01 - Value Proposition Course - Session 1 - Introduction to Value Proposition_BB_PC0

7/30/2019 01 - Value Proposition Course - Session 1 - Introduction to Value Proposition_BB_PC0

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Value Proposition DevelopmentSession 1 What is a Value Proposition?


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Introduction


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Dr. Flint McGlaughlin Director, MECLABS Group

Flint McGlaughlin is the Director of MECLABS Group. The organization

has partnered with key market leaders including The New York Times,

Microsoft Corporation, and Reuters Group.

Dr. McGlaughlin also serves as the Director of Enterprise Research at

the Transforming Business Institute, University of Cambridge (UK) and

as a Trustee for Westminster Theological Centre. Dr. McGlaughlin

originally studied Philosophy and Theology at the University of

Londons Specialist Jesuit College.

Today, his primary research is focused on enterprise as transformative

agent. His work has won multiple awards and has been quoted inmore than 13,000 online and offline sources.

INTRODUCTION


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MECLABS is a science lab that conducts R&D in sales and marketing.

We conduct rigorous scientific experiments with research partners from all

industries to help leaders optimize the financial performance of their sales and

marketing funnels.

MECLABS was the first Internet-based research lab to conduct

experiments in optimizing the conversion rate of sales and marketingprocesses.

1990 Preliminary Research Begins

1997 Research Program Established

2001 First Research Report Published

2002 Testing of Research Partnership Model Begins

2003 Offer Response Optimization Theory Validated

2006 Patent Filings for Research Findings (10 Heuristics)

INTRODUCTION


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INTRODUCTION


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INTRODUCTION

1,300+ major experiments

Over 1 bi llion emails tested

10,000 sales-paths tested

500,000 decision-maker interviews

5 mill ion phone calls

100+ conferences/clinics


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We optimize the financial performanceof the sales and marketing funnel

MECLABS Sciences Group

Conversion

Group

Leads

Group

Technology

Group

Training

Group

Strategy

Group

Applied ResearchPrimary Research

Agency

Group

INTRODUCTION


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STUDENT ACTIVITY

Before we start this course, take a moment

and write down the value proposition of

your company


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MarketingExperiments conductedan incentivizedsurvey to test howeasy it is to find a truly effectivevalue proposition.

The rules were simple: send us abusiness plan, and articulate thevalue proposition on a 5x7 indexcard.

We received almost 400 entries infour weeks. Many were from someof the top business schools in the

U.S. Even more were from existing,profitable businesses looking togrow.

AN EXPERIMENT: VALUE PROPOSITION SURVEY


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0 - No real value proposition.

1 - Limited value to a small market. There is extensive competition and/or few barriers to entry.

2 - Substantial value to a medium-sized market. There is limited competition and/or significant

barriers to entry.

3 - A product or service with strong product differentiation, but little competitive protection.

4 - A unique product or service that is highly valuable to a large market, and strong competitive

protection and/or extensive barriers to entry. This may take the form of a registered patent

or limited access to product components.

5 - A unique product or service that is highly valuable to a large market, and exclusive or near-

exclusive control of essential product components. This may also include a registered

patent.

Every submission was graded as objectively as the research question would allow

by a group within our team using the following five-point scale:



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Results: Out of 275 plans with value propositions of some kind, there were only

six (2%) that scored a "4." No companies scored a "5." The vast majority (90%) of

companies scored a "2" or below.

Rank Total %

0 No real value proposition 120 30%1 Limited value to a small market 22 6%

2 Substantial value to a medium-sized market 215 54%

3 Strong unique value, little competitive protection 32 8%

4 Strong unique value, extensive competitive barriers to entry 6 2%

5 Strong unique value, exclusive control of product rights 0 0%



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No

48%Yes

52%

Source: 2012 MarketingSherpa Website Optimization Benchmark Survey

Methodology: Fielded April 2012, N=547

Survey Question: Are you

confident that each

member of your

marketing team can

clearly and succinctly

state your company (or

product) value

proposition?

2012 SURVEY DATA


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Survey Question: Has

your organization tested

your value proposition(s)?

2012 SURVEY DATA

No

71%

Yes

29%

Source: 2012 MarketingSherpa Website Optimization Benchmark Survey

Methodology: Fielded April 2012, N=1,156


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INTERACTIVE QUIZ

Can you find the value proposition on the

following pages??


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COMMON EXAMPLES: AT&T (B2C)


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COMMON EXAMPLES: HP (B2B)


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COMMON EXAMPLES: BOSTON HERALD (SUBSCRIPTION)


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COURSE FOCUS

How can we conceptualize a simple, yet powerful,

paradigm for crafting value propositions?


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COURSE FOCUS

Session 1: What is a Value Proposition?In this session, you will learn the underlying theory of a value proposition framework.

Session 2: What Determines the Force of a Value Proposition?

In this session, you will learn how to measure and adjust the four factors that determine the forceof a value proposition.

Session 3: How to Craft your Value PropositionIn this session, you will learn a step-by-step process for crafting the essential value proposition

argument.

