Value Props: Why People Actually Buy

Do you know what value you’re providing your customers, why they choose your product over the competition? The reasons may surprise you.

In this episode of “How to Sell More,” host Mark Drager explores strategies for establishing effective value propositions with SHAKE Marketing Group founder Stacey Danheiser. She emphasizes the integral role ongoing research plays in refining your company's value proposition and the importance of incorporating customer feedback into product development, marketing strategies, and overall business direction.

• Know Your Customer: Value is subjective and varies from customer to customer. Businesses often make the mistake of assuming their perception of value aligns with that of their customers, leading to ineffective value propositions.
• Understand Your Competition: Staying ahead in the market requires a deep understanding of both direct and indirect competitors. This involves recognizing not just product features but also how competitors position themselves and their messaging strategies.
• Keep Your Departments in Sync: Aligning the internal understanding of a company's value proposition across all departments is crucial. Discrepancies in understanding and communication can lead to mixed messages in the market.

Stacey has been in the game for over 15 years, shaking things up in the telecommunications, cable, and financial services industries with her customer-first strategies. Tune in to learn how she’s helping B2B companies stand out and grow.

“Value, like beauty, is in the eye of the beholder.” -- Stacey Danheiser

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Links to This Episode

• Apple Podcast
• Spotify
• YouTube
• Audible

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Key Takeaways

• Understanding and Communicating Value - If you want to truly understand what your customers value, engaging in in-depth customer research is essential. Among other things, It will help you understand what messaging brought them to you, what you’re doing right and what areas can be improved upon.

• Competitive and Market Research for Differentiation - Conducting regular, comprehensive market research is vital for staying informed about industry trends, customer shifts, and potential disruptors. This allows you to adapt your strategies proactively, not reactively.

• Internal Alignment and Customer Feedback Loop - Continual customer feedback is integral to refining your company's value proposition. It should be incorporated into product development, marketing strategies, and overall business direction.

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Top 3 Reasons to Listen

Know what you’re up against: If you’re not doing any competitive research, then you’re likely lost in the “sea of sameness” and creating messaging that’s similar to your competitors.

Messaging matters: Differentiation doesn’t just come from products but also from unique messaging and positioning. How you communicate its value can significantly impact its success.

Making the sale is just the first step: Operational excellence is key to delivering the value promised in your messaging. You need to fulfill these promises through effective operations and customer service.

Follow Stacey Danheiser on Social

Website: https://www.shakemktg.com/about-us

Instagram: https://www.instagram.com/danheiser/?hl=en

Best-selling Power book “Look Inside: The Real Reason Your Organization Isn't Winning the Marketing Game”

https://www.amazon.com/Look-Inside-Organization-Winning-Marketing-ebook/dp/B0C22BXVTV

LinkedIn: https://www.linkedin.com/in/staceydanheiser/

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More About Today's Guest, Stacey Danheiser

Marketer, foodie, yogi, mama and author. Biz Owner at @Shakemktg. Helping women build businesses.

Stacey Danheiser is the co-author of Value-ology and the founder of SHAKE Marketing Group, a B2B marketing and sales practice based in Denver, Colorado. A corporate marketer turned entrepreneur, Stacey spent 15 years working in marketing leadership positions in the telecommunications, cable and financial services industries before starting her own consultancy. Stacey believes that effective marketing is all about putting the customer at the center of your decisions. She co-wrote Value-ology to provide business professionals with a formula to create and communicate their value to customers.

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A Transcription of The Talk

Mark Drager: So, Stacey, you've written a bunch of books, and you're a speaker, deeply engaged in the B2B marketing world. Today, we're going to talk about value for customers, and and developing a value proposition, but specifically for B2B business owners, heads of sales and marketing, and all of us responsible for creating value within organizations, especially in B2B. You sent over a few topics before we kicked off, and one of them I found super curious. I think I understand value, as do most successful salespeople and marketers, and most in the C-suite. Yet, you sent me a note saying, no, no, we tend to get this wrong. So, what do we tend to get wrong? Or why is value misunderstood?

Stacey Danheiser: Yes, I mean, I love this topic. Value is one of those words that's thrown around in businesses, and we kind of assume that we know what it means. Simply put, value is what we exchange for someone else's money. It gets confusing because, like beauty, value is in the eye of the beholder. We tend to think of value in our terms, what we value, and can't imagine that someone else wouldn't value the same thing. Very seasoned salespeople understand this concept. However, I work with many CEOs, marketers, and sales professionals who get confused. They think they know what the customer values and push to talk about their interests, forgetting it's really about the end user. A perfect example is when companies talk about cutting costs. Maybe that resonates with 80% of customers, but there are 20% who aren't interested in cutting costs. They're trying to grow, go fast, or launch new products. If you come in with a 'we'll help you cut costs' message, it doesn't land because it's not relevant.

