profitable growth for yourself. One company that manufactured resins used in exterior paints discovered this firsthand. By researching the needs of commercial painting contractors—a key customer segment—the company learned that labor constituted the lion’s share of contractors’ costs, while paint made up just
15% of costs. Armed with this insight, the resin maker emphasized that its product dried so fast that contractors could apply two coats in one day—substantially lowering labor costs. Customers snapped up the product—and happily shelled out a 40% price premium for it.
To craft compelling customer value propositions:
UNDERSTAND CUSTOMERS’ BUSINESSES
Invest time and effort to understand your customers’ businesses and identify their unique requirements and preferences.
Example:
The resin manufacturer deepened its understanding of key customers in several ways. It enrolled managers in courses on how painting contractors estimate jobs. It conducted focus groups and field tests to study products’ performance on crucial criteria.
It also asked customers to identify performance trade-offs they were willing to make and to indicate their willingness to pay for paints that delivered enhanced performance.
And it stayed current on customer needs by joining industry associations composed of key customer segments.
SUBSTANTIATE YOUR VALUE CLAIMS
“We can save you money!” won’t cut it as a customer value proposition. Back up this claim in accessible, persuasive language that describes the differences between your offerings and rivals’ that matter most to customers.
And explain how those differences translate into monetary worth for customers.
Example:
Rockwell Automation precisely calculated cost savings from reduced power usage that customers would gain by purchasing
Rockwell’s pump solution instead of a competitor’s
comparable