Session 4: How to Apply your Value PropositionIn this session, you will learn how to infuse your value proposition into every element of your

marketing collateral.

In four key sessions, we will cover the definition of value proposition, how to

properly craft a value proposition, and then express it effectively to your customers:


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We must understand the meaning of the termvalue proposition

Point 1


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Common Responses: Whats your value proposition?

We empower your software decisions.

I don't sell products and services, I sell results; my guarantee.

We help mid-life women find their passion and purpose.

We are the leading technology provider.

Get found online.

This site has what the person is looking to find.

CONFUSIONOVERTHETERM VALUEPROPOSITION


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Landing Page Optimization

Ongoing literature review of:

More than 1,100

academic articles

20 popular authors

including:

Starch

Hopkins

Reeves

Kotler

Porter

Lanning

Review spanning from

1890s to present

Session 2 Understanding Value Proposition


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Landing Page OptimizationSession 2 Understanding Value Proposition


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Landing Page OptimizationSession 2 Understanding Value Proposition

Business Software Suite

#1 On-Demand. 6459+ World Clients

Award-Winning Solution. Free Trial

www.XXXXXXXXXX.com/Business

54%Conversion

21%Conversion

97%Conversion

109%Conversion

31%Conversion

124%Conversion

201%Conversion

29%Conversion

15%Conversion

100%Conversion

21%Conversion137%

Conversion

63%Conversion


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Landing Page Optimization

So what is a functional

understanding of the term ValueProposition?

Session 2 Understanding Value Proposition

The answer to this question another question


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If I am your ideal prospect, why should I buy from

you rather than any of your competitors?

WHATISAVALUEPROPOSITION?


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UNDERSTANDINGTHEROLEOFAVALUEPROPOSITION

Key Principles

1. The answer to the question, What is your value proposition?

can only be discovered by answering yet another question: If I

am your ideal prospect, why should I buy from you rather than

any of your competitors?


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Value Proposition Question: If I am your ideal prospect, why should Ibuy from you rather than your competitors?

1. You are fundamentally answering a first-person question posed in the mind of

your customers. It always implies a because answer.

2. A value proposition focuses on a specific customer segment. This requires you to

consider whom you will not serve and the associated tradeoffs.

3. A value proposition is an ultimate reason the reason why; it is the culmination of

a careful argument supported by evidentials.

4. A value proposition must differentiate you from your competitors. In at least one

way, you must have an only factor.

WHATISAVALUEPROPOSITION?


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STUDENT ACTIVITY

How would you answer the question, If I am your

ideal prospect, why should I buy from you rather

than your competitors?


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We must understand the fundamental role of thevalue proposition

Point 2


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Key Principles

1. The answer to the question, What is a value proposition? can

only be discovered by answering yet another question: If I am

your ideal prospect, why should I buy from you rather than any

of your competitors?

2. The value proposition is the fundamental force powering your

prospects up the sales funnel.

UNDERSTANDINGTHEROLEOFAVALUEPROPOSITION


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g=9.8

1m/s2

1. The funnel is often presented as

one potentially useful analogy for

marketing. It is in fact, the

primary analogy. All marketing

should influence a decision.

2. The funnel analogy distorts

reality. People are not falling into

your funnel, they are falling out.

The funnel must be inverted.

3. People dont travel down the

center of the funnel. People areclimbing up the sides.

THREEFLAWSINTHEFUNNELANALOGY


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(Mi)YES

(Ma)YESY

ValuePropositio

n

Business Software Suite

#1 On-Demand. 6459+ World C lients

Award-Winning Solution. Free Trial

www.XXXXXXXXXX.com/BusinessPPC Ad

Landing Page

Sales Call

THE INVERTED SALES FUNNEL

(Mi)YES

(Mi)YES

(Mi)YES

(Mi)YES

(Mi)YES


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We need to understand the relationship between thecore and the derivative value propositions

Point 3


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HOWDOESTHEMESSAGINGCONNECT?


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HOWDOTHESEDIFFERENTDIVISIONSLINK?


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KEY QUESTION

How do we reconcile all these different value

proposition applications?


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1. The value proposition must be framed with customer logic rather

than company logic.

Key Principles

UNDERSTANDINGCORE/DERIVATIVEVALUEPROPOSITIONS


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CUSTOMERLOGICVS. COMPANYLOGIC

Marketer MarketValue

Proposition


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than company logic.

2. Customer logic demands an obvious connection between the

company, its various products, and its different prospects.

Key Principles



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1

3

2

Question: If I am [PROSPECT A], why should I buy

from you rather than any of your competitors?

Question: If I am your ideal prospect, why should I

buy from you rather than any of your competitors?

Question: If I am [PROSPECT A], why should I

buy this product rather than any other product?


click this PPC ad rather than any other PPC ad?

