What’s the “Value” of a Value Proposition?
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The purpose of a value proposition is to increase the profitability of a business by attracting and retaining clients in a thoughtful manner. But developing one that actually helps move a firm forward is a challenging process. That is why some firms wind up creating a value proposition without any true “value” and others avoid creating one at all. Certain firms even create a value proposition merely to justify their existence. The end result? No results. A value proposition that has value for your target markets, however, will affect the growth and profitability of your practice.
The Components of a Valuable Proposition What makes a great value proposition? It speaks to the specific needs of a targeted group of buyers of your services. The narrower the proposition, the more meaningful it will be to your audience. The more encompassing the proposition, the more diluted it becomes. With value propositions, you really can’t be all things to all people. Your target audience should be able to read it and respond with the thought, “That is important to me“ or “I would be willing to buy that.” A common mistake is to broaden the focus for fear of either alienating some segment of your market or some of your firm’s personnel. But creating direction is also about eliminating options and being clear about which paths you will not be taking. Without focus, you risk creating confusion. For an accounting firm, a value proposition should lead to one result: having targeted consumers understand exactly how your firm addresses their needs above and beyond many of the core accounting services that have become a commodity. This can only be done by first examining the holes that exist in the market. What problems are your potential clients grappling with? Can you play a key role in dealing with those problems? In what areas are they underserved? How can you be first in addressing those areas? Asking those types of questions on a continual basis is at the core of identifying market benefits. In today’s business world, the issues are constantly shifting. Evolving challenges call for evolving solutions.
1. Market Benefits If your value proposition is based on what your clients and prospects value, it will serve its purpose—and deliver results. Firm leaders, however, often focus on what they themselves value. Or they misconstrue what their clients say is important to them. Think of a value proposition as a formula: Market Benefits - Price to the Market = Value Proposition
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Ultimately, the market itself determines what is beneficial to it. What are those perceived benefits? Organizations want to achieve three things: 1) grow their business, 2) become more efficient in how they make or deliver their products or services, and 3) save money. These are the areas you want to address. The more compelling your market benefits are to your prospective clients, the more you can dictate price and grab market share.
2. Uniqueness According to marketing literature, a value proposition needs to present a unique product or service. For an accounting firm, establishing absolute uniqueness is virtually impossible because all accounting firms provide similar services to the marketplace. Though it is possible to emphasize the way in which products and services are delivered (e.g., responsiveness, relationship) rather than the merits of the expertise or services themselves, this approach may not resonate with those who have not already had experience with the firm. In addition, it may be difficult for a firm to provide delivery in a consistent manner. Emphasizing such qualities as timeliness and proactivity—which are baseline expectations for professional services firms—is neither unique nor compelling. Clients are more likely to view these as “dis-satisfiers.” If their current provider doesn’t have a strong delivery system, they will simply switch to another provider that does. By specializing in specific industries and developing specialized services, you can reduce the number of competitors in your market. Because of the nature of the profession, you will never achieve complete uniqueness. By refining your value proposition, you move a step closer toward it.
The Means vs. The End The value proposition, however, is not the end in itself. It is merely the platform for effective, sustainable marketing. Once a value proposition is completed, the critical work begins: creating the strategy and tactics to bring it to life. For example, if a firm develops its value proposition around being a market leader in the banking industry, it needs to focus consistently on developing strategies and executing tactics that bring such a value proposition to life within that industry. Your value proposition is your compass. You need to consult it regularly in order to make certain your firm is on course with developing ways to serve your current and future clients. www.myavenir.com
Mitch Gorochow Director of Client Relations
About AVENIR
With over 30 years of accounting, tax and consulting experience, Mitch Gorochow knows what a CPA firm needs to be successful. Along with strategic and tactical guidance, he provides firms with highly effective tools to maximize their business development opportunities and add value for their clients.
After years of serving ”top-five” professional services firms, our partners realized that small to regional professional services firms did not have the resources to hire, develop and manage seasoned marketing and business development professionals—or foster a culture of growth. AVENIR was born to fill that need. Our proven business model centers on being your partner throughout the marketing and sales process for your firm’s growth and success.
AVENIR Consulting, LLC Greenwood Village, CO (866) 406-4146 www.myavenir.com