Mark Drager: Oh, that's such a good point. A few years ago, I worked with an entrepreneur and business owner. I'm not cheap, but I always look for ways to maximize every investment. I assumed the people I worked with wanted the same. However, this entrepreneur seemed to be throwing money around. They had the budget, but some investments seemed unnecessary. So, I spoke to the business owner privately, questioning the spending. They explained, "Mark, my business is my Lamborghini. I want the very best." That moment taught me to respect different value sets. So, how do we approach this? I often sit with business owners or C-suite decision-makers and find they think they know their customers. But do they really know the ones who aren't the best customers, prospects, or those they're losing? How do you find out the different value sets or segment audiences to understand if people are price-conscious or have other values?

Stacey Danheiser: It's a great question. Yes, I come across that a lot. We think we know our customers, but unless you're selling sales solutions to other sellers, you're probably not your target customer. There are many ways to slice the customer database. When I do customer research, clients often give me their 'best customers' to talk to. This is useful for replicating ideal customers. However, neutral interviews reveal the real story of working with the company, the problems solved, and potential improvements. Often, customers rank the company lower than expected. I like to think of value in three buckets: create, communicate, and deliver. Creating value involves having the right products and services. Communicating value is about relevance and resonance. Delivering value is crucial, as value propositions are promises for the future. Operational excellence is vital here. Companies often overlook the delivery aspect, leaving it to junior Customer Success teams. This is where feedback is most impactful. Understanding the entire customer lifecycle across departments is key to improvement, not just in marketing.

Mark Drager: It only takes a single touchpoint or interaction, that goes uncorrected, to really tarnish a relationship. I've been in service-based businesses for a long time and have always found that with a really strong value proposition, selling is easy. Now, delivery is hard, and keeping things sold can be very challenging. But as you know, when I'm working with people, and I'd love to get your thoughts on this, you mentioned the idea of the promise, the promise being made. We need to not only communicate, I think, but also prove. People are very cynical and very skeptical, and we have to constantly prove ourselves. There's this idea of the brand promise, or if we don't want to use such technical or fluffy terms, it really comes down to making a commitment.

Like, I am committing to drive value for you, to do a great job, to deliver some kind of value to you, as you mentioned, the value creation. So I'm making a promise to you. I've seen two things: organizations that vastly overpromise and underdeliver, and people who are afraid to make claims or promises, to put anything forward, because they fear that if they don't deliver, it would be terrible. So, I always think it's not marketing's job to dumb itself down for poor operations; it's operations' job to live up to the promises that marketing must make to close the deal. I'm not an operations guy, so it's easy for me to say, 'Hey, it's your job to live up to the claims we make.' But if we have to make a certain promise to win the business, then operations should do whatever it takes to live up to this promise. Do you see it the same way as me, or is there another way to look at this?

Stacey Danheiser: Well, I love that view. My background is in large corporations, particularly in Fortune 500 companies, so I've seen this play out in real-time, where operations were failing while marketing and sales were trying to put lipstick on a pig. The focus in those companies was on operational excellence. CEOs understand that if we're not delivering on our promises, our whole business falls apart. It's often thought of as a marketing and sales problem, but often it's another lever that needs fixing. Understanding the industry's table stakes—what's the bare minimum you need to provide just to be considered—is crucial. Then there are aspirations to be the Patagonia or Apples of their industry. What's typically broken is the commitment to excellence, a culture of experimentation, learning, and growth. Marketing's job, in my view, is to connect with customers and get feedback that goes back into the business. This feedback should inform what the business works on and prioritizes. Closing the loop with customer feedback is essential, so it's more than just updating the homepage copy on the website; it's about using that feedback effectively.

Mark Drager: I've often thought, you know, we had a client we were working with for many, many years who was in, I don't even know how to explain it, which is not great. But they essentially had fire-rated cables. And so for every public building, there is a law that states that if the building is burning to the ground, communications cables, the fire equipment, and all of the emergency staff have to be able to operate for two hours in a burning building. So what a strange, weird little client, what a strange industry. Anyway, they had a fire-rated cable, that was the best, it was the best of the best of the best. Here's the problem. It costs more money. It had a longer lead time, it was more challenging to install, and distributors didn't understand it. End users did not want to order it or install it because it was higher human. It was just worse, to install and work with because it was the very best product. And so the client came to us and said, "How do we sell this?" And it's like, how do we sell something that is in a lab setting much better, and everyone agrees is better? But if you're doing a 20, 30, 40, a $100 and $50 million investment? Do you really like, does it? Does it matter if something is 20%? Better if the other thing still passes the code? Yeah, and it's cheaper, and it's easier to install, and people like it, like how do we, how do we, how do we do this? How do we put that lipstick on that pig? Or how do we get this thing sold?