Prospect B

PRODUCT

#3

PRODUCT

#4

PRODUCT#1

PRODUCT

#2PRODUCT

#3

PRODUCT

#4

PRODUCT

#2

PRODUCT

#3

PRODUCT

#4

Primary

Value

Proposition

Conversion steps

associated with a

specific product

PRODUCT

#2

The Value Proposition Spectrum

PROSPECT-LEVEL

PROCESS-LEVEL

PRODUCT

#1PRODUCT

#1

PRODUCT-LEVEL

THE VALUE PROPOSITION SPECTRUM

Key Principles


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Primary Value Proposition: If I am your ideal prospect, why should I


Fundamental Question: If I am [a particular prospect] why should I

[take this action] rather than [this/these other action(s)]?

Primary Value Proposition: If I am your ideal prospectwhy should I

buy from yourather than (buy from) any of your competitors ?

[a particular prospect]

[this other action][take this action]

THE PHILOSOPHICAL FOUNDATION


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Prospect-Level: If I am a college student, why should I buy from you ratherthan any of your competitors?


[this other action]

[take this action]

Product-Level: If I am a college student, whyshould I buy this mp3 playerrather than any other mp3 player?


[this other action]

[take this action]

Process-Level: If I am a college student, why should I click this mp3 player adrather than any other mp3 player ad?


[this other action]

[take this action]

EXAMPLEDERIVATIVEVALUEPROPOSITIONS


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THE VALUE PROPOSITION SPECTRUM

1

3

2






buy this product rather than any other product?



Prospect B

PRODUCT

#3

PRODUCT

#4

PRODUCT

#1

PRODUCT

#2PRODUCT

#3

PRODUCT

#4

PRODUCT

#2

PRODUCT#3

PRODUCT

#4

Primary

Value

Proposition

Conversion steps

associated with a

specific product

PRODUCT

#2


PROSPECT-LEVEL

PROCESS-LEVEL

PRODUCT

#1PRODUCT

#1

PRODUCT-LEVEL

/


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than company logic.

2. Customer logic demands an obvious connection between the

company, its various products, and its different prospects.

3. While there is a connection, derivative value propositions are so

interlinked they will often overlap.

Key Principles



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Identify at least one way (for

each derivative level) that this

page communicates its

derivative value propositions.

AUDIENCE ACTIVITY

Find the following:

1. A Prospect-levelVP

2. A Product-levelVP

3. A Process-levelVP


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Product-level

AUDIENCE ACTIVITY


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A A


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Notice how the

product-level,

prospect-level, and

process-level value

proposition overlap

at the call-to-action.

AUDIENCE ACTIVITY

Email templates

designed to appeal to

different segmentsCall-to-action emphasis boththe product-level (free trial)

and the process-level (get

started) value propositions.


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Key Principles

K P S 1


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KEY PRINCIPLES SESSION 1

Key Principles

1. The answer to the question, What is your value proposition?

can only be discovered by answering yet another question: If I

am your ideal prospect, why should I buy from you rather than

any of your competitors?

1. You are fundamentally answering a first-person question posed in the mind of your

customers. It always implies a because answer.

2. A value proposition focuses on a specific customer segment. This requires you to

consider whom you will not serve and the associated tradeoffs.

3. A value proposition is an ultimate reason the reason why; it is the culmination ofa careful argument supported by evidentials.

4. A value proposition must differentiate you from your competitors. In at least one

way, you must have an only factor.

K P S 1


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1. The value proposition is the

fundamental force powering your

prospects up the sales funnel.

2. The value proposition must be

framed with customer logic ratherthan company logic.

3. Customer logic demands an obvious

connection between the company,

its various products, and its different

prospects.

4. While there is a connection,

derivative value propositions are so

interlinked they will often overlap.

(Mi)YES

(Ma)YESY

ValueProposition

(Mi)YES

(Mi)YES

(Mi)YES

(Mi)YES

(Mi)YES

Key Principles


K P S 1


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1

3

2





Question: If I am [PROSPECT A], why should Ibuy this product rather than any other product?



Prospect B

PRODUCT

#3

PRODUCT

#4

PRODUCT

#1

PRODUCT

#2PRODUCT

#3

PRODUCT

#4

PRODUCT

#2

PRODUCT

#3

PRODUCT

#4

Primary

Value

Proposition

Conversion steps

associated with a

specific product

PRODUCT

#2


PROSPECT-LEVEL

PROCESS-LEVEL

PRODUCT

#1PRODUCT

#1

PRODUCT-LEVEL

Key Principles

EXAMPLE DERIVATIVE VALUE PROPOSITIONS


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Prospect-Level: If I am a college student, why should I buy from you rather

than any of your competitors?


[this other action]

[take this action]

Product-Level: If I am a college student, whyshould I buy this mp3 playerrather than any other mp3 player?


[this other action]

[take this action]

Process-Level: If I am a college student, why should I click this mp3 player ad

rather than any other mp3 player ad?


[this other action]

[take this action]

EXAMPLE DERIVATIVE VALUE PROPOSITIONS

Example of Derivatives


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Value Proposition DevelopmentSession 1 What is a Value Proposition?

01 - Value Proposition Course - Session 1 - Introduction to Value Proposition_BB_PC0

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