Customer Value Proposition in Present Business market and The

Customer Decision Process.

Customer Value Proposition
In the present Business market with the increasing competitiveness the value proposition of a
company is very essential for that company’s survival. A value proposition is a statement as to
why the customer will chose or buy your product/ services and not the competitors products/
services. It helps the customer understand and choose between two different suppliers according
to their requirements.

A good value proposition can give you an advantage over your competitors and is often what
your prospects use to evaluate you. And for many consumers, your value proposition is the first
thing they encounter when exploring your brand. So, having a clear, concise value proposition is
more important than ever.

When creating a value proposition, it’s important to identify all the benefits your
product/services offer. Describing what makes these benefits valuable in a quickly digestible
way for the customer will help your value proposition make an impression. It’s also critical to
identify your customer’s main problem your value proposition helps solve. By connecting this
value to your buyer’s challenges your value proposition will become clearer. This is what helps
differentiate your brand as the best provider of this product or service.

To create a comprehensive and resourceful value proposition requires a virtual team activity,
documentation and assimilation of the key ideas and benefits by team to apply them in real world
situations in front of a customer.

The main aspects that a company needs to investigate before understanding the key customer
value proposition are the Point of Parity and the Point of Difference with its competitors.

Point of Parity: These are the common elements or the must have elements with the
competitors. It is the main reason why a customer adds your product/service to his list of
considerations.

Point of Difference: It is the main essential attribute that differentiates your product/service with
the competitors. This is the key value proposition because of which a customer chose your
product/service over the alternatives.

There are three kinds of value proposition:

1. All benefits: This is the simplest method in which the company lists down all the key
benefits of the product/ service they offer to the customers. This approach requires the
least amount of knowledge about the customer and the competitors. But this short-sighted
 approach is a major drawback for many companies which causes benefit assertion. In
this the company might claim advantages for features that provide no potential benefit to
the end user. It also dilutes the main key point of difference from its competitors by
stating all the benefits at once. The company needs to understand the customer and the
competitors and construct its value proposition accordingly.
2. Favorable point of difference: In this the company tries to identify the key point of
difference between its offerings and that of the alternative’s. The company emphasizes of
the main point of difference with its competitors and tries to project that to the customer.
It tries to answer the key question of “why should we buy your product?” This does not
however convey the main key value proposition to its customers and this has a major
drawback of value presumption which assumes that the favorable point of difference
must be valuable for the customer. This is always not the case and the company is unable
to express its value proposition to the customers.
3. Resonating focus: The basic idea behind a Resonating Focus value proposition is to
identify the one or two points of difference (between your solution and your competitor's)
that deliver the greatest value to the target customers. This is the gold standard for
understanding customer value proposition. To begin with, companies that use Resonating
Focus value propositions develop customized value propositions for various customer
segments. This is necessary because the elements of value that matter most are likely to
vary based on the type of customer involved. It's also possible to extend the Resonating
Focus value proposition concept from customers (organizations) to individual buyers or
buyer personas. This helps in understand and iterating the value proposition according to
the customer needs and demands.

It is always essential to demonstrate superior value proposition to the customers. But this is not
enough in the present business market which requires constant iteration of the value proposition
according to the needs of the customers. The company needs to work with the customers to
understand the changing needs and how their offerings are beneficial to the customers in the long
run. As the company becomes knowledgeable about their offerings, they develop superior value
to customer and even how the value delivered varies across different customers. This enables the
company and the customer to develop a superior business performance in the present market.
Thus, it is essential to make customer value proposition a fundamental part of business strategy.
The Consumer Decision Journey
The consumer decision journey is the process through which a consumer goes, in order to buy a
product or service. The marketing funnel that was referred to previously by marketers, is now
changing as the consumers are moving out of it. In order to influence consumers, there are touch
points to site as and when at a particular stage in the decision-making process.

The authors refer to touch points as the metaphor of funnel i.e. when the consumers start their
decision of buying with number of potential brands in their head and eventually reduce that
number as they move through the funnel and end with only one brand. In the contemporary day,
the funnel concept is resulting to tap into touch points and buying is resulting from a variety of
digital channels and a wide choice of product ranges. The before mentioned is added with an
increasingly well-informed consumer. Thus, marketers need to acquire a more complicated
approach that what the funnel suggests. This we call as the consumer decision journey. This
approach helped researchers understand how the diversification of media and products has made
it easier for the companies ultimately, to get a better consideration of their offerings to the
consumers in the initial consideration stage and also, the one- way communication system has
been converted into a two- way communication system, with only the companies making a
‘push’ marketing , (selling their offerings to their potential customers) but a ‘pull’ strategy has
been built by them. In addition to the plus points of the same approach, it helps integrate and
implement all the marketing functions- strategy, spending, channel management and message.
This is of utmost importance in the present scenario.

The way consumers make decision

The funnel describes how a consumer considers a whole lot of brand as their initial consideration
set, but moving further towards the funnel, the same number reduces, and reaches anyone in the
very brand. Then, the post-sale services make a huge impact on the consumers, in the decision of
re-buy or re-considering the same brand in the consideration stage. The decision-making process
is more a circular process, with four phases: initial consideration, active evaluation or the process
of researching, closure when consumers are buying a brand, post-purchase.
Brand Consideration

Potential consumers usually consider the initial consideration set of brands (which they already
have in their minds) as their finally decided brands but not necessarily every time. There are
chances of other brands to jump in the middle of the funnel and be so assuring that they make
them their first choices. Although, this depends on the industry in which the particular brand is
in. The fig. below gives the illustration of the same.

Empowered Consumers

This is a very important change that has been noticed recently, with contrast to the traditional
way of marketing. As mentioned earlier, it is more of a ‘pull’ strategy(consumers trying to gather
information about the product or services that they are interested in buying) that happen these
days, than ‘push’ strategy where marketers referred to direct marketing, phone calls etc. The
figure below gives a representation that, 2/3rd of touch points during active-evaluation involves
consumer-driven activities like, internet reviews and word-of-mouth, etc.
Loyalty

Loyalty comes mostly from the after-sales services. The marketer should be most active in this
phase, as most of the re-consideration and purchase comes from this same activity. There are two
types of loyal customers: Active loyalists- who not only sticks with the brand throughout but also
recommend it. Passive loyalists- whether from laziness or confusion caused by the dizzying array
of choices, stay with a brand w/o being committed to it. It is important to increase the active
loyalists’ base and for that they need to look for the touch points that will enhance the same,
most.

Aligning Marketing with the consumer decision journey

1.) Prioritize objectives and spending

2.) Tailor messaging
3.) Invest in consumer-driven marketing
4.) Win the in-store battle

It is thus very essential to have a proper integration with all the aspects of the organization like
the information website, PR programs and loyalty programs. There must be harmony between all
the sectors to understand the customers in their process of customer decision making. The CMOs
of the companies need not only take up the role of branding, advertising and market research but
also understanding the basic essence of customer decision making to build a more
comprehensive brand. The CMO is the most deserving candidate who can help in unification of
all these processes to have a better and more efficient marketing structure.

Abhishek Ghosh
Sayanna Das
Anjali Paswan
Marketing Sec A