And so inevitably we do tonnes and tonnes of research. And we come down to the fact that it's just like there's this one environmental aspect of it. Oh, the competitor's cables are carcinogenic, or, you know, the cause of cancer when they burn and put off all these toxic fumes and stuff. But then we had to figure out ways to just demonstrate this and prove that it was true and not get sued and all of these other things. And so I can understand in these really complex situations, it's one thing to say value. And it's another thing to actually do this. How do you tend to handle it? Or how do you recommend clients go about these really challenging situations where you have a product or you have a service or you have a company and you know that these that your service is, is equal or better in some ways, but frankly, because of things outside your control, commoditization or marketplace or competitors, like you just you can't go back and redevelop something brand new, you have this thing that simply must get sold. How do you handle that?

Stacey Danheiser: Yeah, I mean, I guess there's a couple of things. So one, is the concept of differentiation, right? What you're talking about, and I think it's interesting, where there are product-led companies, engineering-led organizations where they focus on this aspect of differentiation. That nobody hears about that there's, it's the piece. So that's problem number one.

Mark Drager: That's true. It's like a bunch of people who are really into this, invent and create these things, never asking how the average user would look at it like care.

Stacey Danheiser:  Yeah. So I love so, one tool, by the way, that everybody can use to help sort of understand this concept is the Bain Pyramid of Value. Have you used this, the B2B Pyramid of Value? I like this one as a visual because it shows, you know, different things that like concepts that people would care about. And I think I would start there with, what does our customer base really actually care about? And in that situation, you just talked about the ease of use, ease of implementation is has got to be probably at the top of you're deploying hundreds of 1000s of these, these cables, or, you know, in multiple buildings like that absolutely is a critical aspect to get right. So that's kind of number one is building differentiation, that's one of my favorite quotes is like, just because you're unique, doesn't mean you're useful. Okay, so that's basically that concept.

The second piece, I think, is the other one, you were just talking about. A great one. And where I see many companies kind of failing when they talk about value or value propositions is proof points. So ideally, you understand what makes your product unique different,, and useful. And then you are able to measure that. So how do you measure the value that you're providing? And I think a lot of value propositions are weak, because they are empty promises, right? And so anything that's, we're going to transform your business? Well, we are all now rolling our eyes at the word transform, because it's so overused. And it's been so over-promised that we are very smart humans and very smart consumers. And so we don't believe it. And so you have to find a way that is like, how can we measure and put some proof points around something. So in those situations in, in kind of complex products, I always look for like little nuggets, little insights, somebody has bought this thing, why did they buy it? What is it solving for the business? And try to find some patterns that might emerge from those particular businesses. So are they all in the same industry?

For example, do they happen to all be in the same location? Are they all the same potential stage of their business lifecycle, do they all have kind of a similar background in terms of maybe engineering or associations that they're all part of, I mean, there's always like, kind of little different things that you can, that you can find to almost like create a segment, you're kind of like pulling a little niche, and you're trying to create a little niche in the market, that's like, we have found this random niche, hospital managers, you know, tend to really like that great, then we're gonna go, it's like, we have to go sell this thing. Find your niche first, and then go try to replicate that. And, and a lot of companies just don't do that at all. They don't, they don't really understand customer segmentation. And so that's like, one of the things that I try to teach marketers and try to help companies with is, let's just look at some patterns and things that that are emerging from your current customer base people, some, some people are buying this, and they bought it for a reason. And it's, it's typically not obvious, I'd say.

Mark Drager: What's always crazy to me is how many businesses are so bad at this and yet still successful. I had a client who worked for an organization, a large one, that's been around for 170 years. They had no call center, no inbound, and sold to distributors with zero brand presence, and zero marketing assets. It was like they just locked up all the distribution for certain equipment and just locked up the region. So if you needed this equipment, you had to come to them. This is a publicly-traded company. So, if you're this successful without any of this stuff, imagine how great it would be if you just started implementing some of it. And so, I know that you have some strategies. There are a few different ways, I think four different ways, that we can go about doing this type of market research in a way that is appropriate, achievable, and that we can handle. Can you walk us through those four key areas for researching these value propositions?

