Step Two of building a Value Proposition Statement that works is all about nailing your vendor category description. So, continuing with the series on how to build the right Value Proposition Statement that works for your organization, I will focus now on articulating your Vendor category.
When played right, Vendors are responsible for how an industry develops and delivers new products, services and solutions. If a client considers your company to be strategic, s/he is motivated to build a relationship that will strengthen and mutually benefit both businesses, and not just negotiate the lowest price possible.
The best and most current example I can think of is Samsung.
As reported recently, while Samsung Electronics is reeling from a patent pounding by its smartphone rival Apple Inc, this is unlikely to damage the other part of their relationship – where Samsung is the sole supplier of Apple-designed chips that power the iPhone and iPad. So while Samsung plans to appeal the U.S. verdict and a damages bill for $1.05 billion for copying critical features of Apple’s popular mobile devices, Samsung will not want to put at risk its Apple supply contract which is worth billions of dollars. Experts and analysts said the symbiotic business relationship between Samsung and Apple is too important for either to put at risk.
So it is not surprising – but often overlooked – that a crucial factor in your Value Proposition is how your market and customers define your company. And that starts with how you define it.
Precisely: What they call you starts with what you call yourself.
What’s in a (category) name?
Vendor categories are a way to classify the types of goods and services you offer. Simple examples of vendor categories include: service providers (such as a payroll service or travel agency), suppliers (such as an office supply store or specialty supply house), equipment manufacturers (a company that supplies parts or material), technology (cloud computing), etc.
But you need to try harder than that. If you wish to play a strategic role in your client’s business model, you need to think in strategic terms. Think big.
In Shakespeare’s Romeo and Juliet, Juliet tells Romeo that a name is an artificial and meaningless convention. This (probably) applies in love but not in marketing. In other words, wordsmithing your Vendor category has a potentially enormous payoff.
Next Step: create your Vendor Category definition options
Go back and identify the “key players” as you did before.
For each key player identified in your business model, which words do you use to describe your Vendor Category? What are you to them?
Now step back and review the table you have created.
Once you have done this, you will have completed Step Two of building a Value Proposition Statement that works: determining the Vendor category options. Next posts will deal with the next elements of the formula.