How To Set Your Business Apart From The Competition
In one of my recent speaking engagements, I challenged participants in the audience to think about the real value that their firms provide to the marketplace. Afterwards I received quite a few Emails from folks asking how to create a compelling value proposition that would accentuate a growers’ competitive strategy in the face of this less-than-stellar economic recovery. To answer that, let me preface my remarks with an observation: Too many companies enter the marketplace today without having fully defined their customer value proposition. Instead, growers tend to market a nice list of “powerful” benefits (which, ironically, their competitors most likely state they have, too).
Value Proposition Is More Than A Buy-Line
Let me start by saying that the underlying purpose of a value proposition is to identify and satisfy an unmet need that your target market possesses. An effective value proposition describes what you do in terms of tangible business results for the customer. However, it’s more than a statement of offer or a buy-line. It’s a commitment to deliver a specific combination of resulting experiences, at a particular price, to a group of specifically targeted customers, more profitably and better than the competition. In short, it’s about being different, but in a good way.
In marketing lingo, differentiation exists when customers (under conditions of competitive supply and faced with a range of choices): (a) perceive that product offerings do not have the same value and (b) are prepared to dispose of unequal levels of resource (usually money) in acquiring as many of the available offerings as they wish.
In layman’s terms, customers (both end consumers and business-to-business) generally use five major attributes in making a decision about what products/services to buy and from whom to buy them: quality, price, service, convenience and selection. Value represents the trade-off between the benefits derived from this varying mix of attributes relative to the sacrifices (dollars) made in getting them.
So the key for firms in the floriculture industry is to provide greater value to customers. The interesting thing is that the difference in value that customers perceive (when comparing your firm to competitors) can either be real or perceived through various signals you relay through your marketing efforts.
Differentiation Is Crucial
For a customer value proposition to be uniquely persuasive, it must be distinctive, measurable, defendable and sustainable. It is critical to define and support the value proposition in such a way that your customers will either pay more for your product/service offerings than the competition’s services, or substantially more customers will desire your products/services over those of your competitors. Developing a value proposition is the most difficult and time-consuming of all marketing activities. That’s probably why so many companies go to market without one clearly articulated.
Essentially, your job in defining your value proposition is to uncover the value that your company offers (and which your customers and prospects will want to buy); your job is not to develop a long list of benefits. Why not? Because, again, your competitors will more than likely have the same list.
So the question becomes very clear. How do you differentiate in a way that encourages more customers to buy from you or are willing to pay more based on your value proposition? Answer this and I assure you that your firm will be one that will not only survive future economic downturns, but will remain profitable while doing so.
Housing Remains Bright Spot Despite Drag From The Sequester
Speaking of the economy, real GDP is forecast to slow from the 2.5 percent pace we experienced in the first quarter to about a 1.5 percent pace in the second quarter. Not surprisingly, the implementation of federal government sequestration measures (mandated spending cuts) is currently the primary drag on the economy. The main bright spot is the housing market, which is expected to continue to post strong gains, as we are now facing housing shortages in many markets.
Prospects for the third quarter are a little better, as investment is expected to pick up slightly. Most companies seem to be throwing in the towel and giving investors back their excess cash as dividends instead of investing them in infrastructure projects. The consumer should do better in the wake of the recent run-up in both equity markets and home prices. We have actually begun to see consumers extract equity from their homes again to support spending. Real GDP is expected to rise at a 2.3 percent pace in the third quarter.
The economy is projected to end the year on a high note. Real GDP is forecast to hit 3.6 percent in the fourth quarter. The deficit has actually narrowed much more quickly than anyone expected, which means it should be easier to get a budget deal done, once the two sides are forced to do so. The debt ceiling is now expected to be crossed sometime late in the year. Of course, if the sequester persists, growth will accelerate much less than is forecast.
In summary, there is an old adage that says: “If you always do what you’ve always done, you’ll always get what you’ve always gotten.” This latest economic downturn has certainly caused us all to do some things differently than we had been doing them previously. We’re doing more with fewer people and in some cases, fewer resources.
But as we move into the future with brighter economic prospects, even more aggressive marketing will be needed to ensure that we are considered as necessities in our consumers’ lives and not mere luxuries. Now is exactly the time to make those strategic marketing investments to articulate our value propositions, both as individual firms and through industry-wide efforts (e.g. America in Bloom).