The Value of the Value Proposition for Your Startup
Editor's Note: Mike Albainy presented the Value of Your Value Prop as part of Cambia Grove's Lunch & Learn series. Check out our upcoming Lunch & Learn: Sales Skills For Founders and Pricing Your Product.
In the health care startup world, it is almost certain that you’re competing for attention against many entrenched system monoliths, all of whom claim to solve every problem and have strong brand power in the market. So how do you get prospects to take a chance on the little guy when there are so many big players dominating the space? It starts will a well-defined customer centric value proposition.
When I started MD Clarity in 2010, I was so focused on the need for our product to exist, based on a personal experience with the health care system. I found it so frustrating that nobody could tell me the cost of any visit, and being a frugal, cost-conscious person with a high deductible, I was determined to figure out how to make this better. But I made the mistake that many startups do. I focused on the intrinsic value our solution provided. Early visionaries bought in, because their doctors understood the value as well and wanted to be transparent on costs with their patients. But what happened when we tried to expand beyond our visionary customers was quite a different story.
I quickly realized that an altruistic attitude toward solving all problems in the health care space was not going to be a winning strategy and went back to the drawing board. The gross majority resisted, questioning the value of sharing their costs with patients, or claiming that they didn’t have time for it because they were already overwhelmed. So, I focused on asking our visionary customers, and potential customers that previously had shown interest but resisted to buy, two simple questions.
- What makes our product valuable to you?
- What could make it more valuable?
What I found out was enlightening. Our customers were using our product to solve problems we didn’t intend to solve and surfaced related challenges they needed help with. The value in it for them, beyond the patient experience, was that they could now transform their collection process, eliminating the need for sending confusing bills to patients many weeks after their visit. Their related challenges were complementary to our existing solution, and we found that we could optimize their workflow to allow for more time to work with patients on costs and tie it to a financial ROI. Communicating this value to future prospects became our focus, and the intrinsic value became an auxiliary benefit.
WHAT IS A VALUE PROPOSITION ANYWAYS?
Simply put, it is easy to understand why a customer should purchase a product or service from a specific business. A value proposition should be a clear statement that explains how a product solves a pain point, communicates the specifics of its added benefit and states the reason why it's better than similar products on the market. The ideal value proposition is concise and appeals to a customer's strongest decision-making drivers.
BECOMING CUSTOMER CENTRIC
Becoming customer centric in your value proposition starts with shifting from what you think is important to what perspective customers think is important. Be extremely clear about why buyers should care about what you have to sell and quantify it in terms of outcomes that matter to perspective customers. Do you help them increase revenue? Reduce costs? Reduce risk? Increase customer experience? Whatever your strengths, start with the “what’s in it for them” mindset to make your message more customer centric.
WHERE ARE WE NOW?
Defining a value proposition is no easy task. It’s not a static document. It evolves over time and grows as the company grows. Our value proposition continues to change as our company grows. The biggest lesson we have learned along the way is to adopt a customer centric approach throughout all of our internal processes, from product development to marketing and sales. It has become the ethos of the company. That means keeping our messaging consistent across all content and regularly auditing the message to ensure its customer centric, and ensuring that every product decision we make is optimized for that value proposition.
We have learned that it’s a lot easier to sell products and services by adapting internal strategies to be in line with a customer-centric approach. Focusing on customer-centric value has helped us shorten sales cycles, improve ROI, and has resulted in greater customer loyalty.
Here is a link to books and blogs that have really opened up my thinking.
Mike Albainy is Founder & CEO of MD Clarity.