Value Propositions – Cost is King
While in a meeting yesterday with a potential client someone started vacuuming outside of the conference room. The potential client apologized saying that office cleaning is now being done during normal business hours as a result of a corporate cost reduction initiative. This gave me flashbacks from 2001 when Lucent turned out half of the hall lights to save money. Fortunately, the vacuuming played right in to the Connexius value proposition I was pitching of less cost, better service.
This got me thinking afterwards about how now is the perfect time for entrepreneurs to start a business with a cost-based value proposition. Historically I have sold based on revenue generation. However, with the economy the way it is with no real prospect of imminent improvement, cost is definitely what you lead with now. Additionally, because cost reductions flow straight to the bottom line, $1 in savings equates to $5-10 in incremental revenue. I believe if you can prove that your product or service will reduce a potential client’s operational expense, you will be guaranteed a legitimate shot at their business which is really all you can ask a potential customer.