Are you losing B2B sales because of the ‘top-10 failures’ in your ‘Value Proposition’?

It’s a damned pity to lose out right at the end of the sales process

It takes enormous time, effort and expense to get yourself on the shortlist for selection by clients for valuable projects and contracts. It’s great if you are the winning bidder, but if you’ve just lost out at this final stage then you have burned a great deal of money for no avail.

If you’re losing – what’s going wrong?
The primary reasons for losing out are price (you’re just too expensive), your sales process is weak or that at the end of the day your ‘value proposition’ to your clients is just too weak. If you are too expensive then you need to go out and do the hard work to get your cost structure down so that you can realistically compete. If you have a poorly structured sales process (or your sales people don’t follow it) then you have a sales management issue to address.

A word of warning on ‘cost plus’ pricing
If you are using some sort of ‘cost plus’ basis for pricing then you are walking yourself into a bearpit. Unless you are selling a complete commodity which is available from multiple suppliers including yourself then you should avoid ‘cost plus’ pricing. There is little logical connection between the value of your service to a purchaser and the internal cost structure of your business. In a ‘cost plus’ situation its all too easy for internal costs to build up unchecked and the blame for lost revenues and unprofitable contracts is then misplaced onto the sales organisation 

Clients are not dumb – they will buy on price if your value proposition is weak

Procurement departments come in for a lot of criticism from sales organisations. But all they are doing is protecting the interests of their own organisation when its making important purchases. If your ‘value proposition’ is weak and/ or unconvincing – then it’s straightforward for your client’s procurement function to make the decision solely on price forcing you to discount heavily and/ or lose business to your competitors.So your failures to win must relate to your Sales Process and Value Proposition
Assuming you have something of real value to offer clients and your cost structure and pricing strategies are competitive, then the root causes of failing to win profitable contracts are :

  • You’re unable to articulate added value that you bring
  • Clients fail to accept your articulation of value
  • Procurement structure bid comparisons on a commodity’ basis

In terms of what needs fixing, this boils down to:

  • Fixing a weak sales process
  • Fixing a weak value proposition’ and/ or supplying convincing evidence to substantiate the claimed value proposition’
Fixing a broken ‘sales process’ deserves a detailed discussion elsewhere. So for today, let’s just focus on assessing how robust your ‘value proposition’ is by examining it against the ‘top-10’ critical questions it must answer.

How to diagnose whether you have a value proposition’ issue
To get a useful assessment you could do a rapid ‘desk research’ job for yourself to get a first cut answer for yourself on whether your value propositions’ stack up. It should only take you 5-10 minutes to analyse a specific business proposal using our Value Proposition diagnostic tool, so you can analyse a representative sample of proposals within 45-60 minutes.

To test how well your sales organisation makes propositions take a look at a sample of five current sales proposals and invite your lead sales person (and their manager) to sit down with you and evaluate each proposal opportunity against these ten questions:

1.Does the proposal demonstrate knowledge of the client’s business?
2.Does it summarise the agreed needs of the client?
3.Does it specify the objectives for making a change?
4.Does it explain how the proposed solution would meet their needs?
5.Does it describe clear and tangible benefits relevant to the expressed needs?
6.Does it provide a financial justification and/ or ROI calculation?
7. What proof/ evidence do you have to support the ROI calculation (and how convincing is it)?
8. Can your client coach who is supporting your bid articulate your ‘value proposition’ for themselves unaided by your assistance?

9. Can the ultimate decision maker who is making the buying decision for your contract articulate your ‘value proposition’?
10. Is your ‘value proposition’ included as one of the key factors within the client’s decision making criteria in their buying process?
Reviewing each proposal against this set of questions should only take around 10 minutes. If it is taking you a long time to be able to answer a specific question that should indicate to you that your proposal is unclear on the particular topic.
Completing your ‘Value Proposition’ diagnostic scorecard
All you need to do is complete a brief scorecard with the 10 questions and 3 columns (a column for YES, a column for NO and a column for UNSURE. Simply review each question and place a tick in the relevant column. If you don’t get 10 ticks in the YES column, you know you need to work on. If you see a consistent pattern across all 5 proposals/ opportunities then you know you have an area of weakness that requires fixing and incorporating within your sales process.
If you want to download a ‘Value Proposition’ diagnostic template, then just go to:
So what does a strong Value Proposition look like?
First of all your product or service must make a real tangible difference to key performance measures for your client. These should include key financial measures such as:
  • Increased revenues
  • Higher margins
  • Reduced costs
  • Increased customer retention
  • Higher sales per square foot (in retail)
These are more convincing when backed by improvements to key operational metrics that drive the financial measures such as:
  • Increased customer satisfaction
  • Increased wallet share
  • Increased basket value
  • Higher operational efficiency
  • Reduced employee turnover
  • Increased employee productivity
  • Reduced error rates
To make your Value Proposition more convincing you should have case studies and references from similar businesses who have achieved these results working with you in the past. Ideally you should be able to put your prospective clients in touch with existing clients directly so that they can hear at first hand what results you’ve been able to achieve.
Compelling Value propositions translate into more business and profits for you
The final challenge is for your clients to be able to articulate the expected impact on their business for themselves. If the client believes passionately in your value proposition then you are in a very strong position to overcome your competitors and win the business.
Good luck in applying the diagnostic, I’m sure you will learn a great deal. And best wishes for the future in winning more contract bids. Happy hunting 🙂
Regards John.

Designed by: Carne Associates & modified by Dawud Miracle