Value is a key word in business. It is the primary subject of product and service pricing models, a key driver of consumer satisfaction and yet a concept eerily lost in the practice of recruiting. It has been said literally thousands of times that recruiting is like sales, and most recruiters subscribe to this belief.
So why is it that many don’t understand the importance of being able to craft what professional marketers and salesmen call “the value proposition”? When you stop to think about it, everything we do in life either creates value for ourselves or someone else.
Being able to craft a value proposition is a critical skill, one appropriate for anyone in business, regardless of his or her function. It is a skill that an individual must call upon when seeking a job, a company must master when trying to acquire new customers, and one politicians must employ when trying to get the public to pass a new initiative that involves raising taxes. Everywhere around you professionals are using value propositions to entice you to act the way they want you to!
It’s time recruiters, and HR professionals in general, started to leverage this most critical marketing skill.
What is a Value Proposition?
If you were to pick up any relatively successful book written in the last twenty years on the subject of marketing, and more specifically branding, you would most likely find an elaborately phrased definition of the term “value proposition.” After reading this definition, you would probably scratch your head for a while and wonder exactly what it means for you. Relax, creating a value proposition isn’t rocket science. But it does require that you be able to think like someone else, namely the person your value proposition will attempt to influence.
In short, a value proposition is a very short offer to an individual (think candidate) or target population (think labor pool) that grants them more value than they give up from their perspective in relation to all of their opportunities, one of which is always doing nothing. The critical elements involved with crafting a value proposition include:
- Understanding your target, including their values, wants, needs, and the priority they attach to each.
- Keeping your offer short. If you are lucky, you will get a few sentences (probably two to four) to articulate your value.
- Understanding that your offer must come out on top in relation to all of the other opportunities at the target’s fingertips, one of which is always do nothing.
This last point always gets people thinking. There are a wide variety of activities in life that, quite frankly, we don’t enjoy doing, and if given the opportunity to do nothing instead, we would seize it. Things like going to dentist, cleaning up after a large party, and applying online for a job come to mind for me. Yes, you heard me correctly, applying online for a job makes my list of the most painful things I would rather avoid and do nothing instead. Apparently, I am not the only one. The issue of motivating the currently unemployed segment of the U.S. workforce to apply for any one of the several hundred thousand open positions in the United States has become such an issue that even the President mentioned it in his latest news interview. When the process itself has become so devoid of value that even the applicants most in need opt to do nothing versus complete it, you know you have a problem.
The cornerstone of developing a unique and winning value proposition rests on understanding what your target individual or group values. In many cases, what they really value isn’t stated as much as it is implied. For example, think about your corporate values statement. Most firms list values such as integrity, teamwork, and community support. But when it comes down to measuring success, the only value that matters is profit.
In recruiting, we have all met candidates whose actions conflict with their rhetoric. To avoid going round and round with such candidates you should do everything possible upfront to understand their true values, often called their motivators. When a candidate indicates that challenging work in a forward-thinking firm is their most important factor in choosing an opportunity, but their resume demonstrates a track record of always choosing the safe bet, his or her actual behavior contradicts his or her stated desires. Discussing this contradiction further, albeit in a non-confrontational way, may help uncover the candidate’s true motivators.
Doing such an analysis on a target group will provide the insight needed to craft a value proposition to get that most desired population to apply or develop an ongoing relationship with your organization. To identify the value elements that need to make it into your value proposition, consider the following steps:
- Identify all of the possible elements of value you have to offer, including tangible and intangible benefits. Be honest when doing this. Is it really true that you have the best management team in the industry? How can you prove that, and more importantly how can you disprove your competitors’ claim to the same distinction? Only list what you can quickly and easily prove as fact.
- Go through your list and determine which elements are mutually exclusive, that is, more of one requires less of the other. Stock options or grants versus base compensation is usually a good example.
- Have a sample from your target audience rank your elements in terms of the priority they assign to each. You can also use your current employees if they are the models for which you hire against. Test their ranking by putting them through a simulation that requires them to choose more or less of those elements that are mutually exclusive. If the result of this conjoint analysis aligns with their initial ranking, it is probably true. If it does not, use the results from the conjoint analysis.
Identifying value accurately depends upon your approaching this initiative from the right perspective. If you approach this from the role of a corporate custodian, your results will reflect your organization’s values, not those of your target audience. Knowing a particular group or individual’s perspective is crucial in understanding their specific value drivers.
Crafting Your Value Proposition
As with metrics, and all good things in business in general, a world-class value proposition combines both qualitative and quantitative elements. It uses a mix of financial, emotional, and functional benefits to entice the target to act as you desire. Designing the language of the actual proposition is the only thing that makes mastering the art of using value propositions difficult.
Based on the steps you took to identify value, you should know have a fairly good understanding of how a group or individual describes value. You will now leverage that understanding to craft the language of your proposition in such a way that aligns with their terminology and differentiates you from other alternatives available to them. To accomplish the development of a finely honed and effective value proposition, consider the following:
- Start by writing a one-page narrative that clearly puts forth the value your opportunity provides.
- Continue cutting your one-page narrative down until you have just two to four sentences that provide the most bang for the buck.
- Perform a quality check to make sure your sentences promote value from the target’s perspective using their language.
- Test your proposition on a sample from your target audience, and use their initial unscripted reaction to fine-tune your message.
Mastering a few of the concepts that marketers and sales professionals use on a daily basis is only one of many steps needed to elevate the science behind the human resource function. Understanding value propositions, and being able to design them is an essential skill that can be used in every aspect of life, from getting children to eat Brussels sprouts to getting top candidates to apply to your organization. One of the elements necessary to persuade anyone to do something is a robust understanding of the language they use and which they are comfortable with. Many HR professionals forget that they speak “HR speak,” and that most people don’t understand it. If the idea of using language to persuade is a subject of interest to you, check out books and websites on neuro-linguistic programming.