The return of the value proposition

Yes, there are weird things going on with the economy right now. But the essence of business has not changed. Consumers have money, and companies have products and services. It is the burden of a company to explain why consumers should want a product or service... more than they want their money.

Before you call me captain obvious, spend a few minutes flipping through your local paper, or clicking through the channels on your television or radio. Ignore the content or programming; pay attention only to the advertising.

There are the furniture stores that promote “Nothing down, and no payments until 2010,” offering no indication whatsoever as to the product line, style, quality, or function of the furniture they sell. In the wake of so much negative press about credit over-extension, is the chance to rack-up more debt—in and of itself—enough to pull anyone into a furniture store?

There are the clothing stores that shout about price: “10, 20, 50, 75% off and more!” But the fact is, if I don’t buy, I save 100%.

There are the car dealerships who advertise only a payment, apparently certain that price is the only criteria consumers are focused on in an economy like this. Sorry, but most consumers are not attracted to another new payment of any kind right now, no matter how small.

I want to know the vehicle I drive will get me to work reliably in a job market where I can’t afford to show-up late. I want to know the vehicle I drive is a financially predictable alternative to the old clunker that’s been nickel-and-diming me to death, because it needs one repair after another. I want to know that I’m not just buying a car… but I’m buying the loyalty of a dealership that will still be there to help me tomorrow. (I’ve heard a lot of dealerships are going away… are you one of them?) I want plain talk. I want to know I can get the deal done quickly and painlessly… without a bunch of pressure, and fast enough that I can still make my child’s Saturday afternoon hockey game. I don't want a new payment. Not even a low one. The payment is a sacrifice I'm prepared to trade for the value your vehicle and dealership can provide me.

Implications: It is time for companies to re-think how they (and their products and services) add value to the lives of consumers. There has never been a more important time to know who your most important, profitable customers are… and understand what kind of benefits really drive the consumer’s purchase decisions in your category.

This one simple paradigm shift can take the anxiety out of the marketing process for a host of companies: Instead of wondering whether the consumer will respond to your marketing plan, evaluate whether the marketing plan responds to the consumer.

Mike Anderson