Stacey Danheiser: Yeah, I think the first high level, just what most people do to come up with their value propositions, are they sit in a room with each other, internal people at the company, and they talk about, "What's our value proposition? Okay, let's throw some stuff at the board. And we'll see what sticks. Okay, that one sounds good. Let's go with that." So, when I like to look at the bigger picture and figure out if we're really going to make a mark in the market, there are four key areas that I like to look at. The first is, of course, market research. This is the 'market' in marketing. Most companies skip this. It's having a sense of what is happening in the industry. What are the trends? Do we understand our customers' industry? And do we know what's driving things? Because not every industry is the same. So it's really about having a deep understanding of what's happening and what the trends are. Companies can get better at that simply by prioritizing and spending time on it.

A lot of people subscribe to industry newsletters, maybe the CEO, probably, and maybe a couple of salespeople are. In my experience, a lot of marketers are not doing this. They're not subscribing to these things. So that would be my advice: find a couple of good ones and make sure that your team, your marketing, and your sales team who are interacting with customers all the time, have their pulse on the industry. That could be associations, publications, etc. The second area is competitor research. Now, this is another area that companies tend to do once, specifically relating to the product. "Oh, we're creating the product, the engineering team is doing competitive research, we're comparing our product to somebody else's." But ideally, the organization is looking more holistically at the competitor piece. And I know there are varying thoughts about this. On one side of the equation, it's, "Hey, our competitors are irrelevant, we're so much better, we don't even have to think about them. We're just going to be heads down and build our business." Well, that's not true.

Mark Drager: That's not true. If you're listening and you're like, "Yeah, I'm better," that's great. But that's not true.

Stacey Danheiser: Yeah. And not only that, but I think it's naive to think that you're... I like to say that this approach is very naive because it's completely the opposite of customer-centric. Customers are evaluating you against something else, whether that means they're doing it themselves, using a completely different solution, or doing nothing. They are solving their problems somehow, some way today, before you even come on the scene. And not…

Mark Drager: Not only that, I think most people are so caught up in their known competitors, the people that they may be going up against for, say, a pitch, an RFP, or even a purchasing decision. So everyone knows that they have those competitors that you're up against, and you hate. But then there are all of the secondary competitors, they're all of the non-direct competitors, they're the competitors, who are actually taking budget or disposable income or attention away, or there are the competitors who are just frankly, stirring things up. And you know, if right now, with the global economy, what's happening with interest rates, and what's happening with the idea that recession can be coming for the last two years, that's a compact like, we have to compete against that. If you want to try and get organizations to be able to move forward with something and make investments that are long-term, they may be hesitant to do so right now, simply because we have to compete against the press. So there's, there's always competition, you have to be going up against.

Stacey Danheiser: Yeah. The big one, too, it's that my colleagues and I did a bunch of research for one of our books on the sea of sameness. And the reality is, a lot of people are stuck in the industry mindset. And they just kind of copy each other. And they it's so let's not even talk about the product. But we're talking about communications now, how companies are communicating what they do, and the value they bring. And a lot of them are using the exact same words, the exact same way, the exact same jargon. And so if you are not doing any competitive research at all, then chances are you're probably creating something that is just feeding the sea of sameness. Engine. And so if you want to be different, you have to know what you're up against. Right. And so that's, that's what I'll say about that. And, again, each kind of person should really have an understanding of the competitive landscape to your point, here are our direct competitors. Here are some of the lesser-known indirect competitors. And then here's the reality of like, how many, what percentage of our deals end in no deal, no decision, what percentage of people are trying to DIY it. And like knowing that that is also a competitor that you have to compete against. So that's number two. Number three is customer research, of course. And so this goes back to that Bain pyramid,

I think is a great start to really just start getting into that. Also, my recommendation, not just because I did this, you can use whoever, but is that you should really hire somebody to do formal research, formal customer research at least once a year, because you're going to get a completely different story from a neutral third party than you are when you just go put a salesperson or a marketing person or the CEO to do customer interviews. Also, customer interviewing is a skill set. And not everybody has that. And so I've found that there are classes that you can send your team to, but you have to really be in that journalist mindset to be able to do customer research. So that's like primary research, you should absolutely be doing that, you know, and talking to customers. The other piece is secondary research, of course. So reading literature and subscribing to newsletters and associations are like in your customers' world. Google Alerts obviously is a great one. Annual Report or are listening in on investor relations calls, if you have any public companies that you're targeting, that's a great way to get some insights like, where's the company focused? What are they struggling with right now, they tend to divulge a lot of information that can be useful in the sales cycle for you there. So that's, that's on the customer research side.

