Value Propositions for Highly Regulated, Commoditized, or Channel Partner Brands
Even in a highly regulated or commoditized industry, you can craft powerful value propositions.
I hear a common complaint from marketers at companies that have a “boxed-in” product:
- Highly Regulated Industries — insurance, healthcare, pharmaceuticals, and banking
- A Commoditized Product — traditionally foodstuffs or precious metals, but today this applies to most retailers who compete with Amazon
- Channel Partners — systems integrators, value-added resellers, value-added distributors, independent software vendors, independent hardware vendors, and other companies that rely on channel marketing partnerships with major brands
Marketers in these industries often lament “We can’t create a powerful value proposition for our brands and products.” Essentially, all their competitors have the same products and they are forced to compete on price.
Again, I say: Even in a highly regulated or commoditized industry, you can craft a powerful value proposition.
Exclusivity has a large effect on a value proposition’s force, according to the MECLABS Institute value proposition methodology.
That is one reason many marketing leaders struggle with the value proposition of brands in highly regulated industries. In some cases, the products are very similar or even identical, due to regulatory requirements. So how do you compete?
I was reminded of this challenge while participating in a value proposition workshop with an insurance industry brand recently. While the aim of that workshop was to create a specific value proposition for its brand, a few overarching themes emerged that I thought you might find helpful if you work in a highly regulated or commoditized industry …
Communicate Hidden Value
The nuts and the bolts of a product are just the beginning. Yes, you might offer a very similar product, but can your company offer it in a more customer-first way that better demonstrates value to the customer?
For example, a water fountain is a pretty simple product. You push a button, you get cold water in a public setting. But:
- Who is buying water fountains?
- What are their goals?
- Can you help them succeed?
Elkay filtered ezH2O water bottle filling stations communicate hidden value with its exclusive Green Ticker, which shows a count of how many plastic water bottles have been saved by refilling reusable water bottles at that particular fountain, instead of buying bottled water.
This feature hopefully drives changed consumer behavior, but it also offers exclusive value to the decision-maker who picks which water fountain should be installed in a building, by helping facilities managers meet corporate sustainability initiatives.
Simplicity Can Really Stick Out in a Complex Industry
One of the largest banks in North America engaged in value proposition testing with MECLABS Institute to discover the most effective expression of value for a small-business banking solution.
Value categories were identified — price, savings, support, product design, and benefits for small businesses (potential growth, simplification of banking, and reduced work).
After experimentation in the channel and on the landing page, the team discovered the most compelling value was the small business benefit of simplifying banking.
Often heavily regulated and commoditized industries have complex offerings. While the product itself may necessarily be the same as your competitors, helping to simplify the use of that complex product could give your brand a value proposition edge.
Clarity Helps With Process-Oriented Value Propositions, As Well
A brand’s overall value proposition is just one of the four levels of value proposition. Companies often have to communicate process-oriented value propositions, as well; explaining to users why they should take a specific action.
A major Canadian financial services institution conducted experimentation with MECLABS to discover the best way to increase conversion for its welcome banking package.
By more clearly communicating the offering, the team achieved a 200 percent conversion lift over the control.
Again, heavily regulated and commodified industries tend to be filled with complexity. Some companies try to overcome that in their processes with boastful marketing language — which tries to sell, not help, a skeptical customer.
Instead, provide transparency and clarify the process steps customers need to take. This will help you differentiate your value proposition by providing a better customer experience, even if the product itself is similar to competitors.
People Can Make the Difference
When you hear words like clarity and simplicity, you may assume that shorter marketing copy is always better.
However, Aetna’s HealthSpire startup generated 638% more leads for its call center with a longer landing page.
For a complex decision, like finding the right Medicare plan, having knowledgeable human beings you can trust to help you navigate these intricate and anxiety-filled options is a compelling value proposition. A longer, more complex landing page was necessary for HealthSpire to communicate the value of that human interaction.
Tell Your Brand’s Story
What is your brand’s story?
Eggs are a commodity product, but Country Hen eggs are able to command premium pricing; in part, by including a newsletter in each package.
“We often feel like we have a salesforce of thousands of loyal customers looking out for our best interest,” sales coordinator Kathy Moran told me.
The commodification challenge was especially acute while working with a precious metals company. Gold and silver are literally commodities. I interviewed the founder, the company principals, and previous customers for hours while searching for the value prop and determining what copy could best communicate it. A common theme became abundantly clear — the founder’s honesty, integrity, and transparency made this company stand out — so a key part of the website was telling his story and making specific promises to potential customers.
It wasn’t necessary to come up with boastful, flowery marketing. The most important job of the copywriter is to search for that true kernel of differentiated value and communicate it in a compelling way.
‘What If … ?’ Is a Question Upon Which Powerful Value Props Are Built
Think outside the box. It’s a trite and overused phrase, I know. But when it comes to heavily regulated and commoditized industries, it’s all too easy to feel constrained by a pre-defined notion of what is possible in your industry. The legal review is too extensive, internal compliance is too risk-averse, or the product is just inherently cut-and-dry.
But the marketer’s stock-in-trade is ideas. The right idea can help truly differentiate your brand in the marketplace.
As a visceral example, we were conducting the before-mentioned value proposition workshop in a commodity conference room at the One Ocean Resort & Spa in Atlantic Beach, Fla. But the azure blue ocean and cooling breezes of the mighty Atlantic were just down the hallway, so we broke out of the commodity conference room and conducted the final session on the resort’s beachfront back patio.
We broke out of the conference room during the last session of the @MECLABS Value Proposition workshop for an insurance brand. We brainstormed value claim evidentials on @OneOceanResort's beachfront patio. pic.twitter.com/uKuOpJIE25
— Daniel Burstein (@DanielBurstein) June 5, 2019
And I think that is a great analogy. An entirely different viewpoint (from staid conference room to majestic ocean) is just around the corner.
The same is true for your value proposition.
While the product may be the same, the way you deliver and service it could be wildly different and create value for the customer.
For example, generic drugs — color-coded by day of the week, distributed in bottles stamped with which week you’re supposed to take them. Life insurance companies that pay out annuities, instead of lump-sum benefits, so you know your surviving children will be taken care of and not quickly spend through a one-time windfall. Banks that offer target dates certificates of deposit so you can save money based on your timeline, instead of a standard one-, three-, or five-year schedule. Doctors who provide a menu of options any time treatments or drugs are needed, showing pros, cons, and costs of each — instead of just writing a prescription or ordering a surgery.
I just made all of these up on the spot, so people with far more industry knowledge than me can quickly box them out and say they are impossible.
Let the compliance department or corporate counsel have those concerns. As marketers, we must ask, “What if?” and then challenge their denouncements to see if it really can’t be done … or just is new and scary and hasn’t been done before.
To paraphrase George Bernard Shaw,
“The reasonable marketer adapts a value proposition to the world: the unreasonable one persists in trying to adapt the world to a value prop. Therefore, all progress depends on the unreasonable marketer.”
Marketers, let us all be unreasonable.
Daniel Burstein is the Senior Director, Content and Marketing at MECLABS Institute. Daniel oversees all content and marketing coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the marketing direction for MECLABS — digging for actionable discoveries while serving as an advocate for the audience.