Using customer value propositions in business to business markets

“Customer value proposition” or “CVP”? has become one of the most widely used terms in business to business marketing in recent years.

However, a recent article in this month’s Harvard Business Review shows that companies often get it wrong when putting together a customer value proposition and more importantly, making it a persuasive CVP.

When managers construct a customer value proposition, they often simply list all the benefits their offering might deliver without thinking about the true features of a product that their customers are really interested in. Without an understanding of the customer’s requirements and preferences through detailed market research, suppliers can end up stressing points of difference that deliver relatively little value to the target customer.

Past research shows, those suppliers who provide a simple, yet powerfully captivating CVP by making their offerings superior on the few elements that matter most to target customers normally results in market share gain. Of course, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer’s business priorities is of paramount importance.

When properly constructed, value propositions force suppliers to focus on what their offerings are really worth. Once companies become disciplined about understanding their customers, they can make smarter choices about where to allocate scarce resources.

At B2B International we have found that customer value propositions can be a guiding beacon as well as the cornerstone for superior business performance. It is the responsibility of senior management and general management, not just marketing management, to ensure that their customer value propositions are just that.

Extract from an article by James C. Anderson, James A. Narus and Wouter van Rossum of Harvard Business Review

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