I have like a whole kind of training program and things that I do on that just to get like marketers in this mindset, I don't know, we have, you know, over the past 10 years, I've gotten so far away from marketing became that is now all about the tech and how to implement, you know, new technology to get like mass communications out versus marketing are about understanding our customer. And having it be the central department that is really sort of owning customer insights and customer research, and not just sort of that short-term bias that the sales team typically has, Hey, I just got off of a call and we need to go change our whole entire pricing strategy are we just we have to go update this piece of content, or we have to go participate in this event. Those are all great, but they're very short-term. And he really needs somebody that's overseeing, like, big picture, you know, long term, what's happening with the customer base?

The fourth one, just real quick, is Company Research. And so what I mean by that is like, what do you understand about your own company? What are the goals that you're really trying to achieve? I find that a lot of and what are you really good at what right? What are your strengths? What are your weaknesses, and being honest? So you want to really hone in if you know what makes you different if you know what your strengths are, if you know what your company's trying to achieve, and your mission and all of that. Ideally, you're painting your value proposition is painting a story that's leading everybody to that as the solution. And a lot of companies just don't they can't answer that question. Or maybe one department can answer that question, but everyone is not aligned. And so when you're not aligning, you're gonna have this inconsistent story out in the market. And you're gonna have an inconsistent story from one seller to the next, or from one executive to the next, or from the marketing team versus the sales team. And so that piece is really important.

Mark Drager: I think you've really helped articulate something that I've been thinking about for a while now. Last year, I read J.D. Rockefeller's biography. I listened to it a few times by Ron Chernow, a titan great book. But what I found interesting is in the 1860s, 1870s, 1880s, you know, let's, let's go way back. Art marketing was something that was around, but at the time, it was about finding a market and creating a market. And I've thought about that, because as you mentioned, you know, marketing is about now it's about tech, and it's about brand. And it's about advertising. And it's about lead gen and lead qualifications and lead scoring and working the leads and doing everything you need. And then it's got to touch product and product of it like it does all of this stuff. I'm not saying it doesn't. But at its core, what it was 100 or 200 years ago because it was around for that long, is to find a market and create a market. And so what you're talking about is getting back to basics, which I love, and I could talk about all day. So I've been speaking with Stacey Danheiser, she is the founder of Shake Marketing Group, also the author of "Look Inside: The Real Reason You're Not Winning the Marketing Game," and a co-author of two books, "Value-ology" and "Stand Out Marketing." So, Stacy, I end every single conversation by asking the same question, but I'm going to switch things up today. Because I'm actually curious, what is your favorite question to ask when you're doing customer research?

Stacey Danheiser: I mean, I like to think about this, which question I, there's so many, I tend to run the interviews, like pretty, more like a conversation. But I always love to know, like, you know, the question of value, of course, you know, what is the what's, what is the primary value that you're getting from this organization? I love that question. Because people will give you the exact words that they need to hear, and that they need to see on a website or in a sales pitch, you know, they'll say, it's like, that's what you pull out and use in the marketing, we don't need to go be all fancy. When you ask that question, what's the number one value you're getting? Like, you know, they just, I don't have to think about it. Like, they just deliver. And so I can go run my business and do whatever I want. And this thing I know, is just gonna work. And I don't have to worry about it. But I'm like, That's great. That's the value, right? It's, it's typically not things when I ask companies this, they will never, they'll never even think about that. They won't even they'll know they won't say that. Oh, the number one value we give is we have the best expertise. You know, we have some other random feature and that stuff never comes up in customer interviews. It's always like a bigger picture higher level. You know, it's typically related to a feeling or something that people are getting to do because they're working with a particular company.

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Resources & Go Deeper

“How to Create a Strong Value Proposition for B2B Marketing & Sales”

This article discusses the importance of a strong value proposition in B2B marketing and sales, clarifying what a value proposition is and is not.

How to Create a Strong Value Proposition for B2B Marketing & Sales (daniel-one.com)

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"11 Best Practices for B2B Customer Experience"

This article outlines best practices for enhancing customer experience in B2B settings. Key practices include knowing your customers, offering personalized experiences, using customer service technology, educating and advising customers, and collecting customer feedback.

11 Best Practices for B2B Customer Experience (hubspot.com)

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"The A to Z Guide to B2B Brand Storytelling"

This guide delves into the importance of storytelling in B2B marketing. It explains how storytelling is a strategic approach to shaping a brand's identity and values into a narrative that connects with customers.

The A to Z Guide to B2B Brand Storytelling | Renegade