The essential importance of behavior

Using an approach that focuses not only on the product’s positioning in the market, but also and above all, on the purchasing process and customer behavior, is a challenge and a change in thinking and executing strategies to increase the company’s profitability. Certainly, seeking a correct positioning of the product/service in the market is a necessary condition, but not sufficient to ensure sustainable growth.

Focus on shaping the entire customer buying process, – not focusing all your energies on the mere act of “buying” – understanding the key behaviors that drive the purchase of products/services and looking for new iterations with customers in different sales channels, can therefore be a significant competitive advantage that companies can put in the field against competitors, even in the light of increasingly uncertain and changing market conditions.