Each Customer Segment Deserves its Own Value Proposition
A One-Trick Pony
After visiting a Third-Party Logistics (3PL) provider a couple of times, we noticed how, during facility tours, the company emphasized the presence of warehouse automation to all prospects.
While automation can definitely qualify as a differentiating factor in this industry, one can speculate that it is not a priority to all prospects. Other attributes such as location, price, fulfillment options and other value-added services can easily play a more important role to some prospects.
Risk and not much reward
The risk of having one strong value proposition and promoting it to all prospects, irrespective of their individual needs, is that customers tend to gravitate towards the solutions that address their most pressing requirements.
As a result, if another player in the market promotes values that are more in line with the existing customer demands, he is likely to convert the customer and close the deal. However, that reality is not something that companies should accept, and there is no need to forgo those customers.
A Better Approach
Conjoint analysis is a survey-based statistical technique that helps companies understand customer preferences.
In a conjoint analysis, the company presents many combinations of product and service attributes to past, current and potential customers.
The respondents show their preferences between different sets of combinations and then, through statistical analysis, one is able to determine the value of each attribute to customers.
By adding demographic and other qualifying questions in the survey, one can further separate prospects into segments, identifying what matters the most to each segment.
Finally, the company can qualify prospects as they come, and present them with a value proposition that resonates the most with that segment, resulting in a faster and more effective sales cycle.
MarketPrax helps companies optimize pricing, features, products and services for each customer segment with conjoint analysis and segmentation. For a free consultation, or for more information, reach out to us at info @ marketprax.com. Join also our 17,000+ followers on LinkedIn for new content.